Document:

FIRST AMENDMENT

                                 to that certain

            SECOND AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT

     This FIRST  AMENDMENT  (this  "AMENDMENT"),  dated as of April 29, 2005, to
that certain Second Amended and Restated Credit and Security Agreement, dated as
of January 2, 2004 (as  modified  and  supplemented  and in effect  from time to
time,  the  "CREDIT  Agreement"),   among  Columbus  McKinnon   Corporation,   a
corporation  organized  under  the  laws of New  York  (the  "BORROWER"),  Larco
Industrial Services Ltd., a business corporation organized under the laws of the
Province of Ontario, Columbus McKinnon Limited, a business corporation organized
under the laws of Canada,  the Guarantors  from time to time party thereto,  the
Lenders from time to time party thereto (collectively,  the "LENDERS"),  Bank of
America,  N.A.,  as  Administrative  Agent for such Lenders (the "AGENT") and as
Issuing Lender.

     WHEREAS, the Borrower has requested that the Agent and the Lenders agree to
amend  certain  of  the  terms  and  provisions  of  the  Credit  Agreement,  as
specifically set forth in this Amendment.

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

     1. DEFINITIONS. Capitalized terms used herein without definition shall have
the meanings assigned to such terms in the Credit Agreement.

     2. AMENDMENTS TO DEFINITIONS. Section 1.1 of the Credit Agreement is hereby
amended as follows:

     (a) The second table contained in the definition of "Applicable  Margin" is
hereby deleted and replaced with the following:

<TABLE>
<CAPTION>

                  --------------------------------------------------------------------------------------------------
                         APPLICABLE MARGIN (% PER ANNUM)
                  --------------------------------------------------------------------------------------------------
                  ------------- ---------------------- -------------------- ------------------- --------------------
                     LEVEL      SENIOR LEVERAGE RATIO   LIBOR RATE LOANS     BASE RATE LOANS        UNUSED FEE
                  ------------- ---------------------- -------------------- ------------------- --------------------
                  <S>           <C>                    <C>                  <C>                 <C>
                       I              =>3.00:1                2.00%               0.75%               0.375%
                  ------------- ---------------------- -------------------- ------------------- --------------------
                       II       => 2.50:1 and <3.00:1         1.75%               0.50%                0.25%
                  ------------- ---------------------- -------------------- ------------------- --------------------
                      III       => 2.00:1 and <2.50:1         1.75%               0.50%                0.20%
                  ------------- ---------------------- -------------------- ------------------- --------------------
                       IV             < 2.00:1                1.50%               0.25%                0.20%
                  ------------- ---------------------- -------------------- ------------------- --------------------

</TABLE>

     (b) The  definition of "Approved  Restructuring  Charges" is hereby deleted
and replaced with the following:

<PAGE>

               ""APPROVED   RESTRUCTURING   CHARGES"  means  cash  restructuring
               charges  incurred by the  Borrower  and/or its  Subsidiaries  and
               approved  by the Agent up to an amount not to exceed  $750,000 in
               the aggregate in any fiscal year.

     (c) The  definition  of "Agent" is hereby  deleted  and  replaced  with the
following:

               ""AGENT"  means  Bank  of  America,   N.A.  in  its  capacity  as
               administrative agent for the Lenders hereunder."

     (d) The definition of "Agent's  Office" is hereby deleted and replaced with
the following:

               ""AGENT'S OFFICE" means 100 Federal Street, Boston, MA 02110."

     (e) The definition of "Cash Management Bank" is hereby deleted and replaced
with the following:

               ""CASH MANAGEMENT BANK" means Bank of America, N.A."

     (f) The  definition of "Domestic  Borrowing  Base" is hereby amended by (i)
deleting  the  period  at  then  end  of  clause  (d)  contained  therein,  (ii)
substituting  in lieu thereof the text "; PLUS" and (iii)  adding the  following
new clause (e) at the end thereof.

               "(e) the  lesser  of (i)  $15,000,000  and  (ii)  the  Term  Loan
               Borrowing Base, PLUS"

     (g) The definition of "Domestic  Borrowing  Base" is hereby further amended
by  deleting  the  second  sentence  contained  in the  last  paragraph  of such
definition and substituting in lieu thereof the following:

               "Notwithstanding  anything to the contrary set forth herein,  the
               Agent  may in its sole  discretion  at any time and from  time to
               time,  subject to subsections  11.2(b)(xi)) and (b)(xii),  adjust
               the percentages of Eligible Accounts, Eligible Fixed Assets or of
               Eligible Inventory,  change eligibility criteria contained in the
               definitions  of  Eligible  Accounts,  Eligible  Fixed  Assets  or
               Eligible  Inventory,  and change and/or establish  reserves (such
               reserves to be standard  and  customary  for  facilities  of this
               nature) taken in respect of Eligible  Inventory,  Eligible  Fixed
               Assets  and  Eligible  Accounts  from time to time based upon the
               results of any appraisals or other sources of  information  which
               demonstrate  in the  Agent's  reasonable  judgment  based  on due
               inquiry a change in the collectability of accounts  receivable of
               the Borrower or any Domestic  Subsidiary and/or the marketability
               or  composition  of inventory and fixed assets of the Borrower or
               any Domestic Subsidiary and/or other market changes affecting the
               value of  accounts,  inventory  or fixed  assets  comprising  the
               Domestic Borrowing Base."

     (h) The definition of "Eligible Accounts" is hereby amended by (i) deleting
clause (xv) contained  therein,  (ii)  redesignating  the existing  clause (xvi)
contained  therein as clause (xv) and (iii)  redesignating  the existing  clause
(xvii) contained therein as clause (xvi).

     (i) The  definition of "Eligible  Inventory" is hereby  amended by deleting
clause (vi) contained therein and substituting in lieu thereof the following:

<PAGE>

               "(vi)  it is  not  accounted  for  in  the  obsolescence  reserve
               maintained by any Credit Party or has not been  determined by the
               Agent  in  its  sole   discretion   to   constitute   slow-moving
               inventory;"

     (j) The  definition  of  "Extraordinary  Receipts"  is  hereby  amended  by
deleting  clause (a)  contained  therein and  substituting  in lieu thereof "(a)
INTENTIONALLY OMITTED,".

     (k) The  definition of "Fee Letter" is hereby deleted and replaced with the
following:

               ""FEE LETTER" means that certain Fee Letter,  dated  November 27,
               2002, between the Borrower and Bank of America, N.A., as assignee
               of Fleet Capital Corporation.

     (l) The  definition of "Fixed Charge  Coverage  Ratio" is hereby amended by
deleting clause (b)(i)  contained  therein and  substituting in lieu thereof the
following:

               "(i) the aggregate  amount of Interest Expense for such Reference
               Period  (net of  amortization  during  such  Reference  Period of
               financing costs incurred in connection  with this Agreement,  the
               Existing Credit Agreement, the Senior Subordinated Note Indenture
               and the Senior Note Indenture) and"

     (m) The definition of "Issuing  Lender" is hereby deleted and replaced with
the following:

               ""ISSUING LENDER" means (a) Bank of America,  N.A. and (b) solely
               in  connection  with Letters of Credit  outstanding  on the First
               Amendment Effective Date, Fleet National Bank."

     (n) The  definition  of  "LIBOR  Rate" is  deleted  and  replaced  with the
following:

               "LIBOR  RATE" means,  for any  Interest  Period with respect to a
               LIBOR Rate Loan, the rate per annum equal to the British  Bankers
               Association LIBOR Rate ("BBA LIBOR"), as published by Reuters (or
               other commercially  available source providing  quotations of BBA
               LIBOR  as   designated  by  the  Agent  from  time  to  time)  at
               approximately 11:00 a.m., London time, two Business Days prior to
               the  commencement  of such Interest  Period,  for Dollar deposits
               (for  delivery on the first day of such  Interest  Period) with a
               term equivalent to such Interest Period divided by a number equal
               to 1.00 minus the Eurocurrency  Reserve Rate. If such rate is not
               available at such time for any reason,  then the "LIBOR Rate" for
               such  Interest  Period shall be the rate per annum  determined by
               the  Agent  to be the  rate at  which  deposits  in  Dollars  for
               delivery  on the  first day of such  Interest  Period in same day
               funds in the  approximate  amount  of the LIBOR  Rate Loan  being
               made,  continued  or converted by Bank of America and with a term
               equivalent  to such  Interest  Period would be offered by Bank of
               America 's London  Branch to major banks in the London  interbank
               eurodollar  market at their request at  approximately  11:00 a.m.
               (London time) two Business Days prior to the commencement of such
               Interest Period.

<PAGE>

     (o) The  definition  of  "Revolving  Credit  Notes"  is hereby  amended  be
deleting  the period  contained  therein and  substituting  in lieu  thereof the
following:

               ", as such promissory notes may be amended and restated from time
               to time."

     (p) The  definition  of  "Senior  Subordinated  Note  Documents"  is hereby
amended by  deleting  the period  contained  therein  and  substituting  in lieu
thereof the following:

               ";  PROVIDED  that,  after the  repayment in full of the Existing
               Senior  Subordinated  Notes and the  issuance  of the  Additional
               Senior Subordinated Notes,  "Senior  Subordinated Note Documents"
               shall mean the Additional Senior Subordinated Note Documents."

     (q) The  definition  of  "Senior  Subordinated  Note  Indenture"  is hereby
amended by  deleting  the period  contained  therein  and  substituting  in lieu
thereof the following:

               ";  PROVIDED  that,  after the  repayment in full of the Existing
               Senior  Subordinated  Notes and the  issuance  of the  Additional
               Senior Subordinated Notes,  "Senior  Subordinated Note Indenture"
               shall mean the Additional Senior Subordinated Note Indenture."

     (r) The  definition of "Senior  Subordinated  Notes" is hereby  deleted and
replaced with the following:

               ""SENIOR   SUBORDINATED   NOTES"   means  the   Existing   Senior
               Subordinated Notes; PROVIDED that, after the repayment in full of
               the Existing  Senior  Subordinated  Notes and the issuance of the
               Additional Senior Subordinated Notes, "Senior Subordinated Notes"
               shall mean the Additional Senior Subordinated Notes.

     (s) The  definition of "Special  Counsel" is hereby amended by deleting the
reference to "Fleet Capital  Corporation"  contained therein and substituting in
lieu thereof a reference to "Bank of America, N.A.".

     (t) The definition of "Total Revolving Credit Commitment" is hereby amended
by adding the following sentence at the end of such definition:

               "On the First  Amendment  Effective  Date,  the  Total  Revolving
               Credit Commitment is $65,000,000."

     (u) The following definitions are hereby added to Section 1.1 of the Credit
Agreement and inserted in correct alphabetical order:

               ""ADDITIONAL  SENIOR  SUBORDINATED  NOTES"  means the  Borrower's
               senior subordinated notes to be issued pursuant to the Additional
               Senior   Subordinated   Indenture,   on  terms   and   conditions
               (including,   without   limitation,   subordination   provisions)
               satisfactory  to the  Agent,  as the same  shall,  subject to the
               terms and conditions of this Agreement, be amended,  supplemented
               or otherwise modified and in effect from time to time.

<PAGE>

               "ADDITIONAL   SENIOR   SUBORDINATED  NOTE  DOCUMENTS"  means  the
               Additional  Senior  Subordinated  Note Indenture,  the Additional
               Senior  Subordinated  Notes and all other documents,  instruments
               and  agreements  executed and  delivered in  connection  with the
               Additional Senior  Subordinated  Notes, in each case, in form and
               substance  satisfactory to the Agent, as the same shall,  subject
               to the  terms  and  conditions  of this  Agreement,  be  amended,
               supplemented  or  otherwise  modified  and in effect from time to
               time.

               "ADDITIONAL   SENIOR   SUBORDINATED  NOTE  INDENTURE"  means  the
               Indenture relating to the Additional Senior  Subordinated  Notes,
               in form and  substance  satisfactory  to the  Agent,  as the same
               shall, subject to the terms and conditions of this Agreement,  be
               amended from time to time.

               "ADDITIONAL  SENIOR  SUBORDINATED  NOTES"  means  the  Borrower's
               senior subordinated notes to be issued pursuant to the Additional
               Senior   Subordinated   Indenture,   on  terms   and   conditions
               (including,   without   limitation,   subordination   provisions)
               satisfactory  to the  Agent,  as the same  shall,  subject to the
               terms and conditions of this Agreement, be amended,  supplemented
               or otherwise modified and in effect from time to time.

               "EXISTING SENIOR  SUBORDINATED NOTES" means the Borrower's 8-1/2%
               senior  subordinated notes due 2008 issued pursuant to the Senior
               Subordinated  Note Indenture,  as the same shall,  subject to the
               terms and conditions of this Agreement, be amended,  supplemented
               or otherwise modified and in effect from time to time.

               "FIRST AMENDMENT EFFECTIVE DATE" means April 29, 2005.

               "OPERATING  LEASES"  means leases under which any Credit Party or
               any of its Subsidiaries is the lessee or the obligor,  other than
               capital leases."

     3.  AMENDMENT TO TERM LOAN.  Section 2.2 of the Credit  Agreement is hereby
amended by adding the following new clause (f) immediately  following clause (e)
contained therein:

               "(f) On the First  Amendment  Effective  Date,  (i) the aggregate
               outstanding  principal  amount of the Term Loans  (equivalent  to
               $5,321,428.60)  shall be converted  into an equivalent  amount of
               Revolving Loans,  owing to each of the Lenders in accordance with
               their  respective  Commitment  Percentages  and (ii) the Borrower
               shall pay to the Agent for the PRO RATA  accounts  of the Lenders
               all interest accrued to such date on the Term Loans."

     4. AMENDMENTS TO DOMESTIC LETTERS OF CREDIT AND FOREIGN LETTERS OF CREDIT.

     (a)  Section  2.4(a)(i)(a)  of the Credit  Agreement  is hereby  amended by
deleting the amount  "$12,000,000"  contained  therein and  substituting in lieu
thereof the amount "$20,000,000".

     (b) Section  2.4(a)(ii)(a)  of the Credit  Agreement  is hereby  amended by
deleting the amount  "$5,000,000"  contained  therein and  substituting  in lieu
thereof the amount "$10,000,000".

<PAGE>

     (c)  Section  2.4(b)  of the  Credit  Agreement  is hereby  amended  by (i)
deleting the amount  "$12,000,000"  contained  therein and  substituting in lieu
thereof  the amount  "$20,000,000"  and (ii)  deleting  the amount  "$5,000,000"
contained therein and substituting in lieu thereof the amount "$10,000,000".

     5.  AMENDMENTS  TO  PAYMENTS  GENERALLY;  PRO RATA  TREATMENT;  SHARING  OF
SET-OFFS; COLLECTION.

     (a)  Section  2.7(b)(iv)  of the  Credit  Agreement  is hereby  amended  by
deleting the amount  "$5,000,000"  contained  therein and  substituting  in lieu
thereof the amount "$10,000,000".

     (b) Section  2.7(g) of the Credit  Agreement is hereby  amended by deleting
the reference to "2.7(d)"  contained  therein and substituting in lieu thereof a
reference to "2.7(e)".

     (c) Section  2.7 of the Credit  Agreement  is hereby  amended by adding the
following new clause (h) immediately following clause (g) contained therein:

               "(h)  SUSPENSION  OF SECTIONS  2.7(C) AND (D).  Commencing on the
               First  Amendment  Effective  Date,  the  provisions  contained in
               Sections 2.7(c) and (d) shall be inoperative  until the Agent, in
               its sole  discretion and upon notice to the Borrower,  reinstates
               such provisions."

     6. AMENDMENT TO PREPAYMENT OF LOANS.

     (a) Section 2.8(a) of the Credit  Agreement is hereby amended by adding the
following immediately after the first sentence contained therein:

               "Each such  prepayment  shall be  accompanied  by the  payment of
               accrued  interest  on  the  principal  prepaid  to  the  date  of
               prepayment and shall be applied, in the absence of instruction by
               the Borrower,  first to the principal of Base Rate Loans and then
               to the  principal of LIBOR Rate Loans.  Each  partial  prepayment
               shall be allocated among the Lenders, in proportion, as nearly as
               practicable,  to the respective  unpaid  principal amount of each
               Lender's  Revolving  Credit Note, with  adjustments to the extent
               practicable  to  equalize  any prior  repayments  not  exactly in
               proportion."

     (b)  Section  2.8(c)(ii)  of the  Credit  Agreement  is hereby  amended  by
deleting  the  text  "and  corresponding  increase  in the  Domestic  Prepayment
Reserve" contained therein and adding a period after the word "Commitments".

     7. AMENDMENT TO FEES.

     (a) Section 2.9(b)(x) of the Credit Agreement is hereby amended by deleting
the text "one-half of one percent (1/2%)"  contained therein and substituting in
lieu thereof the text "the  Applicable  Margin then in effect and  applicable to
the column "Unused Fees" set forth in the definition of "Applicable Margin""

     (b)  Section  2.9(c)(iii)  of the  Credit  Agreement  is hereby  amended by
deleting the proviso contained therein and substituting in lieu thereof the text
"PROVIDED  that any such fees  accruing  after  the date on which the  Revolving

<PAGE>

Credit  Commitment  terminates  shall be payable on demand and any  fronting fee
with respect to documentary Letters of Credit shall be payable upon the issuance
of such documentary Letter of Credit.

     8. AMENDMENT TO CHANGE IN DOMESTIC BORROWING BASE,  CANADIAN BORROWING BASE
AND TERM LOAN  BORROWING  BASE.  Section 2.13 of the Credit  Agreement is hereby
amended by deleting the first sentence  contained  therein and  substituting  in
lieu thereof the following sentence:

               "The  Domestic  Borrowing  Base and the Canadian  Borrowing  Base
               shall be determined  monthly (or at such other interval as may be
               specified  pursuant to subsection  7.1) by the Agent by reference
               to  the  Borrowing  Base  Certificate,   commercial  finance  and
               collateral  audit  reports,  the Collateral  Update  Certificate,
               Accounts Receivable/Loan  Reconciliation Report and/or appraisals
               or reappraisals of Eligible Fixed Assets delivered to the Lenders
               and the Agent  pursuant to  subsection  7.1  together  with other
               information obtained by or provided to the Agent."

     9.  AMENDMENT TO  COLLECTION  OF PROCEEDS OF ACCOUNTS  RECEIVABLE.  Section
4.3(a) of the Credit  Agreement is hereby  amended by adding the  following  new
sentence at the end of such Section 4.3(a):

               "Notwithstanding  the  foregoing,  (a)  commencing  on the  First
               Amendment  Effective  Date,  the  provisions  contained in clause
               (iii)(B) above shall be inoperative  until the Agent, in its sole
               discretion  and upon  notice  to the  Borrower,  reinstates  such
               provisions and (b) until the Agent  reinstates  such  provisions,
               all  amounts  in  such  accounts  shall  be  transferred  to  the
               Borrower's  operating account maintained with the Cash Management
               Bank."

     10. AMENDMENTS TO AFFIRMATIVE COVENANTS.

     (a) Section  7.1(f) of the Credit  Agreement is hereby  further  amended by
adding the following text at the end of such Section 7.1(f):

               "PROVIDED  that,  the Borrower  shall only be required to deliver
               such  Borrowing Base  Certificate  pursuant to this clause (f) in
               the event that (i) Domestic Excess Availability,  as evidenced by
               the most recent Borrowing Base Certificate  delivered pursuant to
               Section 7.1(g), is less than $12,000,0000 or (ii) Domestic Excess
               Availability   is  less  than   $15,000,000  but  not  less  than
               $12,000,000,  as  evidenced  by the most  recent  Borrowing  Base
               Certificate   delivered  pursuant  to  Section  7.1(g),  and  the
               Domestic Excess  Availability has not, as evidenced by an updated
               Borrowing Base Certificate,  been increased to an amount equal to
               or greater than  $15,000,000  within ten (10) days of delivery of
               such original Borrowing Base Certificate;  PROVIDED further that,
               in the event that the Domestic Excess Availability,  as evidenced
               by the Borrowing Base Certificates  delivered pursuant to Section
               7.1(g) for any three consecutive  months following the occurrence
               of an event described in clause (i) or (ii) above, is at or above
               $15,000,000,   such  requirement  to  deliver  a  Borrowing  Base
               Certificate pursuant to this clause (f) shall terminate (it being
               understood  that such  requirement  to deliver a  Borrowing  Base
               Certificate  pursuant to this clause (f) shall be  reinstated  in

<PAGE>

               the event that the circumstances  described in clause (i) or (ii)
               are repeated);"

     (b) Section  7.1(g) of the Credit  Agreement is hereby  amended by deleting
clause (i) contained therein and substituting in lieu thereof the following:

               "(i) a Borrowing Base  Certificate in the form attached hereto as
               EXHIBIT  B-1  setting  forth  the  Domestic  Borrowing  Base  and
               Canadian  Borrowing  Base,  together  with  an  updated  list  of
               Eligible  Fixed  Assets as of such month  ended and a list of all
               Hedging  Agreements  entered into by any Credit Party during such
               month,"

     (c) Section  7.1(j) of the Credit  Agreement is hereby  amended by deleting
the text contained therein and substituting in lieu thereof the following:

               "INTENTIONALLY OMITTED."

     (d) Section 7.6 of the Credit  Agreement is hereby  amended by deleting the
first PROVISO contained therein and substituting in lieu thereof the following:

               "PROVIDED  that,  so  long  as no  Default  has  occurred  and is
               continuing,  (x) all such  visits  shall be on  reasonable  prior
               notice, at reasonable times during regular business hours and (y)
               the Agent shall not conduct commercial finance  examinations more
               than once in any 365 day period;  PROVIDED  that, the Agent shall
               have the right to conduct commercial finance examinations once in
               any 180 day  period  while the Credit  Parties  are  required  to
               deliver a Borrowing Base Certificate  pursuant to Section 7.1(f);
               and  PROVIDED  further that after the  occurrence  and during the
               continuance  of any Default,  the Agent and the Lenders may visit
               at any reasonable times."

     (e) Section  7.9 of the Credit  Agreement  is hereby  amended by adding the
following text immediately following the text "Existing Indebtedness":

               ", a portion  of the  Senior  Subordinated  Notes  (solely to the
               extent permitted pursuant to Section 8.6(e))"

     11. AMENDMENT TO NEGATIVE COVENANTS.

     (a) Section 8.1 of the Credit  Agreement is hereby  amended by deleting the
word  "and" at the end of  clause  (e) and  adding  the  following  new  clauses
immediately following clause (f):

               "(g)  Indebtedness  of any Credit  Party or any  Subsidiary  of a
               Credit  Party  under  any  Operating  Lease;  PROVIDED  that  the
               aggregate  amount of such  Indebtedness of the Credit Parties and
               their Subsidiaries shall not exceed $6,000,000 annually; and

               (h)  Indebtedness  of the  Borrower  in the  aggregate  principal
               amount not to exceed  $125,000,000,  evidenced or incurred  under
               the Additional Senior Subordinated Note Documents;  PROVIDED that
               (i)  all   principal   and  interest  of  the   Existing   Senior
               Subordinated Notes shall be contemporaneously  repaid in full and
               (ii) such  Indebtedness  is designated  as "Senior  Indebtedness"
               under the Additional Senior Subordinated Note Indenture."

<PAGE>

     (b)  Section  8.5 of the Credit  Agreement  is hereby  amended by  deleting
clause (b) contained therein and substituting in lieu thereof the following:

               "(b) The  Credit  Parties  will not,  and will not  permit any of
               their  Subsidiaries to, enter into any Hedging  Agreement,  other
               than Hedging  Agreements  entered into in the ordinary  course of
               business on a non-speculative basis to hedge or mitigate risks to
               which the Credit  Parties  are  exposed  in the  conduct of their
               business or the management of their liabilities."

     (c) Section  8.6 of the Credit  Agreement  is hereby  amended by adding the
following new clause (e):

               "(e) (i)  prepayments  of  principal  of the Senior  Subordinated
               Notes  so  long  as (A) no  Default  shall  have  occurred  or be
               continuing and no Default shall be caused thereby, (B) the Credit
               Parties  shall  be in  compliance  with  each  of  the  financial
               covenants   set  forth  in  Section  8.10  for  the  most  recent
               applicable  period  ended  prior to such  payment,  (C) the Fixed
               Charge  Coverage Ratio for the period of two (2) quarters  ending
               prior to such  payment,  calculated  on a pro forma basis  giving
               effect to the  making of such  payment of  principal  (as if such
               payment  were made on the first day of such period and  including
               the amount of such payment in clause (b)(ii) of the definition of
               "Fixed Charge  Coverage Ratio" in the calculation of Fixed Charge
               Coverage  Ratio as if they were  scheduled or required  payments)
               shall not be less than  1.25:1.00,  and the Credit  Parties shall
               deliver  a   Compliance   Certificate   prior  to  such   payment
               demonstrating  such Fixed  Charge  Coverage  Ratio,  (D) Domestic
               Excess Availability, calculated on a pro forma basis after giving
               effect to such payment  shall not be less than  $15,000,000,  and
               the Agent  shall  have  received  a  Borrowing  Base  Certificate
               demonstrating  the  same,  (E) the  number  of  days  of  average
               outstandings  for the Borrower's  accounts payable over the three
               (3) month period prior to such  payment  shall not exceed  thirty
               five (35),  (F) the Agent shall have  received  evidence that the
               Credit  Parties have  obtained all  necessary  consents  from the
               holders of the  Senior  Notes with  respect to such  payment  and
               shall  have  received  a legal  opinion,  covering  such  matters
               relating to such payment as the Agent shall  reasonably  request,
               (G) the  Credit  Parties  shall have  closed a tender  offer with
               respect to all  Existing  Senior  Subordinated  Notes that remain
               outstanding  after  giving  effect to such  payment,  and (H) the
               aggregate  amount  of such  payments  shall not be  greater  than
               $155,000,000   (provided   that  the  aggregate   amount  of  the
               prepayments of the Existing Senior  Subordinated  Notes shall not
               exceed $145,000,000); and PROVIDED that not more than $30,000,000
               of such  payments  may be funded with the  proceeds of  Revolving
               Credit Loans;  or (ii)  prepayments  of principal of the Existing
               Senior  Subordinated Notes so long as the conditions set forth in
               (i)(A)-(F)  are  satisfied  and  the  aggregate  amount  of  such
               payments shall not be greater than $30,000,000; and PROVIDED that
               not more than $30,000,000 of such payments may be funded with the
               proceeds of Revolving Credit Loans."

<PAGE>

     (d) Section  8.10(a) of the Credit  Agreement is hereby amended by deleting
the text contained therein and substituting in lieu thereof the following:

               "INTENTIONALLY OMITTED."

     (e) Section  8.10(b) of the Credit  Agreement is hereby amended by deleting
the table contained therein and substituting in lieu thereof the following:

         ------------------------------------------- -----------------------
                           PERIOD                             RATIO
         ------------------------------------------- -----------------------

            June 30, 2004 and each fiscal quarter         4.25 to 1.00
                      ending thereafter
         ------------------------------------------- -----------------------

     (f) Section  8.10(d) of the Credit  Agreement is hereby amended by deleting
the text contained therein and substituting in lieu thereof the following:

               "INTENTIONALLY OMITTED."

     (g) Section 8.15 of the Credit  Agreement is hereby amended by deleting the
text contained therein and substituting in lieu thereof the following:

               "INTENTIONALLY OMITTED."

     12. AMENDMENT TO EVENTS OF DEFAULT.  Section 9.1(p) of the Credit Agreement
is hereby amended by deleting the text  contained  therein and  substituting  in
lieu thereof the following:

               "INTENTIONALLY OMITTED."

     13. NEW AGENT.

     (a)  Article 10 of the  Credit  Agreement  is hereby  amended by adding the
following new section immediately following Section 10.11:

               "10.12.  ASSIGNMENT  TO BANK OF AMERICA.  Effective  on the First
               Amendment  Effective  Date, (a) Fleet hereby resigns as Agent and
               Fleet National Bank hereby resigns as Issuing Lender (except with
               respect to the  Letters of Credit  outstanding  on such date) and
               Cash Management Bank (b) the Required Lenders hereby appoint Bank
               of America,  N.A. as Agent,  Issuing  Lender and Cash  Management
               Bank and (c) Fleet and Fleet National bank hereby assigns to, and
               Bank  of  America,   N.A.  hereby  assumes,  all  of  the  rights
               (including,  without limitation, all liens and security interests
               granted to Fleet in its  capacity  as Agent) and  obligations  of
               Fleet as Agent and Fleet National Bank as Issuing Lender and Cash
               Management Bank. The Credit Parties agree to continue to maintain
               all current accounts with Fleet National Bank with Fleet National
               Bank and Fleet  National  Bank will  continue  to comply with any
               instructions  from the Agent  without the further  consent of the

<PAGE>

               Credit Parties. The Credit Parties and the Lenders authorize Bank
               of America,  N.A. to take all actions and file all such documents
               and statements to reflect such assignment.

     (b) Section 10.6 of the Credit  Agreement is hereby amended by deleting the
period at the end of the second sentence  contained  therein and substituting in
lieu thereof the following:

               "; PROVIDED that if the Agent shall notify the Credit Parties and
               the  Lenders  that  no   qualifying   Person  has  accepted  such
               appointment,  then  such  resignation  shall  nonetheless  become
               effective  in  accordance  with such notice and (1) the  retiring
               Agent  shall  be  discharged  from  its  duties  and  obligations
               hereunder  and  under  the  other  Loan  Documents  and  (2)  all
               payments,  communications and determinations  provided to be made
               by, to or through the Agent  shall  instead be made by or to each
               Lender directly,  until such time as the Required Lenders appoint
               a successor  Agent as  provided  for above in this  Section.  Any
               resignation  by Bank of America as Agent pursuant to this Section
               shall also constitute its resignation as Issuing Lender. Upon the
               acceptance of a successor's  appointment as Agent hereunder,  (a)
               such successor shall succeed to and become vested with all of the
               rights,  powers,  privileges  and duties of the retiring  Issuing
               Lender,  (b) the retiring Issuing Lender shall be discharged from
               all of its respective  duties and obligations  hereunder or under
               the other Loan  Documents,  and (c) the successor  Issuing Lender
               shall issue letters of credit in substitution  for the Letters of
               Credit,  if any,  outstanding  at the time of such  succession or
               make other  arrangements  satisfactory  to the  retiring  Issuing
               Lender to  effectively  assume the  obligations  of the  retiring
               Issuing Lender with respect to such Letters of Credit.

     14.  AMENDMENT TO NOTICES.  Subsection  11.1(b) of the Credit  Agreement is
hereby deleted in its entirety and replaced with the following:

               "(b) if to the Agent, to Bank of America,  N.A., One East Avenue,
               10th  Floor,  Mail  Stop  NY7-144-10-03,   Rochester,  NY  14638,
               Attention:  Colleen M. O'Brien Telephone no. 585-546-9362 and Fax
               no.  585-546-9278,  with a copy to  Bingham  McCutchen  LLP,  150
               Federal Street, Boston, MA 02110, Attention:  Matthew F. Furlong,
               Telephone no. (617) 951-8904 and Fax no. (617) 951-8736;

     15. AMENDMENT TO SCHEDULES. (a) SCHEDULE 1.1-(A) to the Credit Agreement is
hereby deleted and replaced with SCHEDULE 1.1-(A) attached hereto,  (b) SCHEDULE
1.1-(B) to the Credit  Agreement is hereby  deleted and replaced  with  SCHEDULE
1.1-(B) attached hereto,  and (c) SCHEDULE 2.1 of the Credit Agreement is hereby
deleted and replaced with SCHEDULE 2.1 attached hereto.

     16.  AMENDMENT  TO  EXHIBITS.  (a) EXHIBIT B-1 to the Credit  Agreement  is
hereby deleted and replaced with EXHIBIT B-1 attached hereto and (b) EXHIBIT B-2
to the Credit Agreement is hereby deleted and replaced with EXHIBIT B-2 attached
hereto

     17.  AFFIRMATION  AND  ACKNOWLEDGMENT.  The  Borrower  hereby  ratifies and
confirms all of its Obligations to the Lenders,  including,  without limitation,
the  Loans,  the Notes and the other Loan  Documents,  and the  Borrower  hereby
affirms  its  absolute  and  unconditional  promise  to pay to the  Lenders  all
Obligations under the Credit Agreement as amended hereby.  Each Guarantor hereby
acknowledges  and  consents  to this  Amendment  and agrees  that its  Guarantee

<PAGE>

remains in full force and effect,  and each such Guarantor confirms and ratifies
all of its Guarantee  obligations  under the Credit Agreement and the other Loan
Documents.  The Borrower and the Guarantors  hereby confirm that the Obligations
or Guarantee obligations under the Credit Agreement, as the case may be, are and
remain secured pursuant to the Credit Agreement and the Collateral Documents and
pursuant to all other  instruments  and documents  executed and delivered by the
Borrower  or such  Guarantor,  as  security  for the  Obligations  or  Guarantee
obligations under the Credit Agreement, as the case may be.

     18.  REPRESENTATIONS  AND WARRANTIES.  The Borrower  hereby  represents and
warrants to the Lenders as follows:

     (a) The execution  and delivery by the Borrower and the  Guarantors of this
Amendment,  and the  performance  by the  Borrower and the  Guarantors  of their
obligations  and  agreements  under this  Amendment and the Credit  Agreement as
amended  hereby,  are within the  corporate  authority  of the  Borrower and the
Guarantors and, have been duly authorized by all necessary corporate proceedings
on  behalf  of the  Borrower  and  the  Guarantors,  and do not  contravene  any
provision  of law,  statute,  rule or  regulation  to which the  Borrower or any
Guarantor  is  subject  or the  Borrower's  or any  Guarantor's  charter,  other
incorporation papers, by-laws or any stock provision or any amendment thereof or
of any agreement or other instrument binding upon the Borrower or any Guarantor.

     (b) This Amendment and the Credit  Agreement as amended  hereby  constitute
legal,  valid  and  binding  obligations  of the  Borrower  and the  Guarantors,
enforceable  in accordance  with their  respective  terms,  except as limited by
bankruptcy, insolvency, reorganization,  moratorium or other laws relating to or
affecting  generally the enforcement of creditors' rights or general  principles
of equity and except to the extent that  availability  of the remedy of specific
performance  or  injunctive  relief is  subject to the  discretion  of the court
before which any proceeding therefor may be brought.

     (c) Other than approvals or consents which have been obtained,  no approval
or consent of, or filing with, any governmental  agency or authority is required
to make valid and legally binding the execution,  delivery or performance by the
Borrower of this Amendment,  the Credit  Agreement,  as amended  hereby,  or any
pledge described herein.

     (d) The  representations  and  warranties  contained  in ss.5 of the Credit
Agreement  are true and  correct  at and as of the date  made and as of the date
hereof, except to the extent of changes resulting from transactions contemplated
or permitted by the Credit  Agreement  and the other Loan  Documents and changes
occurring in the ordinary course of business that singly or in the aggregate are
not  materially  adverse,  or  to  the  extent  that  such  representations  and
warranties relate expressly to an earlier date.

     (e) The Borrower has performed  and complied in all material  respects with
all terms and conditions  herein required to be performed or complied with by it
prior to or at the time hereof,  and as of the date hereof,  after giving effect
to the provisions hereof, there exists no Event of Default or Default.

     19.  RATIFICATION,  ETC. Except as expressly amended or waived hereby,  the
Credit  Agreement,  the other Loan Documents and all documents,  instruments and
agreements related thereto are hereby ratified and confirmed in all respects and
shall continue in full force and effect. This Amendment and the Credit Agreement
shall  hereafter be read and construed  together as a single  document,  and all
references in the Credit Agreement or any related agreement or instrument to the
Credit  Agreement shall  hereafter  refer to the Credit  Agreement as amended by
this Amendment.

<PAGE>

     20.  EFFECTIVENESS.  This Amendment  shall become  effective as of the date
first written above upon the  satisfaction of each of the following  conditions,
in each case in a manner  satisfactory  in form and substance to the Agent:

     (a) this Amendment  signed by the Borrower,  the Guarantors,  the Agent and
the Lenders;

     (b)  the  Agent  shall  have  received  a  certificate  from  the  Borrower
containing (i) a  representation  from the Borrower that the Indebtedness of the
Borrower  incurred under the Credit  Agreement (as amended  hereby) is permitted
under the Senior Note Documents and the Senior  Subordinated  Note Documents and
(ii) a calculation,  in form and substance satisfactory to the Agent, evidencing
compliance  (after giving effect to this Amendment)  with Section  4.03(b)(1) of
the Senior Note Indenture;

     (c) the Agent  shall have  received a  favorable  written  opinion (i) from
Phillips  Lytle  LLP,  special  counsel  to the  Borrower  and  Yale  Industrial
Products,  Inc.  covering  such  matters  relating  to  this  Amendment  and the
transactions  contemplated hereby as the Agent shall reasonably request and (ii)
Hodgson  Russ LLP  covering  such  matters  relating to the Senior Notes and the
Senior Subordinated Notes as the Agent shall reasonably request;

     (d) the Agent shall have received such other items, documents,  agreements,
items or  actions  as the  Agent  may  reasonably  request,  including,  without
limitation,  corporate  authority  documents and incumbency  certificates of the
Borrower and Yale Industrial Products, Inc.;

     (e) no Default or Event of Default shall have occurred and be continuing;

     (f) the  Borrower  shall  have paid all fees and  expenses  of the Agent in
connection  with  the  preparation  of  this  Amendment  and  the   transactions
contemplated  hereby,  including,  without limitation,  the fees and expenses of
counsel to the Agent; and

     (g) the  Lenders  shall have  received  from the  Borrower  fully  executed
amended and restated revolving credit notes in favor of each Lender.

     21.  POST-CLOSING  COVENANT.  (a)  Within  thirty  (30)  days of the  First
Amendment  Effective Date, the Borrower shall deliver, or cause to be delivered,
(i) favorable written opinions from counsel to the Canadian  Borrowers and Crane
Equipment & Service,  Inc.  covering such matters relating to this Amendment and
the transactions  contemplated  hereby as the Agent shall reasonably request and
(ii) corporate authority  documents and incumbency  certificates of the Canadian
Borrowers and Crane  Equipment & Service,  Inc. and (b) within  forty-five  (45)
days of the First Amendment Effective Date, the Borrower shall deliver, or cause
to be delivered,  (i) favorable  written opinions from counsel to Audubon Europe
S.A.R.L.  covering such matters  relating to this Amendment and the transactions
contemplated  hereby as the Agent shall  reasonably  request and (ii)  corporate
authority documents and incumbency certificates of Audubon Europe S.A.R.L.

     22.  COUNTERPARTS.  This Amendment may be executed in several  counterparts
and by each party on a separate  counterpart,  each of which when  executed  and
delivered shall be an original,  and all of which together shall  constitute one
instrument.  In proving  this  Amendment it shall not be necessary to produce or
account  for more than one such  counterpart  signed by the party  against  whom
enforcement is sought.

<PAGE>

     23.  DELIVERY  BY  FACSIMILE.  This  Amendment,  to the  extent  signed and
delivered  by means of a facsimile  machine,  shall be treated in all manner and
respects as an original  agreement or instrument and shall be considered to have
the same binding legal effect as if it were the original  signed version thereof
delivered in person. At the request of any party hereto or to any such agreement
or  instrument,  each other party hereto or thereto  shall  re-execute  original
forms thereof and deliver them to all other  parties.  No party hereto or to any
such  agreement  or  instrument  shall raise the use of a  facsimile  machine to
deliver a signature or the fact that any  signature  or agreement or  instrument
was  transmitted  or  communicated  through the use of a facsimile  machine as a
defense to the  formation  of a  contract  and each party  forever  waives  such
defense.

     24. MISCELLANEOUS PROVISIONS.

     (a) Except as otherwise  expressly  provided by this Amendment,  all of the
terms,  conditions  and  provisions  of the Credit  Agreement and the other Loan
Documents  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, and that this Amendment and the Credit Agreement shall be
read and construed as one instrument.

     (b) This Amendment shall be construed according to and governed by the laws
of the Commonwealth of Massachusetts.

     (c)  Pursuant  to  Section  11.3 of the  Credit  Agreement,  all  costs and
expenses  incurred or sustained by the Agent in connection  with this Amendment,
including  the  fees  and  disbursements  of  legal  counsel  for the  Agent  in
producing,  reproducing and negotiating this Amendment,  will be for the account
of the Credit Parties whether or not this Amendment is consummated.

                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

     IN  WITNESS  WHEREOF,  each of the  undersigned  have  duly  executed  this
Amendment as of the date first set forth above.

                                          BORROWER

                                          COLUMBUS MCKINNON CORPORATION

                                          By:    /S/ KAREN L. HOWARD
                                                 -------------------------------
                                          Name:  Karen L. Howard
                                          Title: Vice President - Treasurer

                                          CANADIAN BORROWERS
                                          ------------------

                                          LARCO INDUSTRIAL SERVICES LTD

                                          By:    /S/ KAREN L. HOWARD
                                                 -------------------------------
                                          Name:  Karen L. Howard
                                          Title: Vice President

                                          COLUMBUS MCKINNON LIMITED

                                          By:    /S/ KAREN L. HOWARD
                                                 -------------------------------
                                          Name:  Karen L. Howard
                                          Title: Vice President

                                          GUARANTORS
                                          ----------

                                          YALE INDUSTRIAL PRODUCTS, INC.

                                          By:    /S/ KAREN L. HOWARD
                                                 -------------------------------
                                          Name:  Karen L. Howard
                                          Title: Vice President

                                          CRANE EQUIPMENT & SERVICE, INC.

                                          By:    /S/ KAREN L. HOWARD
                                                 -------------------------------
                                          Name:  Karen L. Howard
                                          Title: Vice President

<PAGE>

                                          AUDUBON EUROPE S.A.R.L.

                                          By:    /S/ ROBERT R. FRIEDL
                                                 -------------------------------
                                          Name:  Robert R. Friedl
                                          Title: Manager

                                          By:    /S/ Romain Thillens
                                                 -------------------------------
                                          Name:  Romain Thillens
                                          Title: Manager

<PAGE>

                                          BANK OF AMERICA, N.A.
                                          as Administrative Agent

                                          By:    /S/ Tamisha U. Eason
                                                 -------------------------------
                                          Name:  Tamisha U. Eason
                                          Title: Agency Management Officer

<PAGE>

                                          BANK OF AMERICA, N.A.
                                          as Lender, Issuing Lender, and Cash
                                             Management Bank

                                          By:    /S/ Colleen M. O'Brien
                                                 -------------------------------
                                          Name:  Colleen M. O'Brien
                                          Title: Vice President

<PAGE>

                                          CHARTER ONE BANK, NATIONAL ASSOCIATION

                                          By:    /S/ Jeffrey P. Kenefick
                                                 -------------------------------
                                          Name:  Jeffrey P. Kenefick
                                          Title: Vice President

<PAGE>

                                          WACHOVIA CAPITAL FINANCE CORPORATION
                                          (CENTRAL)

                                          By:    /S/ BARRY FELKER
                                                 -------------------------------
                                          Name:  Barry Felker
                                          Title: Associate

<PAGE>

                                          MANUFACTURERS AND TRADERS TRUST
                                          COMPANY

                                          By:    /S/ ANDREW M. CONSTANTINO
                                                 -------------------------------
                                          Name:  Andrew M. Constantino
                                          Title: Vice President

<PAGE>

                                         MERRILL LYNCH CAPITAL, A DIVISION OF
                                         MERRILL LYNCH BUSINESS FINANCIAL
                                         SERVICES INC.

                                          By:    /S/ NICOLA ROBERTS
                                                 -------------------------------
                                          Name:  Nicola Roberts
                                          Title: Assistant Vice President

<PAGE>

Acknowledged and Agreed by:

FLEET CAPITAL CORPORATION

By:    /S/ MATTHEW BOURGEOIS
       ---------------------------
Name:  Matthew Bourgeois
Title: Vice President

FLEET NATIONAL BANK

By:    /S/ MATTHEW BOURGEOIS
       ---------------------------
Name:  Matthew Bourgeois
Title: OfficerEXHIBIT 10.1

                       FORM OF NOTE MODIFICATION AGREEMENT

     This Note Modification  Agreement (this "Modification") by and between BLUE
DOLPHIN ENERGY COMPANY (the "Borrower") and  ________________  (the "Lender") is
entered into on the ____ day of April 2005.

                                    RECITALS:

A.  Borrower  executed  that certain  Promissory  Note dated  September 8, 2004,
payable to the order of Lender,  in the face amount of $__________ (the "Note"),
a copy of which is attached hereto as Exhibit A.

     B.  Pursuant to Section 3(c) of the Note,  the Maturity Date under the Note
was extended to the Extended Maturity Date.

     C. Borrower and Lender have agreed to amend certain terms of the Note.

     D. Borrower and Lender desire to acknowledge and document the amendments to
the Note subject to the terms and conditions contained herein.

     NOW,  THEREFORE,  in  consideration of the promises herein  contained,  the
mutual benefits to be derived herefrom and other good and valuable consideration
received by each party,  and each  intending  to be legally  bound  hereby,  the
parties agree as follows:

     1. Specific Amendments to Note.

          A. The following  definitions  are hereby amended in their entirety to
     read as follows:

     Base Rate means,  from day-to-day,  an annual rate of interest equal to the
     lesser of (a) 12.0% and (b) the Maximum Rate.

     Maturity Date means the earlier to occur of (a) June 30, 2006,  and (b) the
     date upon which the Obligation has been accelerated  pursuant to Section 11
     below.

          B. The following definition is hereby added to the Note:

Modification  means that certain Note  Modification  Agreement dated April ____,
2005 between Borrower and Lender.

          C. The  definition of Extended  Maturity Date as set forth in the Note
     is hereby  deleted  therefrom  for all purposes  from and after the date of
     this Modification.

          D. Section 3(b) is hereby amended in its entirety to read as follows:

          (b) So long as no Default  exists on any interest  payment date,  from
     the date of the  Modification  until the Maturity Date,  interest due under
     this Note that has accrued  during such period shall not be payable on such
     interest  payment date,  but shall  continue to accrue on a daily basis and

<PAGE>

     shall be due and payable on the Maturity  Date;  provided that, all accrued
     but  unpaid  interest  under  this  Note  shall be due and  payable  on any
     interest payment if a Default exists on any such interest payment date. The
     outstanding  Principal  Debt plus all accrued  and unpaid  interest on this
     Note and all other  Obligations  shall be due and  payable on the  Maturity
     Date.

     2. General Amendments to Loan Documents.  The Loan Documents shall continue
in force and effect to secure the obligations of Borrower  pursuant to the Note,
and any  reference  to the  descriptions  of the  obligations,  indebtedness  or
liabilities of Borrower  secured by any such Loan  Documents  shall be deemed to
refer to the  obligations of Borrower  pursuant to the Note, as hereby  amended.
This  Modification  modifies the Note and the other Loan Documents but in no way
acts as a release or  relinquishment  of the liens securing payment of the Note,
including  without  limitation the liens and security  interests  created by the
Mortgage,  and such liens and security  interests are hereby renewed,  extended,
ratified, confirmed and carried forward by Borrower in all respects.

     3.  Conditions   Precedent  in  Connection  with  the  Modification.   This
Modification   shall  not  become  effective  unless  and  until  the  following
conditions have been satisfied:

          A.  Receipt  of  Modification.  Lender  shall have  received  multiple
     counterparts of this Note Modification  Agreement,  as requested by Lender,
     duly executed by an authorized officer of Borrower.

          B.  Payment of Legal Fees.  Lender shall have paid to Porter & Hedges,
     L.L.P.  all reasonable  legal fees incurred to such firm in connection with
     this Modification.

          C. Legal Matters Satisfactory to Lender. All legal matters incident to
     the  consummation of the  transactions  contemplated  by this  Modification
     shall be satisfactory to the Lender.

     4. Reaffirmation of Representations and Warranties.

          A. To induce  the  Lender to enter  into this  Modification,  Borrower
     hereby represents and warrants to Lender as follows:

          i.   The  execution  and  delivery  of  this   Modification   and  the
               performance  by  the  Borrower  of  its  obligations  under  this
               Modification (i) are within Borrower's corporate power, (ii) have
               been duly  authorized by all necessary  corporate  action,  (iii)
               have been authorized by all necessary  governmental  approval (if
               any shall be required),  and (iv) do not and will not  contravene
               or  conflict  with any  provision  of law or of the  articles  of
               incorporation  or the  bylaws  of  Borrower  or of any  agreement
               binding upon Borrower.

          ii.  This  Modification   represents  the  legal,  valid  and  binding
               obligations   of  Borrower   enforceable   against   Borrower  in
               accordance  with its  terms  subject  as to  enforcement  only to
               bankruptcy,  insolvency,  reorganization,   moratorium  or  other
               similar laws  affecting  the  enforcement  of  creditors'  rights
               generally.

          iii. Since the original date of the Note, no change, event or state of
               affairs has occurred and is continuing  which would  constitute a
               Default or solely by the  passage of time or the giving of notice
               would constitute a Default.

<PAGE>

          B. To induce  the  Borrower  to enter into this  Modification,  Lender
     hereby represents and warrants to Borrower as follows:

          i.   Each and every document which evidences or secures payment of the
               Note represents the valid, enforceable and collectible obligation
               to Borrower.

          ii.  There are no existing  claims,  defenses or rights of setoff with
               respect to any of the documents evidencing or securing payment of
               the Note.

          iii. Since the original date of the Note, no change, event or state of
               affairs has occurred and is continuing  which would  constitute a
               Default or solely by the  passage of time or the giving of notice
               would constitute a Default.

     5.  Reaffirmation  of Note.  This  Modification  shall be  deemed  to be an
amendment to the Note,  and the Note,  as amended  hereby,  is hereby  ratified,
adopted and confirmed in each and every respect.

     6.  Defined  Terms.  Each  capitalized  term used  herein,  but not defined
herein, shall have the meaning given to it in the Note.

     7. Governing Law. THIS  MODIFICATION  SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE  WITH THE LAWS OF THE STATE OF TEXAS AND THE  APPLICABLE  LAWS OF THE
UNITED  STATES OF AMERICA.  This  Modification  has been  entered into in Harris
County,  Texas,  and it shall be performable  for all purposes in Harris County,
Texas. Courts within the State of Texas shall have jurisdiction over any and all
disputes  between  the  Borrower  and  the  Lender,  whether  in law or  equity,
including,  but not limited to, any and all disputes  arising out of or relating
to this Modification or any other Loan Documents;  and venue in any such dispute
whether in federal or state court shall be laid in Harris County, Texas.

     8.  Severability.  Whenever  possible each  provision of this  Modification
shall  be  interpreted  in  such  manner  as to be  effective  and  valid  under
applicable law, but if any provision of this Modification shall be prohibited by
or invalid under  applicable  law, such  provision  shall be  ineffective to the
extent of such prohibition or invalidity,  without invalidating the remainder of
such provision or the remaining provisions of this Modification.

     9.  Execution in  Counterparts.  This  Modification  may be executed in any
number of counterparts and by the different parties on separate  counterparts on
different dates,  and each such  counterpart  shall be deemed to be an original,
but all  such  counterparts  shall  together  constitute  but  one and the  same
agreement.

     10. Section  Captions.  Section captions used in this  Modification are for
convenience  of reference  only, and shall not affect the  construction  of this
Modification.

     11.  Successors and Assigns.  This  Modification  shall be binding upon the
Borrower,  the Lender and its respective successors and assigns, and shall inure
to the benefit of the Borrower,  the Lender and the  respective  successors  and
assigns of the Lender.

     12. Non-Application of Chapter 346 of Texas Finance Code. The provisions of
Chapter 346 of the Texas Finance Code (which  regulates  certain  revolving loan

<PAGE>

accounts and  revolving  tri-party  accounts) are  specifically  declared by the
parties  hereto not to be  applicable to this  Modification  or any of the other
Loan Documents or to the transactions contemplated hereby.

     13.  NOTICE OF FINAL  AGREEMENT.  THE WRITTEN NOTE AND LOAN  DOCUMENTS,  AS
HEREBY AMENDED,  REPRESENT THE FINAL AGREEMENT AMONG THE LENDER AND BORROWER 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.

                                                    BORROWER:

                                                    BLUE DOLPHIN ENERGY COMPANY,
                                                    a Delaware corporation

                                                    By:_________________________
                                                       Michael J. Jacobson
                                                       President

                                                    LENDER:

                                                    INVESTORS,

                                                    By:

                                                    By:_________________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}]]