Document:

<PAGE>

                                                                    EXHIBIT 10.7

                           ASSET PURCHASE AGREEMENT

This ASSET PURCHASE AGREEMENT ("Agreement") is dated as of the 13th day of July,
2000, by and between Channelhealth Incorporated (the "Seller"), a corporation
organized and existing under the laws of the State of Delaware and having its
principal place of business in South Burlington, Vermont, and IDX Systems
Corporation (the "Buyer"), a corporation organized and existing under the laws
of the State of Vermont and having its principal place of business in South
Burlington, Vermont.

                             W I T N E S S E T H:

WHEREAS, the Buyer formed the Seller as a subsidiary of the Buyer to carry on
certain Internet-related businesses previously carried on by the Buyer and known
as the "Physician Channel", the "Patient Channel" and the "eCommerce Channel"
(collectively the "ChannelHealth Business"); and

WHEREAS, the Buyer contributed assets related to the ChannelHealth Business to
the Seller and the Buyer and the Seller entered into a Cross License and
Software Maintenance Agreement and a Marketing, Development and Services
Agreement, both dated January 1, 2000, governing the licensing of intellectual
property rights related to the ChannelHealth Business and the marketing and
distribution of the ChannelHealth Business services; and

WHEREAS, the Seller and the Buyer have agreed that it is in the best interests
of both corporations for the Seller to convey the "eCommerce Channel" and
certain components of the "Patient Channel" businesses back to the Buyer; and

WHEREAS, the Seller has agreed to sell certain assets and assign certain
intellectual property rights, contract rights and obligations and certain
liabilities related to the "eCommerce Channel" and certain components of the
"Patient Channel" businesses (the "Discontinued  Businesses") to the Buyer, and
the Buyer has agreed to purchase such assets and assume such contract rights and
obligations and such liabilities pursuant to the terms of this Agreement;

NOW, THEREFORE, in consideration of the premises and the mutual agreements,
covenants, and provisions hereinafter set forth, the Seller and the Buyer hereby
agree as follows:

                                   ARTICLE I
                             Assets to Be Conveyed

At the Closing (as hereinafter defined), the Seller shall assign, sell, convey,
transfer, and deliver to the Buyer, by good and sufficient instruments, as
listed on Exhibit D and in forms acceptable to Buyer and Seller, and the Buyer
shall purchase from the Seller the following tangible and intangible assets (the
"Assets"):

Section 1.1    Personal Property.  All tangible personal property used in the
operation of the Discontinued Businesses, including, without limitation, all
personal property listed on Exhibit A attached hereto and incorporated herein.
<PAGE>

Section 1.2    Intangible Assets.

     1.2(a) Contract Rights. The Seller's right, title, and interest in and to
(a) all contracts, contract rights, contract proposals, and open accounts
related exclusively to the Discontinued Businesses and to which the Seller is a
party and which are in effect on the Closing Date (as hereinafter defined),
including, without limitation, the contracts identified as "Transferred
Contracts" on Exhibit B attached hereto and incorporated herein, and all
documents, and records pertaining to such contracts; and (b) all contract rights
and obligations related to the Discontinued Businesses arising in contracts
related to both the Discontinued Businesses and other portions of the
ChannelHealth Businesses and which are in effect on the Closing Date, including
without limitation, contract rights and obligations related to the Discontinued
Businesses in the contracts identified as "Divided Contracts" on Exhibit B. The
"Transferred Contracts" and the "Divided Contracts" are sometimes hereafter
referred to as the "Contracts."

     1.2(b) Intellectual Property Rights. At the Closing Seller shall transfer
and assign to Buyer all of its copyrights in and to the products known as
DietSite, eCommerce Channel and the Virtual Office component of Patient Channel
(specifically excluding Health Resources, MyHealth, the WebWorks Task Engine,
the Task Engine Database, and "secure messaging") and any patents with claims
directed wholely or in part to inventions embodied in, or necessary to implement
or practice any portion of the products known as DietSite, eCommerce Channel and
the Virtual Office component of Patient Channel (specifically excluding Health
Resources, MyHealth, the WebWorks Task Engine, the Task Engine Database, and
"secure messaging"). Seller shall execute an assignment to effectuate and
confirm such assignment.

Section 1.3    Tradename; Domain Name; Goodwill. All goodwill connected in any
way with the Discontinued Businesses together with Seller's right, title and
interest to the trademarks and domain names "PATIENT CHANNEL",
"www.patientchannel.com" "VIRTUAL OFFICE", "MYHEALTH", "ECOMMERCE CHANNEL",
"www.ecommercechannel.com", "DIETSITE", "www.dietsite.com" and the DIETSITE
logo, and any related registrations or pending registration applications.

Section 1.4    Cash.  All of the Seller's cash and cash equivalents in excess of
its Accrued Liabilities as of the Closing Date.  "Accrued Liabilities" shall
mean the Seller's accounts payable, other current liabilities and accrued
liabilities.

Section 1.5    Excluded Assets. The Assets do not include any other assets of
the Seller.

                                  ARTICLE II
                             Transferred Employees

     The Buyer agrees to offer employment to each of the employees identified on
Exhibit E (the "Hired Employees") for the same or greater rate of compensation
as that at which they were employed by the Seller immediately prior to the
Closing Date and shall continue the employee benefits of the Hired Employees
without interruption.

                                       2
<PAGE>

                                  ARTICLE III
                                Purchase Price

Section 3.1    Purchase Price. The purchase price to be paid by the Buyer to the
Seller for the Assets shall be equal to the sum of Twenty-Five Million Dollars
($25,000,000) (the "Purchase Price"), which shall be allocated as mutually
agreed by the parties at Closing.

Section 3.2    Payment of Purchase Price. The Purchase Price shall be paid by
cancellation of 2,771,009 shares of the Seller's Common Stock held by the Buyer.
Such number of shares representing a value of $25 million based on the aggregate
value of the consideration as of the close of trading on July 7, 2000, to be
received by Seller's shareholders pursuant to that certain Agreement and Plan of
Merger by and among Allscripts Holding, Inc., Allscripts, Inc., Bursar
Acquistion, Inc., Bursar Acquisition No. 2, Inc., IDX Systems Corporation, and
Channelhealth Incorporated.

                                  ARTICLE IV
                                  Liabilities

The Seller hereby assigns and the Buyer assumes responsibility for, and, in
accordance with Article IX, the Buyer shall indemnify and hold the Seller, its
officers, directors, agents, employees, affiliates, subsidiaries, predecessors,
successors and assigns harmless from and against, the liabilities of the Seller
identified on Exhibit C (the "Liabilities").

                                   ARTICLE V
                        Representations and Warranties

Section 5.1    Representations and Warranties of the Seller. The Seller
represents, warrants, and agrees with and to the Buyer, as of the date hereof
and shall represent, warrant and agree with the Buyer as of the Closing Date, as
follows:

(a)  Organization and Qualification. The Seller is a corporation duly organized,
and validly existing in good standing under the laws of the State of Delaware
and has all necessary corporate power, authority, and capacity to own its assets
and to carry on the ChannelHealth Business as currently conducted.

(b)  Due Authorization. The Seller has taken all necessary corporate action and
has full corporate power and authority to assume and to perform its obligations
and to transfer the Assets under the terms of this Agreement.

(c)  Title to Assets. The Seller has title to all of the Assets as good and
marketable as the title Buyer conveyed to Seller upon contribution of the
Assets, and the Assets are free and clear of all claims, liens, pledges, and
encumbrances, if any, created since contribution of the Assets to the Seller by
the Buyer.

(d)  Condition of Assets. The Seller's tangible assets to be conveyed pursuant
to this Agreement are sold "AS IS."

                                       3
<PAGE>

(e)  Contracts. The Seller has performed all of its material obligations and is
not in default in any material respect under any of the Contracts. The Contracts
are in full force and effect and are enforceable by the Seller in accordance
with their terms, subject to no defenses or offsets.

(f)  Compliance with Other Instruments. Except as set forth on Schedule 5.1(f),
the execution, delivery, and performance of this Agreement by the Seller does
not conflict with, result in a breach of the terms or conditions of, accelerate
any provision of, or constitute any default under the Seller's Certificate of
Incorporation or Bylaws, or any contract, agreement, lease, or other instrument
to which the Seller is a party or by which the Seller is bound, except where
such conflict, breach, acceleration, or default would not cause a material
adverse effect on the Seller's business or financial condition or ability to
perform its obligations under this Agreement.

(l)  Survival. The representations, warranties, and agreements of the Seller
contained herein shall be true on and as of the Closing Date, but they shall not
survive the Closing.

Section 5.2    Representations and Warranties of the Buyer. The Buyer
represents, warrants, and agrees with and to the Seller, as of the date hereof,
as follows:

(a)  Organization and Qualification. The Buyer is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Vermont.

(b)  Due Authorization. The Buyer has taken, or will have taken as of the
Closing Date, all necessary corporate action and has full power and authority to
assume and to perform its obligations under this Agreement.

(c)  Binding Obligation. This Agreement constitutes a valid and binding
obligation of the Buyer enforceable in accordance with its terms.

(d)  Compliance with Other Instruments. The execution, delivery, and performance
of this Agreement by the Buyer does not, and on the Closing Date will not,
conflict with, result in a breach of the terms or conditions of, accelerate any
provision of, or constitute any default under the Buyer's Articles of
Incorporation or Bylaws, or any contract, agreement, lease or other instrument
to which the Buyer is a party or by which the Buyer is bound, except where such
conflict, breach, acceleration, or default would not cause a material adverse
effect on the Buyer's business or financial condition or ability to perform its
obligations under this Agreement.

(e)  Survival. The representations, warranties and agreements of the Buyer
contained herein shall be true on and as of the Closing Date, but they shall not
survive the Closing.

                                       4
<PAGE>

                                  ARTICLE VI
                  Conditions Precedent to Buyer's Obligations

The obligation of the Buyer to purchase the Assets is subject to the
satisfaction, on or prior to the Closing Date, of the following conditions:

Section 6.1    Representations and Warranties True. Each of the representations
and warranties of the Seller contained in Section 5.1 shall be true and correct
when made and as of the Closing Date.

Section 6.2    Board Approval. The Buyer shall have obtained approval of the
transactions contemplated by this Agreement by its Board of Directors.

                                  ARTICLE VII
                 Conditions Precedent to Seller's Obligations

The obligation of the Seller to sell the Assets is subject to the satisfaction,
on or prior to the Closing Date, of the following conditions:

Section 7.1    Representations and Warranties True. Each of the representations
and warranties of the Buyer contained in Section 5.2 shall be true and correct
when made and as of the Closing Date.

Section 7.2    Board Approval. The Seller shall have obtained approval of the
transactions contemplated by this Agreement by its Board of Directors.

Section 7.3    Shareholder Approval. The Seller shall have obtained approval of
the transactions contemplated by this Agreement by its shareholders.

                                 ARTICLE VIII
                                    Closing

Section 8.1    Closing Date. The closing of the transactions contemplated by
this Agreement ("Closing") shall take place on or before the Closing Date of
that certain Agreement and Plan of Merger by and among Allscripts Holding, Inc.,
Allscripts, Inc., Bursar Acquistion, Inc., Bursar Acquisition No. 2, Inc., IDX
Systems Corporation, and Channelhealth Incorporated, of even date herewith (the
"Closing Date") at such time and in such place as the Seller and the Buyer may
mutually agree upon.

Section 8.2    Documents to be Delivered by the Seller. At the Closing, the
Seller shall deliver or cause to be delivered to the Buyer the following:

(a)  A copy of the resolutions of the Seller's Board of Directors and minutes of
the meeting of Seller's shareholders, certified by the Secretary of the Seller,

                                       5
<PAGE>

authorizing the Seller's execution of this Agreement and performance of its
obligations under this Agreement.

(b)  A bill of sale in the form of that attached hereto, and other instruments
of assignment, transfer, and conveyance, for all of the Assets to be conveyed by
Seller to Buyer under Article I of this Agreement, executed by a duly authorized
agent of the Seller and conveying title to the Assets listed on Exhibit A.

(c)  An assignment of the Contracts and Waiver of any rights under the Divided
Contracts.

(d)  An Assignment of the trademarks and domain names listed in Section 1.3.

(e)  An assignment or assignments of the copyrights and patent rights listed in
Section 1.2(b).

Section 8.3    Documents to be Delivered by the Buyer. At the Closing, the Buyer
shall deliver or cause to be delivered to the Seller the following:

(a)  A copy of the resolutions of the Buyer's Board of Directors, certified by
the Secretary of the Buyer, authorizing the Buyer's execution of this Agreement
and performance of its obligations under this Agreement.

(b)  The Purchase Price.

(c)  An assumption of the Contracts and Liabilities.

                                  ARTICLE IX
                                Indemnification

     The Buyer shall indemnify, defend and hold harmless the Seller, its
officers, directors, employees, successors and assigns from, against and in
respect of any and all claims, liabilities, damages and all related expenses
(including without limitation, reasonable attorney's fees, court costs and
expert witness fees), whether fixed or contingent, liquidated or unliquidated,
known or unknown to the Buyer, related to the Liabilities.

                                   ARTICLE X
                           Termination and Amendment

Section 10.1   Termination. This Agreement may be terminated at any time prior
to the Closing by:

(a)  mutual consent of the Seller and Buyer;

(b)  the Buyer upon failure of a condition precedent to the obligations of Buyer
set forth in Article VI; or

                                       6
<PAGE>

(c)  the Seller upon failure of a condition precedent to the obligations of
Seller set forth in Article VII.

Section 10.2   Effect of Termination. In the event of any permitted termination
of this Agreement, this Agreement shall thereafter be void, and no party hereto
will have any liability to any other party.

Section 10.3   Amendment. This Agreement may be amended by an instrument in
writing signed on behalf of each of the parties hereto.

Section 10.4   Extension. At any time prior to the Closing, the parties hereto
may by written instrument:

(a)  extend the time for the performance of any of the obligations or other acts
of the other parties hereto;

(b)  waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto; or

(c)  waive compliance with any of the agreements or satisfaction of any of the
conditions contained herein.

                                  ARTICLE XI
                                 Miscellaneous

Section 11.1   Governing Law; Jurisdiction. This Agreement shall be governed by
and construed in accordance with the laws of the State of Vermont.

Section 11.2   Binding Effect. This Agreement shall be binding upon, and shall
inure to the benefit of, and shall be enforceable by, the parties hereto and
their respective legal representatives, successors, and assigns.

Section 11.3   Entire Agreement. This Agreement, including the Exhibits hereto,
contains the entire agreement of the parties hereto with respect to the
transactions contemplated hereby and supersedes all prior agreements, writings
and negotiations with respect thereto.

Section 11.4   Brokers. Each party represents and warrants to the other that, to
the knowledge of the party making the representation, no broker or agent is
entitled to any brokerage fee or commission with respect to the transactions
contemplated by this Agreement.

Section 11.5   Notices. All notices, requests, waivers, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if hand delivered, mailed, first class postage prepaid, return
receipt requested, or sent by facsimile:

                                       7
<PAGE>

(a)  If to the Seller, to:

               Jeffrey J. McMahan
               Channelhealth Incorporated
               25 Green Mountain Drive
               P.O. Box 8370
               Burlington, VT 05402-8370
               Facsimile:  802-865-1197

(b)  If to the Buyer, to:

               Robert W. Baker, Jr.
               IDX Systems Corporation
               1400 Shelburne Road
               P.O. Box 1070
               South Burlington, Vermont 05402-1070
               Facsimile:  802-862-6351

Section 11.6   Headings. The headings in this Agreement are for convenience and
identification purposes only and are not to be considered in the interpretation
of any part hereof.

Section 11.7   Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall
constitute together one and the same instrument.

IN WITNESS WHEREOF, the parties to this Agreement have caused this Agreement to
be duly executed as of the date first written above.

                                       SELLER:

                                       CHANNELHEALTH INCORPORATED

                                       By:
                                          -------------------------------
                                          Its Duly Authorized Agent

                                       BUYER:

                                       IDX SYSTEMS CORPORATION

                                       By:
                                          -------------------------------
                                          Its Duly Authorized Agent

                                       8
<PAGE>

                                   Exhibits

Exhibit A      Tangible Assets

Exhibit B      Intangible Assets

Exhibit C      Assumed Liabilities

Exhibit D      Conveyance Instruments

Exhibit E      Hired Employees

                                       9<PAGE>

                                                                    EXHIBIT 10.1

                              FIRST AMENDMENT TO
                          EIGHTH AMENDED AND RESTATED
                          REVOLVING CREDIT AGREEMENT

     THIS FIRST AMENDMENT TO EIGHTH AMENDED AND RESTATED REVOLVING CREDIT
AGREEMENT (this "First Amendment"), dated effective as of the 21st day of
September, 2000, is entered into by and among GULF ISLAND FABRICATION, INC., a
Louisiana corporation ("Borrower"), GULF ISLAND, L.L.C., a Louisiana limited
liability company ("Gulf Island Subsidiary"), DOLPHIN SERVICES, INC., a
Louisiana corporation ("Dolphin"), SOUTHPORT, INC., a Louisiana corporation
("Southport"), GULF ISLAND MINDOC COMPANY, L.L.C. (formerly Vanguard Ocean
Services, L.L.C.), a Louisiana limited liability company ("MinDOC" and together
with Gulf Island Subsidiary, Dolphin, and Southport, each an "Existing
Subsidiary" and, collectively, the "Existing Subsidiaries"), WHITNEY NATIONAL
BANK, a national banking association ("Whitney"), BANK ONE, LOUISIANA, NA, a
national banking association, in its individual capacity ("Bank One") (each of
Whitney and Bank One individually, a "Bank" and collectively, the "Banks"), and
BANK ONE, LOUISIANA, NA, a national banking association, in its capacity as
agent for the Banks as set forth hereinafter (the "Agent").

                                   RECITALS:
                                   --------

     A.   Borrower, the Existing Subsidiaries, Whitney, and Bank One, in its
capacity as a Bank and as Agent, entered into that certain Eighth Amended and
Restated Revolving Credit Agreement, dated effective as of January 1, 2000 (the
"Restated Credit Agreement");

     B.   Borrower, the Existing Subsidiaries, Banks, and Agent desire to amend
the Restated Credit Agreement (i) to extend the maturity date of the Revolving
Credit Facility from December 31, 2001 to December 31, 2002 and (ii) to reflect
the name change of Vanguard Ocean Services, L.L.C. to Gulf Island MinDOC
Company, L.L.C.

     NOW, THEREFORE, for and in consideration of the mutual covenants,
agreements and undertakings herein contained Borrower, the Existing
Subsidiaries, Banks, and Agent hereby agree as follows:

                                   ARTICLE I

                    AMENDMENTS TO RESTATED CREDIT AGREEMENT

     1.  Restated Credit Agreement. The Restated Credit Agreement is hereby
         -------------------------
amended by deleting "VOS" in each instance where "VOS" appears and replacing
"VOS" with "MinDOC".

     2.  Preamble. The preamble of the Restated Credit Agreement is hereby
         --------
amended by deleting the phrase "Vanguard Ocean Services, L.L.C." in the first
sentence thereof and replacing it with the phrase "Gulf Island MinDOC Company,
L.L.C."
<PAGE>

     3.  Section 1.1.  Section 1.1 of the Restated Credit Agreement is hereby
         -----------
amended by deleting the date "December 31, 2001" in the first sentence thereof
and replacing such date with the phrase "the Termination Date."

     4.  Section 2.1.  Section 2.1 of the Restated Credit Agreement is hereby
         -----------
amended by deleting the date "December 31, 2001" in the first sentence thereof
and replacing such date with the phrase "the Termination Date."

     5.  Section 5.4.  Section 5.4 of the Restated Credit Agreement is hereby
         -----------
amended by deleting the date "December 31, 1998" in each instance where such
date appears in Section 5.4 and replacing such date with the date "December 31,
1999." Section 5.4 is further amended by deleting the date "September 30, 1999"
in the second sentence thereof and replacing such date with "June 30, 2000."

     6.  Section 11.1.  Section 11.1 of the Restated Credit Agreement is hereby
         ------------
amended to include the following substituted definition:

     "Termination Date" means December 31, 2002.

                                  ARTICLE II

                    SPECIAL REPRESENTATIONS AND WARRANTIES
                     WITH RESPECT TO THIS FIRST AMENDMENT

     In order to induce Banks and Agent to enter into this First Amendment,
Borrower and the Existing Subsidiaries represent and warrant to Banks that:

     1.  Borrower Authorization. Borrower is duly authorized to execute, deliver
         ----------------------
and perform its obligations under this First Amendment and is and will continue
to be duly authorized to borrow monies under and to perform its obligations
under the Restated Credit Agreement, as amended by this First Amendment and as
it may be further amended from time to time.

     2.  Enforceability Against Borrower. This First Amendment shall, upon
         -------------------------------
execution and delivery, constitute the legal, valid and binding obligation of
Borrower, enforceable in accordance with its terms.

     3.  Existing Subsidiary Authorization. Each Existing Subsidiary is duly
         ---------------------------------
authorized to execute, deliver and perform its obligations under this First
Amendment and is and will continue to be duly authorized to apply for Letters of
Credit and to agree to the related reimbursement obligations under the Restated
Credit Agreement, as amended by this First Amendment and as it may be further
amended from time to time.

     4.  Enforceability Against Existing Subsidiaries. This First Amendment
         --------------------------------------------
shall, upon execution and delivery, constitute the legal, valid and binding
obligation of each Existing Subsidiary enforceable in accordance with its terms.

                                       2
<PAGE>

                                  ARTICLE III

                 CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS
                                FIRST AMENDMENT

     This First Amendment shall become effective as of the date first above
written when and only when (i) Agent shall have received at the offices of
Agent, a counterpart of this First Amendment executed and delivered by Borrower,
the Existing Subsidiaries and Banks and (ii) Agent shall have additionally
received all of the following documents, each document (unless otherwise
indicated) being dated the date of receipt thereof by Agent, duly authorized,
executed and delivered, and in form and substance satisfactory to Agent and each
of the Banks:

     1.  Borrower's Resolutions. Copies, duly certified by the Secretary or
         ----------------------
Assistant Secretary of Borrower, of the resolutions of Borrower's Board of
Directors authorizing the borrowings under the Restated Credit Agreement, as
amended hereby, and the execution and delivery of this First Amendment and the
new Notes contemplated hereby;

     2.  Existing Subsidiaries' Resolutions. Copies, duly certified by the
         ----------------------------------
Secretary or Assistant Secretary of each Existing Subsidiary, authorizing the
borrowings under the Restated Credit Agreement, as amended hereby, and the
execution and delivery of this First Amendment;

     3.  Notes. Borrower's duly executed Notes payable to the order of Banks, in
         -----
the form attached as Exhibits "B" and "C" hereto, with appropriate insertion s;

     4.  No Default Certificate. Borrower's duly executed default and warranty
         ----------------------
certificate;

     5.  Borrower's Incumbency Certificate. Certificates of Borrower's Secretary
         ---------------------------------
or Assistant Secretary certifying the names of the officers of Borrower
authorized to execute the documents or certificates to be delivered hereunder by
Borrower, together with the true signatures of such officers; and

     6.  Existing Subsidiaries' Incumbency Certificate.  Certificates of the
         ---------------------------------------------
Secretary or Assistant Secretary of each Existing Subsidiary certifying the
names of the officers of such Existing Subsidiary authorized to execute the
documents or certificates to be delivered hereunder by such Existing Subsidiary,
together with the true signatures of such officers.

                                  ARTICLE IV

                                 MISCELLANEOUS

     1.  Definitions.  All terms used herein with initial capital letters and
         -----------
not otherwise defined herein shall have the meanings ascribed to such terms in
the Restated Credit Agreement.

                                       3
<PAGE>

     2.  Substitution of Exhibits and Schedules.  Exhibits "B" and "C" of the
         --------------------------------------
Restated Credit Agreement are hereby deleted, and Exhibits "B" and "C" attached
hereto are hereby substituted in place thereof. Schedule 1 of the Restated
Credit Agreement is hereby deleted, and Schedule 1 attached hereto is hereby
substituted in place thereof.

     3.  Ratification of Notes and Liens.  Borrower does hereby ratify, reaffirm
         -------------------------------
and acknowledge its obligations under the Notes, and Gulf Island Subsidiary does
hereby further ratify, reaffirm and acknowledge its mortgage, pledge and/or
assignment of, and/or grant of a security interest in, all Collateral heretofore
provided by Gulf Island Subsidiary as security for the Notes and the other
Obligations under the Restated Credit Agreement. Gulf Island Subsidiary does
hereby further ratify, confirm and acknowledge to Agent and Banks that: (a) the
mortgage, pledge and/or assignment of, and/or grant of a security interest in,
all such Collateral is and shall remain in full force and effect; (b) the
Collateral Documents to which Gulf Island Subsidiary is a party are and shall
continue to be valid, binding and enforceable obligations of Gulf Island
Subsidiary; (c) the Collateral Documents and the Collateral shall continue to
secure, with the original ranks and priority, the Notes and the other
Obligations of Borrower and the Existing Subsidiaries as renewed, rearranged,
extended and now evidenced by the Notes executed of even date herewith in the
forms attached hereto as Exhibits "B" and "C"; and (d) any references in the
Collateral Documents to the Notes shall be deemed a reference to the Notes
executed of even date herewith in the forms attached hereto as Exhibits "B" and
"C".

     4.  Ratification of Existing Subsidiaries Continuing Guaranty.  The
         ---------------------------------------------------------
Existing Subsidiaries do hereby ratify, reaffirm and acknowledge their
obligations under the Guaranty heretofore provided by the Existing Subsidiaries
under the Restated Credit Agreement. The Existing Subsidiaries do hereby further
ratify, reaffirm and acknowledge to Agents and Banks that: (a) the Guaranty is
and shall remain in full force and effect; (b) the Guaranty to which the
Existing Subsidiaries are a party is and shall continue to be valid, binding and
an enforceable obligation of the Existing Subsidiaries.

     5.  No Other Changes. The Restated Credit Agreement as hereby amended is
         ----------------
hereby ratified and confirmed in all respects. Any reference to the Restated
Credit Agreement in any Loan Document shall be deemed to refer to the Restated
Credit Agreement as amended hereby. The execution, delivery and effectiveness of
this First Amendment shall not, except as expressly provided herein, operate as
a waiver of any right, power or remedy of Banks under the Restated Credit
Agreement or any other Loan Document. Except as amended by this First Amendment,
the Restated Credit Agreement shall remain in full force and effect. Nothing
contained herein or in any other documents contemplated hereby shall be
considered a novation or discharge of the debt of Borrower to Banks under the
Restated Credit Agreement.

     6.  Counterparts. This First Amendment may be executed in as many
         ------------
counterparts as may be deemed necessary or convenient, and by the different
parties hereto in separate counterparts, each of which, when so executed, shall
be deemed an original, but all of which counterparts shall constitute but one
and the same instrument.

                                       4
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to
be executed by their respective officers thereunto duly authorized, effective as
of the date first written above.

                              BORROWER:

                              GULF ISLAND FABRICATION, INC.

                              By:  /s/ Kerry J. Chauvin
                                 ___________________________________
                                  Kerry J. Chauvin, President & CEO

                              BANKS:

                              BANK ONE, LOUISIANA, NATIONAL
                              ASSOCIATION

                              By: /s/ J. Charles Freel, Jr.
                                 ___________________________________
                                    J. Charles Freel, Jr.,
                                    First Vice President

                              WHITNEY NATIONAL BANK

                              By: /s/ Harry C. Stahel
                                 ___________________________________
                                    Harry C. Stahel,
                                    Senior Vice President

                              EXISTING SUBSIDIARIES:

                              GULF ISLAND, L.L.C.

                              By:  /s/ Kerry Chauvin
                                 ___________________________________
                                   Kerry Chauvin, President

                              DOLPHIN SERVICES, INC.

                              By:  /s/ James Stewart
                                 ___________________________________
                                    James Stewart, President

                                       5
<PAGE>

                                    SOUTHPORT, INC.

                                    By:  /s/  Kirk Meche
                                       ------------------------------------
                                         Kirk Meche, President

                                    GULF ISLAND MINDOC COMPANY, L.L.C.

                                    By:  /s/ Kerry J. Chauvin
                                         ----------------------------------
                                    Kerry J. Chauvin, President

                                    AGENT:

                                    BANK ONE, LOUISIANA, NATIONAL
                                     ASSOCIATION

                                    By: /s/ J. Charles Freel, Jr.
                                       _____________________________________
                                        J. Charles Freel, Jr.,
                                        First Vice President

                                       6
<PAGE>

                          COMMERCIAL PROMISSORY NOTE
                                  (REVOLVING)

$10,000,000.00                                            New Orleans, Louisiana
                                                          September 21, 2000

          FOR VALUE RECEIVED, the undersigned ("Borrower", whether one or more),
in solido, promises to pay to the order of BANK ONE, LOUISIANA, NA ("Bank"), as
provided below, at 201 St. Charles Avenue, New Orleans, Louisiana 70170, the sum
of TEN MILLION AND NO/100 DOLLARS ($10,000,000.00), with interest thereon from
date until paid, at the rates specified in the Loan Agreement (as hereinafter
defined). All payments shall be applied first to interest, then to other charges
and insurance premiums (if applicable), then to principal.

          This note is one of the notes referred to in, is subject to the terms
and conditions of, and is entitled to the benefits of, that certain Eighth
Amended and Restated Revolving Credit Agreement, dated as of January 1, 2000, as
amended by that certain First Amendment thereto, dated effective as of the date
hereof, by and among Borrower, the Existing Subsidiaries (as defined therein),
Whitney National Bank ("Whitney"), and Bank, in its individual capacity and as
agent for Bank and Whitney (the "Loan Agreement"), which Loan Agreement, among
other things, contains provisions for the maximum amount of credit to be made
available hereunder, certain fees, acceleration of the maturity hereof upon the
happening of certain stated events, and also for prepayments on account of
principal hereof prior to the maturity hereof upon the terms and conditions
therein specified. Bank may from time to time make advances to Borrower under
the Loan Agreement, the aggregate unpaid principal balance of which shall not
exceed the principal amount stated herein. Borrower shall be obligated to repay
only the actual amount advanced, plus interest and appropriate penalties
calculated as provided in this Note.

          SINGLE PAYMENT NOTE/SINGLE PRINCIPAL PAYMENT, PERIODIC INTEREST
          ---------------------------------------------------------------
  INSTALLMENTS. PRINCIPAL SHALL BE PAYABLE IN FULL ON DECEMBER 31, 2002, AND
  ------------
  INTEREST THEREON SHALL BE PAYABLE ON THE LAST DAY OF SEPTEMBER, AND THE LAST
  DAY OF EACH CALENDAR QUARTER THEREAFTER.

          A.  SECURITY. This note is secured by all of the Collateral Documents
              --------
(as defined in the Loan Agreement).

          B.  LATE PAYMENT. A payment is not deemed made until funds are
              ------------
collected and made available to Bank. If any payment, whether the payment
represents principal or interest or both, is not paid in full when due, whether
during the term of this note or at maturity, and such nonpayment shall have
continued for a period of five (5) days following written notice thereof by Bank
to Borrower, Bank may impose upon and collect from Borrower a late charge equal
to five percent (5%) of the unpaid amount of the payment then due and owing.
Late charges imposed under this section shall not be less than $25.00 nor more
than $100.00 per occurrence.

<PAGE>

          C.  DEFAULT. If this note is in default, Bank may, at its option and
              -------
without notice or demand, declare immediately due and payable the entire unpaid
balance of the note.

          Each of the following shall constitute a default under this note: if
this note is not paid in accordance with its terms and such nonpayment in
accordance with its terms shall have continued for a period of five (5) days
following written notice of such default by Bank to Borrower; or the occurrence
of an Event of Default, as defined in the Loan Agreement.

          D.  ATTORNEY'S FEES. Borrower agrees to pay the reasonable fees of
              ---------------
any attorney at law who may be employed to recover the amount hereof, or any
part hereof, in principal or interest, or to protect any security herefor or the
interest of the holder hereof, or to compromise or to take any other action with
regard hereto, which fees shall not exceed twenty-five percent (25%) of the
amount then owing hereon or sought to be collected, protected, or preserved.

          E.  PREPAYMENT. Borrower may prepay the note in full or in part at
              ----------
any time in accordance with the terms of the Loan Agreement.

          F.  WAIVER OF DEFENSES.  Each party waives presentment for payment,
              ------------------
demand, notice of nonpayment, demand, and protest, and agrees that the time of
payment hereof may be extended from time to time, one or more times, without
notice of such extension or extensions, and without further consent. The term
"party" as used in this note, means each maker, endorser, guarantor, or other
surety of this note, including any person or entity pledging or mortgaging
property to secure this note and their heirs, successors, or assigns. Without
notice to, or consent of, any party, Bank may substitute, release, discharge, or
otherwise alter the obligation of any party, without affecting in any way the
obligation of any other party. No waiver of any right by Bank shall be
effective, unless in writing and signed by Bank. No delay by Bank in the
exercise of any right shall affect such right, nor preclude future exercise of
such similar rights. As used herein, the term "Bank" shall be deemed to include
not only Bank and its successors and assigns, but also any transferee(s),
endorsee(s), or future holder(s) of this note.

          G.  INTEREST CALCULATION. Interest shall be calculated as specified in
              --------------------
the Loan Agreement.

          H.  ELECTION OF LAW.  This note shall be governed by and construed
              ---------------
under the law of the State of Louisiana.  Each party agrees that any action
arising out of this note, or any renewals or substitutions for this note, may be
brought in any competent court in the Parish of Orleans, State of Louisiana.

          This note, together with that certain Commercial Promissory Note
(Revolving) dated the date hereof, in the principal sum of $10,000,000.00,
executed by Borrower, payable to the order of Whitney, bearing interest at the
per annum rate set forth herein (the "Whitney Note"), is given in renewal and
rearrangement and not in novation or discharge of: (a) that certain promissory
note of Borrower payable to the order of

                                       2

<PAGE>

Bank, dated January 1, 2000, in the amount of $10,000,000.00, and (b) that
certain promissory note of Borrower payable to the order of Whitney, dated
January 1, 2000, in the amount of $10,000,000.00 (both of the foregoing
promissory notes being collectively referred to as the "Original Notes").

      The indebtedness evidenced by this note and the Whitney Note is a
continuation of and an increase in the indebtedness evidenced by the Original
Notes, which indebtedness is in no way extinguished or diminished hereby, and
nothing contained in this note shall be construed (a) as a novation of the
Original Notes or any collateral securing same; (b) as payment of any amount of
principal or interest on the Original Notes; or (c) to release, cancel,
terminate, or otherwise impair the status or priority of the liens created by
the Collateral Documents (as defined in the Loan Agreement) and Borrower hereby
ratifies, confirms, and approves the continuing existence, validity, priority,
and binding effect of the Collateral Documents.

                                             BORROWER:

                                             GULF ISLAND FABRICATION, INC.

                                             By:
                                                -----------------------------
                                                  Kerry J. Chauvin
                                                  President & CEO

                                       3

<PAGE>

                           COMMERCIAL PROMISSORY NOTE
                                  (REVOLVING)

$10,000,000.00                                            New Orleans, Louisiana
                                                              September 21, 2000

          FOR VALUE RECEIVED, the undersigned ("BORROWER", whether one or more),
in solido, promises to pay to the order of WHITNEY NATIONAL BANK ("BANK"), as
provided below, at 228 St. Charles Avenue, New Orleans, Louisiana 70130, the sum
of TEN MILLION AND NO/100 DOLLARS ($10,000,000.00), with interest thereon from
date until paid, at the rates specified in the Loan Agreement (as hereinafter
defined).  All payments shall be applied first to interest, then to other
charges and insurance premiums (if applicable), then to principal.

          This note is one of the notes referred to in, is subject to the terms
and conditions of, and is entitled to the benefits of, that certain Eighth
Amended and Restated Revolving Credit Agreement, dated as of January 1, 2000, as
amended by that certain First Amendment thereto dated the date hereof, by and
among Borrower, the Existing Subsidiaries (as defined therein) Bank and Bank
One, Louisiana, NA ("BANK ONE"), in its individual capacity and as agent for
Bank and Bank One (the "LOAN AGREEMENT"), which Loan Agreement, among other
things, contains provisions for the maximum amount of credit to be made
available hereunder, certain fees, acceleration of the maturity hereof upon the
happening of certain stated events, and also for prepayments on account of
principal hereof prior to the maturity hereof upon the terms and conditions
therein specified.  Bank may from time to time make advances to Borrower under
the Loan Agreement, the aggregate unpaid principal balance of which shall not
exceed the principal amount stated herein.  Borrower shall be obligated to repay
only the actual amount advanced, plus interest and appropriate penalties
calculated as provided in this Note.  Bank, at Bank's election, may exercise any
and all rights and remedies described in this note through Bank One, as Bank's
agent.

          SINGLE PAYMENT NOTE/SINGLE PRINCIPAL PAYMENT, PERIODIC INTEREST
          ---------------------------------------------------------------
INSTALLMENTS.  PRINCIPAL SHALL BE PAYABLE IN FULL ON DECEMBER 31, 2002, AND
-------------
INTEREST THEREON SHALL BE PAYABLE ON THE LAST DAY OF SEPTEMBER, 2000, AND THE
LAST DAY OF EACH CALENDAR QUARTER THEREAFTER.

          A.  SECURITY.  This note is secured by all of the Collateral Documents
              ---------
(as defined in the Loan Agreement).

          B.  LATE PAYMENT.  A payment is not deemed made until funds are
              -------------
collected and made available to Bank.  If any payment, whether the payment
represents principal or interest or both, is not paid in full when due, whether
during the term of this note or at maturity, and such nonpayment shall have
continued for a period of five (5) days following written notice thereof by Bank
to Borrower, Bank may impose upon and collect from Borrower a late charge equal
to five percent (5%) of the unpaid amount of the payment then due and owing.
Late charges imposed under this section shall not be less than $25.00 nor more
than $100.00 per occurrence.

                                       4
<PAGE>

          C.  DEFAULT.  If this note is in default, Bank may, at its option and
              --------
without notice or demand, declare immediately due and payable the entire unpaid
balance of the note.

          Each of the following shall constitute a default under this note:  if
this note is not paid in accordance with its terms and such nonpayment in
accordance with its terms shall have continued for a period of five (5) days
following written notice of such default by Bank to Borrower; or the occurrence
of an Event of Default, as defined in the Loan Agreement.

          D.  ATTORNEY'S FEES.  Borrower agrees to pay the reasonable fees of
              ----------------
any attorney at law who may be employed to recover the amount hereof, or any
part hereof, in principal or interest, or to protect any security herefor or the
interest of the holder hereof, or to compromise or to take any other action with
regard hereto, which fees shall not exceed twenty-five percent (25%) of the
amount then owing hereon or sought to be collected, protected, or preserved.

          E.  PREPAYMENT.  Borrower may prepay the note in full or in part at
              -----------
any time in accordance with the terms of the Loan Agreement.

          F.  WAIVER OF DEFENSES.  Each party waives presentment for payment,
              -------------------
demand, notice of nonpayment, demand, and protest, and agrees that the time of
payment hereof may be extended from time to time, one or more times, without
notice of such extension or extensions, and without further consent.  The term
"PARTY" as used in this note, means each maker, endorser, guarantor, or other
surety of this note, including any person or entity pledging or mortgaging
property to secure this note and their heirs, successors, or assigns.  Without
notice to, or consent of, any party, Bank may substitute, release, discharge, or
otherwise alter the obligation of any party, without affecting in any way the
obligation of any other party.  No waiver of any right by Bank shall be
effective, unless in writing and signed by Bank.  No delay by Bank in the
exercise of any right shall affect such right, nor preclude future exercise of
such similar rights.  As used herein, the term "BANK" shall be deemed to include
not only Bank and its successors and assigns, but also any transferee(s),
endorsee(s), or future holder(s) of this note.

          G.  INTEREST CALCULATION.  Interest shall be calculated as specified
              ---------------------
in the Loan Agreement.

          H.  ELECTION OF LAW.  This note shall be governed by and construed
              ----------------
under the law of the State of Louisiana.  Each party agrees that any action
arising out of this note, or any renewals or substitutions for this note, may be
brought in any competent court in the Parish of Orleans, State of Louisiana.

          This note, together with that certain Commercial Promissory Note
(Revolving) dated the date hereof, in the principal sum of $10,000,000.00,
executed by Borrower, payable to the order of Bank One, bearing interest at the
per annum rate set forth herein (the "BANK ONE NOTE"), is given in renewal and
rearrangement and not in novation or discharge of: (a) that certain promissory
note of Borrower payable to the order of Bank, dated January 1, 2000, in the
amount of $10,000,000.00, and (b) that certain promissory note of Borrower
payable to the order of Bank

                                       5
<PAGE>

One, dated January 1, 2000, in the amount of $10,000,000.00 (both of the
foregoing promissory notes being collectively referred to as the "ORIGINAL
NOTES").

          The indebtedness evidenced by this note and the Bank One Note is a
continuation of the indebtedness evidenced by the Original Notes, which
indebtedness is in no way extinguished or diminished hereby, and nothing
contained in this note shall be construed (a) as a novation of the Original
Notes or any collateral securing same; (b) as payment of any amount of principal
or interest on the Original Notes; or (c) to release, cancel, terminate, or
otherwise impair the status or priority of the liens created by the Collateral
Documents (as defined in the Loan Agreement) and Borrower hereby ratifies,
confirms, and approves the continuing existence, validity, priority, and binding
effect of the Collateral Documents.

                              BORROWER:

                              GULF ISLAND FABRICATION, INC.

                              BY: ______________________________
                                      KERRY J. CHAUVIN
                                      PRESIDENT & CEO

                                       6

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