THIRD AMENDMENT, WAIVER AND CONSENT TO REVOLVING CREDIT AGREEMENT

                    THIS THIRD AMENDMENT, WAIVER AND CONSENT TO REVOLVING
          CREDIT AGREEMENT (this "Amendment") is entered into as of May 10,
          1995, by and among AVONDALE INDUSTRIES, INC., a Louisiana
          corporation (the "Company"), the various financial institutions
          signatory hereto (collectively, the "Banks," and, individually, a
          "Bank"), and BANK OF AMERICA NATIONAL TRUST AND SAVINGS
          ASSOCIATION, as LC Issuer and as successor agent to BANK OF
          AMERICA ILLINOIS (successor-in-interest to CONTINENTAL BANK), as
          agent for the Banks (the "Agent").  Words and phrases having
          defined meanings in the Credit Agreement referred to below shall
          have the same respective meanings when used herein, unless
          otherwise expressly defined herein.

                                     WITNESSETH:

                    WHEREAS, the parties hereto have entered into a
          Revolving Credit Agreement, dated as of May 10, 1994 as amended
          by that certain First Amendment and Waiver to Revolving Credit
          Agreement dated as of May 31, 1994 and that certain Second
          Amendment to Revolving Credit Agreement dated as of February 9,
          1995 (collectively, the "Existing Agreement" and as amended by
          this Amendment, the "Credit Agreement"), relating to a revolving
          credit facility in an amount not to exceed $35,000,000 for the
          Company's ongoing working capital and general corporate needs;

                    WHEREAS, the Company, the Banks and the Agent desire
          (i) to amend and waive certain provisions of the Existing
          Agreement to permit the Company to extend certain financial
          accommodations to or for the benefit of American Heavy Lift
          Shipping Company, Inc., a Delaware corporation ("American Heavy
          Lift") in connection with the Company's construction of four (4)
          product tankers to be flagged under the United States flag for
          use in the United States coastwise trade and that comply with the
          requirements of the Oil Pollution Act of 1990 (collectively, the
          "AHL Tankers") and (ii) to increase the amount of the revolving
          credit facility to $42,500,000, in each case, on the terms and
          conditions set forth herein; and

                    WHEREAS, Bank of America National Trust and Savings
          Association has succeeded to the rights and duties of the Agent
          under the Credit Agreement and the other Loan Documents;

                    WHEREAS, the Company has delivered to the Agent and the
          Agent has delivered to the Banks an Extension Notice in which the
          Company requested that the Expiration Date of the Existing
          Agreement be extended for one additional year;

                    NOW THEREFORE, in consideration of the premises and the
          mutual agreements set forth herein and for other consideration
          the receipt and sufficiency of which are hereby acknowledged, the
          parties hereto agree as follows;
                    1.   Amendments to the Existing Agreement.  Subject to
<PAGE>
          and conditioned upon the fulfillment of each of the conditions
          precedent set forth in Section 4 hereof, the Existing Agreement
          is hereby amended as follows:

                    (a)  The definition of "LC Issuer" is hereby amended to
          delete the terms thereof in their entirety and to insert the
          following therefor:

                         "LC Issuer" shall mean Bank of America Illinois
               and/or Bank of America National Trust and Savings
               Association in its individual capacity and not as Agent and,
               with the consent of the Agent, the Company and Bank of
               America National Trust and Savings Association, any Bank.
               With respect to Letters of Credit issued by the LC Issuer,
               the LC Issuer shall have the benefits of each provision of
               this Agreement as if it were a Bank, and provisions of this
               Agreement and the other Loan Documents which are for "the
               benefit of the Banks" shall also be for the benefit of the
               LC Issuer.  If there shall be more than one LC Issuer at any
               time, to the extent relevant, the term "LC Issuer" shall
               mean both LC Issuers.

                    (b)  The definition of "Line of Credit" is hereby
          amended to delete the terms thereof in their entirety and to
          insert the following therefor:

                         "Line of Credit" shall mean the aggregate
               revolving credit line extended by the Banks to the Company
               for Loans and Letters of Credit pursuant to and in
               accordance with the terms of this Agreement, in the amount
               of $42,500,000.00 as such amount may be reduced from time to
               time in accordance with Section 2.5 or Section VIII.

                    (c) Section 2.2(a) is hereby amended to delete the
          terms thereof in their entirety and to insert the following
          therefor:

               The Loans made by each Bank pursuant hereto shall be
               evidenced by a promissory note of the Company substantially
               in the form of Exhibit J (as amended, supplemented, amended
               and restated, or otherwise modified, each a "Revolving Note"
               and collectively the "Revolving Notes"), made payable to the
               order of such Bank in a principal amount equal to such
               Bank's Commitment as of the Effective Date (or such other
               amount as may otherwise be relevant as a result of any
               assignments permitted by this Agreement).

                    (d)  Section 10.2 is hereby amended to delete the terms
          of the first sentence of the second paragraph thereof in its
          entirety and to insert the following therfor:

               Notwithstanding the foregoing, without the consent of any
               Bank or the LC Issuer, the Agent, upon the request of the
               Company, shall release its Lien, or enter into intercreditor
               and/or subordination agreements with lenders to the
               Company's and any Subsidiary Guarantor's customers
               subordinating the Agent's Lien, on certain Inventory which
               shall constitute or form a part of work-in-process with
<PAGE>
               respect to which both title thereto has passed to customers
               of the Company or any Subsidiary Guarantor pursuant to the
               terms of the applicable contract with such customers and for
               which an Account has arisen (whether or not such Account has
               been billed).

                    (e)  Schedule I is hereby amended to delete the terms
          thereof in their entirety and to insert Exhibit A attached hereto
          therefor.

                    2.   Waiver Relating to American Heavy Lift Contract.
          Subject to and conditioned upon the fulfillment of each of the
          conditions precedent set forth in Section 4 hereof, and effective
          as of the date of this Amendment, the Required Banks hereby (i)
          waive the provisions of Sections 7.3 and 7.13 of the Existing
          Agreement to the extent, and solely to the extent, necessary to
          permit the Company to extend financial accommodations to American
          Heavy Lift (in the form of a guarantee) in connection with the
          Company's construction of the AHL Tankers in an aggregate
          principal amount not to exceed $6,000,000 for all such extensions
          and (ii) waive the provisions of Section 7.9 of the Existing
          Agreement to permit the Company to purchase the sterns of the AHL
          Tankers for consideration not to exceed $20,000,000 in the
          aggregate, which sterns shall be simultaneously resold to
          American Heavy Lift for consideration in the same amount and of
          the same type as that paid by the Company therefor.  The
          documentation pursuant to which such extensions of credit are
          made and governed shall be substantially in the form of that
          documentation delivered to each of the Banks prior to the date of
          this Amendment, with any material changes thereto requiring the
          further consent of the Required Banks.

                    3.  Acknowledgment Relating to Existing DOL Letter of
          Credit.  Each of the Banks hereby acknowledges that Bank of
          America National Trust and Savings Association ("BofA") and Bank
          of America Illinois ("BAI") in their respective capacities as LC
          Issuers are contemplating the substitution of the current
          $20,000,000 Letter of Credit issued by BAI in favor of the United
          States Department of Labor (the "DOL") (the "BAI Letter of
          Credit") with a $20,000,000 Letter of Credit issued by BofA in
          favor of the DOL (the "BofA Letter of Credit").  In order to
          facilitate such exchange the BofA Letter of Credit will be
          delivered to the DOL prior to the surrender of the BAI Letter of
          Credit to BAI.  Each of the Banks acknowledges and agrees that it
          shall continue to have a participation interest in both the BAI
          Letter of Credit and the BofA Letter of Credit notwithstanding
          the limitations on their respective commitments set forth in the
          Credit Agreement.  Upon BAI's actual receipt of the  BAI Letter
          of Credit the BAI Letter of Credit shall be cancelled and the
          Agent shall notify each of the Banks of such cancellation.

                    4.   Conditions Precedent to Effectiveness of
          Amendments, Waiver and Consent.  The amendments and modifications
          set forth in Section 1 hereof and the waivers and consents set
          forth in Sections 2 hereof shall become effective upon, and are
          expressly conditioned upon, the fulfillment of each of the
          following conditions precedent on or prior to June 1, 1995:
<PAGE>
                    (a)  Amendment.  The Agent shall have received this
          Amendment, duly executed and delivered by an authorized officer
          of the Company and each of the Banks.

                    (b)  Subsidiary Guarantor Consent.  The Agent shall
          have received (with a copy for each of the other Banks) from each
          of the Subsidiary Guarantors a reaffirmation of the Subsidiary
          Guarantee executed by it.

                    (c)  Material Adverse Change.  In the opinion of the
          Banks (as evidenced by their execution of this Amendment), no
          event or condition shall have occurred or exist which could
          reasonably be expected to have a Material Adverse Effect.

                    (d)  MARAD Approval.  The Agent shall have received
          copies of MARAD documentation approving the increase in the Line
          of Credit and the amendment to the 900 Foot Floating Drydock
          Mortgage reflecting such increase.

                    (e)  Legal Opinion.  The Agent shall have received the
          favorable opinion of Jones, Walker, Waechter, Poitevent, Carrere
          & Denegre, Louisiana counsel to the Company, addressed to the
          Agent, the LC Issuer and the Banks in form and substance
          satisfactory to the Agent and its counsel.

                    (f)  Revised Revolving Notes.  The Agent shall have
          received an Amended and Restated Revolving Note (or an amendment
          to the existing Revolving Notes) for each of the Banks evidencing
          the increase in each Bank's Commitment as contemplated by this
          Amendment.

                    (g)  Fee.  The Agent shall have received a fee equal to
          0.25% of the $7,500,000 increase in the Line of Credit (which fee
          shall be paid to the Banks (including Bank of America Illinois as
          a Bank) pro rata based upon the respective increases in their
          Commitments), and an amendment processing fee for its own account
          pursuant to a separate letter agreement with the Company.

                    (h)  American Heavy Lift Documentation.  The Agent
          shall have received copies of all documentation relating to
          American Heavy Lift's issuance of bonds guaranteed by MARAD and
          the Company's related guarantees and such documents shall be in
          form and substance satisfactory to Agent and its counsel.

                    (i)  Extension Documentation.  The Agent shall have
          received a duly executed Consent Notice satisfactory to Agent
          from each of the Banks agreeing to extend the Expiration Date for
          one additional year (to May 10, 1997).

                    (j)  Other Documents.  The Agent shall have received
          such other documents, instruments and agreements as it shall have
          reasonably requested in connection with the transactions
          contemplated by this Amendment.

                    5.   Representations, Warranties and Covenants.  In
          order to induce the Agent and the Banks to enter into this
          Amendment, the Company hereby represents, warrants and covenants
          to the Agent and the Banks as follows:
<PAGE>
                         (a)  The execution, delivery and performance by
               the Company of this Amendment (i) are within the Company's
               corporate powers, (ii) have been duly authorized by all
               necessary corporate action, (iii) require no action by or in
               respect of, or filing with, any governmental body, agency or
               official, (iv) 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 Certificate or Articles of
               Incorporation or By-Laws of the Company, (v) do not
               contravene, or constitute a default under, any agreement,
               judgment, injunction, order, decree, indenture, contract,
               lease, instrument or other commitment to which the Company
               is a party or by which the Company or any of its assets are
               bound and (vi) will not result in the creation or imposition
               of any Lien upon any asset of the Company under any existing
               indenture, mortgage, deed of trust, loan or credit agreement
               or other agreement or instrument to which the Company is a
               party or by which it or any of its assets may be bound or
               affected.

                         (b)  This Amendment and the Credit Agreement are
               the legal, valid and binding obligations of the Company, and
               are enforceable against the Company in accordance with their
               terms.

                         (c)  The representations and warranties contained
               in the Credit Agreement and the other Loan Documents are
               true and correct in all material respects on and as of the
               date hereof as though made on the date hereof, except to the
               extent that such representations expressly relate solely to
               an earlier date (in which case such representations and
               warranties were true and accurate on and as of such earlier
               date).

                         (d)  No Default or Event of Default has occurred
               and is continuing.

                         (e)  On or prior to May 31, 1995 the Company shall
               cause to be delivered to the Agent the favorable opinion of
               Jones, Walker, Waechter, Poitevent, Carrere & Denegre,
               Louisiana counsel to the Company, addressed to the Agent,
               the LC Issuer and the Banks in form and substance
               satisfactory to the Agent and its counsel with respect to
               the amendment to the 900 Foot Floating Drydock Mortgage
               reflecting the increase in the Commitments contemplated by
               this Amendment.

                         (f)  The Company will not, without the prior
               written consent of the Required Banks, amend or otherwise
               modify (or agree to amend or otherwise modify) any provision
               of (i) those certain Credit Support Agreements, dated on or
               about the date hereof, by and between the Company and
               American Heavy Lift or (ii) any promissory notes, mortgages,
               security agreements or similar instruments or agreements
               executed pursuant to or in connection with such Credit
               Support Agreements.

                    6.   Reference to and Effect Upon the Credit Agreement.
<PAGE>
          Upon the effectiveness of this Amendment, each reference in the
          Existing Agreement to "the Agreement", "hereunder", "hereof",
          "herein", or words of like import, shall mean and be a reference
          to the Credit Agreement, as amended hereby and each reference to
          the Existing Agreement in any other Loan Document shall mean and
          be a reference to the Credit Agreement, as amended hereby.

                    7.   Reaffirmation; Expenses.  The Company hereby
          reaffirms to the Agent and each of the Banks that, except as
          modified hereby, the Credit Agreement and all of the Loan
          Documents remain in full force and effect and have not been
          otherwise waived, modified or amended.  Except as expressly
          modified hereby, all of the terms and conditions of the Credit
          Agreement shall remain unaltered and in full force and effect.
          The Company acknowledges that all reasonable legal expenses of
          the Agent related to this Amendment shall be paid by the Company.

                    8.   Confirmation of Collateral Documents.  The Company
          hereby (i) ratifies and confirms its obligations under the
          Collateral Documents and acknowledges and agrees that the
          Collateral Documents to which the Company is a party are the
          legal, valid and binding obligations of the Company, enforceable
          against it in accordance with their terms; and (ii) agrees that
          the Obligations (for purposes of each of such Collateral
          Documents) shall include, without limitation, the Obligations
          under and as defined in the Credit Agreement as amended by this
          Amendment.

                    9.   Choice of Law.  THIS AMENDMENT SHALL BE GOVERNED
          BY AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS (AS
          OPPOSED TO CONFLICTS OF LAW PROVISIONS) OF THE STATE OF ILLINOIS
          AND ANY DISPUTE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
          INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THE COMPANY,
          THE SUBSIDIARIES, THE AGENT AND THE BANKS IN CONNECTION WITH THIS
          AMENDMENT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY OR
          OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS
          AND DECISIONS OF THE STATE OF ILLINOIS.

                    10.  Counterparts.  This Amendment may be executed in
          one or more counterparts, each of which shall be deemed an
          original, but all of which together shall constitute one and the
          same instrument.  One or more counterparts of this Amendment may
          be delivered by telecopier, with the intention that they shall
          have the same effect as an original counterpart thereof.

                    IN WITNESS WHEREOF, the parties hereto have caused
          their duly authorized officers to execute and deliver this
          Agreement as of the date first above written.

                                        AVONDALE INDUSTRIES, INC.


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

                                        BANK OF AMERICA NATIONAL TRUST AND
                                          SAVINGS ASSOCIATION, as Agent
<PAGE>

                                        By: /s/ DANIEL G. FARTHING
 					    ----------------------
                                        Name:  Daniel G. Farthing
                                        Title: Vice President

                                        THE BANKS:

                                        BANK OF AMERICA ILLINOIS, successor-
                                         in-interest to CONTINENTAL BANK, 
                                         as a Bank and as LC Issuer

                                        By: /s/ THOMAS BARNETT
					    ------------------
                                        Name:  Thomas Barnett
                                        Title: Vice President

                                        BANK OF AMERICA NATIONAL TRUST AND
                                          SAVINGS ASSOCIATION, as LC Issuer


                                        By: /s/ THOMAS BARNETT
					    ------------------
                                        Name:  Thomas Barnett
                                        Title: Vice President

                                        WHITNEY NATIONAL BANK


                                        By: /s/ ELMER H. HEMPHILL, JR.
                                        Name: Elmer H. Hemphill, Jr.
                                        Title: Senior Vice President

                                        FIRST INTERSTATE BANK OF TEXAS,N.A.


                                        By: /s/ FRANK W. SCHAGEMAN
					    ----------------------	
                                        Name: Frank W. Schageman
                                        Title: Vice President


                                        FIRST NATIONAL BANK OF COMMERCE


                                        By: /s/ DAVID A. DOHERTY
                                            --------------------
					Name: David A. Doherty
                                        Title: VIce President
<PAGE>
                                      EXHIBIT A

                                    SCHEDULE I TO
                              AVONDALE INDUSTRIES, INC.
                              REVOLVING CREDIT AGREEMENT

          Commitments                            Amount         Percentage

          Bank of America Illinois                $18,200,000   42.8235295%
          Whitney National Bank                   $12,150,000   28.5882353%
          First National Bank of Commerce         $ 6,075,000   14.2941176%
          First Interstate Bank                   $ 6,075,000   14.2941176%

          Total                                   $42,500,000  100.0000000%

                                       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 consents to the Company's execution of the
          foregoing Third Amendment, Waiver and Consent to Revolving Credit
          Agreement and 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/ THOMAS M. KITCHEN
					   ---------------------
					   Thomas M. Kitchen		
                                        Title:

          Dated:  May 10, 1995
<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 consents to the Company's execution of the
          foregoing Third Amendment, Waiver and Consent to Revolving Credit
          Agreement and 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
					   ---------------------
					   Thomas M. Kitchen		
                                        Title:

          Dated:  May 10, 1995
<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 consents to the Company's execution of the
          foregoing Third Amendment, Waiver and Consent to Revolving Credit
          Agreement and 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\ B. L. HICKS
					    --------------	
					    B. L. Hicks
                                        Title:

          Dated:  May 10, 1995
<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 consents to the Company's execution of the
          foregoing Third Amendment, Waiver and Consent to Revolving Credit
          Agreement and 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/ THOMAS M. KITCHEN
					   ---------------------
					   Thomas M. Kitchen	
                                        Title:

          Dated:  May 10, 1995
<PAGE>
                                       CONSENT

                    By Subsidiary Guarantee dated as of February 9, 1995
          (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 consents to the Company's execution of
          the foregoing Third Amendment, Waiver and Consent to Revolving
          Credit Agreement and 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
					   ---------------------
					   Thomas M. Kitchen	
                                        Title:

          Dated:  May 10, 1995
<PAGE>

                    By Subsidiary Guarantee dated as of February 9, 1995
          (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 consents to the Company's execution of
          the foregoing Third Amendment, Waiver and Consent to Revolving
          Credit Agreement and 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:

                                             By  Avondale Properties, Inc.,
                                                  a general partner

                                             By /s/ THOMAS M. KITCHEN
					        ---------------------
					     Name: Thomas M. Kitchen
                                             Title:

          Dated:  May 10, 1995