Document:

EXHIBIT 10.3

                          Second Supplemental Agreement
                                     to the
                         Contract dated 30 December 1986

between

Sachtleben Chemie GmbH, Dr.-Rudolf-Sachtleben-Strasse 4, 47198 Duisburg

                                        hereinafter referred to as "Sachtleben"

and

KRONOS TITAN GMBH, Peschstrasse 5, 51373 Leverkusen

                                        hereinafter referred to as "KRONOS"

On 30 December 1986 Sachtleben and KRONOS entered into a contract to reuse the
dilute acid which results from the production of titanium oxide in the
Leverkusen and Homberg works, to separate both the filter salts which derive
from this dilute acid together with the additional filter salts delivered from
Nordenham, to deliver the fresh acid produced from the filter salts and to
deliver burner discharge ("Main Contract"). In order to adapt this contract to
changed circumstances and to clarify cases where doubt has arisen, the
contracting parties enter into the following agreements:

1.  Interest

1.1     A proportion of the interest paid on borrowings by Sachtleben, which
        corresponds to the ratio of the plant assets used in the cooperation to
        Sachtleben's plant assets as a whole, also constitutes part of the
        operating costs for the dilute acid recovery plant and for the filter
        salts separation plant. These costs are to be apportioned between the
        parties as a fixed-cost component (Main Contract Section 8; 1st
        Supplemental Agreement dated 3 May 1996 No. 3). The cooperation assets
        consist of the filter salts separation plant and the ancillary
        operations belonging wholly or in part to it. Interest on any other
        Sachtleben ancillary operations shall only be charged to the extent that
        plant attributable to the cooperation assets is served, either directly
        or indirectly, by these ancillary operations and where interest on
        borrowings must be expended for such service plant. The book values in
        accordance with German law are used as a basis to determine the plant
        asset values. Interest paid to affiliates of Sachtleben shall also be
        taken into account (Section 15 German Stock Corporation Act,
        Aktiengesetz, "AktG").

1.2     Interest to be paid by KRONOS shall - as shown in Annex 1 - be
        calculated by taking the product (B) of the factor (p) which results
        from the comparison of the interest for costing purposes on the
        cooperation assets (A1, A2) with that on the plant assets as a whole
        (K), as computed internally at Sachtleben in accordance with the

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        clearing system installed at SC (currently SAP-R/3), and the amount
        planned in Sachtleben's Income Statement for interest on borrowings
        actually expended (F).

1.3     The amount of interest to be paid by KRONOS, calculated in accordance
        with 1.2, shall, with temporary effect, be included in the monthly
        invoicing in the course of the routine Sachtleben cost accounting. This
        amount shall be itemized separately in the monthly account.

1.4     Within three months following the expiry of the financial year,
        Sachtleben shall calculate the final amount of the interest to be paid
        by KRONOS. In this calculation the total amount of interest paid on
        borrowings shall be taken from the attested annual accounts and any
        fractional set-off resulting from a budgeted/actual cost check of the
        participation factor shall be waived, by analogy with the procedure on
        expenditure for depreciation. The amount thus calculated shall be
        compared with the sum of the invoiced installments over the year. Any
        difference between the amounts in favor, or to the detriment, of KRONOS
        shall be payable or credited within 14 days without interest.

1.5     The foregoing new regulations  supplement  Section 1 para. 12, Section 8
        of the Main Contract with respect to the dilute acid recovery  plant and
        No. 3 of the 1st  Supplementary  Agreement  dated 3 May 1996.  They come
        into force retrospectively, effective as of 1 October 2000. The interest
        payments  under No. 1.2 for the months  October 2000 to  September  2001
        shall  be  calculated  after  the  net  annual  profit  of SC  has  been
        ascertained.   Any  difference  between  this  amount  and  installments
        burdened thus far on account of interest for costing  purposes  shall be
        refunded to KRONOS promptly.

2.  Division of Capacity, Fixed Costs and Variable Costs of the Dilute Acid
    Recovery Plant

2.1     The contracting parties are agreed that the current maximum capacity of
        the dilute acid recovery plant is approx. 900,000 metric tons per year.
        They are agreed that KRONOS is entitled to a partial capacity of 235,000
        metric tons per year, equivalent to 26%, and that Sachtleben is entitled
        to a partial capacity of 665,000 metric tons per year, equivalent to
        74%.

2.2     The fixed operating costs of the dilute acid recovery plant shall be
        borne by the contracting parties in the ratio: KRONOS 26% and Sachtleben
        74%. The actual utilization proportions shall be revealed in the course
        of invoicing. The contracting parties may reach agreement once annually
        on the utilization proportions and, as the case may be, agree a new
        assessment of the fixed cost proportions. Any adjustment of the fixed
        cost proportions where the plant capacity is agreed to be >= 780,000
        metric tons per year shall be based on KRONOS' taking up at least
        225,000, max. 235,000 metric tons per year and Sachtleben's taking up at
        least 545,000 metric tons per year. In individual cases the contracting
        parties shall reach agreement in good time on the adjustment of costs
        for investment in the dilute acid recovery plant and on the effects of
        investments (or other measures) which modify the plant capacity.

2.3     Effective as of 1 October 2000, the above provisions modify the relevant
        provisions  in Section  5.1,  Section  7.1,  and Section 8.1 1st and 2nd

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                                                                          Page 3

        sentence  (with  Annex  6) of  the  Main  Contract,  together  with  the
        provisions in No. 3 and No. 4 of the 1st Supplemental  Agreement dated 3
        May 1996. For the period up to 30 September  2000, the provisions  which
        were in force thus far remain  unchanged.  Sachtleben  took the modified
        calculation  into account for the first time in the  invoicing for April
        2001. After both parties have signed the instant Supplemental Agreement,
        Sachtleben shall calculate the discrepancy arising from the overburdened
        fixed costs  between  October 2000 and March  2001and  refund the excess
        amount to KRONOS.

3.      Continued Validity

        The Main Contract and the First Supplemental Agreement to the Main
        Contract dated 3 May 1996 continue to remain in force unchanged, insofar
        as they are not modified by an express provision of the instant
        Supplemental Agreement.

4.      Written Form Requirement

        Any modifications to this Agreement must be in writing. Cancellation of
        the written form requirement must also be in writing.

47198 Duisburg-Homberg, dated December 6, 2001

Sachtleben Chemie GmbH

/s/ Dr. Griebler       Mr. Dratsdrummer
    -----------------------------------
     Dr. Griebler      Mr. Dratsdrummer

51373 Leverkusen, dated January 8, 2002
KRONOS TITAN GMBH & CO OHG

/s/ Dr. U. Fiand       V. Roth
    -----------------------------------
    Dr. U. Fiand       V. Roth
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                                                                          Page 4

Annex 1

Diagram for calculating the interest burden for KRONOS

1. Calculation of the interest for costing purposes in the operating    A(A1;A2)
   costs via primary cost check (currently in SAP-R/3 System)
   (Separate for ancillary operations of the DSR and FS and its
   ancillary operations)

2. Interest for costing purposes on SC as a whole                       K

3. Calculation of the proportion of interest for costing purposes,      p = A/K
   contained in the operating costs, in the interest for costing
   purposes as a whole

4. Interest on borrowings in accordance with the Income Statement       F

5. Calculation of the proportion of interest on borrowings for the      B=F x p
   operating costs

6. Apportionment of B based on the separate calculation of A            B1
                                                                        B2
   DSR:

   FS:

7. Calculation of the interest burden KRONOS                            B1 x 26%
   invoicing                                                            B2 x 45%
   DSR:

   FS:FORM OF NOTE

                      FORTUNE NATURAL RESOURCES CORPORATION
                           10% SECURED PROMISSORY NOTE

$_________________                                               August 19, 2002

FOR VALUE RECEIVED, the undersigned, FORTUNE NATURAL RESOURCES CORPORATION, a
Delaware corporation with offices at One Commerce Green, 515 West Greens Road,
Suite 720, Houston, Texas 77067 ("Maker"), promises to pay to
________________________ with an address at _____________________________
("Payee"), on January 1, 2003 except as otherwise provided herein (the "Maturity
Date"), the principal amount of __________________ ($________) in lawful money
of the United States of America (the "Principal) together with all accrued
interest.

The Note is secured by property of the Maker as provided herein. It bears simple
interest (the "Interest") at the annual rate of ten percent (10%), payable, in
arrears, on the Interest Payment Dates (as defined in Section 1 below), until
the Principal and all accrued Interest thereon (collectively the "Obligations")
shall be paid in full.

1.    Interest.
      --------

Maker will pay Interest on the first day of each January, April, July and
October (the "Interest Payment Dates") commencing on October 1, 2002. Interest
on the Note will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from the date of delivery of the Note.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.

2.    Method of Payment.
      -----------------

Maker will pay Principal and Interest in money of the United States that at the
time of payment is legal tender for the payment of public and private debts.
Maker may, however, pay Principal and Interest by its check, subject to
collection, payable in such money. It may mail an Interest check to Payee's
address as it first appears on this Note or such other address as Payee shall
give by notice to Maker. Payee must surrender this Note to Maker to collect
Principal payments.

3.    Designation of Collateral.
      -------------------------

To secure payment of this Note, and of any other current or future liabilities
of Maker to Payee, Maker has given a security interest in and to Maker's
ownership interest in the oil and gas production from the leaseholds more fully
described on Exhibit "A", attached hereto and incorporated herein, together with
the personal property and fixtures located thereon (the "Collateral").

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4.    Warrants.
      --------

In further consideration of the value received from Payee, Maker hereby
covenants to issue to Payee, at the earlier of the date this Note is repaid in
full or the Maturity Date, ________________ (_______) three-year common stock
purchase warrants exercisable at $0.27.

5.    Registration.
      ------------

Maker shall use its best efforts to file with the Securities and Exchange
Commission as promptly as practicable after the issuance of the warrants
referred to in paragraph 4, above, a registration statement covering the shares
of common stock underlying such warrants, and will use its best efforts to have
such registration statement declared effective and remain effective for a period
of two years. Maker will provide Payee with a copy of such registration
statement and any amendments thereto and copies of the final prospectus included
therein in such quantities as may be reasonably required to permit Payee to sell
such shares of common stock after the registration statement is declared
effective. Maker will bear all expenses necessary and incidental to the
performance of its obligations hereunder.

6.    Covenants.
      ---------

Maker covenants and agrees that from and after the date hereof and until the
date of repayment in full of the Obligations it shall comply with the following
conditions:

      (i)   Maintenance of Existence and Conduct of Business. Maker shall, and
      shall cause each of its subsidiaries, if any, to (A) do or cause to be
      done all things necessary to preserve and keep in full force and effect
      its corporate existence and rights; and (B) continue to conduct its
      business so that the business carried on in connection therewith may be
      properly and advantageously conducted at all times.

      (ii)  Books and Records. Maker shall, and shall cause each of its
      subsidiaries, if any, to keep adequate books and records of account with
      respect to its business activities.

      (iii) Insurance. Maker shall, and shall cause each of its subsidiaries,
      if any, to maintain insurance policies insuring such risks as are
      customarily insured against by companies engaged in businesses similar to
      those operated by Maker or such subsidiaries, as the case may be. All such
      policies are to be carried with reputable insurance carriers and shall be
      in such amounts as are customarily insured against by companies with
      similar assets and properties engaged in a similar business.

      (iv)  Compliance with Law. Maker shall, and shall cause each of its
      subsidiaries, if any, to comply in all material respects with all federal,
      state and local laws and regulations applicable to it or such
      subsidiaries, as the case may be, which if breached would have a material
      adverse effect on Maker's or such subsidiaries', as the case may be,
      business or financial condition.

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<PAGE>

7.    Representations and Warranties of Maker.
      ---------------------------------------

Maker represents and warrants that it: (i) is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite corporate power to carry on its business as now conducted
and to own its properties and assets it now owns; (ii) is duly qualified or
licensed to do business as a foreign corporation in good standing in the
jurisdictions in which ownership of property or the conduct of its business
requires such qualification except jurisdictions in which the failure to qualify
to do business will have no material adverse effect on its business, prospects,
operations, properties, assets or condition (financial or otherwise); (iii) has
full power and authority to execute and deliver this Note, and that the
execution and delivery of this Note will not result in the breach of or default
under, with or without the giving of notice and/or the passage of time, any
other agreement, arrangement or indenture to which it is a party or by which it
may be bound, or the violation of any law, statute, rule, decree, judgment or
regulation binding upon it; and (iv) has taken and will take all acts required,
including but not limited to authorizing the signatory hereof on its behalf to
execute this Note, so that upon the execution and delivery of this Note, it
shall constitute the valid and legally binding obligation of Maker enforceable
in accordance with the terms thereof.

8.    Maker's Right to Prepay.
      -----------------------

Maker may prepay this Note at any time.

9.    Acknowledgment of Payee's Investment Representations.
      ----------------------------------------------------

By accepting this Note, Payee acknowledges that this Note has not been and will
not be registered under the Securities Act of 1933 (the "Act") or qualified
under any state securities laws and that the transferability thereof is
restricted by the registration provisions of the Act as well as such state laws.
Based upon the representations and agreements being made by Payee herein, this
Note is being issued to Payee pursuant to an exemption from such registration
provided by Section 4 (2) of the Act and applicable state securities law
qualification exemptions. Payee represents that the acquisition of this Note is
for investment purposes only and not with a view to resale or other distribution
thereof, nor has it been acquired with the intention of selling, transferring or
otherwise disposing of all or any part of it for any particular event or
circumstance, except selling, transferring or disposing of it only upon full
compliance with all applicable provisions of the Act, the Securities Exchange
Act of 1934, the Rules and Regulations promulgated by the Commission thereunder,
and any applicable state securities laws. Payee further understands and agrees
that no transfer of this Note shall be valid unless made in compliance with the
restrictions set forth on the front of this Note, effected on Maker's books by
the registered holder hereof, in person or by an attorney duly authorized in
writing, and similarly noted hereon. Maker may charge Payee a reasonable fee for
any re- registration, transfer or exchange of this Note.

                                       3
<PAGE>

10.   Limitation of Liability.
      -----------------------

No director, officer, employee or stockholder, as such, of Maker shall have any
liability for any obligations of Maker under this Note or for any claim based
on, in respect or by reason of such obligations or their creation. Payee, by
accepting this Note, waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of this Note.

11.   Limitation of Interest Payments.
      -------------------------------

Nothing contained in this Note or in any other agreement between Maker and Payee
requires Maker to pay or Payee to accept Interest in an amount which would
subject Payee to any penalty or forfeiture under applicable law. In no event
shall the total of all charges payable hereunder, whether of Interest or of such
other charges which may or might be characterized as interest, exceed the
maximum rate permitted to be charged under the laws of the States of New York or
Texas. Should Payee receive any payment which is or would be in excess of that
permitted to be charged under such laws, such payment shall have been and shall
be deemed to have been made in error and shall automatically be applied to
reduce the Principal outstanding on this Note.

12.   Waiver of Presentment.
      ---------------------

Maker and all endorsers, sureties, and guarantors of this instrument jointly and
severally waive, as of the Post-Default Date but not before, presentment and
notice of dishonor.

13.   Miscellaneous.
      -------------

(a) Effect of Forbearance. No forbearance, indulgence, delay or failure to
exercise any right or remedy by Payee with respect to this Note shall operate as
a waiver or as an acquiescence in any default.

(b) Effect of Single or Partial Exercise of Right. No single or partial exercise
of any right or remedy by Payee shall preclude any other or further exercise
thereof or any exercise of any other right or remedy by Payee.

(c) Governing Law. This Note shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the internal laws of the
State of Texas applicable to contracts made and to be performed entirely within
such State.

(d) Headings. The headings and captions of the various paragraphs herein are for
convenience of reference only and shall in no way modify any of the terms or
provisions of this Note.

(e) Loss, Theft, Destruction or Mutilation. Upon receipt by Maker of evidence
reasonably satisfactory to it of loss, theft, destruction or mutilation of this
Note, Maker shall make and deliver or caused to be made and delivered to Payee a
new Note of like tenor in lieu of this Note.

                                       4
<PAGE>

(f) Modification of Note or Waiver of Terms Thereof Relating to Payee. No
modification or waiver of any of the provisions of this Note shall be effective
unless in writing and signed by Payee and then only to the extent set forth in
such writing, nor shall any such modification or waiver be applicable except in
the specific instance for which it is given. This Note may not be discharged
orally but only in writing duly executed by Payee.

(g) Notice. All offers, acceptances, notices, requests, demands and other
communications under this Note shall be in writing and, except as otherwise
provided herein, shall be deemed to have been given only when delivered in
person, via facsimile transmission if receipt thereof is confirmed by the
recipient, or, if mailed, when mailed by certified or registered mail prepaid,
to the parties at their respective addresses first set forth above, or at such
other address as may be given in writing in future by either party to the other.

(h) Successors and Assigns. This Note shall be binding upon Maker, its
successors, assigns and transferees, and shall inure to the benefit of and be
enforceable by Payee and its successors and assigns.

(i) Severability. If one or more of the provisions or portions of this Note
shall be deemed by any court or quasi-judicial authority to be invalid, illegal
or unenforceable in any respect, the invalidity, illegality or unenforceability
of the remaining provisions, or portions of provisions contained herein shall
not in any way be affected or impaired thereby, so long as this Note still
expresses the intent of the parties. If the intent of the parties cannot be
preserved, this Agreement shall either be renegotiated or rendered null and
void.

IN WITNESS WHEREOF, Maker has caused this Note to be executed on its behalf by
an officer thereunto duly authorized as of the date set forth above.

                                  Fortune Natural Resources Corporation
                                  a Delaware corporation

        [SEAL]

                                  By:  /s/ Ronald P. Nowak
                                       ----------------------------------
                                       Ronald P. Nowak
                                       President

ATTEST: /s/ Dean w. Drulias
        ----------------------------
        Dean W. Drulias, Secretary

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