THIRD AMENDMENT TO AMENDED AND
                         RESTATED REVOLVING CREDIT AGREEMENT
                        AND REQUEST FOR RELEASE OF COLLATERAL


               This  THIRD  AMENDMENT  TO  AMENDED  AND  RESTATED REVOLVING
          CREDIT AGREEMENT (this "Third Amendment") is entered  into  as of
          October  24,  1997,  among AVONDALE INDUSTRIES, INC., a Louisiana
          corporation (the "Company"),  the  several financial institutions
          party  to  this  Third  Amendment  (collectively,   the  "Banks";
          individually, a "Bank"), and BANK OF AMERICA NATIONAL  TRUST  AND
          SAVINGS  ASSOCIATION,  as  agent  for  the  Banks  (the "Agent").
          Capitalized  terms  which are used herein without definition  and
          which are defined in the Credit Agreement referred to below shall
          have the meanings ascribed to them in the Credit Agreement.

               WHEREAS, the Company,  the  Banks, and the Agent are parties
          to  a  certain Amended and Restated  Revolving  Credit  Agreement
          dated as  of  January  28,  1997  (as previously amended by First
          Amendment  to  Amended  and Restated Revolving  Credit  Agreement
          entered  into as of March  14,  1997,  and  Second  Amendment  to
          Amended and  Restated  Revolving Credit Agreement entered into as
          of April 30, 1997, the "Credit Agreement"); and

               WHEREAS, the Company  has  requested  that the Agent and the
          Banks amend the Credit Agreement to (i) modify certain provisions
          relating  to  the  refinancing  of  a  portion  of   the   LPD-17
          Expenditures   and   the   corresponding   Commitment  reduction,
          prepayment and release of certain Collateral; and (ii) modify the
          provisions regarding dividends and related matters,  in each case
          as provided herein; and

               WHEREAS,  the  Agent and the Banks are willing to so  modify
          the  Credit  Agreement,   upon  the  terms  and  subject  to  the
          conditions hereinafter set forth;

               NOW, THEREFORE, for good  and  valuable  consideration,  the
          receipt  and  sufficiency  of  which  is hereby acknowledged, the
          parties hereto hereby agrees as follows:

              SECTION 1.  Amendments to the Credit Agreement.
                          ----------------------------------

                   (a) The reference in Section 2.3 of the Credit Agreement
          to "$50,000,000" is amended to read "$65,000,000".

                   (b)   The clause "other than the  liens  created  by the
          900  Foot Floating Drydock Mortgage," appearing immediately prior
          to the proviso in the first sentence of Subsection 2.18(a) of the
          Credit Agreement is deleted therefrom.
<PAGE>
                   (c)   The clause "a preferred ship mortgage covering the
          Avondale  Drydock  (substantially  in  the  form  of the 900 Foot
          Floating  Drydock  Mortgage,  with  such  revisions  as  may   be
          requested  by  the  Agent or the Required Banks), along with such
          MARAD and other consents  and  related  documentation  as  may be
          required  by  the  Agent  and  the  Required  Banks in connection
          therewith," is inserted after the word "deliver"  and  before the
          word  "Security"  in  subpart  (i)  of  the  second  sentence  of
          Subsection 2.18(b) of the Credit Agreement.

                   (d)   The  reference  in  Section  6.12  of  the  Credit
          Agreement to "$50,000,000" is amended to read "$65,000,000".

                   (e)   Section 7.6 of the Credit Agreement is amended  by
          deleting  clause  (ii)  thereof  and  substituting  the following
          clauses (ii) and (iii) in lieu thereof:

                      (ii)  so long as no Default or Event of Default
                      shall have  occurred  and  be  continuing,  the
                      Company  may  pay cash dividends on its capital
                      stock and make  payments  for  the  purchase or
                      redemption of shares of its common stock during
                      any Dividend Calculation Period in an aggregate
                      amount  not  to  exceed (A) 40% of Consolidated
                      Net Income for such Dividend Calculation Period
                      minus  (B) the aggregate  amount  of  all  cash
                      dividends  paid  by  the Company and the amount
                      paid   by   the  Company  for   purchases   and
                      redemptions pursuant to this clause (ii) during
                      such Dividend  Calculation Period, and (iii) in
                      addition to purchases and redemptions permitted
                      pursuant to clause  (ii)  of  this Section 7.6,
                      and so long as no Default or Event  of  Default
                      has occurred and is continuing, the Company may
                      purchase  or redeem shares of its common stock,
                      provided that  during  the period commencing on
                      the Effective Date (April 30, 1997) through the
                      Expiration Date, the aggregate number of shares
                      of common stock purchased  or  redeemed  by the
                      Company  pursuant to this clause (iii) may  not
                      exceed 1,500,000  and the aggregate amount paid
                      by the Company on account  of such purchases or
                      redemptions may not exceed $50,000,000.00.   As
                      used in this Section 7.6, "Dividend Calculation
                      Period"  shall mean, as of the last day of each
                      of  the Company's  fiscal  quarters,  the  four
                      fiscal quarter period ending on such day.

                   (f)   Schedule  I  to  the  Credit  Agreement  is hereby
          deleted and Schedule I attached hereto is substituted therefor.
<PAGE>
              SECTION 2. Representations and Warranties.
                         ------------------------------
          The Company represents and warrants to the Agent and to  each  of
          the Banks that:

                   (a)   This  Third Amendment and the Credit Agreement  as
          amended  hereby, (i) have  been  duly  authorized,  executed  and
          delivered  by  the  Company and each of the Subsidiary Guarantors
          and  constitute  their   legal,  valid  and  binding  obligations
          enforceable in accordance  with  their respective terms (subject,
          as  to  the enforcement of remedies,  to  applicable  bankruptcy,
          reorganization, insolvency, moratorium and similar laws affecting
          creditors' rights generally and to general principles of equity),
          within the  Company's  and  the  Subsidiary Guarantors' corporate
          powers, (ii) require no action by  or  in  respect  of, or filing
          with,  any  governmental body, agency or official, (iii)  do  not
          contravene, or  constitute  a default under, any provision of any
          applicable law, statute, ordinance,  regulation,  rule,  order or
          other  governmental  restriction, or of the charter documents  of
          the Company or any Subsidiary  Guarantor,  or  of  any agreement,
          judgment, injunction, order, decree, indenture, contract,  lease,
          instrument  or  other  commitment  to  which  the  Company or any
          Subsidiary  Guarantor is a party or by which the Company  or  any
          Subsidiary Guarantor  or  any of their assets are bound, and (iv)
          will not result in the creation  or  imposition  of any Lien upon
          any  asset of the Company or any Subsidiary Guarantor  under  any
          existing  indenture,  mortgage,  deed  of  trust,  loan or credit
          agreement or other agreement or instrument to which  the  Company
          or  any Subsidiary Guarantor is a party or by which it or any  of
          its assets may be bound or affected.

                   (b)   The  representations  and  warranties set forth in
          Section IV of the Credit Agreement are true  and  correct  in all
          material  respects  before  and after giving effect to this Third
          Amendment with the same effect  as  if  made  on the date hereof,
          except   to   the  extent  such  representations  and  warranties
          expressly related  to  an  earlier  date, in which case they were
          true  and correct in all material respects  on  and  as  of  such
          earlier date.

                   (c)   As  of  the  date  hereof,  at  the  time  of  and
          immediately  after  giving  effect  to  this  Third Amendment, no
          Default or Event of Default has occurred and is continuing.

                   (d)   As  of  the  date  hereof,  at  the  time  of  and
          immediately  after  giving  effect  to  this Third Amendment,  no
          events or conditions have occurred or exist  which,  individually
          or in the aggregate, have had, or could reasonably be expected to
          have, a Material Adverse Effect, and no litigation is  pending or
          threatened  against the Company or any Subsidiary in which  there
          is a reasonable  possibility  of  an adverse decision which would
          result in a Material Adverse Effect.
<PAGE>
              SECTION 3. Certain Covenants.
                          -----------------
          The Company hereby agrees to deliver to the Agent the following:

                        (a)  no  later  than October  28,  1997:   (i)
               certified copies of all corporate  action  taken by the
               Company  and  each  of  the  Subsidiary  Guarantors  to
               authorize  the  execution, delivery and performance  of
               this Third Amendment  and  any other documents required
               or contemplated hereunder, and  (ii)  a  certificate of
               incumbency with respect to the officers of  the Company
               and  each  of the Subsidiary Guarantors authorized  and
               directed to  execute  and  deliver this Third Amendment
               and the Consents attached hereto; and

                        (b) no later than November 4, 1997:  copies of
               all documents and instruments executed and delivered in
               connection   with  the  refinancing   of   the   LPD-17
               Expenditures in  accordance with Section 2.18(a) of the
               Credit Agreement.

              SECTION 4. Conditions of Effectiveness.
                         ---------------------------
          This  Third  Amendment  shall  be  effective  on  the  date  (the
          "Effective  Date") of the delivery by the Company to the Agent of
          the  following:   (a)  this   Third   Amendment,  signed  by  the
          Company, each of the Subsidiary  Guarantors,  the  Agent and each
          of the Banks; and (b) the fees and expenses payable to  the Agent
          pursuant to Section 10.5 of the  Credit  Agreement, in connection
          with this Third Amendment.

              SECTION 5. Effect of  Amendment.
                         --------------------
          This  Third  Amendment (i) except as expressly  provided  herein,
          shall  not  be deemed  to be a consent  to  the  modification  or
          waiver of  any other term or condition of the Credit Agreement or
          of  any of the instruments or agreements  referred to therein and
          (ii) shall not prejudice any right  or  rights which the Agent or
          the Banks may  now have under or in connection  with  the  Credit
          Agreement,   as   amended  by  this   Third  Amendment.    Except
          as otherwise  expressly provided  by this Third Amendment, all of
          the  terms,  conditions  and  provisions of the  Credit Agreement
          shall  remain the same.  It is  declared  and agreed  by  each of
          the parties  hereto that the Credit Agreement, as amended hereby,
          shall  continue  in  full  force  and  effect, subject to and  in
          accordance with the terms thereof, and  that this Third Amendment
          and  such  Credit  Agreement  shall  be read and construed as one
          instrument.
<PAGE>
              SECTION 6. Miscellaneous.
                         -------------  
          This  Third  Amendment  shall  for  all purposes  be construed in
          accordance  with  and  governed  by  the  laws  of  the  State of
          Illinois.   The   captions  in  this   Third  Amendment  are  for
          convenience  of reference only and shall not define or limit  the
          provisions  hereof.   This  Third  Amendment  may  be executed in
          separate  counterparts,  each  of  which  when  so  executed  and
          delivered shall  be  an original, but all of which together shall
          constitute one instrument.  In proving  this Third Amendment,  it
          shall  not  be necessary to produce or account  for more than one
          such counterpart.

              SECTION 7.  Request  for  Release  of  Collateral; Consent of
                          -------------------------------------------------   
                          Banks.
                          -----

                   (a)  Pursuant to Section 2.18 of  the  Credit  Agreement
          as amended pursuant hereto, the Company hereby requests that  the
          Agent   release  the  liens  and  other  security  (but  not  the
          Subsidiary Guarantees) securing the Obligations, at the Company's
          expense,  and,  in  connection  therewith  and  as  an inducement
          thereto,  hereby  represents  and  warrants  to the Agent and the
          Banks that (a) the Company  has  refinanced  a  sufficient amount
          of  the  LPD-17  Expenditures  directly  funded  with the Line of
          Credit to  reduce the  Line  of Credit to an amount not to exceed
          $65,000,000;  (b)  the  material  terms  of  such refinancing are
          summarized in Exhibit A attached hereto;  (c)  the  amount of the
          Commitments has reduced automatically, permanently and  pro  rata
          among the Banks to an  aggregate  amount equal to $65,000,000 and
          the  Company  has prepaid the outstanding principal amount of the
          Loans  by  an  amount equal to  the  excess,  if  any, of (i) the
          aggregate  amount  of  Loans  outstanding   plus   the  aggregate
          amount  of  Letter  of  Credit Outstandings over (ii) the Line of
          Credit   (after   giving   effect   to   such  reduction  in  the
          Commitments); and (d) no Default or Event of Default has occurred
          and is continuing.

                   (b)   The  Banks  consent to the Company's  request  for
          release of collateral set forth  in  Section  7(a)  of this Third
          Amendment, and hereby direct the Agent to execute and  deliver  a
          Global  Release  Agreement  in  substantially the form set out in
          Exhibit B attached to this Third  Amendment,  and  to execute and
          deliver  such  UCC termination statements, release of  liens  and
          other instruments  as  may  be necessary to release and terminate
          the  liens  and  security  interests  securing  the  Obligations.
          Pursuant to Section 6.12 and  clause  (v)  of Section 7.13 of the
          Credit Agreement, the Agent and each Bank acknowledges  that  the
          terms  of the LPD-17 Refinancing Indebtedness are satisfactory to
          it.

                      [SIGNATURES BEGIN ON THE FOLLOWING PAGE]
<PAGE>
               NO  ORAL  AGREEMENTS.   THE  CREDIT AGREEMENT (AS AMENDED BY
          THIS THIRD AMENDMENT) AND THE OTHER LOAN DOCUMENTS, REPRESENT THE
          FINAL AGREEMENT BETWEEN THE PARTIES  AND  MAY NOT BE CONTRADICTED
          BY   EVIDENCE  OF  PRIOR,  CONTEMPORANEOUS  OR  SUBSEQUENT   ORAL
          AGREEMENTS OF THE PARTIES.

               THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

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


                                            AVONDALE INDUSTRIES, INC.


                                            By    /s/ Eugene K. Simon, Jr.
                                                  ------------------------
                                            Name:     Eugene K. Simon, Jr.
                                            Title:    V. P. - Finance



                    [SIGNATURES CONTINUED ON THE FOLLOWING PAGE]

<PAGE>

                                            BANK OF AMERICA NATIONAL TRUST
                                            AND SAVINGS ASSOCIATION, as
                                            Agent


                                            By    /s/ Janice Hammond
                                                  ------------------
                                            Name:     Janice Hammond
                                            Title:    Vice President
                                                      Agency Specialist


                                            BANK OF AMERICA NATIONAL TRUST
                                            AND SAVINGS ASSOCIATION,
                                            successor to Bank of America
                                            Illinois, as a Bank


                                            By    /s/ Gina M. West
                                                  ---------------- 
                                            Name:     Gina M. West
                                            Title:    Vice President




                    [SIGNATURES CONTINUED ON THE FOLLOWING PAGE]

<PAGE>


                                            WHITNEY NATIONAL BANK


                                            By:    /s/ Brigette L. Duhe
                                                   -------------------- 
                                            Name:      Brigette L. Duhe
                                            Title:     Banking Officer



                    [SIGNATURES CONTINUED ON THE FOLLOWING PAGE]

<PAGE>


                                            ABN-AMRO BANK, N.V.


                                            By:    /s/ David P. Orr
                                                   ----------------
                                            Name:      David P. Orr
                                            Title:     Vice President


                                            By:    /s/ Lila Jordan
                                                   ---------------
                                            Name:      Lila Jordan
                                            Title:     Vice President



                    [SIGNATURES CONTINUED ON THE FOLLOWING PAGE]

<PAGE>

                                            FIRST NATIONAL BANK OF COMMERCE


                                            By:    /s/ David Kocen
                                                   --------------- 
                                            Name:      David Kocen
                                            Title:     Banking Officer




<PAGE>

          Attachments:

          Schedule I -Commitments

          Exhibit A -Summary of Material Terms of LPD-17 Refinancing
                     Indebtedness
          Exhibit B -Form of Global Release

          Consents of Guarantors:
                    Avondale Gulfport Marine, Inc.
                    Avondale Technical Services, Inc.
                    Crawford Technical Services, Inc.
                    Genco Industries, Inc.
                    Avondale Properties, Inc.
                    Avondale Land Management Company

<PAGE>
                                          SCHEDULE I

                                          COMMITMENTS


           Bank of America National Trust and
           Savings Association                  $23,705,882.35  36.470588%

           Whitney National Bank                $18,352,941.18  28.235294%

           ABN-AMRO Bank, N.V.                  $11,470,588.24  17.647059%

           First National Bank of Commerce      $11,470,588.24  17.647059%
                                                -------------- ------------
                                                $65,000,000.00 100.0000000%
                                                ============== ============ 

<PAGE>
                                      EXHIBIT A

            Summary of Material Terms of LPD-17 Refinancing Indebtedness
            ------------------------------------------------------------

                                    See attached
                    "EXHIBIT "A"

                            Summary of LPD-17 Refinancing
                            -----------------------------

                                BACKGROUND INFORMATION

               In  March, 1997, Avondale acquired the property on which the
          UNO/Avondale   Maritime  Technology  Center  of  Excellence  (the
          "Technology Center")  will be located.  On May 16, 1997, Avondale
          entered into a Cooperative  Endeavor  Agreement (the "Cooperative
          Endeavor Agreement") with the State of  Louisiana  (the "State"),
          the  Board  of  Supervisors  of  Louisiana  State University  and
          Agricultural  and  Mechanical College, acting on  behalf  of  the
          University of New Orleans  (the  "Board"),  and University of New
          Orleans   Research   and   Technology   Foundation,   Inc.   (the
          "Foundation").   Under  the  Cooperative Endeavor Agreement,  the
          State made a non-binding commitment  to  appropriate $40,000,000,
          plus  interest, in installments over the period  from  September,
          1997 through  September,  2008 for donation to the Foundation for
          purposes of funding the Technology Center.

               At essentially the same time:

               1.   Avondale  donated the  property  where  the  Technology
               Center will be located to the Board, acting on behalf of the
               University of New Orleans.

               2.  The Board in turn leased the undeveloped property to the
               Foundation through a ground lease.

               3.  The Foundation  subleased  the  property,  including the
               proposed   Technology  Center  to  be  constructed  by   the
               Foundation, to Avondale.

               4.  Avondale entered into a second tier sublease in favor of
               the Board, on  behalf  of the University of New Orleans, for
               use of space in the Technology  Center  by the University of
               New Orleans' naval architecture program.

               As  a  result of these transactions, the Foundation  is  the
               nominal  borrower  on all indebtedness incurred to construct
               and  to  equip  the Technology  Center.   Avondale  and  the
               Foundation intend, however, that appropriations by the State
               under the Cooperative  Endeavor  Agreement  will service the
               Foundation's  debt.   If  the  State's  appropriations   are
               insufficient,  Avondale  will  be ultimately responsible for
               making  up  the  shortfall.   In  June,   1997,   the  State
               appropriated  $3.75 million and donated this amount  to  the
               Foundation  in  accordance  with  the  Cooperative  Endeavor
               Agreement.

<PAGE>


                                 FINANCING STRUCTURE

               Avondale  and  the   Foundation   established  two  separate
               financing facilities for the construction  and  equipping of
               the  Technology  Center,  the first of which (the "Equipment
               Lease Facility") is with Interlease  ("Interlease"), and the
               second  of  which  (the  "Building Loan Facility")  is  with
               Whitney National Bank ("Whitney") and First National Bank of
               Commerce of New Orleans ("FNBC").

                A. The Equipment Lease Facility.
                --------------------------------

               The  Equipment  Lease  Facility  is  a  relatively  standard
               equipment leasing arrangement  between  Interlease,  as  the
               financing lessor, and the Foundation, as lessee, pursuant to
               which  the Foundation will lease from Interlease most of the
               computer  equipment  necessary  to  furnish  the  Technology
               Center.   Under the Equipment Lease Facility, the Foundation
               may  lease up  to  $14,000,000  in  computer  equipment  and
               related accessories, with each leased item to be subject, at
               the Foundation's  option,   to a 3, 4 or 5 year term.  Lease
               payments include an interest component which varies with the
               lease term.   Lease payments are made once annually, and the
               Equipment Lease Facility requires  the  cost of each item of
               leased equipment to be fully amortized  over the lease term.
               Upon  expiration  of  the  lease  term  for  any  item,  the
               Foundation may purchase such item for $1.

               Avondale  has  fully  and  unconditionally  guaranteed   the
               Foundation's  payment  and performance obligations under the
               Equipment  Lease  Facility.    The   Avondale   guaranty  is
               unsecured.   The  Avondale  guaranty  contains  a waiver  of
               subrogation rights by Avondale and an agreement to waive any
               rights of contribution or indemnity which Avondale  may have
               against the Foundation.

               In  the  event  of  a  default  under  the  Equipment  Lease
               Facility, Interlease is entitled to exercise the usual range
               of   equipment   lease  remedies,  including  the  right  to
               repossess the leased  equipment  and to enforce the Avondale
               guaranty.   Avondale does not have  any  extraordinary  cure
               rights (such  as an additional grace period in which to cure
               a lease default)  but  should  be entitled, as guarantor, to
               cure a lease default subject to  the  same  time limitations
               and conditions that apply to the Foundation as lessee.
<PAGE>
                B.  The Building Loan Facility.
                -------------------------------

               Avondale  and the Foundation financed the remainder  of  the
               Technology  Center  through  the Building Loan Facility with
               Whitney and FNBC.  The Building Loan Facility is governed by
               a  Loan  Agreement dated as of August  14,  1997  among  the
               Foundation,   Avondale,   Whitney,   and   FNBC  (the  "Loan
               Agreement").  The Foundation has the right to  borrow  up to
               $26,000,000  under  the  Loan Agreement's line of credit for
               purposes  of  constructing  and   equipping  the  Technology
               Center, with such debt to be secured  by   (a)  a  leasehold
               mortgage  on  the  Foundation's lease on the land underlying
               the Technology Center, (b) an assignment of the construction
               contract between the  Foundation and the general contractor,
               (c)  a  security interest  in  the  Foundation's  equipment,
               fixtures,  general  intangibles,  and other items of movable
               property  located  at  the Technology  Center,  and  (d)  an
               unconditional, unsecured guaranty by Avondale.

               The Building Loan Facility  bears  interest  at  the rate of
               7.30% per annum and is payable in annual installments due on
               each September 1, commencing September 1, 1997 and ending on
               September 1, 2006.  The installments are in unequal amounts.

               Whitney and FNBC have the usual remedies in the event  of  a
               default  by  the  Foundation,  including  foreclosure on the
               leasehold  mortgage,  execution  upon  the movable  property
               subject   to   the  Foundation's  security  agreement,   and
               enforcement of the Avondale guaranty.

               The Avondale guaranty  prohibits  Avondale's exercise of any
               subrogation rights until the Building Loan Facility has been
               paid  in  full.   Avondale  is  entitled   to   receive  any
               acceleration  notice  delivered  to  the  Foundation but  is
               generally  not  entitled  to any extraordinary  cure  rights
               (such as longer cure periods).

                    AVONDALE'S RIGHT TO USE THE TECHNOLOGY CENTER

               Avondale's right to use the  Technology  Center derives from
               its sublease from the Foundation which in  turn  derives its
               rights  to  use  the Technology Center from the Foundation's
               ground lease with the Board.  Avondale's sublease, which has
               a term of 50 years,   requires  an  annual rental payment of
               $100,000 (which is subject to an offset in favor of Avondale
               if Avondale is required to make payments  on  its guaranties
               of the Foundation's debt).  The sublease also passes  on  to
               Avondale  all  requirements  imposed on the Foundation under
               its ground lease with the Board.   The  sublease includes an
               intervention   by   the  Board,  as  the  ultimate   lessor,
               consenting to the sublease  and permitting Avondale a 30 day
               period in which to cure any default  by the Foundation under
               the ground lease.  Avondale will lose  its  rights under the
               sublease following a default thereunder or under  the ground
               lease,  which,  in  each  instance, is not cured within  the
               applicable cure period.
<PAGE>

                                      EXHIBIT B

                               Form of Global Release
                               ----------------------

                                     See attached


                                     EXHIBIT "B"

                               GLOBAL RELEASE AGREEMENT

               THIS  GLOBAL RELEASE AGREEMENT (this "Agreement") is entered
          into as of the  24th  day  of October, 1997, by and among BANK OF
          AMERICA NATIONAL TRUST AND SAVINGS  ASSOCIATION  (as successor to
          Continental  Bank  N.A., the "Agent"), as agent for  the  several
          financing  institutions   (the   "Banks")  party  to  the  Credit
          Agreement  (as  defined  herein), AVONDALE  INDUSTRIES,  INC.,  a
          Louisiana Corporation (the "Company"),  AVONDALE GULFPORT MARINE,
          INC.,  a Delaware corporation  ("Gulfport"),  AVONDALE  TECHNICAL
          SERVICES,  INC.,  a Louisiana corporation ("Technical"), CRAWFORD
          TECHNICAL SERVICES, INC., a Texas corporation ("Crawford"), GENCO
          INDUSTRIES,  INC.,  a   Texas   corporation  ("Genco"),  AVONDALE
          PROPERTIES, INC., a Louisiana corporation ("Avondale Properties")
          and  AVONDALE  LAND  MANAGEMENT  COMPANY,   a  Louisiana  general
          partnership ("Shipyard Partnership").

                           W  I  T  N  E  S  S  E  T  H  :

               WHEREAS, the Company, the Banks and the Agent are parties to
          that  certain  Amended  and Restated Revolving Credit  Agreement,
          dated as of January 28, 1997,  as  amended  by that certain First
          Amendment  to  Amended  and Restated Revolving Credit  Agreement,
          dated as of March 14, 1997,  as  further  amended by that certain
          Second  Amendment  to  Amended  and  Restated  Revolving   Credit
          Agreement,  dated as of April 30, 1997 and as further amended  by
          that certain  Third  Amendment  to Amended and Restated Revolving
          Credit Agreement and Request for  Release of Collateral, dated as
          of  even  date  with  this Agreement (as  at  any  time  amended,
          modified or supplemented  and  in  effect  from time to time, the
          "Credit Agreement");

               WHEREAS,  capitalized terms used but not  otherwise  defined
          herein shall have  the  meaning  ascribed  to  such  terms in the
          Credit Agreement;

               WHEREAS,  Gulfport,  Technical,  Crawford,  Genco,  Avondale
          Properties  and  Shipyard  Partnership  (each  a "Subsidiary" and
          collectively  the  "Subsidiaries") each entered into  a  separate
          guarantee  in favor of  the  Agent,  as  agent  for  the  various
          financial   institutions   party   to   the   Credit   Agreement,
          guaranteeing  certain obligations of the Company under the Credit
          Agreement (each a "Subsidiary Guarantee");

               WHEREAS,  the   Company   executed   that  certain  Security
          Agreement in favor of the Agent, as agent for the Banks, dated as
          of May 10, 1994 (the "Company Security Agreement"),  pursuant  to
          which   the  Company  granted  a  security  interest  in  certain
          collateral to secure the Obligations;

               WHEREAS,   each  Subsidiary  executed  a  separate  security
          agreement (each a  "Subsidiary  Security Agreement", and together
          with the Company Security Agreement,  the  "Security Agreements")
          in favor of the Agent, as agent for the Banks,  pursuant to which
          each Subsidiary granted a security interest in certain collateral
          to secure the Obligations;

               WHEREAS,  all of the requirements under Section  2.18(a)  of
          the Credit Agreement  as amended by the Third Amendment have been
          fulfilled, thereby allowing  the  Company to require the Agent to
          release the liens and other security securing the Obligations and
          the Company hereby directs that the  Agent release such liens and
          security; and

               WHEREAS, the Agent has agreed to  release all such liens and
          security in accordance with the terms hereof.

               NOW, THEREFORE, in consideration of the premises, and mutual
          covenants, agreements and understandings  contained herein and in
          the   Credit   Agreement,   and  for  other  good  and   valuable
          consideration, the receipt and  sufficiency  of  which are hereby
          acknowledged, the parties hereto agree as follows:

               1.   Termination and Release.  The Agent, for  itself and on
          behalf  of  the  Banks,  hereby terminates, releases and  forever
          discharges the Company and  each of the Subsidiaries from each of
          their respective Security Agreements  and  from  any other pledge
          agreements, security interests, mortgages, assignments, liens and
          other security (but not the Subsidiary Guarantees)  securing  the
          Obligations  (collectively,  "Other Security Instruments") to the
          extent such Other Security Instruments secure the Obligations;

               2.   Further Assurances.   The  Agent,  for  itself  and  on
          behalf  of  the  Banks,  agrees  to  execute  any and all further
          documents  necessary to achieve the purpose and  intent  of  this
          Agreement,  including   without   limitation   any  and  all  UCC
          termination instrument and any other instrument  or  document  to
          release  the  liens and other security as contemplated herein and
          in Section 2.18(a) of the Credit Agreement.

               3.   Counterparts.    This  Agreement may be executed by one
          or  more  of  the  parties to this Agreement  on  any  number  of
          separate  counterparts,   and  all  of  said  counterparts  taken
          together  shall  be  deemed  to   constitute   one  in  the  same
          instruments.

               4.   Severability.  Any provision of this Agreement which is
          prohibited or unenforceable in any jurisdiction shall, as to such
          jurisdiction, be ineffective to the extent of such prohibition or
          unenforceability  without  invalidating the remaining  provisions
          hereof,  any  such  prohibition   or   unenforceability   in  any
          jurisdiction  shall  not  invalidate or render unenforceable such
          provision in any jurisdiction.

               5.   Governing  Law.  This  Agreement  and  the  rights  and
          obligations  of  the parties  hereunder  shall  be  governed  by,
          construed and interpreted  in  accordance  with  the  laws of the
          State of Louisiana.

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

                                        BANK OF AMERICA NATIONAL  TRUST AND
                                        SAVINGS ASSOCIATION, as Agent

                                        By:     /s/ Janice Hammond
                                             --------------------------
                                             Name:  Janice Hammond
                                             Title: Vice President
                                                    Agency Sepcialist

                                        AVONDALE INDUSTRIES, INC.

                                        By:     /s/ Eugene K. Simon, Jr.
                                             ---------------------------
                                             Name:  Eugene K. Simon, Jr.
                                             Title: Assistant Secretary

                                        AVONDALE GULFPORT MARINE, INC

                                        By:     /s/ Kenneth B. Dupont
                                             -------------------------
                                             Name:  Kenneth B. Dupont
                                             Title: President

                                        AVONDALE TECHNICAL SERVICES, INC.

                                        By:     /s/ Thomas M. Kitchen
                                             --------------------------
                                             Name:  Thomas M. Kitchen
                                             Title: President

                                        CRAWFORD TECHNICAL SERVICES, INC.

                                        By:     /s/ Joseph J. Jarvis III
                                             --------------------------
                                             Name:  Joseph J. Jarvis III
                                             Title: President

                                        GENCO INDUSTRIES, INC.

                                        By:      /s/ Kenneth B. Dupont
                                             ---------------------------
                                             Name:   Kenneth B. Dupont
                                             Title:  CEO

                                        AVONDALE PROPERTIES, INC.

                                        By:      /s/ Thomas M. Kitchen
                                             ---------------------------
                                             Name:   Thomas M. Kitchen
                                             Title:  V. P.

                                        AVONDALE LAND MANAGEMENT COMPANY

                                           By: Avondale Industries, Inc.
                                               a general partner


                                                By:  /s/ Thomas M. Kitchen
                                                     ---------------------
                                                Name:    Thomas M. Kitchen
                                                     ---------------------
                                                Title:   V. P.
                                                     ---------------------


                                           By:  Avondale Properties, Inc.
                                                a general partner


                                                By:  /s/ Thomas M. Kitchen
                                                     ---------------------
                                                Name:    Thomas M. Kitchen
                                                     ---------------------
                                                Title:   V. P.
                                                     ---------------------





<PAGE>
                                       CONSENT


                  By  Subsidiary  Guarantee dated as of May 10, 1994 (the
             "Guarantee"), the undersigned  (the  "Guarantor") guaranteed
             to the Secured Parties (as defined therein),  subject to the
             terms,  conditions  and  limitations set forth therein,  the
             prompt payment and performance of all of the Obligations (as
             defined  therein).   The  Guarantor   (a)  consents  to  the
             Company's  execution  of  the foregoing Third  Amendment  to
             Amended and Restated Revolving  Credit Agreement and Request
             for  Release  of  Collateral  (the "Third  Amendment"),  (b)
             consents to the release of collateral therein requested, and
             (c) acknowledges the continued  validity, enforceability and
             effectiveness of the Guarantee with  respect  to  all loans,
             advances  and  extensions  of credit to the Company, whether
             heretofore or hereafter made,  together  with  all  interest
             thereon and all expenses in connection therewith.


                                      AVONDALE GULFPORT MARINE, INC.



                                      By:    /s/ Kenneth B. Dupont
                                             ---------------------
                                      Name:      Kenneth B. Dupont
                                      Title:     President


             Dated  as  of  even  date  with the  above-referenced  Third
             Amendment.


<PAGE>

                                       CONSENT


             By   Subsidiary   Guarantee  dated  as  of May 10, 1994 (the
             "Guarantee"),  the undersigned (the "Guarantor")  guaranteed
             to the Secured Parties (as defined therein),  subject to the
             terms,  conditions  and  limitations set forth therein,  the
             prompt payment and performance of all of the Obligations (as
             defined therein).    The Guarantor    (a)  consents  to  the
             Company's  execution  of   the foregoing Third  Amendment to
             Amended and Restated Revolving  Credit Agreement and Request
             for Release  of  Collateral   (the "Third Amendment"),   (b)
             consents to the release of collateral therein requested, and
             (c) acknowledges the continued  validity, enforceability and
             effectiveness of the Guarantee with  respect  to  all loans,
             advances  and  extensions  of credit to the Company, whether
             heretofore or hereafter made, together  with  all   interest
             thereon and all expenses in connection therewith.


                                      AVONDALE  TECHNICAL  SERVICES, INC.



                                      By:    /s/ Thomas M. Kitchen
                                             ---------------------
                                      Name:      Thomas M. Kitchen
                                      Title:     President

             Dated  as  of  even  date  with the  above-referenced Third
             Amendment.


<PAGE>


                                       CONSENT


             By   Subsidiary   Guarantee  dated  as  of May 10, 1994 (the
             "Guarantee"),  the undersigned (the "Guarantor")  guaranteed
             to the Secured Parties (as defined therein),  subject to the
             terms,  conditions  and  limitations set forth therein,  the
             prompt payment and performance of all of the Obligations (as
             defined therein).    The Guarantor   (a)  consents   to  the
             Company's  execution  of   the  foregoing Third Amendment to
             Amended and Restated Revolving  Credit Agreement and Request
             for Release  of  Collateral   (the "Third Amendment"),   (b)
             consents to the release of collateral therein requested, and
             (c) acknowledges the continued  validity, enforceability and
             effectiveness of the Guarantee with  respect  to  all loans,
             advances  and  extensions  of credit to the Company, whether
             heretofore or hereafter made, together  with  all   interest
             thereon and all expenses in connection therewith.


                                      CRAWFORD  TECHNICAL  SERVICES, INC.



                                      By:    /s/ Joseph J. Jarvis, III
                                             -------------------------
                                      Name:      Joseph J. Jarvis, III
                                      Title:     President

             Dated  as  of  even  date  with the  above-referenced Third
             Amendment.


<PAGE>

                                       CONSENT


             By   Subsidiary   Guarantee  dated  as  of May 10, 1994 (the
             "Guarantee"),  the undersigned (the "Guarantor")  guaranteed
             to the Secured Parties (as defined therein),  subject to the
             terms,  conditions  and  limitations set forth therein,  the
             prompt payment and performance of all of the Obligations (as
             defined therein).    The Guarantor   (a)  consents   to  the
             Company's  execution  of   the  foregoing Third Amendment to
             Amended and Restated Revolving  Credit Agreement and Request
             for Release  of  Collateral  (the "Third Amendment"),    (b)
             consents to the release of collateral therein requested, and
             (c) acknowledges the continued  validity, enforceability and
             effectiveness of the Guarantee with  respect  to  all loans,
             advances  and  extensions  of credit to the Company, whether
             heretofore or hereafter made, together  with  all   interest
             thereon and all expenses in connection therewith.


                                      GENCO INDUSTRIES, INC.



                                      By:    /s/ Kenneth B. Dupont
                                             ---------------------
                                      Name:      Kenneth B. Dupont
                                      Title:     Chief Executive Officer

             Dated  as  of  even  date with  the  above-referenced Third
             Amendment.

<PAGE>

                                       CONSENT


             By   Subsidiary   Guarantee  dated  as  of May 10, 1994 (the
             "Guarantee"),  the undersigned (the "Guarantor")  guaranteed
             to the Secured Parties (as defined therein),  subject to the
             terms,   conditions  and limitations set forth therein,  the
             prompt payment and performance of all of the Obligations (as
             defined therein).    The Guarantor   (a) consents    to  the
             Company's  execution  of   the  foregoing Third Amendment to
             Amended and Restated Revolving  Credit Agreement and Request
             for Release  of  Collateral  (the "Third Amendment"),    (b)
             consents to the release of collateral therein requested, and
             (c) acknowledges the continued  validity, enforceability and
             effectiveness of the Guarantee with  respect  to  all loans,
             advances  and  extensions  of credit to the Company, whether
             heretofore or hereafter made, together  with  all   interest
             thereon and all expenses in connection therewith.


                                      AVONDALE PROPERTIES, INC.



                                      By:    /s/ Thomas M. Kitchen
                                             ---------------------
                                      Name:      Thomas M. Kitchen
                                      Title:     Vice President &
                                                 Secretary

             Dated  as  of  even  date with  the  above-referenced Third
             Amendment.


<PAGE>


                                       CONSENT


             By   Subsidiary   Guarantee  dated  as  of May 10, 1994 (the
             "Guarantee"),  the undersigned (the "Guarantor")  guaranteed
             to the Secured Parties (as defined therein),  subject to the
             terms,   conditions  and limitations set forth therein,  the
             prompt payment and performance of all of the Obligations (as
             defined therein).    The Guarantor   (a) consents    to  the
             Company's  execution  of   the  foregoing Third Amendment to
             Amended and Restated Revolving  Credit Agreement and Request
             for Release  of  Collateral  (the "Third Amendment"),    (b)
             consents to the release of collateral therein requested, and
             (c) acknowledges the continued  validity, enforceability and
             effectiveness of the Guarantee with  respect  to  all loans,
             advances  and  extensions  of credit to the Company, whether
             heretofore or hereafter made, together  with  all   interest
             thereon and all expenses in connection therewith.


                                      AVONDALE LAND MANAGEMENT COMPANY,
                                      a Louisiana general partnership

                                      By:  Avondale Industries, Inc.,
                                           a general partner


                                      By:    /s/ Thomas M. Kitchen
                                             ---------------------
                                      Name:      Thomas M. Kitchen
                                      Title:     Vice President & CFO


                                      By:  Avondale Properties, Inc.,
                                           a general partner


                                      By:    /s/ Thomas M. Kitchen
                                             ---------------------
                                      Name:      Thomas M. Kitchen
                                      Title:     Vice President &
                                                 Secretary


             Dated  as  of  even  date  with the above-referenced Third
             Amendment.