REVOLVING CREDIT AGREEMENT

Revolving Credit Agreement

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MCDERMOTT INTERNATIONAL I | BWX TECHNOLOGIES, INC., | CREDIT LYONNAIS NEW YORK BRANCH,

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Title: REVOLVING CREDIT AGREEMENT
Governing Law: New York Date: 3/15/2004
Industry: Oil Well Services and Equipment Sector: Energy

REVOLVING CREDIT AGREEMENT
, Parties: mcdermott international i , bwx technologies inc. , credit lyonnais new york branch

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EXHIBIT 4.8

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$150,000,000

REVOLVING CREDIT AGREEMENT

Dated as of December 9, 2003

Among

BWX TECHNOLOGIES, INC.,

as Borrower,

Certain Subsidiaries of the Borrower,

as Guarantors,

THE LENDERS FROM TIME TO TIME PARTY HERETO,

as Lenders,

and

CREDIT LYONNAIS NEW YORK BRANCH,

as Administrative Agent

CREDIT LYONNAIS SECURITIES,

as Lead Arranger and Sole Bookrunner

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TABLE OF CONTENTS

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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS.......................................................... 1

Section 1.1 Certain Defined Terms............................................................ 1

Section 1.2 Computation of Time Periods...................................................... 19

Section 1.3 Accounting Terms................................................................. 19

Section 1.4 Types of Loans................................................................... 20

Section 1.5 Miscellaneous.................................................................... 20

ARTICLE II THE LOANS................................................................................. 20

Section 2.1 The Loans........................................................................ 20

Section 2.2 Method of Borrowing.............................................................. 21

Section 2.3 Fees............................................................................. 25

Section 2.4 Reduction of the Commitments..................................................... 25

Section 2.5 Repayment........................................................................ 26

Section 2.6 Interest......................................................................... 26

Section 2.7 Prepayments...................................................................... 27

Section 2.8 Funding Losses................................................................... 29

Section 2.9 Increased Costs.................................................................. 30

Section 2.10 Payments and Computations........................................................ 31

Section 2.11 Taxes............................................................................ 32

Section 2.12 Assignment of Commitments Under Certain Circumstances............................ 35

Section 2.13 Sharing of Payments, Etc......................................................... 35

Section 2.14 Applicable Lending Offices....................................................... 36

Section 2.15 Letters of Credit................................................................ 36

ARTICLE III CONDITIONS OF LENDING..................................................................... 40

Section 3.1 Initial Conditions Precedent..................................................... 40

Section 3.2 Conditions Precedent to Each Borrowing........................................... 43

Section 3.3 Determinations Under Sections 3.1 and 3.2........................................ 44

ARTICLE IV REPRESENTATIONS AND WARRANTIES............................................................ 44

Section 4.1 Existence; Subsidiaries.......................................................... 44

Section 4.2 Power and Authority.............................................................. 44

Section 4.3 Authorization and Approvals...................................................... 45

Section 4.4 Enforceable Obligations.......................................................... 45

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Section 4.5 Financial Statements............................................................. 45

Section 4.6 True and Complete Disclosure..................................................... 45

Section 4.7 Litigation....................................................................... 46

Section 4.8 Use of Proceeds.................................................................. 46

Section 4.9 Investment Company Act........................................................... 46

Section 4.10 Public Utility Holding Company Act............................................... 46

Section 4.11 Taxes............................................................................ 46

Section 4.12 Pension Plans.................................................................... 47

Section 4.13 Condition of Property; Casualties................................................ 48

Section 4.14 Insurance........................................................................ 48

Section 4.15 No Burdensome Restrictions; No Defaults.......................................... 48

Section 4.16 Environmental Condition.......................................................... 48

Section 4.17 Title to Property, Etc........................................................... 49

Section 4.18 Subsidiaries; Corporate Structure................................................ 49

Section 4.19 Labor Relations.................................................................. 49

Section 4.20 Guarantors....................................................................... 49

Section 4.21 Intellectual Property............................................................ 49

Section 4.22 Solvency......................................................................... 50

Section 4.23 Compliance with Laws............................................................. 50

ARTICLE V AFFIRMATIVE COVENANTS..................................................................... 50

Section 5.1 Compliance with Laws, Etc........................................................ 50

Section 5.2 Maintenance of Insurance......................................................... 51

Section 5.3 Preservation of Existence, Etc................................................... 51

Section 5.4 Payment of Taxes, Etc............................................................ 51

Section 5.5 Reporting Requirements........................................................... 51

Section 5.6 Maintenance of Property.......................................................... 54

Section 5.7 Inspection....................................................................... 54

Section 5.8 Use of Proceeds.................................................................. 54

Section 5.9 Nature of Business............................................................... 55

Section 5.10 Books and Records................................................................ 55

Section 5.11 New Subsidiaries................................................................. 55

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ARTICLE VI NEGATIVE COVENANTS........................................................................ 55

Section 6.1 Liens, Etc....................................................................... 55

Section 6.2 Debts, Guaranties and Other Obligations.......................................... 57

Section 6.3 Merger or Consolidation; Asset Sales............................................. 58

Section 6.4 Investments...................................................................... 59

Section 6.5 Transactions With Affiliates..................................................... 61

Section 6.6 Compliance with ERISA............................................................ 61

Section 6.7 Restricted Payments.............................................................. 61

Section 6.8 Maintenance of Ownership of Subsidiaries......................................... 62

Section 6.9 Agreements Restricting Liens and Distributions................................... 62

Section 6.10 Financial Contract Obligations................................................... 62

Section 6.11 Leases........................................................................... 62

Section 6.12 Sale and Leaseback Transactions and other Off-Balance

Sheet Liabilities................................................................ 63

Section 6.13 Limitation on Changes in Fiscal Periods.......................................... 63

Section 6.14 Leverage Ratio................................................................... 63

Section 6.15 Fixed Charge Coverage Ratio...................................................... 63

Section 6.16 Maximum Debt to Capitalization Ratio............................................. 63

Section 6.17 Acquisitions..................................................................... 63

ARTICLE VII EVENTS OF DEFAULT......................................................................... 64

Section 7.1 Events of Default................................................................ 64

Section 7.2 Optional Acceleration of Maturity................................................ 66

Section 7.3 Automatic Acceleration of Maturity............................................... 67

Section 7.4 Non-exclusivity of Remedies...................................................... 67

Section 7.5 Right of Set-off................................................................. 67

Section 7.6 Application of Proceeds.......................................................... 67

ARTICLE VIII THE GUARANTY.............................................................................. 68

Section 8.1 Guaranty......................................................................... 68

Section 8.2 Guaranty Absolute................................................................ 68

Section 8.3 Waiver........................................................................... 69

Section 8.4 Subrogation...................................................................... 69

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ARTICLE IX THE AGENTS AND THE ISSUING LENDERS........................................................ 70

Section 9.1 Appointment; Nature of Relationship.............................................. 70

Section 9.2 Powers........................................................................... 70

Section 9.3 General Immunity................................................................. 71

Section 9.4 No Responsibility for Loans, Recitals, etc....................................... 71

Section 9.5 Action on Instructions of Lenders................................................ 71

Section 9.6 Employment of Agents and Counsel................................................. 71

Section 9.7 Reliance on Documents; Counsel................................................... 72

Section 9.8 Agent's and the Issuing Lenders' Reimbursement and

Indemnification.................................................................. 72

Section 9.9 Notice of Default................................................................ 72

Section 9.10 Rights as a Lender............................................................... 72

Section 9.11 Lender Credit Decision........................................................... 73

Section 9.12 Successor Agent and Issuing Lender............................................... 73

ARTICLE X BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS......................................... 74

Section 10.1 Successors and Assigns........................................................... 74

Section 10.2 Participations................................................................... 74

Section 10.3 Assignments...................................................................... 75

Section 10.4 Dissemination of Information..................................................... 76

ARTICLE XI MISCELLANEOUS............................................................................. 77

Section 11.1 Amendments, Etc.................................................................. 77

Section 11.2 Notices, Etc..................................................................... 77

Section 11.3 No Waiver; Remedies.............................................................. 78

Section 11.4 Costs and Expenses............................................................... 78

Section 11.5 Binding Effect................................................................... 78

Section 11.6 Indemnification.................................................................. 78

Section 11.7 Execution in Counterparts........................................................ 79

Section 11.8 Survival of Representations, etc................................................. 79

Section 11.9 Severability..................................................................... 79

Section 11.10 Usury Not Intended............................................................... 79

Section 11.11 Governing Law.................................................................... 80

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Section 11.12 Consent to Jurisdiction.......................................................... 80

Section 11.13 Waiver of Jury................................................................... 81

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EXHIBITS:

Exhibit A - Form of Assignment and Acceptance

Exhibit B - Form of Commitment Increase Agreement

Exhibit C - Form of Compliance Certificate

Exhibit D - Form of Joinder Agreement

Exhibit E - Form of Note

Exhibit F - Form of Notice of Borrowing

Exhibit G - Form of Notice of Conversion or Continuation

Exhibit H - Form of Request for Issuance of Letter of Credit

SCHEDULES:

Schedule 1 - Notice Information for Lenders

Schedule 1.1 - Joint Ventures

Schedule 1.2 - Certain Existing Letters of Credit

Schedule 4.5 - Off-Balance Sheet Liabilities

Schedule 4.7 - Litigation

Schedule 4.11 - Certain Tax Matters

Schedule 4.12 - Pension Plans

Schedule 4.16 - Environmental Disclosures

Schedule 4.18 - Subsidiaries/Corporate Structure

Schedule 6.1 - Existing Liens

Schedule 6.2 - Existing Debt

Schedule 6.4 - Existing Investments

Schedule 6.9 - Existing Agreements Restricting Liens

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REVOLVING CREDIT AGREEMENT

This Revolving Credit Agreement dated as of December 9, 2003 is among

BWX Technologies, Inc., a Delaware corporation (the "Borrower"), the Guarantors,

the Lenders, and Credit Lyonnais New York Branch, as Administrative Agent for

the Lenders.

The Borrower, the Guarantors, the Lenders, and the Administrative Agent

agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

Section 1.1 Certain Defined Terms. As used in this Agreement, the terms

defined above shall have the meanings set forth above and the following terms

shall have the following meanings (unless otherwise indicated, such meanings to

be equally applicable to both the singular and plural forms of the terms

defined):

"Acquisition" means any transaction, or any series of related

transactions, consummated on or after the date of this Agreement, by which the

Borrower or any of its Subsidiaries (a) acquires any going business concern or

all or substantially all of the assets of any firm, corporation or limited

liability company, or division thereof, whether through the purchase of assets,

merger or otherwise or (b) directly or indirectly acquires (in one transaction

or as the most recent transaction in a series of transactions) at least a

majority (in number of votes) of the securities of a corporation which have

ordinary voting power for the election of directors (other than securities

having such power only by reason of the happening of a contingency) or a

majority (by percentage or voting power) of the outstanding ownership interests

of a partnership or limited liability company; provided, however, that the term

"Acquisition" does not include the mere formation of a Subsidiary by the

Borrower or any of its Subsidiaries.

"Administrative Agent" means CLNY in its capacity as contractual

representative of the Lenders pursuant to Article IX, and any successor

administrative agent pursuant to Section 9.12.

"Affiliate" of any Person means any other Person that, directly or

indirectly, through one or more intermediaries, controls, is controlled by, or

is under common control with, such Person or any Subsidiary of such Person. The

term "control" (including the terms "controlled by" or "under common control

with") 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

ownership of a Control Percentage, by contract or otherwise.

"Agreement" means this Revolving Credit Agreement dated as of December

9, 2003 among the Borrower, the Guarantors, the Lenders, and the Administrative

Agent, as it may be amended or modified and in effect from time to time.

"Alternate Base Rate" means, for any day, a rate of interest per annum

equal to the higher of (a) the Prime Rate in effect for such day and (b) the sum

of the Federal Funds Effective Rate in effect for such day plus 1/2 of 1% per

annum.

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"Annual Report Date" has the meaning set forth in Section 5.5(c).

"Applicable Lending Office" means, with respect to any Lender, the

office, branch, subsidiary, affiliate or correspondent bank of such Lender

listed on Schedule 1 or such other office, branch, subsidiary, affiliate or

correspondent bank as such Lender may from time to time specify in writing to

the Borrower and the Administrative Agent from time to time.

"Applicable Margin" means, at any time with respect to each Type of

Loan, the percentage rate per annum as set forth below for the Level in effect

at such time:

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LEVEL I LEVEL II LEVEL III

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

Eurodollar Loans 1.50% 2.00% 2.50%

Base Rate Loans 0.50% 1.00% 1.50%

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"Arranger" means Credit Lyonnais Securities.

"Assignment and Acceptance" means an assignment and acceptance

agreement substantially in the form of the attached Exhibit A or the form

promulgated by the Loan Syndications and Trading Association, Inc.

"Authorized Officer" means any Responsible Officer or any other

employee of the Borrower designated as an "Authorized Officer" by prior written

notice from the Borrower to the Administrative Agent.

"Base Rate Loan" means a Loan that bears interest as provided in

Section 2.6(a).

"Borrowing" means a borrowing consisting of simultaneous Loans of the

same Type made by each Lender pursuant to Section 2.2(a) or, except for purposes

of Section 3.2, Converted to Loans of a different Type pursuant to Section

2.2(b).

"Borrowing Date" means the date on which any Loan is made or any Letter

of Credit is issued, increased or extended hereunder.

"Business Day" means, (a) with respect to any payment or rate selection

of Eurodollar Loans, a day (other than a Saturday or Sunday) on which banks

generally are open in New York for the conduct of substantially all of their

commercial lending activities and on which dealings in Dollars are carried on in

the London interbank market and (b) for all other purposes, a day (other than a

Saturday or Sunday) on which banks generally are open in New York for the

conduct of substantially all of their commercial lending activities.

"BWICO" means Babcock & Wilcox Investment Company, a Delaware

corporation, or any successors thereto that collectively own all of the issued

and outstanding Capital Stock of the Borrower.

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"BWICO Loan" means the loan made by the Borrower to BWICO pursuant to

the terms of the Loan Agreement dated as of April 3, 2000, between the Borrower

and BWICO, as amended by that certain Amendment No. 1 to Loan Agreement dated as

of July 1, 2000, by that certain Amendment No. 2 to Loan Agreement dated as of

December 31, 2002, and by that certain Amendment No. 3 to Loan Agreement dated

effective as of November 1, 2003.

"Capital Stock" means any and all shares, interests, participations or

other equivalents (however designated) of capital stock of a corporation, any

and all equivalent ownership interests in a Person (other than a corporation),

and any and all warrants, rights or options to purchase any of the foregoing.

"Capitalized Lease" of a Person means any lease of any Property by such

Person as lessee which would, in accordance with GAAP, be required to be

classified and accounted for as a capital lease on the balance sheet of such

Person.

"Capitalized Lease Obligations" of a Person means the amount of the

obligations of such Person under Capitalized Leases which would be shown as a

liability on a balance sheet of such Person prepared in accordance with GAAP.

"Cash Collateral Account" means a special interest bearing cash

collateral account pledged by the Borrower to the Administrative Agent for the

ratable benefit of the Secured Parties containing cash deposited pursuant to

Section 2.7(c), 2.15(e), 7.2 or 7.3 to be maintained at the Administrative

Agent's office in accordance with Section 2.15(g) and bear interest or be

invested in the Administrative Agent's reasonable discretion.

"Cash Equivalents" means (a) marketable direct obligations issued by,

or unconditionally guaranteed by, the United States government or issued by any

agency thereof and backed by the full faith and credit of the United States of

America, in each case maturing within one year from the date of acquisition; (b)

certificates of deposit, time deposits, eurodollar time deposits or overnight

bank deposits having maturities of six months or less from the date of

acquisition issued by, and money market deposit accounts issued or offered by,

any Lender or by any commercial bank organized under the laws of the United

States of America or any state thereof or other jurisdiction thereof having

combined capital and surplus of not less than $250,000,000 (or the equivalent in

any other currency); (c) eurodollar time deposits having maturities of six

months or less from the date of acquisition thereof with any branch or office

located in the United States of any commercial bank organized under the laws of

a country that is a member of the Organization for Economic Cooperation and

Development, and comparable in credit quality to the investments permitted under

the preceding clause (b); (d) commercial paper of an issuer rated at least A-2

by S&P or P-2 by Moody's, or carrying an equivalent rating by a nationally

recognized rating agency, if both of the two named rating agencies cease

publishing ratings of commercial paper issuers generally, and maturing within

270 days from the date of acquisition; (e) repurchase obligations of any Lender

or of any commercial bank satisfying the requirements of clause (b) or (d) of

this definition, having a term of not more than 30 days with respect to

securities issued or fully guaranteed or insured by the United States

government; (f) securities with maturities of one year or less from the date of

acquisition issued or fully guaranteed by any state, commonwealth, territory,

province or other jurisdiction of the United States or any other foreign

country, by any political subdivision or taxing authority of any such state,

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commonwealth, territory, province or other jurisdiction, the securities of which

state, commonwealth, territory, province, other jurisdiction, political

subdivision or taxing authority (as the case may be) are rated at least A by S&P

or A2 by Moody's; (g) securities with maturities of six months or less from the

date of acquisition backed by standby letters of credit issued by any Lender or

any commercial bank satisfying the requirements of clause (b) or (d) of this

definition; (h) to the extent reasonably required in the judgment of the

Borrower in connection with any business conducted by the Borrower, any of its

Subsidiaries or any Joint Venture in the United Kingdom, investments comparable

in credit quality and tenor referred to those in clauses (a) through (g) of this

definition and customarily used for cash management purposes in such

jurisdiction; and (i) shares of money market mutual or similar funds which

invest exclusively in assets satisfying the requirements of clauses (a) through

(g) of this definition or which invest in financial instruments which are

otherwise rated AAA by S&P or Aaa by Moody's.

"Casualty Event" means, with respect to any asset owned by any Person,

(a) any loss or damage to, or any condemnation or taking of, such asset, for

which such Person receives, anticipates recovering or has filed a claim for

Casualty Proceeds or (b) any Lien imposed by any Governmental Authority pursuant

to Environmental Law and that has not been released or bonded within ten

Business Days following the applicable Credit Party's receipt of notice of such

imposition unless such Lien is being contested in good faith and by appropriate

proceedings.

"Casualty Proceeds" means the proceeds of any insurance, condemnation

award or other compensation paid or payable to any Credit Party or the

Administrative Agent in respect of any Casualty Event, less the reasonable fees,

taxes and expenses paid or payable with respect to such proceeds.

"CERCLIS", or the "CERCLA Information System", means the inventory

maintained by the EPA of sites with potential Releases of Hazardous Substances

that have been or may need to be addressed by the CERCLA program.

"CERCLA" means the Comprehensive Environmental Response, Compensation,

and Liability Act of 1980, as amended, state and local analogs, and all rules

and regulations and requirements thereunder in each case as now or hereafter in

effect.

"Change of Control" means any of (a) the acquisition by any Person or

group (within the meaning of Section 13(d)(3) of the Securities Exchange Act of

1934, as amended) (excluding underwriters in the course of their distribution of

voting stock in an underwritten public offering), of beneficial ownership

(within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act

of 1934, as amended) of 30% or more of the voting power of the outstanding

shares of voting stock of MII, (b) the Borrower shall cease to be a direct,

wholly-owned Subsidiary of either (i) BWICO or, (ii) if BWICO ceases to be a

direct, wholly-owned Subsidiary of McDermott, McDermott, (c) McDermott ceases to

be a direct, wholly-owned Subsidiary of MII, (d) 50% or more of the members of

the Board of Directors of the Borrower on any date shall not have been (i)

members of the Board of Directors of the Borrower on the date 12 months prior to

such date or (ii) approved (by recommendation, nomination, election or

otherwise) by Persons who constitute at least a majority of the members of the

Board of Directors of the Borrower as constituted on the date 12 months prior to

such date, (e) all or substantially all of the assets of the Borrower are sold

in a single transaction or series of related

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transactions to any Person or (f) the Borrower merges or consolidates with or

into any other Person, with the effect that immediately after such transaction

the stockholders of the Borrower immediately prior to such transaction hold less

than a majority of the total voting power entitled to vote in the election of

directors, managers or trustees of the Person surviving such transaction.

"CLNY" means Credit Lyonnais New York Branch.

"Closing Date" means the date on which the conditions precedent set

forth in Section 3.1 shall have been satisfied, which date shall not be later

than December 9, 2003.

"Code" means the United States Internal Revenue Code of 1986, as

amended, reformed or otherwise modified from time to time.

"Commitment" means, for each Lender, the amount in Dollars set opposite

such Lender's name on the signature pages of this Agreement as its Commitment,

or, if such Lender has entered into any Assignment and Acceptance or Commitment

Increase Agreement after the Closing Date, the amount set forth for such Lender

as its Commitment in the Assignment and Acceptance delivered to the

Administrative Agent pursuant to Section 10.3(b) or such Commitment Increase

Agreement, as applicable.

"Commitment Increase Agreement" means a Commitment Increase Agreement

executed by a Lender in substantially the form of the attached Exhibit B.

"Compliance Certificate" means a Compliance Certificate signed by a

Responsible Officer in substantially the form of the attached Exhibit C.

"Consolidated Debt" means at any time the Debt of the Borrower and its

Subsidiaries calculated on a consolidated basis as of such time.

"Consolidated EBITDA" means, for any period of determination, (a)

Consolidated Net Income for such period of determination plus (b) to the extent

deducted in determining Consolidated Net Income, Consolidated Interest Expense,

charges against income for foreign, federal, state, and local taxes, and

depreciation and amortization expense for such period minus (c) extraordinary

gains for such period minus (d) any gain realized upon the sale or other

disposition of any assets of the Borrower or any of its Subsidiaries for such

period (other than sales of inventory in the ordinary course of business of the

Borrower or such Subsidiary), all as determined on a consolidated basis in

accordance with GAAP; provided that, "Consolidated EBITDA" shall be (i) reduced

to the extent that Consolidated Net Income for such period includes net income

attributable to Joint Ventures during such period in excess of the actual

distributions received from such Joint Ventures during such period, and (ii)

increased to the extent that actual cash distributions are received from such

Joint Ventures during such period in excess of the portion of Consolidated Net

Income which is attributable to such Joint Ventures during such period.

"Consolidated Funded Debt" means at any time Funded Debt of the

Borrower and its Subsidiaries calculated on a consolidated basis as of such

time.

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"Consolidated Interest Expense" means, for any period, the interest

expense of the Borrower and its Subsidiaries calculated on a consolidated basis

in accordance with GAAP for such period.

"Consolidated Net Income" means, for any period, the net income of the

Borrower and its Subsidiaries calculated on a consolidated basis for such period

after taxes, as determined in accordance with GAAP.

"Consolidated Net Worth" means, at any time, the net worth or total

shareholders equity of the Borrower and its Subsidiaries on a consolidated basis

determined in accordance with GAAP.

"Contingent Obligation" of a Person means any agreement, undertaking or

arrangement by which such Person assumes, guarantees, endorses, contingently

agrees to purchase or provide funds for the payment of, or otherwise becomes or

is contingently liable upon, the obligation or liability of any other Person, or

agrees to maintain the net worth or working capital or other financial condition

of any other Person, or otherwise assures any creditor of such other Person

against loss, including, without limitation, any comfort letter, operating

agreement, take-or-pay contract or the obligations of any such Person as general

partner of a partnership with respect to the liabilities of the partnership.

"Continue", "Continuation", and "Continued" each refers to a

continuation of Loans for an additional Interest Period upon the expiration of

the Interest Period then in effect for such Loans.

"Control Percentage" means, with respect to any Person, the percentage

of the outstanding Capital Stock (including any options, warrants or similar

rights to purchase such Capital Stock) of such Person having ordinary voting

power which gives the direct or indirect holder of such Capital Stock the power

to elect a majority of the Board of Directors (or other applicable governing

body) of such Person.

"Controlled Group" means all members of a controlled group of

corporations or other business entities and all trades (whether or not

incorporated) under common control which, together with the Borrower or any of

its Subsidiaries, are treated as a single employer under Section 414 of the

Code.

"Convert", "Conversion", and "Converted" each refers to a conversion of

Loans of one Type into Loans of another Type pursuant to Section 2.2(b).

"Credit Documents" means this Agreement, any Notes issued pursuant to

Section 2.2(g), the Letter of Credit Documents, any Joinder Agreement and each

other agreement, instrument or document executed by any Credit Party or any of

their respective officers at any time in connection with this Agreement.

"Credit Party" means the Borrower and any Guarantor.

"Debt," for any Person, means without duplication:

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(a) indebtedness of such Person for borrowed money (but excluding

accounts payable arising in the ordinary course of such Person's business that

shall not remain unpaid for a period of more than 90 days after such liabilities

become due and payable);

(b) obligations of such Person evidenced by bonds, debentures, notes or

other similar instruments;

property or services (other than accounts payable arising in the ordinary course

of such Person's business that shall not remain unpaid for a period of more than

90 days after such liabilities become due and payable);

(d) Capitalized Lease Obligations;

(e) all obligations of such Person in respect of letters of credit,

bank guarantees or similar instruments which are issued upon the application of

such Person or upon which such Person is an account party or for which such

Person is in any way liable;

(f) all obligations of such Person to purchase securities or other

Property arising out of or in connection with the sale of the same or

substantially similar securities or Property;

(g) Net Mark-to-Market Exposure of Financial Contracts;

(h) (i) the aggregate liquidation value of all Preferred Interests of

such Person that are mandatorily redeemable other than for (A) the common stock

issued by such Person, (B) other common ownership interests issued by such

Person, or (C) other Preferred Interests issued by such Person that (1) are not

mandatorily redeemable (except as permitted by clauses (A) and (B) above), and

(2) which do not require the payment of a mandatory cash dividend or other

return on capital payable in cash (except at the redemption date for such

Preferred Interests), or that may be put by the holder to such Person for

consideration other than the common stock or other common ownership interests,

as applicable, of such Person, and (ii) the aggregate liquidation value of all

Preferred Interests of such Person that require the payment of a mandatory cash

dividend or other return on capital payable in cash (except at the redemption

date for such Preferred Interests);

(i) all obligations of such Person in the form of earn-out payments,

profit payment liabilities or other similar amounts owing in respect of

Acquisitions or similar transactions;

(j) all Off-Balance Sheet Liabilities; provided that, solely for the

purpose of calculating compliance with the covenants set forth in Sections 6.14

through 6.16, Off-Balance Sheet Liabilities shall not constitute "Debt" to the

extent, and only to the extent, such Off-Balance Sheet Liabilities constitute

Non-Recourse Debt;

(k) indebtedness or obligations of others, whether or not assumed,

secured by Liens or payable out of the proceeds or production from Property on

or in respect of any Property now or hereafter owned or acquired by such Person,

the amount of such Debt being deemed to be the lesser of the value of such

Property and the amount of the obligation so secured; and

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(l) Contingent Obligations for the Debt of another Person referred to

in clauses (a) through (k) of this definition.

"Debt Incurrence" means any issuance for cash or Cash Equivalents by

the Borrower or any of its Subsidiaries of any Debt after the Closing Date not

otherwise permitted pursuant to Section 6.2.

"Debt Incurrence Proceeds" means, with respect to any Debt Incurrence,

all cash and Cash Equivalents received by the Borrower or any of its

Subsidiaries from such Debt Incurrence after payment of, or provision for, all

brokerage commissions and other reasonable out-of-pocket fees and expenses

actually incurred.

"Default" means (a) an Event of Default or (b) any event or condition

which with notice or lapse of time or both would, unless cured or waived, become

an Event of Default.

"Dollars" and "$" means the lawful money of the United States of

America.

"Eligible Assignee" means (a) a Lender, (b) an Affiliate of a Lender,

or (c) a commercial bank or other financial institution that (i) is approved by

the Administrative Agent and the Issuing Lenders, and, so long as no Default

exists, is approved by the Borrower, in either case, such approval not to be

unreasonably withheld, (ii) provides evidence reasonably satisfactory to the

Administrative Agent of its compliance with Section 313 of The USA Patriot

Certification Act, (iii) is organized under the laws of the United States or any

state thereof or is organized under the laws of any country which is a member of

the Organization for Economic Cooperation and Development, and (iv) has a

combined capital, surplus and undivided profits of at least $250,000,000 (or the

U.S. Dollar equivalent in any other currency); provided that, unless an Event of

Default under Section 7.1(a) shall have occurred and be continuing or all or any

portion of the Obligations have been accelerated, no Person shall be deemed to

be an "Eligible Assignee" unless such Person shall also be an institution

entitled to receive (provided all forms, if any, are delivered to the extent

required by Section 2.11(e)), upon the effective date of an assignment in

accordance with Section 10.3, all payments under this Agreement without

deduction or withholding of any United States federal income taxes.

"Environment" or "Environmental" shall have the meanings set forth in

42 U.S.C. Section 9601(8) (1988).

"Environmental Claim" means any third party (including Governmental

Authorities) action, lawsuit, claim, regulatory action or proceeding, order,

decree, consent agreement or notice of potential or actual responsibility or

violation which seeks to impose liability under any Environmental Law.

"Environmental Law" means all Legal Requirements applicable to the

assets or operations of the Borrower or any of its Subsidiaries relating to, or

in connection with, the protection of the Environment, including, without

limitation, CERCLA, and the Federal Water Pollution Control Act of 1972 (as

applicable), relating to (a) pollution, contamination, injury, destruction,

loss, protection, cleanup, reclamation or restoration of the air, surface water,

groundwater, land surface or subsurface strata, or other natural resources; (b)

solid, gaseous or liquid waste generation, treatment, processing, recycling,

reclamation, cleanup, storage, disposal

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<PAGE>

or transportation; (c) exposure to pollutants, contaminants, hazardous, or toxic

substances, materials or wastes; or (d) the manufacture, processing, handling,

transportation, distribution in commerce, use, storage or disposal of hazardous,

or toxic substances, materials or wastes.

"Environmental Permit" means any permit, license, order, approval or

other authorization under any Environmental Law.

"EPA" means the United States Environmental Protection Agency or any

successor thereto.

"Equity Issuance" means any issuance of equity securities (including

any preferred equity securities) by the Borrower or any of its Subsidiaries

other than equity securities issued (a) to the Borrower or one of its

Subsidiaries, (b) to BWICO, so long as BWICO is a wholly-owned direct Subsidiary

of McDermott and McDermott is a wholly-owned Subsidiary of MII, (c) to

McDermott, if the Borrower is a wholly-owned Subsidiary of McDermott and

McDermott is a wholly-owned Subsidiary of MII, or (d) pursuant to employee or

director and officer stock option plans in the ordinary course of business.

"Equity Issuance Proceeds" means, with respect to any Equity Issuance,

all cash and Cash Equivalents received by the Borrower or any of its

Subsidiaries from such Equity Issuance after payment of, or provision for, all

brokerage commissions and other reasonable out-of-pocket fees and expenses

actually incurred.

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

amended from time-to-time.

"Eurocurrency Liabilities" has the meaning assigned to that term in

Regulation D.

"Eurodollar Loan" means a Loan that bears interest based on the

Eurodollar Rate.

"Eurodollar Rate" means, with respect to a Eurodollar Loan for the

relevant Interest Period, the rate per annum (rounded upward, if not an integral

multiple of 1/100 of 1%, to the nearest 1/100 of 1% per annum) appearing on

Telerate Page 3750 (or any successor page) as the London interbank offered rate

for deposits in Dollars as of 11:00 a.m. (London, England time) two Business

Days prior to the first day of such Interest Period, and having a maturity equal

to such Interest Period, provided that (a) if for any reason the rate does not

appear on Telerate Page 3750 (or any successor page), the applicable Eurodollar

Rate for the relevant Interest Period shall instead be the applicable British

Bankers' Association Interest Settlement Rate (rounded upward, if not an

integral multiple of 1/100 of 1%, to the nearest 1/100 of 1% per annum) for

deposits in Dollars as reported by any other generally recognized financial

information service selected by the Administrative Agent as of 11:00 a.m.

(London time) two Business Days prior to the first day of such Interest Period,

and having a maturity equal to such Interest Period, and (b) if no such British

Bankers' Association Interest Settlement Rate for deposits in Dollars is

available to the Administrative Agent, the applicable Eurodollar Rate for the

relevant Interest Period shall instead be the rate determined by the

Administrative Agent to be the rate at which CLNY or one of its Affiliate banks

offers to place deposits in Dollars with prime banks in the London interbank

market at approximately 11:00 a.m. (London time) two Business Days prior to the

first

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<PAGE>

day of such Interest Period, in the approximate amount of CLNY's relevant

Eurodollar Loan and having a maturity equal to such Interest Period.

"Eurodollar Rate Reserve Percentage" of any Lender for the Interest

Period for any Eurodollar Loan means the reserve percentage applicable during

such Interest Period (or if more than one such percentage shall be so

applicable, the daily average of such percentages for those days in such

Interest Period during which any such percentage shall be so applicable) under

regulations issued from time-to-time by the Federal Reserve Board for

determining the maximum reserve requirement (including, without limitation, any

emergency, supplemental or other marginal reserve requirement) for such Lender

with respect to liabilities or assets consisting of or including Eurocurrency

Liabilities having a term equal to such Interest Period.

"Events of Default" has the meaning set forth in Section 7.1.

"Existing Credit Agreement" means the Omnibus Credit Agreement dated as

of February 10, 2003 among the Borrower, J. Ray McDermott, S.A., J. Ray

McDermott Holdings, Inc., and J. Ray McDermott, Inc., as borrowers, MII, as

guarantor, the lenders named therein, and the agents and issuing lenders named

therein.

"Existing Letters of Credit" means the letters of credit set forth on

the attached Schedule 1.2 issued pursuant to the Existing Credit Agreement.

"Federal Funds Effective Rate" means, for any day, a fluctuating

interest rate per annum equal to the weighted average of the rates on overnight

Federal funds transactions with members of the Federal Reserve System arranged

by Federal funds brokers on such day, as published for such day (or, if such day

is not a Business Day, for the immediately 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 at approximately

11:00 a.m. (New York time) on such day on such transactions received by the

Administrative Agent from three Federal funds brokers of recognized standing

selected by it.

"Federal Reserve Board" means the Board of Governors of the Federal

Reserve System or any of its successors.

"Financial Contract" of a Person means (a) any exchange-traded or

over-the-counter futures, forward, swap or option contract or other financial

instrument with similar characteristics or (b) any Rate Hedging Agreement.

"Financial Contract Obligations" of a Person means any and all

obligations of such Person, whether absolute or contingent and howsoever and

whensoever created, arising, evidenced or acquired (including all renewals,

extensions and modifications thereof and substitutions therefor), under (a) any

and all Financial Contracts to which such Person is a party or is otherwise

bound, and (b) any and all cancellations, buy backs, reversals, terminations or

assignments of any Financial Contract to which such Person is a party or is

otherwise bound.

"Financial Statements" means the audited consolidated balance sheet of

the Borrower and its consolidated Subsidiaries as at December 31, 2001 and as at

December 31, 2002, and the related audited consolidated statements of income,

cash flow, and retained earnings of the

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<PAGE>

Borrower and its consolidated Subsidiaries for the fiscal years then ended and

referred to in Section 4.5, copies of which have been delivered to the

Administrative Agent and the Lenders.

"Fixed Charge Coverage Ratio" has the meaning set forth in Section

6.15.

"Fund," "Trust Fund," or "Superfund" means the Hazardous Substance

Response Trust Fund, established pursuant to 42 U.S.C. Section 9631 (1988) and

the Post-closure Liability Trust Fund, established pursuant to 42 U.S.C. Section

9641 (1988), which statutory provisions have been amended or repealed by the

Superfunds Amendments and Reauthorization Act of 1986, and the "Fund," "Trust

Fund," or "Superfund" that are now maintained pursuant to Section 9507 of the

Code.

"Funded Debt" means all Debt of the types described in clauses (a),

(b), (d), and (h) of the definition of "Debt".

"GAAP" means with respect to any financial statements of the Borrower

or any of its Subsidiaries, or calculations related to such financial statements

of the Borrower or any of its Subsidiaries, United States generally accepted

accounting principles as in effect from time-to-time applied on a basis

consistent with the requirements of Section 1.3.

"Governmental Authority" means, any foreign, supranational, national,

state or provincial governmental authority (or any political subdivision

thereof), any governmental or regulatory agency, department, commission, board,

bureau, authority or instrumentality lawfully entitled to exercise any

executive, judicial, legislative, police, regulatory or taxing authority or

power or any government court, in each case, having jurisdiction over such

Person or such Person's Property in connection with such subject.

"Governmental Proceedings" means any action or proceedings by or before

any Governmental Authority, including, without limitation, the promulgation,

enactment or entry of any Legal Requirement.

"Guarantors" means (a) BWXT Services, Inc., a Delaware corporation, and

BWXT Federal Services, Inc., a Delaware corporation; and (b) each Subsidiary of

the Borrower that becomes a guarantor of all or a portion of the Obligations and

which has entered into a Joinder Agreement substantially in the form of the

attached Exhibit D.

"Hazardous Substance" means the substances identified as such pursuant

to CERCLA and those regulated under any other Environmental Law, including

without limitation pollutants, contaminants, petroleum, petroleum products,

radionuclides, radioactive materials, and medical and infectious waste.

"Hazardous Waste" means the substances regulated as such pursuant to

any Environmental Law.

"Immaterial Subsidiaries" has the meaning set forth in Section 6.4(f).

"Insurance Policies" includes all insurance policies (and all rights

under such insurance policies) required to be obtained pursuant to Section

5.2(a).

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"Intercompany Debt" means all Debt owing by any Credit Party to any

other Credit Party or any of its Subsidiaries.

"Interest Period" means, for each Eurodollar Loan, the period

commencing on the date of such Eurodollar Loan or the date of the Conversion of

any existing Base Rate Loan into such Eurodollar Loan and ending on the last day

of the period selected by the Borrower pursuant to the provisions below and

Section 2.2 and, thereafter, each subsequent period commencing on the last day

of the immediately preceding Interest Period and ending on the last day of the

period selected by the Borrower pursuant to the provisions below and Section

2.2. The duration of each such Interest Period shall be one, two, three, or six

months (or such other period that is acceptable to the Lenders), in each case as

the Borrower may select; provided, however, that:

(a) Interest Periods commencing on the same date for Loans by each

Lender comprising part of the same Borrowing shall be of the same duration;

(b) whenever the last day of any Interest Period would otherwise occur

on a day other than a Business Day, the last day of such Interest Period shall

be extended to occur on the next succeeding Business Day, provided that if such

extension would cause the last day of such Interest Period to occur in the next

following calendar month, the last day of such Interest Period shall occur on

the next preceding Business Day;

calendar month (or on a day for which there is no numerically corresponding day

in the calendar month at the end of such Interest Period) shall end on the last

Business Day of the calendar month in which it would have ended if there were a

numerically corresponding day in such calendar month;

(d) the Borrower may not select any Interest Period for any Loan which

ends after the Maturity Date; and

(e) at the Administrative Agent's sole discretion, the Borrower may not

select any Interest Period for any Eurodollar Loan longer than one month until

the satisfactory completion of the syndication of this Agreement by the

Arranger.

"Interim Financial Statements" means the unaudited balance sheet of the

Borrower and its consolidated Subsidiaries dated September 30, 2003, and the

related unaudited statements of income, cash flow, and retained earnings of the

Borrower and its consolidated Subsidiaries for the nine months then ended and

referred to in Section 4.5, copies of which have been delivered to the

Administrative Agent and the Lenders.

"Investment" of any Person means (a) any loan, advance (other than

commission, travel and similar advances to officers and employees, drawing

accounts and similar expenditures or prepayments or deposits made in the

ordinary course of business) or extension of credit that constitutes Debt of the

Person to whom it is extended or contribution of capital by such Person; (b) the

making of any Acquisition by such Person; (c) stocks, bonds, mutual funds,

partnership interests, promissory notes (including structured promissory notes),

debentures or other securities owned by such Person; and (d) any deposit

accounts and certificates of deposit owned by such Person; provided, however,

that "Investments" shall not include capital expenditures of such Person

determined in accordance with GAAP.

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"Issuing Lender" means CLNY, Scotiabank and any successor Issuing

Lender[s] pursuant to Section 9.12, and "Issuing Lenders" shall mean all such

issuing lenders collectively.

"Joint Venture" shall mean each Person listed on Schedule 1.1 hereto,

as such schedule may be supplemented from time to time to add additional Persons

thereto (but in no event shall the Borrower, any other Credit Party or any other

direct or indirect wholly-owned subsidiary of the Borrower be considered a

"Joint Venture"); provided that, (a) any such additional Person is organized for

the purpose of (i) performing work for the United States of America and its

agencies or for any other governments or those government's agencies or (ii)

working as a subcontractor to a prime contractor or other subcontractor

performing work described in the preceding clause (i), and (b) the Investment by

the Borrower or any of its Subsidiaries in such Person shall otherwise be

permitted by this Agreement.

"Legal Requirement" means, as to any Person, any law, statute,

ordinance, decree, award, requirement, order, writ, judgment, injunction, rule,

regulation (or official interpretation of any of the foregoing) of, and the

terms of any license or permit issued by, any Governmental Authority which is

binding on such Person.

"Lenders" means the lenders listed on the signature pages of this

Agreement and each Purchaser that shall become a party to this Agreement

pursuant to Article X.

"Letter of Credit" means (a) standby letters of credit and (b) if the

applicable Issuing Lender in its sole reasonable discretion determines that it

is able to issue bank guaranties, bank guaranties which guarantee obligations

which are not covered by Letters of Credit, in each case issued under the

Commitments and subject to this Agreement and shall expressly include the

Existing Letters of Credit which are described in Parts A and B of Schedule 1.2

(which Existing Letters of Credit under Parts A and B of such Schedule 1.2

shall, as of the Closing Date, be deemed issued pursuant to the Commitments and

shall constitute a portion of the Letter of Credit Exposure).

"Letter of Credit Documents" means, with respect to any Letter of

Credit, such Letter of Credit and any agreements, documents, and instruments

entered into to document such Letter of Credit or presented to the applicable

Issuing Lender in order to effectuate payment under such Letter of Credit.

"Letter of Credit Exposure" means, at any time, the sum of (a) the

aggregate undrawn maximum face amount of each Letter of Credit at such time and

(b) the aggregate unpaid amount of all Reimbursement Obligations owing with

respect to such Letters of Credit at such time minus the amount of any cash

collateral held by the Administrative Agent in the Cash Collateral Account at

such time.

"Letter of Credit Obligations" means any obligations of the Borrower

under this Agreement in connection with the Letters of Credit.

"Level I, Level II, and Level III", and individually, a "Level", shall

mean the level determined by the Leverage Ratio as of the last day of the

immediately preceding fiscal quarter:

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Level Leverage Ratio

Level I <1.00

Level II > than = 1.00 and < 1.50

Level III > than = 1.50

For purposes of calculating the Applicable Margin, the Level (a) shall

be deemed to be Level II from the date of this Agreement until the date

("Initial Margin Date") that is the earlier of (i) the date the Compliance

Certificate for the December 31, 2003 financial statements is received by the

Administrative Agent, and (ii) the date such Compliance Certificate is required

to be delivered to the Administrative Agent, and (b) shall thereafter be

determined from the financial statements of the Borrower and its Subsidiaries

most recently delivered pursuant to Section 5.5 and certified to the

Administrative Agent and the Lenders in the Compliance Certificate required to

be delivered by the Borrower in connection with such financial statements

pursuant to Section 5.5(d), with any such changes in the Applicable Margin

occurring after the Initial Margin Date being effective as of the earlier of (i)

the date the applicable Compliance Certificate is received by the Administrative

Agent and (ii) the date the applicable Compliance Certificate is required to be

delivered. If at any time the Company fails to deliver such financial statements

and Compliance Certificate after the Initial Margin Date within the times

specified in Section 5.5, the Level shall be deemed to be Level III until the

Borrower delivers such financial statements and the related Compliance

Certificate to the Administrative Agent and the Lenders.

"Leverage Ratio" means, for the Borrower and its Subsidiaries on a

consolidated basis, as of the end of any fiscal quarter, the ratio of (a)

Consolidated Debt as of such fiscal quarter end to (b) Consolidated EBITDA for

the four fiscal quarter period then ended.

"Lien" means any mortgage, lien (statutory or other), pledge,

assignment, charge, deed of trust, security interest, hypothecation, preference,

deposit arrangement, encumbrance, priority or other security arrangement or

preferential arrangement of any kind or nature whatsoever to secure or provide

for the payment of any obligation of any Person, whether arising by contract,

operation of law or otherwise (including, without limitation, the interest of a

vendor or lessor under any conditional sale agreement, synthetic lease,

Capitalized Lease or other title retention agreement having substantially the

same economic effect as the foregoing).

"Loan" means a loan by a Lender to the Borrower as part of a Borrowing

and refers to a Base Rate Loan or a Eurodollar Loan.

"Material Adverse Change" shall mean (a) a material adverse change

since September 30, 2003 in the business, Property, condition (financial or

otherwise) or results of operations of the Borrower and its Subsidiaries, taken

as a whole, (b) the occurrence and continuance of any event or circumstance

which could reasonably be expected to have a material adverse effect on any

Credit Party's ability to perform its obligations under this Agreement, any Note

or any other Credit Document to which it is a party, or (c) a material adverse

effect on the validity or enforceability against any Credit Party of any of the

Credit Documents or the rights or remedies of the Administrative Agent or the

Lenders thereunder.

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"Material Subsidiary" means any Subsidiary of the Borrower that (a) has

assets that constitute more than 5% of the combined GAAP value of the assets of

the Borrower and its Subsidiaries, inclusive of the subject Subsidiary, on a

consolidated basis at such time, (b) has contributed more than 5% of the

Consolidated EBITDA of the Borrower during any historical four-fiscal quarter

period, or (c) would, with respect to any new Person acquired by the Borrower,

contribute more than 5% of the Consolidated EBITDA on a pro forma basis for the

four-fiscal quarter period then ended, and "Material Subsidiaries" means all

such Subsidiaries collectively.

"Maturity Date" means the earlier of (i) December 9, 2006 and (ii) the

earlier termination in whole of the Commitments pursuant to Section 2.4 or

Article VII.

"Maximum Rate" means the maximum nonusurious interest rate under all

applicable laws (determined under such laws after giving effect to any items

which are required by such laws to be construed as interest in making such

determination, including without limitation if required by such laws, certain

fees and other costs).

"McDermott" means McDermott Incorporated, a Delaware corporation.

"MII" means McDermott International, Inc., a Panamanian corporation.

"MII Subordinated Loan" means the $25,000,000 subordinated loan made by

MII to the Borrower pursuant to the terms of the Subordinated Loan Agreement

dated as of February 10, 2003 between MII and the Borrower.

"Moody's" means Moody's Investors Service, Inc. or any successor

thereto that is a national credit rating organization.

"Multiemployer Plan" means an employee benefit plan maintained pursuant

to a collective bargaining agreement or any other arrangement to which the

Borrower or any member of the Controlled Group is a party to which more than one

employer (other than the Borrower and the other members of the Controlled Group)

is obligated to make contributions.

"National Priority List" means the list compiled by the EPA of sites

with uncontrolled Hazardous Substance Releases deemed by EPA to be priorities

for further evaluation and cleanup based on the severity of hazards associated

with those Releases.

"Net Cash Proceeds" means, with respect to any Asset Sale, all cash and

Cash Equivalents received by the Borrower or any of its Subsidiaries from such

Asset Sale after payment of, or provision for, all taxes, commissions and other

reasonable out-of-pocket fees and expenses actually incurred.

"Net Mark-to-Market Exposure" of a Person means, as of any date of

determination, the aggregate net obligations of such Person under its Financial

Contracts in an amount equal to the sum of (i) the termination value of any such

Financial Contract that has terminated and (ii) the marked-to-market value of

any such Financial Contract that has not terminated, determined on the basis of

readily available quotations provided by any recognized dealer in such Financial

Contract.

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"Non-Recourse Debt" means Debt incurred in connection with the

financing of an operating or construction project which will be serviced solely

through the revenues of the project being financed and the obligees of which

will have recourse for such Debt solely against such revenues, the assets

comprising such project and, if applicable, a Joint Venture; provided that,

"Non-Recourse Debt" shall in no event include any such Debt which has recourse

to the Borrower or any other Credit Party or any of their respective assets or

revenues.

"Note" means a promissory note of the Borrower payable to the order of

any Lender, in substantially the form of the attached Exhibit E, evidencing

indebtedness of the Borrower to such Lender resulting from Loans owing to such

Lender.

"Notice of Borrowing" means a notice of borrowing in the form of the

attached Exhibit F signed by an Authorized Officer of the Borrower.

"Notice of Conversion or Continuation" means a notice of conversion or

continuation in the form of the attached Exhibit G signed by an Authorized

Officer of the Borrower.

"Obligations" means all unpaid principal of the Loans, unpaid interest

on the Loans, all accrued and unpaid fees and all expenses, reimbursements,

indemnities and other obligations and amounts payable by the Credit Parties to

the Administrative Agent or the Lenders under the Credit Documents.

"Off-Balance Sheet Liability" of a Person means (a) any repurchase

obligation or liability of such Person with respect to accounts or notes

receivable sold by such Person, (b) Synthetic Lease Obligations, (c) any

obligations owing in respect of surety bonds or similar instruments, or (d) any

obligation arising with respect to any other transaction which is the functional

equivalent of or takes the place of borrowing but which does not constitute a

liability on the balance sheets of such Person (but, for the avoidance of doubt,

excluding any Operating Leases).

"Operating Lease" of a Person means any lease of Property (other than a

Capitalized Lease or an Off-Balance Sheet Liability) by such Person as lessee.

"Participants" has the meaning set forth in Section 10.2(a).

"PBGC" means the Pension Benefit Guaranty Corporation or any entity

succeeding to any or all of its functions under ERISA.

"Permitted Liens" has the meaning set forth in Section 6.1.

"Person" means an individual, partnership, limited liability

partnership, limited liability company, corporation (including a business

trust), joint stock company, enterprise, trust, unincorporated association,

joint venture or other entity, or a government or any political subdivision or

agency, department or instrumentality thereof or any trustee, receiver,

custodian or similar official.

"Plan" means an employee benefit plan (other than a Multiemployer Plan)

which is covered by Title IV of ERISA or subject to the minimum funding

standards under Section 412 of

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the Code as to which the Borrower or any member of the Controlled Group may have

any liability.

"Preferred Interests" means, as applied to any Person, shares or other

ownership interests of such Person which shall be entitled to preference or

priority over any other shares or other ownership interests of such Person in

respect of either the payment of dividends or distributions, as applicable, or

the distribution of assets upon liquidation.

"Price-Anderson Act" means The Price-Anderson Act set forth in 42

U.S.C. Section 2210.

"Prime Rate" means a fluctuating rate of interest per annum as shall be

in effect from time-to-time equal to the prime rate of interest publicly

announced by the Administrative Agent from time to time as its prime rate,

whether or not the Borrower has notice thereof, when and as said prime rate

changes.

"Property" of any Person means any interest of such Person in any

property or asset (whether real, personal or mixed, tangible or intangible).

"Pro Rata Share" means, at any time with respect to any Lender, (a)

before the Commitments terminate, the ratio (expressed as a percentage) of such

Lender's Commitments at such time to the aggregate Commitments at such time, and

(b) thereafter, the ratio (expressed as a percentage) of such Lender's aggregate

outstanding Loans and aggregate outstanding participation interest in the Letter

of Credit Exposure at such time to the aggregate outstanding Loans of all the

Lenders and Letter of Credit Exposure at such time.

"Purchaser" has the meaning set forth in Section 10.3(a).

"Quarterly Report Date" has the meaning set forth in Section 5.5(b).

"Rate Hedging Agreement" means an agreement, device or arrangement

providing for payments which are related to fluctuations of interest rates,

exchange rates or forward rates, including, but not limited to,

dollar-denominated or cross-currency interest rate exchange agreements, forward

currency exchange agreements, interest rate cap or collar protection agreements,

forward rate currency or interest rate options, puts or warrants.

"Regulations T, U, X and D" means, respectively, Regulations T, U, X,

and D of the Federal Reserve Board, in each case as the same is from

time-to-time in effect, and all official rulings and interpretations thereunder

or thereof.

"Reimbursement Obligations" means all of the payment obligations of the

Borrower set forth in Section 2.15(c).

"Release" shall have the meaning set forth in CERCLA or under any other

Environmental Law.

"Reportable Event" means a reportable event as defined in Section 4043

of ERISA and the regulations issued under such section.

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"Required Lenders" means, at any time, (a) before the Commitments

terminate, Lenders holding at least 66.7% of the then aggregate Commitments and

(b) thereafter, Lenders having at least 66.7% of the aggregate unpaid principal

amount of the Loans and participation interests in the Letter of Credit Exposure

at such time.

"Response" shall have the meaning set forth in CERCLA or under any

other Environmental Law.

"Responsible Officer" means, the Chief Executive Officer, President,

Chief Financial Officer, Controller, Treasurer or Secretary of the Borrower.

"Restricted Payment" means (a) the declaration or making by the

Borrower or any of its Subsidiaries of any dividends or other distributions (in

cash, property, or otherwise) on, or any payment for the purchase, redemption or

other acquisition of, any shares of any Capital Stock of such Person, other than

dividends payable in such Person's Capital Stock, (b) the making by the Borrower

or any of its Subsidiaries of any direct or indirect payment (scheduled or

otherwise) in respect of the principal of any Subordinated Debt, and (c) any

defeasance or covenant defeasance, purchase, redemption, retirement or other

acquisition by the Borrower or any of its Subsidiaries in respect of

Subordinated Debt of such Person.

"S&P" means Standard & Poor's Rating Agency Group, a division of McGraw

Hill Companies, Inc., or any successor thereto that is a national credit rating

organization.

"Scotiabank" means The Bank of Nova Scotia.

"SEC" means the Securities and Exchange Commission, and any successor

thereto.

"Secured Parties" means the Administrative Agent and the Lenders.

"Settlement Agreement" means the proposed Settlement Agreement by and

among MII, McDermott, BWICO, The Babcock and Wilcox Company, Diamond Power

International, Inc., Americon, Inc., Babcock & Wilcox Construction Co., Inc.,

the Asbestos Claimants Committee, the Legal Representative for Future

Asbestos-Related Claimants, the Asbestos PI Trust, the Asbestos PD Trust, and

the Apollo/Parks Township Trust (as such terms are described therein), which

Settlement Agreement has been filed in connection with the Third Amended and

Restated Joint Plan of Reorganization filed in the Chapter 11 Proceedings

involving The Babcock and Wilcox Company.

"Subordinated Debt" means any Debt of the Borrower or any of its

Subsidiaries that is subordinated to their respective obligations under the

Credit Documents.

"Subsidiary" of a Person means any corporation, association,

partnership or other business entity of which more than 50% of the outstanding

shares of Capital Stock (or other equivalent interests) having by the terms

thereof ordinary voting power under ordinary circumstances to elect a majority

of the board of directors or Persons performing similar functions (or, if there

are no such directors or Persons, having general voting power) of such entity

(irrespective of whether at the time Capital Stock (or other equivalent

interests) of any other class or classes of such entity shall or might have

voting power upon the occurrence of any

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contingency) is at the time directly or indirectly owned or controlled by such

Person, by such Person and one or more Subsidiaries of such Person or by one or

more Subsidiaries of such Person; provided, however, that the term "Subsidiary"

shall not include any now or hereafter existing Joint Venture.

"Synthetic Lease Obligations" means an arrangement treated as an

operating lease for financial accounting purposes and a financing lease for tax

purposes.

"Tax Group" has the meaning set forth in Section 4.11.

"Taxes" has the meaning set forth in Section 2.11(a).

"Termination Event" means (a) the occurrence of a Reportable Event with

respect to a Plan, as described in Section 4043 of ERISA and the regulations

issued thereunder (other than a Reportable Event not subject to the provision

for 30-day notice to the PBGC under such regulations), (b) the withdrawal of any

Credit Party or any of its Affiliates from a Plan during a plan year in which it

was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, (c) the

giving of a notice of intent to terminate a Plan under Section 4041(c) of ERISA,

(d) the institution of proceedings to terminate a Plan by the PBGC, or (e) any

other event or condition which constitutes grounds under Section 4042 of ERISA

for the termination of, or the appointment of a trustee to administer, any Plan.

"Total Capitalization" shall mean, at any time, the sum of Consolidated

Funded Debt at such time and Consolidated Net Worth at such time.

"Transferee" has the meaning set forth in Section 10.4.

"Type" has the meaning set forth in Section 1.4.

Section 1.2 Computation of Time Periods. In this Agreement in the

computation of periods of time from a specified date to a later specified date,

the word "from" means "from and including" and the words "to" and "until" each

means "to but excluding".

Section 1.3 Accounting Terms.

(a) Except as otherwise expressly provided herein, all accounting terms

used herein shall be interpreted, as of any time, using GAAP accounting policies

and practices and financial reference periods that are in effect as of the end

of the period covered by the most recent financial statements delivered pursuant

to Section 5.5 as of such time.

(b) Any calculation made at any time for the purposes of determining

compliance with Sections 6.14 through 6.16 of this Agreement shall be adjusted

to reflect the basis upon which the most recent financial statements delivered

pursuant to Section 5.5 as of such time were prepared.

herein shall, unless expressly provided otherwise, when referring to any Person,

refer to such Person on a consolidated basis and mean such Person and its

consolidated subsidiaries.

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Section 1.4 Types of Loans. Loans are distinguished by "Type". The

"Type" of a Loan refers to the determination whether such Loan is a Eurodollar

Loan or a Base Rate Loan, each of which constitutes a Type.

Section 1.5 Miscellaneous. Article, Section, Schedule and Exhibit

references are to Articles and Sections of and Schedules and Exhibits to this

Agreement, unless otherwise specified. All references to instruments, documents,

contracts, and agreements are references to such instruments, documents,

contracts, and agreements as the same may be amended, supplemented, and

otherwise modified from time to time, unless otherwise specified.

ARTICLE II

THE LOANS

Section 2.1 The Loans.

(a) Loans Generally. Each Lender having a Commitment severally agrees,

on the terms and conditions set forth in this Agreement, to make Loans to the

Borrower in Dollars from time-to-time on any Business Day during the period from

the Closing Date until the last Business Day before the Maturity Date; provided

that, (i) the sum of (A) the aggregate outstanding principal amount of the Loans

plus (B) the Letter of Credit Exposure may not exceed at any time the aggregate

amount of the Commitments, and (ii) the aggregate principal amount of such Loans

may not exceed $100,000,000. Each Borrowing shall be in an aggregate amount not

less than $1,000,000.00 and in integral multiples of $500,000.00 in excess

thereof and shall consist of Loans of the same Type made on the same day by the

Lenders ratably according to their respective Commitments. Within the limits of

each Lender's Commitment, the Borrower may from time-to-time borrow, prepay

pursuant to Section 2.7(b) and reborrow under this Section 2.1(a).

(b) Optional Increase in Commitments. At any time on or before the

six-month anniversary of the Closing Date, the Borrower may, at its option and

subject to the conditions described in this Section, increase the aggregate

Commitments by adding to this Agreement one or more commercial banks or other

financial institutions (who shall, upon completion of the requirements stated in

this Section 2.1(b), constitute Lenders hereunder), or by allowing one or more

Lenders to increase their Commitments hereunder, so that such added and

increased Commitments shall equal the increase in aggregate Commitments

effectuated pursuant to this Section 2.1(b); provided that, without the consent

of all the Lenders, no increase in aggregate Commitments pursuant to this

Section 2.1(b) shall result in the aggregate Commitments exceeding $150,000,000

less the aggregate amount of reductions, if any, made pursuant to Section 2.4;

provided further that, no Lender's Commitment amount shall be increased without

the consent of such Lender. The Borrower may exercise its option to so increase

the aggregate Commitments only if the following conditions are satisfied:

(i) no Default or Event of Default exists hereunder, and the

Borrower shall have delivered a certificate to the Administrative Agent

from a Responsible Officer stating that no Default or Event of Default

exists;

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(ii) the representations and warranties of the Credit Parties

contained in Article IV shall be true and correct except to the extent

any such representation or warranty is stated to relate solely to an

earlier date, in which case such representation or warranty shall have

been true and correct on such earlier date;

(iii) the Guarantors shall have consented to such increase in

writing; and

(iv) at any Lender's request the Borrower shall execute a new

Note evidencing the increased Commitments of such Lender.

The Borrower shall give the Administrative Agent ten Business Days' notice of

the Borrower's intention to increase the aggregate Commitments pursuant to this

Section 2.1(b). Such notice shall specify each new commercial bank or other

financial institution (which in any case shall be an Eligible Assignee), if any,

the changes in amounts of Commitments that will result, and such other

information as is reasonably requested by the Administrative Agent. Each new

commercial bank or other financial institution, and each Lender agreeing to

increase its Commitment, shall execute and deliver to the Administrative Agent a

Commitment Increase Agreement. Upon execution and delivery of such Commitment

Increase Agreement and any additional Notes contemplated thereby, such new

commercial bank or other financial institution shall constitute a "Lender"

hereunder with a Commitment as specified therein, or such Lender's Commitment

shall increase as specified therein, as the case may be. Notwithstanding the

foregoing, after giving effect to this Section, the terms and conditions hereof

shall remain substantially the same as on the Closing Date.

Section 2.2 Method of Borrowing.

(a) Notice. Each Borrowing shall be made pursuant to a Notice of

Borrowing, given not later than (i) if the Borrowing is comprised of Eurodollar

Loans, 11:00 a.m. (New York time) on the third Business Day before the requested

Borrowing Date and (ii) if the Borrowing is comprised of Base Rate Loans, 12:00

noon (New York time) on the requested Borrowing Date, in each case to the

Administrative Agent's Applicable Lending Office. The Administrative Agent shall

give to each Lender prompt notice on the day of receipt of a timely Notice of

Borrowing. The Notice of Borrowing shall be in writing specifying (A) the

Borrowing Date (which shall be a Business Day), (B) the requested Type of Loans

comprising such Borrowing, (C) the aggregate amount of such Borrowing, and (D)

if such Borrowing is to be comprised of Eurodollar Loans, the requested Interest

Period. In the case of a requested Borrowing comprised of Eurodollar Loans, the

Administrative Agent shall promptly notify each Lender of the applicable

interest rate under Section 2.6(b). Each Lender shall make available its Pro

Rata Share of such Borrowing before 2:00 p.m. (New York time) on the Borrowing

Date in immediately available funds to the Administrative Agent at its

Applicable Lending Office or such other location as the Administrative Agent may

specify by notice to the Lenders. After the Administrative Agent's receipt of

such funds and upon fulfillment of the applicable conditions set forth in

Article III, the Administrative Agent will promptly make such funds available to

the Borrower not later than 3:00 p.m. (New York time) at such account as the

Borrower shall specify in writing to the Administrative Agent.

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(b) Conversions and Continuations. In order to elect to Convert or

Continue the Loans under this Section, the Borrower shall deliver an irrevocable

Notice of Conversion or Continuation to the Administrative Agent at its

Applicable Lending Office no later than (i) 11:00 a.m. (New York time) at least

one Business Day in advance of such requested Conversion date in the case of a

Conversion of a Eurodollar Loan to a Base Rate Loan or (ii) 11:00 a.m. (New York

time) at least three Business Days in advance of such requested Conversion date

in the case of a Conversion of a Base Rate Loan into a Eurodollar Loan or in the

case of a Continuation of a Eurodollar Loan. Each such Notice of Conversion or

Continuation shall be in writing or by telecopier, electronic mail, or

telephone, confirmed promptly in writing specifying (A) the requested Conversion

or Continuation date (which shall be a Business Day), (B) the amount and Type of

the Loan to be Converted or Continued, (C) whether a Conversion or Continuation

is requested, and if a Conversion, into what Type of Loan, and (D) in the case

of a Conversion to, or a Continuation of, a Eurodollar Loan, the requested

Interest Period. Promptly after receipt of a Notice of Conversion or

Continuation under this paragraph, the Administrative Agent shall provide each

Lender with a copy thereof and, in the case of a Conversion to or a Continuation

of a Eurodollar Loan, notify each Lender of the interest rate under Section

2.6(b). Notwithstanding anything in this Agreement to the contrary, Conversions

of Eurodollar Loans may only be made at the end of the applicable Interest

Period for such Loans; provided, however, that Conversions of Base Rate Loans

may be made at any time.

(b) above:

(i) at no time shall there be more than five Interest Periods

applicable to outstanding Eurodollar Loans;

(ii) (A) if any Lender shall, at least one Business Day before

the date of any requested Borrowing, notify the Administrative Agent

that the introduction of or any change in or in the interpretation of

any law or regulation makes it unlawful, or that any central bank or

other Governmental Authority asserts that it is unlawful, for such

Lender or any of its Applicable Lending Offices to perform its

obligations under this Agreement to make Eurodollar Loans, or to fund

or maintain Eurodollar Loans, the right of the Borrower to select

Eurodollar Loans from such Lender for such Borrowing or for any

subsequent Borrowing shall be suspended until such Lender shall notify

the Administrative Agent that the circumstances causing such suspension

no longer exist, and such Lender's Loan for such Borrowing shall be a

Base Rate Loan and (B) such Lender agrees to use commercially

reasonable efforts (consistent with its internal policies and legal and

regulatory restrictions) to designate a different Applicable Lending

Office if the making of such designation would avoid the effect of this

paragraph and would not, in the reasonable judgment of such Lender, be

otherwise materially disadvantageous to such Lender;

(iii) if the Administrative Agent is unable to determine the

Eurodollar Rate for any requested Borrowing and the Administrative

Agent gives telephonic or telecopy notice thereof to the Borrower as

soon as practicable, the right of the Borrower to select Eurodollar

Loans for such requested Borrowing or for any subsequent Borrowing and

the obligation of the Lenders to make such Eurodollar Loans shall be

suspended until the Administrative Agent shall notify the Borrower and

the Lenders that the circumstances

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causing such suspension no longer exist, and each Loan comprising such

Borrowing shall be a Base Rate Loan;

(iv)(A) if the Required Lenders shall, by 11:00 a.m. (New York

time) at least one Business Day before the date of any requested

Borrowing, notify the Administrative Agent that the Eurodollar Rate

will not adequately reflect the cost to such Lenders of making or

funding their respective Eurodollar Loans and the Administrative Agent

gives telephonic or telecopy notice thereof to the Borrower as soon as

practicable, the right of the Borrower to select Eurodollar Loans for

such Borrowing or for any subsequent Borrowing and the obligation of

the Lenders to make Eurodollar Loans shall be suspended until the

Administrative Agent shall notify the Borrower and the Lenders that the

circumstances causing such suspension no longer exist, and each Loan

comprising such Borrowing shall be a Base Rate Loan, and (B) each

Lender agrees to use commercially reasonable efforts (consistent with

its internal policies and legal and regulatory restrictions) to

designate a different Applicable Lending Office if the making of such

designation would avoid the effect of this paragraph and would not, in

the reasonable judgment of such Lender, be otherwise materially

disadvantageous to such Lender;

(v) if the Borrower shall fail to select the duration or

Continuation of any Interest Period for any Eurodollar Loans in

accordance with the provisions contained in the definition of "Interest

Period" in Section 1.1 and paragraphs (a) and (b) above or shall fail

to deliver a Notice of Conversion or Continuation or to specify the

Interest Period for a Eurodollar Loan in a Notice of Conversion or

Continuation, the Administrative Agent will forthwith so notify the

Borrower and the Lenders and such Loans will be made available to the

Borrower on the date of such Borrowing and will have an Interest Period

of one month; and

(vi) no Loan may be Converted or Continued as a Eurodollar

Loan at any time when a Default has occurred and is continuing.

(d) Notices Irrevocable. The Notice of Borrowing and each Notice of

Conversion or Continuation delivered by the Borrower shall be irrevocable and

binding on the Borrower. In the case of the initial Borrowing or any Borrowing

for which the related Notice of Conversion or Continuation specifies is to be

comprised of Eurodollar Loans, the Borrower shall indemnify each Lender against

any loss, out-of-pocket cost or expense actually incurred by such Lender as a

result of any failure on the part of the Borrower to fulfill on or before the

Borrowing Date or the date specified in such Notice of Conversion or

Continuation for such Borrowing the applicable conditions set forth in Article

III, including, without limitation, any loss, cost or expense actually 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.

(e) Administrative Agent Reliance. Unless the Administrative Agent

shall have received notice from a Lender before the Borrowing Date that such

Lender will not make available to the Administrative Agent such Lender's Pro

Rata Share of the Borrowing, the Administrative Agent may assume that such

Lender has made its Pro Rata Share of such

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Borrowing available to the Administrative Agent on the Borrowing Date in

accordance with paragraph (a) of this Section 2.2 and the Administrative Agent

may, in reliance upon such assumption, make available to the Borrower on the

Borrowing Date a corresponding amount. If and to the extent that such Lender

shall not have so made its Pro Rata Share of such Borrowing available to the

Administrative Agent, such Lender shall pay to the Administrative Agent, on

demand, such amount with interest thereon at a rate per annum equal to the daily

average Federal Funds Effective Rate for the period until such Lender makes such

amount immediately available to the Administrative Agent. If such Lender shall

repay to the Administrative Agent such corresponding amount and interest as

provided above, such corresponding amount so repaid shall constitute such

Lender's Loan as part of such Borrowing for purposes of this Agreement even

though not made on the same day as the other Loans comprising such Borrowing. If

such Lender's Loan as part of such Borrowing is not made available by such

Lender within three Business Days of the Borrowing Date, the Borrower shall

repay such Lender's share of such Borrowing (together with interest thereon at

the interest rate applicable during such period to Loans comprising such

Borrowing) to the Administrative Agent not later than three Business Days after

receipt of written notice from the Administrative Agent specifying such Lender's

share of such Borrowing that was not made available to the Administrative Agent.

Notwithstanding the foregoing, the failure of any Lender to make the Loan to be

made by it as part of the Borrowing shall not relieve any other Lender of its

obligation, if any, to make its Loan on the Borrowing Date.

(f) Lender Obligations Several. 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 Borrowing Date.

(g) Noteless Agreement; Evidence of Indebtedness.

(i) Each Lender shall maintain in accordance with its usual

practice an account or accounts evidencing the indebtedness of the

Borrower to such Lender resulting from the Loan made by such Lender

from time to time, including the amounts of principal and interest

payable and paid to such Lender from time to time hereunder.

(ii) The Administrative Agent shall also maintain accounts in

which it will record (A) the amount of each Loan made hereunder, the

Type thereof and the Interest Period with respect thereto, (B) the

amount of any principal or interest due and payable or to become due

and payable from the Borrower to each Lender hereunder, and (C) the

amount of any sum received by the Administrative Agent hereunder from

the Borrower and each Lender's share thereof.

(iii) The entries maintained in the accounts maintained

pursuant to paragraphs (i) and (ii) above shall be prima facie evidence

of the existence and amounts of the Obligations therein recorded;

provided, however, that the failure of the Administrative Agent or any

Lender to maintain such accounts or any error therein shall not in any

manner affect the obligation of the Borrower to repay the Obligations

in accordance with their terms.

(iv) Any Lender may request that the Loan owing to such Lender

be evidenced by a Note. In such event, the Borrower shall prepare,

execute and deliver to such Lender

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such Note payable to the order of such Lender. Thereafter, the Loans

evidenced by such Note and interest thereon shall at all times

(including after any assignment pursuant to Section 10.3) be

represented by one or more Notes payable to the order of the payee

named therein or any assignee pursuant to Section 10.3, except to the

extent that any such Lender or assignee subsequently returns any such

Note for cancellation and requests that such Loans once again be

evidenced as described in paragraphs (i) and (ii) above.

Section 2.3 Fees.

(a) Commitment Fees. The Borrower agrees to pay to the Administrative

Agent for the account of each Lender having a Commitment a commitment fee on the

average daily amount by which such Lender's Commitment exceeds the sum of (i)

the aggregate principal amount of such Lender's outstanding Loans and (ii) its

participation share of the Letter of Credit Exposure, from the Closing Date

until the Maturity Date at a per annum rate of .50%. The fees payable pursuant

to this clause (a) are due quarterly in arrears on the last Business Day of each

March, June, September and December commencing with December 31, 2003 and on the

Maturity Date.

(b) Agent's Fees. The Borrower agrees to pay to the Administrative

Agent the agent's fees as separately agreed upon by the Borrower and the

Administrative Agent in the letter agreement dated August 19, 2003 from CLNY to

the Borrower on the dates required by such letter.

Administrative Agent for the pro rata benefit of each Lender with respect to

each Letter of Credit, a letter of credit fee at a per annum rate equal to the

Applicable Margin for Eurodollar Loans in effect from time to time; provided

that, after the occurrence and continuance of an Event of Default under Section

7.1(a), the applicable fee rate on such Letters of Credit shall be the

Applicable Margin for Eurodollar Loans plus 2% per annum and (ii) to such

Issuing Lender, a fee for each Letter of Credit issued for its account of 0.125%

per annum. Each such fee shall be based on the maximum amount available to be

drawn under such Letter of Credit from the date of issuance of the Letter of

Credit until its expiration date (or, if earlier, the date such Letter of Credit

is cancelled or otherwise terminated) and shall be payable quarterly in arrears

on the last Business Day of each March, June, September and December until its

expiration date and on such expiration date. In addition, the Borrower agrees to

pay to the Issuing Lenders all customary administrative and other transaction

costs and fees charged by the Issuing Lenders in connection with the issuance,

amendment, payment and negotiation of a Letter of Credit, such costs and fees to

be due and payable on the date specified by the applicable Issuing Lender in the

invoice for such costs and fees.

Section 2.4 Reduction of the Commitments.

(a) Optional. The Borrower shall have the right, upon at least five

days' irrevocable notice to the Administrative Agent, to terminate in whole or

reduce ratably in part the unused portion of the Commitments; provided that each

partial reduction of Commitments shall be in the minimum aggregate amount of

$1,000,000.00 and in integral multiples of $1,000,000.00 in excess thereof (or

such lesser amount as may then be outstanding); and provided further that the

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aggregate amount of the Commitments may not be reduced below the sum of the

aggregate principal amount of the outstanding Loans plus the Letter of Credit

Exposure.

(b) Generally. Any reduction or termination of the Commitments pursuant

to Section 2.4(a) shall be permanent, with no obligation of the Lenders to

reinstate such Commitments and the commitment fees provided for in Section

2.3(a) shall thereafter be computed on the basis of the Commitments as so

reduced. The Administrative Agent shall give each Lender prompt notice of any

commitment reduction or termination.

Section 2.5 Repayment. The Borrower shall repay the outstanding

principal amount of the Loans on the Maturity Date.

Section 2.6 Interest. The Borrower shall pay interest on the unpaid

principal amount of each Loan made by each Lender to it from the date of such

Loan until such principal amount shall be paid in full, at the following rates

per annum:

(a) Base Rate Loans. If such Loan is a Base Rate Loan, a rate per annum

equal at all times to the lesser of (i) the Alternate Base Rate in effect from

time-to-time plus the Applicable Margin and (ii) the Maximum Rate, payable in

arrears on the last Business Day of each calendar quarter and on the date such

Base Rate Loan shall be paid in full; provided that, any amount of principal,

interest or fees which is not paid when due (whether at stated maturity, by

acceleration, or otherwise) shall bear interest from the date on which such

amount is due until such amount is paid in full, payable on demand, at a rate

per annum equal at all times to the lesser of (i) the Alternate Base Rate in

effect from time-to-time plus the Applicable Margin plus 2% and (ii) the Maximum

Rate.

(b) Eurodollar Loans. If such Loan is a Eurodollar Loan, a rate per

annum equal at all times during the Interest Period for such Loan to the lesser

of (i) the Eurodollar Rate for such Interest Period plus the Applicable Margin

in effect on each day of such Interest Period for Eurodollar Loans and (ii) the

Maximum Rate, payable on the last day of such Interest Period, and, in the case

of Interest Periods of greater than three months, on the Business Day which

occurs during such Interest Period three months from the first day of such

Interest Period; provided that, any amount of principal, interest or fees which

is not paid when due (whether at stated maturity, by acceleration, or otherwise)

shall bear interest from the date on which such amount is due until such amount

is paid in full, payable on demand, at a rate per annum equal at all times to

the lesser of (i) the rate required to be paid on such Loan immediately prior to

the occurrence of such Default plus 2% and (ii) the Maximum Rate. (c) Additional

Interest on Eurodollar Loans. The Borrower shall pay to each Lender, so long as

any such Lender shall be required under regulations of the Federal Reserve Board

to maintain reserves with respect to liabilities or assets consisting of or

including Eurocurrency Liabilities, additional interest on the unpaid principal

amount of each Eurodollar Loan of such Lender, from the effective date of such

Loan until such principal amount is paid in full, at an interest rate per annum

equal at all times to the remainder obtained by subtracting (A) the Eurodollar

Rate for the Interest Period for such Loan from (B) the rate obtained by

dividing such Eurodollar Rate by a percentage equal to 100% minus the Eurodollar

Rate Reserve Percentage of such Lender for such Interest Period, payable on each

date on which interest is payable on such

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Loan. Such additional interest payable to any Lender shall be determined by such

Lender and notified to the Borrower through the Administrative Agent (such

notice to include the calculation of such additional interest, which calculation

shall be conclusive in the absence of manifest error, and be accompanied by any

evidence indicating the need for such additional interest as the Borrower may

reasonably request).

(d) Usury Recapture. In the event the rate of interest chargeable under

this Agreement or the Notes at any time (calculated after giving effect to all

items charged which constitute "interest" under applicable laws, including fees

and margin amounts, if applicable) is greater than the Maximum Rate, the unpaid

principal amount of the Loans shall bear interest at the Maximum Rate until the

total amount of interest paid or accrued on the Loans equals the amount of

interest which would have been paid or accrued on the Loans if the stated rates

of interest set forth in this Agreement had at all times been in effect.

In the event, upon payment in full of the Loans, the total

amount of interest paid or accrued under the terms of this Agreement and the

Loans is less than the total amount of interest which would have been paid or

accrued if the rates of interest set forth in this Agreement had, at all times,

been in effect, then the Borrower shall, to the extent permitted by applicable

law, pay the Administrative Agent for the account of the Lenders an amount equal

to the difference between (i) the lesser of (A) the amount of interest which

would have been charged on its Loans if the Maximum Rate had, at all times, been

in effect and (B) the amount of interest which would have accrued on its Loans

if the rates of interest set forth in this Agreement had at all times been in

effect and (ii) the amount of interest actually paid under this Agreement on its

Loans.

In the event the Lenders ever receive, collect or apply as

interest any sum in excess of the Maximum Rate, such excess amount shall, to the

extent permitted by law, be applied to the reduction of the principal balance of

the Loans, and if no such principal is then outstanding, such excess or part

thereof remaining shall be paid to the Borrower.

Section 2.7 Prepayments.

(a) Right to Prepay. The Borrower shall have no right to prepay any

principal amount of any Loan except as provided in this Section 2.7.

(b) Optional. The Borrower may elect to prepay, in whole or in part,

any of the Loans owing by it to the Lenders, after giving prior written notice

of such election by (i) 11:00 a.m. (New York time) three Business Days before

such prepayment date in the case of Borrowings which are comprised of Eurodollar

Loans, and (ii) 11:00 a.m. (New York time) on the Business Day of such

prepayment, in case of Borrowings which are comprised of Base Rate Loans, in

each case to the Administrative Agent stating the proposed date and aggregate

principal amount of such prepayment. If any such notice is given, the

Administrative Agent shall give prompt notice thereof to each Lender and the

Borrower shall prepay Loans comprising part of the same Borrowing in whole or

ratably in part in an aggregate principal amount equal to the amount specified

in such notice, together with accrued interest to the date of such prepayment on

the principal amount prepaid and amounts, if any, required to be paid pursuant

to Section 2.8 as a result of such prepayment being made on such date; provided,

however, that

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each partial prepayment shall be in an aggregate principal amount not less than

$1,000,000.00 and in integral multiples of $500,000.00 in excess thereof (or

such lesser amount as may then be outstanding).

(i) Deficiency. On any date on which the outstanding principal

amount of the Loans plus the Letter of Credit Exposure exceeds the

aggregate Commitments, the Borrower agrees to make a mandatory

prepayment of the Loans, together with accrued interest to the date of

such prepayment on the principal amount prepaid and amounts, if any,

required to be paid pursuant to Section 2.8 as a result of such

prepayment being made on such date, in the amount of such excess, or if

the Loans have been repaid in full, make deposits into the Cash

Collateral Account to provide cash collateral for the Letter of Credit

Exposure.

(ii) Casualty Events. Following any Casualty Event in which

the Casualty Proceeds with respect thereto could reasonably be expected

to exceed U.S.$5,000,000, all such Casualty Proceeds payable to or

received by the Credit Parties in respect of such Casualty Event shall,

if not used to purchase a replacement asset or otherwise reinvested in

the business of the Borrower and its Subsidiaries within 180 days of

the date of the Casualty Event (or, if such Casualty Proceeds have not

been received by such Credit Party by such 180th day, then on the date

such Casualty Proceeds are received), be deposited with the

Administrative Agent on the last day of such 180-day period (or, if

such Casualty Proceeds have not been received by such Credit Party by

such 180th day, then on the date such Casualty Proceeds are received)

as security for the Obligations and the Administrative Agent shall

apply the Casualty Proceeds to prepay the Loans, or if the Loans have

been repaid in full and only if such Casualty Event shall, or could

reasonably be expected to, materially interfere with or otherwise

disrupt the operations of the Borrower and its Subsidiaries (taken as a

whole), make deposits into the Cash Collateral Account to provide cash

collateral for the Letter of Credit Exposure; provided that, in no

event shall the Credit Parties be required to deposit any Casualty

Proceeds in excess of the amount required to repay the Loans and cash

collateralize the Letter of Credit Exposure; provided further that, if

such Casualty Proceeds will be reinvested to rebuild or otherwise

replace Property damaged by a Casualty Event and the cost (or any

portion thereof) of such construction or replacement has not been

invoiced to the Borrower or such Subsidiary as of the date such

Casualty Proceeds are received, then the Borrower or such Subsidiary

shall be permitted to, until such invoices are received and such

amounts are to be paid, deposit such Casualty Proceeds into, and

maintain such funds in, a segregated account so long as the Borrower or

such Subsidiary shall, concurrently with such deposit, deliver to the

Administrative Agent a certificate executed by a Responsible Officer of

the Borrower detailing both the proposed use of such Casualty Proceeds

and the estimated timing of their application (with updated

certificates to be sent periodically as necessary to update the

Administrative Agent of any changes to such timing).

(iii) Debt Incurrence. The Borrower shall prepay the Loans by

an amount equal to 100% of the Debt Incurrence Proceeds that the

Borrower or any of its Subsidiaries receives from each Debt Incurrence

occurring after the Closing Date within

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30 days after the date of each such Debt Incurrence; provided that, in

no event shall the Credit Parties be required to deposit any Debt

Incurrence Proceeds in excess of the amount required to repay the

Loans.

(iv) Equity Issuance. The Borrower shall prepay the Loans by

an amount equal to 100% of the Equity Issuance Proceeds that the

Borrower or any of its Subsidiaries receives from each Equity Issuance

after the Closing Date within 30 days after the date of each such

Equity Issuance; provided that, in no event shall the Credit Parties be

required to deposit any Equity Issuance Proceeds in excess of the

amount required to repay the Loans.

(d) Application of Prepayments. Each prepayment pursuant to this

Section 2.7 shall be accompanied by accrued interest on the amount prepaid to

the date of such prepayment and amounts, if any, required to be paid pursuant to

Section 2.8 as a result of such prepayment being made on such date.

(e) Illegality. If any Lender shall notify the Administrative Agent and

the Borrower that the introduction of or any change in or in the interpretation

of any law or regulation makes it unlawful, or that any central bank or other

Governmental Authority asserts that it is unlawful for such Lender or its

Applicable Lending Office to perform its obligations under this Agreement or to

make or maintain Eurodollar Loans then outstanding hereunder, the Borrower

shall, no later than 11:00 a.m. (New York time) (A) if not prohibited by law or

regulation to maintain such Eurodollar Loans for the duration of the Interest

Period, on the last day of the Interest Period for each outstanding Eurodollar

Loan or (B) if prohibited by law or regulation to maintain such Eurodollar Loans

for the duration of the Interest Period, on the second Business Day following

its receipt of such notice, (i) prepay all Eurodollar Loans of all of the

Lenders then outstanding, together with accrued interest on the principal amount

prepaid to the date of such prepayment and amounts, if any, required to be paid

pursuant to Section 2.8 as a result of such prepayment being made on such date,

(ii) each Lender shall simultaneously make a Base Rate Loan or, if not otherwise

prohibited, make an Eurodollar Loan in an amount equal to the aggregate

principal amount of the affected Eurodollar Loans, and (iii) the right of the

Borrower to select Eurodollar Loans shall be suspended until such Lender shall

notify Administrative Agent that the circumstances causing such suspension no

longer exist. Each Lender agrees to use commercially reasonable efforts

(consistent with its internal policies and subject to legal and regulatory

restrictions) to designate a different Applicable Lending Office if the making

of such designation would avoid the effect of this paragraph and would not, in

the reasonable judgment of such Lender, be otherwise disadvantageous to such

Lender.

(f) Ratable Payments; Effect of Notice. Each prepayment pursuant to

this Section 2.7 or any other provision of this Agreement shall be made in a

manner such that all Loans comprising part of the same Borrowing are paid in

whole or ratably in part. All notices given pursuant to this Section 2.7 shall

be irrevocable and binding upon the Borrower.

Section 2.8 Funding Losses. If (a) any payment of principal of any

Eurodollar Loan is made other than on the last day of the Interest Period for

such Loan as a result of any payment pursuant to Section 2.7 or the acceleration

of the maturity of the Loans pursuant to Article VII or (b) the Borrower fails

to make a principal or interest payment with respect to any Eurodollar

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Loan on the date such payment is due and payable, the Borrower shall, within

three Business Days of any written demand sent by any Lender to the Borrower

through the Administrative Agent, pay to Administrative Agent for the account of

such Lender any amounts (without duplication of any other amounts payable in

respect of breakage costs) required to compensate such Lender for any additional

losses, out-of-pocket costs or expenses which it may reasonably incur as a

result of such payment or nonpayment, including, without limitation, any loss,

cost or expense actually incurred by reason of the liquidation or reemployment

of deposits or other funds acquired by any Lender to fund or maintain such Loan.

Each Lender shall, as soon as reasonably practicable after a demand by the

Administrative Agent, provide a certificate confirming the amount of its funding

losses for any Interest Period in which they accrue.

Section 2.9 Increased Costs.

(a) Eurodollar Loans. If, due to either (i) the introduction of or any

change (other than any change by way of imposition or increase of reserve

requirements included in the Eurodollar Rate Reserve Percentage) in or in the

interpretation of any law or regulation or (ii) the compliance with any

guideline or request from any central bank or other Governmental Authority

(whether or not having the force of law), there shall be any increase in the

cost to any Lender of agreeing to make or making, funding or maintaining

Eurodollar Loans, then the Borrower shall from time-to-time pay within five

Business Days of demand by such Lender (with a copy of such demand to the

Administrative Agent) to the Administrative Agent for the account of such Lender

additional amounts (without duplication of any other amounts payable in respect

of increased costs) sufficient to compensate such Lender for such increased

cost; provided, however, that, before making any such demand, each Lender agrees

to use commercially reasonable efforts (consistent with its internal policy and

subject to legal and regulatory restrictions) to designate a different

Applicable Lending Office if the making of such a designation would avoid the

need for, or reduce the amount of, such increased cost and would not, in the

reasonable judgment of such Lender, be otherwise disadvantageous to such Lender;

provided further that, prior to any such demand for payment and within 180 days

of obtaining knowledge of such increased costs, such Lender shall have submitted

to the Borrower a certificate indicating the amount of such increased costs and

detailing the calculation of such increased costs, such certificate to be

conclusive and binding for all purposes, absent manifest error. The provisions

of this Section 2.7(a) shall not apply to any introduction, change or compliance

relating to taxes or similar governmental charges.

(b) Capital Adequacy. If any Lender determines in good faith that

compliance with any law or regulation or any guideline or request from any

central bank or other Governmental Authority (whether or not having the force of

law) implemented or effective after the Closing Date affects or would affect the

amount of capital required or expected to be maintained by such Lender or any

corporation controlling such Lender and that the amount of such capital is

increased by or based upon the existence of such Lender's commitment to lend and

other commitments of this type, then, upon demand by such Lender (with a copy of

any such demand to the Administrative Agent), the Borrower shall within five

Business Days of demand pay to the Administrative Agent for the account of such

Lender as the case may be, from time-to-time as specified by such Lender,

additional amounts (without duplication of any other amounts payable in respect

of increased costs) sufficient to compensate such Lender, in light of such

circumstances, with respect to such Lender, to the extent that such Lender

reasonably determines

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such increase in capital to be allocable to the existence of such Lender's

commitment to lend under this Agreement; provided that, prior to any such demand

for payment and within 180 days of obtaining knowledge of such increased costs,

such Lender shall have submitted to the Borrower a certificate as to such amount

and detailing the calculation of such costs, such certificate to be conclusive

and binding for all purposes, absent manifest error.

interpretation thereof by any court or administrative or Governmental Authority

charged with the administration thereof shall either (i) impose, modify or deem

applicable any reserve, special deposit or similar requirement against letters

of credit issued by, or assets held by, or deposits in or for the account of,

the Issuing Lenders or (ii) impose on the Issuing Lenders any other condition

regarding the provisions of this Agreement relating to the Letters of Credit or

any Letter of Credit Obligations, and the result of any event referred to in the

preceding clause (i) or (ii) shall be to increase the cost to the Issuing

Lenders of issuing or maintaining any Letter of Credit (which increase in cost

shall be determined by the applicable Issuing Lender's reasonable allocation of

the aggregate of such cost increases resulting from such event), then, upon

demand by the applicable Issuing Lender, the Borrower shall immediately pay to

Administrative Agent for the account of such Issuing Lender, from time to time

as specified by such Issuing Lender, additional amounts which shall be

sufficient to compensate such Issuing Lender for such increased cost; provided

that, prior to any such demand for payment and within 180 days of obtaining

knowledge of such increased costs, such Issuing Lender shall have submitted to

the Borrower a certificate as to such amount and detailing the calculation of

such costs, such certificate to be conclusive and binding for all purposes,

absent manifest error.

Section 2.10 Payments and Computations.

(a) Payment Procedures. The Borrower shall make each payment under this

Agreement not later than 12:00 p.m. (New York time) on the day when due to the

Administrative Agent at the Administrative Agent's address specified in Section

11.2 (or such other location as the Administrative Agent shall designate in

writing to the Borrower) in immediately available funds. Each Loan shall be

repaid and each payment of interest thereon shall be paid in Dollars. All

payments shall be made without setoff, deduction, or counterclaim. The

Administrative Agent will promptly thereafter, and in any event prior to the

close of business on the day any timely payment is made, cause to be distributed

like funds relating to the payment of principal, interest or fees ratably (other

than amounts payable solely to the Administrative Agent, or a specific Lender

pursuant to Section 2.3(b), 2.3(c), 2.8, 2.9 or 2.11, but after taking into

account payments effected pursuant to Section 11.4) in accordance with each

Lender's Pro Rata Share to the Lenders for the account of their respective

Applicable Lending Offices, and like funds relating to the payment of any other

amount payable to any Lender to such Lender for the account of its Applicable

Lending Offices, in each case to be applied in accordance with the terms of this

Agreement.

(b) Computations. All computations of interest with respect to Base

Rate Loans bearing interest based on the Prime Rate shall be made by the

Administrative Agent on the basis of a year of 365 or 366 days, as the case may

be, and all computations of interest with respect to (i) Base Rate Loans bearing

interest based on the Federal Funds Rate, (ii) Eurodollar Loans, (iii) fees, and

(iv) other amounts shall be made by the Administrative Agent, in each such case

on the

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basis of a year of 360 days and for the actual number of days (including the

first day, but excluding the last day) occurring in the period for which such

interest, fees or other amounts are payable. Each determination by the

Administrative Agent of an interest rate shall be conclusive and binding for all

purposes, absent manifest error.

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.

(d) Agent Reliance. Unless the Administrative Agent shall have received

written notice from the Borrower prior to the date on which any payment is due

to the Lenders 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

date an amount equal to the amount then due to such Lender. If and to the extent

the Borrower shall not have so made such payment in full to Administrative

Agent, each Lender shall repay to the Administr

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