SECOND AMENDMENT TO AMENDED AND RESTATED
                              REVOLVING CREDIT AGREEMENT


               This  SECOND  AMENDMENT  TO  AMENDED  AND RESTATED REVOLVING
          CREDIT AGREEMENT (this "Amendment") is entered  into  as of April
          30,  1997,  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  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.

                                 W I T N E S S E T H:

               WHEREAS, the parties hereto have entered into an Amended and
          Restated Revolving Credit  Agreement dated as of January 28, 1997
          as amended by that certain First  Amendment  thereto  dated as of
          March  14, 1997 (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 $85,000,000
          for the Company's  ongoing  working capital and general corporate
          needs; and

               WHEREAS, the Company has  requested  that the Banks agree to
          certain amendments and modifications to the terms of the Existing
          Agreement;

               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:
<PAGE>
               1.   Amendment to the Existing Agreement.   Subject  to  and
          conditioned  upon  the  fulfillment  of  each  of  the conditions
          precedent  set forth in Section 3 hereof, the Existing  Agreement
          is hereby amended  as  follows:   Section  6.11  of  the Existing
          Agreement is hereby amended to delete the terms thereof  in their
          entirety and to insert the following therefor:

                    Section  6.11.   Delivery  of Assignment of Claims
               Notices.  Except as provided in the  next  sentence  of
               this  Section  6.11, within 30 days after executing any
               contract with any  Governmental Authority of the United
               States, including, without  limitation,  the Department
               of  Navy,  providing  for  aggregate  payments  to  the
               Company  or any Subsidiary Guarantor of  $1,000,000  or
               more,  the   Company   shall,   and  shall  cause  each
               Subsidiary  Guarantor  party thereto,  to  assign  such
               contract  to  the  Agent  and   deliver   a  Notice  of
               Assignment with respect to such contract which has been
               sent  to the United States government pursuant  to  the
               Assignment  of Claims Act of 1940 as amended (31 U.S.C.
               3727, 41 U.S.C. 15) and acknowledged by the appropriate
               administrative   contracting  officer,  and  disbursing
               officer, and if applicable,  any  surety  on  any  bond
               applicable  to  such  contract.   On  or before May 31,
               1997, the Company shall assign the LPD-17  Contract  to
               the  Agent  and  deliver  a  Notice  of Assignment with
               respect to the LPD-17 Contract which has  been  sent to
               the United States government pursuant to the Assignment
               of  Claims  Act of 1940 as amended (31 U.S.C. 3727,  41
               U.S.C.  15)  and   acknowledged   by   the  appropriate
               administrative  contracting  officer,  and   disbursing
               officer,  and  if  applicable,  any surety on any  bond
               applicable to the LPD-17 Contract.

               2.   Conditions Precedent to Effectiveness of Amendments and
          Consents.  The amendments and modifications  set forth in Section
          1   hereof  shall  become  effective  upon,  and  are   expressly
          conditioned  upon,  the  fulfillment  of  each  of  the following
          conditions precedent:

                    (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  Banks)  from each of
          the  Subsidiary  Guarantors  a  reaffirmation  of  the Subsidiary
          Guarantee executed by it in the form attached hereto.

                    (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.
<PAGE>
                    (d)  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.

               3.   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:

                    (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.

               4.   Reference  to  and  Effect  Upon  the Credit Agreement.
          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.
<PAGE>
               5.   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 fees and  expenses of the Agent related
          to this Amendment shall be paid by the Company.

               6.   Confirmation  of  Collateral  Documents.   The  Company
          hereby  (a)  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 (b) 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.

               7.   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.

               8.   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, and if so delivered shall  be  deemed to
          be  delivered  with  the intention that they shall have the  same
          effect as an original  counterpart  hereof.  Any party delivering
          any such counterpart by telecopy shall  promptly  forward  to the
          Agent an original counterpart hereof.

                               [Signature Pages Follow]

<PAGE>
               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


                               [SIGNATURES CONTINUED ON
                                 THE FOLLOWING PAGE]

<PAGE>


                                        BANK OF AMERICA NATIONAL TRUST
                                           AND SAVINGS ASSOCIATION,
                                           as Agent


                                        By:  /s/ W. Thomas Barnett
                                             ---------------------
                                        Name:    W. Thomas Barnett
                                        Title:   Vice President


                                        THE BANKS:

                                        BANK OF AMERICA ILLINOIS


                                        By:  /s/ W. Thomas Barnett
                                             ---------------------
                                        Name:    W. Thomas Barnett
                                        Title:   Vice President


                               [SIGNATURES CONTINUED ON
                                 THE FOLLOWING PAGE]

<PAGE>

                                        WHITNEY NATIONAL BANK



                                        By:  /s/ Elmer H. Hemphill, Jr.
                                             -------------------------- 
                                        Name:    Elmer H. Hemphill, Jr.
                                        Title: Senior Vice President


                               [SIGNATURES CONTINUED ON
                                 THE FOLLOWING PAGE]

<PAGE>


                                        ABN-AMRO BANK, N.V.


                                        By:  /s/ 
                                        Name:
                                        Title:


                               [SIGNATURES CONTINUED ON
                                 THE FOLLOWING PAGE]



<PAGE>

                                        FIRST    NATIONAL    BANK   OF
                                        COMMERCE


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


                               [SIGNATURES CONTINUED ON
                                 THE FOLLOWING PAGE]

<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  Second  Amendment  to Amended  and  Restated 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
                                                     ---------------------
                                             Title:  Vice       President,
                                                     Secretary & Treasurer

          Dated as of April 30, 1997.

<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  Second  Amendment  to Amended  and  Restated 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/ Bruce L. Hicks
                                                     ------------------
                                             Title:  Secretary & Treasurer

          Dated as of April 30, 1997.


<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  Second  Amendment  to Amended  and  Restated 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/ Bruce L. Hicks
                                                     ------------------
                                             Title:  Secretary & Treasurer

          Dated as of April 30, 1997.

<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  Second  Amendment  to Amended  and  Restated 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/ Bruce L. Hicks
                                                     ------------------
                                             Title:  Secretary & Treasurer

          Dated as of April 30, 1997.

<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  Second  Amendment  to Amended  and  Restated 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
                                                     ---------------------
                                             Title:  Vice   President    &
                                                     Secretary

          Dated as of April 30, 1997.

<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  Second  Amendment  to Amended  and  Restated 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:  Vice President, Chief
                                                     Financial Officer and
                                                     Secretary


                                             By  Avondale Properties, Inc.,
                                                 a general partner


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

          Dated as of April 30, 1997.
<PAGE>