FOURTH AMENDMENT TO AMENDED AND
                       RESTATED REVOLVING CREDIT Agreement

         THIS  FOURTH  AMENDMENT  TO  AMENDED  AND  RESTATED   REVOLVING  CREDIT
AGREEMENT  (this "Fourth  Amendment") is made and dated as of September 12, 1998
by and among AVONDALE INDUSTRIES, Inc., a Louisiana corporation (the "Company"),
the several  financial  institutions  party  hereto (the  "Banks"),  and Bank of
America National Trust and Savings Association,  as agent for the Banks (in such
capacity,  the "Agent"),  and amends that certain Amended and Restated Revolving
Credit  Agreement dated as of January 28, 1997 among the Company,  the Banks and
the Agent,  as amended by a First  Amendment to Amended and  Restated  Revolving
Credit  Agreement dated as of March 14, 1997, a Second  Amendment to Amended and
Restated  Revolving  Credit  Agreement  dated as of April  30,  1997 and a Third
Amendment to Amended and Restated  Revolving  Credit  Agreement  and Request for
Release  of  Collateral  dated  as of  October  24,  1997  (as so  amended,  the
"Agreement).

                                     RECITAL

         The Banks and the Agent desire to amend the  Agreement on the terms and
conditions set forth herein.

         NOW, THEREFORE,  for good and valuable  consideration,  the receipt and
adequacy of which are hereby acknowledged, the parties hereby agree as follows:

         1. Terms.  All terms used herein shall have the same meanings as in the
Agreement unless otherwise defined herein. All references to the Agreement shall
mean the Agreement as hereby amended.

         2. Amendments to Agreement.  The parties agree that the Agreement shall
be amended as follows:

         2.1      Section  7.7  of the  Agreement is amended and restated in its
entirety as follows:

                  "Section 7.7 Limitation on Capital Expenditures. Incur Capital
         Expenditures  (excluding  up to  $40,000,000  in  LPD-17  Expenditures)
         which, in the aggregate for the Company and its Subsidiaries taken as a
         whole,  exceed  (a) for the  fiscal  year  ending  December  31,  1998,
         $35,000,000  and (b) for the fiscal year ending  December  31, 1999 and
         for each fiscal year  thereafter,  the sum of (i) $25,000,000 plus (ii)
         the excess of  $25,000,000  (or in the case of the fiscal  year  ending
         December 31, 1999 only,  $35,000,000) over sum of all such expenditures
         of the  Company  and  its  Subsidiaries,  taken  as a  whole,  for  the
         preceding year; provided,  however, that the unused amount permitted to
         be carried forward shall not exceed $10,000,000 in any fiscal year."

         3. Representations and Warranties.  The Company represents and warrants
to Banks and the Agent  that,  on and as of the date  hereof,  and after  giving
effect to this Fourth Amendment:
<PAGE>
         3.1  Authorization.  The  execution,  delivery and  performance of this
Fourth Amendment have been duly authorized by all necessary  corporate action by
the Company and this Fourth  Amendment  has been duly  executed and delivered by
the Company.

         3.2 Binding  Obligation.  This Fourth Amendment is the legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with  its  terms,   except  as  enforceability  may  be  limited  by  applicable
bankruptcy,  insolvency or similar laws affecting the  enforcement of creditors'
rights generally or by equitable principles relating to enforceability.

         3.3 No Legal Obstacle to Fourth Amendment. The execution,  delivery and
performance  of this Fourth  Amendment  will not (a) contravene the terms of the
Company's certificate of incorporation,  by-laws or other organization document;
(b) conflict with or result in any breach or  contravention of the provisions of
any  contract  to which the  Company is a party,  or the  violation  of any law,
judgment,  decree or governmental  order,  rule or regulation  applicable to the
Company,  or result in the creation  under any  agreement or  instrument  of any
security  interest,  lien,  charge, or encumbrance upon any of the assets of the
Company. No approval or authorization of any governmental  authority is required
to permit the  execution,  delivery or performance by the Company of this Fourth
Amendment, or the transactions contemplated hereby.

         3.4 Incorporation of Certain  Representations.  The representations and
warranties  of the Company set forth in Section IV of the Agreement are true and
correct in all respects, except as to such representations made as of an earlier
specified date.

         3.5 Default.  No Default or Event of Default  under the  Agreement  has
occurred and is continuing.

         4.       Miscellaneous.

         4.1 Effectiveness of Agreement. Except as hereby expressly amended, the
Agreement  and each other  Loan  Document  shall  each  remain in full force and
effect,  and are hereby  ratified and confirmed in all respects on and as of the
date hereof.

         4.2  Waivers.  This Fourth  Amendment is specific in time and in intent
and does not  constitute,  nor should it be construed  as, a waiver of any other
right, power or privilege under the Agreement or under any agreement,  contract,
indenture,  document  or  instrument  mentioned  in the  Agreement;  nor does it
preclude  any  exercise  thereof or the  exercise of any other  right,  power or
privilege, nor shall any future waiver of any right, power, privilege or default
hereunder,  or  under  the  Agreement  or any  agreement,  contract,  indenture,
document or instrument  mentioned in the  Agreement,  constitute a waiver of any
other default of the same or of any other term or provision.

         4.3  Counterparts.  This Fourth Amendment may be executed in any number
of  counterparts,  all of such  counterparts  taken  together shall be deemed to
constitute one and the same  instrument.  This Fourth Amendment shall not become
effective until the Company,  the Agent and the Required Banks shall have signed
a copy hereof, and each Guarantor shall have consented hereto,  whether the same
or counterparts, and the same shall have been delivered to the Agent.

         4.4      Jurisdiction.  This Fourth  Amendment shall be governed by and
construed under the laws of the State of Illinois.
<PAGE>
         IN  WITNESS  WHEREOF,  the  parties  hereto  have  caused  this  Fourth
Amendment to be duly executed and delivered as of the date first written above.


                                       AVONDALE INDUSTRIES, INC.

                                       By     /S/ EUGENE K. SIMON, JR.
                                              ----------------------------
                                       Name       EUGENE K. SIMON, JR.
                                              ---------------------------- 
                                       Title      V.P. - FINANCE
                                              ----------------------------



                                       BANK OF AMERICA NATIONAL TRUST AND
                                       SAVINGS ASSOCIATION, as Agent and a Bank
                       
                                       By     /S/ DIANNE ALLEN
                                              ----------------------------   
                                                  Dianne Allen
                                                 Vice President


                                       WHITNEY NATIONAL BANK

                                       By     /S/ ELMER H. HEMPHILL, JR.
                                              ----------------------------
                                       Name       ELMER H. HEMPHILL, JR.
                                              ----------------------------   
                                       Title      SVP
                                              ----------------------------     


ABN-AMRO BANK, N.V.                    ABN-AMRO BANK, N.V.

By     /S/ LAURIE C. TUZO              By     /S/ ERIC R. HOLLINGSWORTH
       -------------------------              ----------------------------
Name       LAURIE C. TUZO              Name       ERIC R. HOLLINGSWORTH
       -------------------------              ----------------------------
Title      SENIOR VICE PRESIDENT       Title      ASSISTANT VICE PRESIDENT
       -------------------------              ----------------------------

                                       FIRST NATIONAL BANK OF COMMERCE

                                       By     /S/ PETE M. YUAN
                                              ----------------------------
                                       Name       PETE M. YUAN
                                              ----------------------------
                                       Title      SENIOR VICE PRESIDENT
                                              ----------------------------
<PAGE>

                              CONSENT OF GUARANTORS


         Each  of  the  undersigned  Guarantors,  as a  party  to  a  Subsidiary
Guarantee dated May 10, 1994,  hereby consents to the foregoing Fourth Amendment
to Amended and  Restated  Credit  Agreement  dated as of even date  herewith and
confirms that the Subsidiary  Guaranty  executed by it remains in full force and
effect after giving  effect  thereto and  represent and warrant that there is no
defense,  counterclaim  or  offset of any type or  nature  under the  Subsidiary
Guaranty.

         Dated as of September 12, 1998.


AVONDALE GULFPORT MARINE, INC.                 AVONDALE TECHNICAL SERVICES, INC.

By     /S/ THOMAS M. KITCHEN                   By     /S/ THOMAS M. KITCHEN
       ----------------------------                   ------------------------
Name:      THOMAS M. KITCHEN                   Name:      THOMAS M. KITCHEN
       ----------------------------                   ------------------------
Title  VP, SECRETARY, AND TREASURER            Title      PRESIDENT
       ----------------------------                   ------------------------

CRAWFORD TECHNICAL SERVICES, INC.              GENCO INDUSTRIES, INC.

By     /S/ JOSEPH J. JARVIS III                By     /S/ EUGENE K. SIMON, JR.
       ----------------------------                   ------------------------
Name:      JOSEPH J. JARVIS III                Name:      EUGENE K. SIMON, JR.
       ----------------------------                   ------------------------
Title      PRESIDENT                           Title      SECRETARY & TRESURER
       ----------------------------                   ------------------------

AVONDALE PROPERTIES, INC.                      AVONDALE LAND MANAGEMENT COMPANY

By     /S/ THOMAS M. KITCHEN                   By     /S/ THOMAS M. KITCHEN
       ----------------------------                   ------------------------
Name:      THOMAS M. KITCHEN                   Name:      THOMAS M. KITCHEN
       ----------------------------                   ------------------------
Title      VP & SECRETARY                      Title      VP & SECRETARY
       ----------------------------                   ------------------------