Document:

THIRD AMENDMENT TO CREDIT AGREEMENT

      This Third Amendment to Credit Agreement dated March 13, 2000, but to be
effective as provided for in Section 5 below, (this "AMENDMENT"), is among
FORTUNE NATURAL RESOURCES CORPORATION, a Delaware corporation (the "BORROWER"),
CREDIT LYONNAIS NEW YORK BRANCH, as Agent (the "AGENT"), and the lenders party
to the Credit Agreement defined below (the "LENDERS"). Capitalized terms used in
this Amendment and not otherwise defined herein shall have the meanings given to
them in the Credit Agreement.

                             PRELIMINARY STATEMENTS:

      WHEREAS, the Borrower, the Agent and the Lenders have entered into that
certain Credit Agreement dated as of July 11, 1997(as modified and amended from
time to time, the "CREDIT AGREEMENT"); and

      WHEREAS, the Borrower has requested and the Agent and Lenders have agreed,
upon the following terms and conditions, to amend the Credit Agreement to, among
other things, extend the Stated-Termination Date from January 11, 2000 to
January 31, 2001, and establish a fixed Borrowing Base in the amount of
$10,000.00 during the period of time from January 11, 2000 through January 31,
2001 (the "EXTENSION PERIOD").

      NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:

      SECTION 1.AMENDMENT TO SECTION 1.1. Section 1.1 of the Credit Agreement,
as such Section was previously amended by the Second Amendment to Credit
Agreement dated August 25, 1999, is hereby amended by deleting the existing
definition of "Stated-Termination Date" in its entirety and inserting in lieu
thereof the following:

                "STATED-TERMINATION DATE means January 31, 2001."

      SECTION 2.AMENDMENT TO SECTION 2.1 (B). Section 2.1(b) of the Credit
Agreement is hereby amended by deleting the reference to "$100,000" in the first
line thereof, and replacing it with "$10,000" so that as amended Section 2.1(b)
shall read as follows:

           "(b) Each Borrowing may only be $10,000 or a greater integral
      multiple of $10,000 if a Base-Rate Borrowing or $500,000 or a greater
      integral multiple of $100,000 if a LIBOR-Rate Borrowing;"

      SECTION 3.AMENDMENT TO BORROWING BASE. Notwithstanding the language
contained in Section 2.6 or any other Section of the Credit Agreement, during
the entire term of the Extension Period, the Borrowing Base shall be fixed at
$10,000 and there shall be no redetermination of the Borrowing Base without the
prior written consent of the Agent.

      SECTION 4.AMENDMENT TO SECTION 10.3. Section 10.3 of the Credit Agreement,
as such Section was previously amended by the First Amendment to Credit
Agreement dated November 3, 1997, is hereby amended by deleting the reference to
"$1,028,000" and replacing it with "$200,000" so that as amended Section 10.3
shall read as follows:

<PAGE>

           "10.3 Coverage of Subordinated Debentures (10-1/2%). The value of all
      investments of Borrower permitted pursuant to paragraphs 1-8 on Schedule
      9.8, plus all cash on hand, to be less than $200,000 at any time during
      which any Subordinated Debentures (10-1/2%) remain outstanding."

      SECTION 5.CONDITIONS OF EFFECTIVENESS. Upon receipt by the Agent of
counterparts of this Amendment duly executed by the Borrower, this Amendment
shall be deemed effective on and as of January 11, 2000.

      SECTION 6.REPRESENTATIVES    AND    WARRANTIES.    The   Borrower
represents and warrants as follows:

           (a) The execution, delivery and performance by the Borrower of this
      Amendment and the Credit Agreement, as amended hereby, and the
      consummation of the transactions contemplated hereby and thereby are
      within the Borrower's powers as a corporation, have been duly authorized
      by all necessary corporate action and do not (I) contravene the Borrower's
      articles of incorporation, by-laws or any other charter documents, (ii)
      violate any law, rule, regulation, order, writ, judgment, injunction,
      decree, determination, or award applicable to the Borrower, (iii) conflict
      with or result in the breach of, or constitute a default under, any
      agreement or instrument binding on or affecting the Borrower or any of its
      properties or (iv) result in or require the creation or imposition of any
      Lien upon or with respect to any of the assets of the Borrower.

           (b) No authorization or approval or other action by, and no notice to
      or filing with, any governmental authority or regulatory body or any other
      third party is required for the due execution, delivery or performance by
      the Borrower of this Amendment or the Credit Agreement, as amended hereby,
      or for the consummation of the transactions contemplated hereby and
      thereby.

           (c) This Amendment has been duly executed and delivered by the
      Borrower. This Amendment and the Credit Agreement, as amended hereby, are
      the legal, valid and binding obligation of the Borrower enforceable
      against the Borrower in accordance with its terms.

      SECTION 7.REFERENCE TO AND EFFECT ON THE LOAN DOCUMENTS:

           (a) Upon the effectiveness hereof, on and after the date hereof each
      reference in the Credit Agreement to "this Agreement", "hereunder",
      "hereof" or words of like import referring to the Credit Agreement, and
      each reference in the other Loan Documents to the Credit Agreement,
      "thereunder", "thereof" or words of like import referring to the Credit
      Agreement shall mean and be a reference to the Credit Agreement, as
      amended hereby.

           (b) Except as specifically amended above, the Credit Agreement is and
      shall continue to be in full force and effect and is hereby in all
      respects ratified and confirmed.

           (c) The execution, delivery and effectiveness of this Amendment shall
      not, except as expressly provided herein, operate as a waiver of any
      rights, power or remedy of any Lender under any of the Loan Documents, nor
      constitute a waiver of any provision of any of the Loan Documents.

      SECTION 8.GOVERNING  LAW.  This  Amendment  shall be governed by,
and construed in accordance with, the laws of the State of New York.

<PAGE>

      SECTION 9.EXECUTION IN COUNTERPARTS. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same agreement.
Delivery of an executed counterpart of a signature page to this Amendment by
telecopier shall be effective as delivery of a manually executed counterpart of
this Amendment.

      SECTION 10. NUMBER OF BANKS. Although initially Credit Lyonnais New York
Branch is the only Lender party hereto, there may be multiple Lenders party
hereto from time to time as a result of one or more assignments pursuant to this
Agreement. Accordingly, various provisions contemplate that the Borrowings will
consist of multiple loans or otherwise contemplate that more than one Lender is
a party hereto. So long as only one Lender is a party hereto, references to
multiple loans or Notes shall include a single loan or Note, as the case may be,
where appropriate, and references to multiple Lenders shall mean such Lender.

      SECTION 11.    FINAL    AGREEMENT.    THIS   WRITTEN    AGREEMENT
REPRESENTS  THE  FINAL  AGREEMENT  AMONG  THE  PARTIES  AND  MAY NOT BE
CONTRADICTED  BY  EVIDENCE  OF PRIOR,  CONTEMPORANEOUS,  OR  SUBSEQUENT
ORAL   AGREEMENT   OF  THE  PARTIES.   THERE  ARE  NO  UNWRITTEN   ORAL
AGREEMENTS AMONG THE PARTIES.

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

                               FORTUNE NATURAL RESOURCES
                               CORPORATION, a Delaware corporation

                               By:  /s/ J. Michael Urban
                                   -------------------------------------

                               Name: J. Michael Urban
                               Title:  Vice President and CFO

                               CREDIT LYONNAIS NEW YORK BRANCH, as
                               Agent and a Lender

                               By:  /s/ Philippe Soustra
                                   ------------------------------------
                               Name:  Philippe Soustra
                               Title: Senior Vice PresidentDecember 10, 1999

                         LONG TERM STOCK INCENTIVE PLAN

      1. Purpose.  The purpose of the Graco Inc. Long Term Stock  Incentive Plan
(the  "Plan") is to further the growth in earnings  and market  appreciation  of
Graco Inc. (the "Company").  The Plan provides substantial  contributions to the
Company  through  ability,  performance,  industry  and  invention.  The Company
intends that the Plan will thereby facilitate securing, retaining and motivating
officers and key employees of high caliber and good potential.

      2.  Administration.  The Plan shall be  administered  by a committee  (the
"Committee")  selected by the Board of Directors  of the Company (the  "Board").
The Committee  shall consist of two or more members who are members of the Board
and  who  are  "Non-Employee   Directors"  within  the  meaning  of  Rule  16b-3
promulgated by the Securities and Exchange  Commission  under the Securities and
Exchange Act of 1934, as amended (the "Exchange Act"),  which term "Non-Employee
Director" is defined in this paragraph for purposes of describing the members of
the  Committee  only and is not  intended  to define such term as it may be used
elsewhere in the Plan. The Committee may delegate to one or more officers of the
Company or a committee of such officers the authority, subject to such terms and
limitations as the Committee shall determine to grant awards to employees of the
Company who are not officers or directors of the Company for purposes of Section
16 of the Exchange Act.

      The Committee shall have full and final authority,  in its discretion,  to
interpret the provisions of the Plan and to decide all questions of fact arising
in its  application;  to  determine  the  employees to whom awards shall be made
under the Plan; to determine the type of award to be made and the amount,  size,
terms and conditions of each such award;  to determine and establish  additional
terms  and  conditions  not  inconsistent  with the Plan and for any  agreements
entered into with  participants  in  connection  with the Plan; to determine the
time when awards will be granted and when rights may be exercised,  which may be
after termination of employment;  and to make all other determinations necessary
or advisable for the administration of the Plan.

      The  Committee  shall  select one of its members as its Chairman and shall
hold its  meetings at such times and places as it may  determine.  A majority of
its members shall constitute a quorum. All determinations of the Committee shall
be  made  by  not  less  than  a  majority  of  its  members.  Any  decision  or
determination  reduced  to  writing  and  signed  by all of the  members  of the
Committee  shall be fully effective as if it had been made by a majority vote at
a meeting duly called and held.  The  granting of a stock  option or  restricted
stock award pursuant to the Plan shall be effective only if a written  agreement
shall have been duly executed and delivered by and on behalf of the Company and,
in the case of a restricted  stock award,  by the employee to whom such right is
granted.  The  Committee  may  appoint a  Secretary  and may make such rules and
regulations for the conduct of its business as it shall deem advisable.

      3.  Participants.  Persons  eligible to  participate  in the Plan shall be
those officers and key employees of the Company or its  subsidiaries  who are in
positions in which their decisions, actions and counsel significantly impact the
performance of the Company or its subsidiaries. Directors of the Company who are
not otherwise salaried employees of the Company shall not be eligible to receive
awards under the Plan. For the purpose of awards of incentive  stock options (as
hereinafter  defined) made under the Plan, the term "subsidiary"  shall have the
meaning  given to it by Section 424 of the  Internal  Revenue  Code of 1986,  as
amended (the  "Code").  For the purpose of all other awards made under the Plan,
the term "subsidiary" shall have the meaning given to it by Rule 405 promulgated
under the  Securities  Act of 1933,  as amended.  References to "the Company" in
this Plan or in any option or other award granted  pursuant to the Plan shall be
deemed references to a subsidiary if appropriate.

      4. Awards under the Plan. Awards by the Committee under the Plan may be in
the form of stock options intended to qualify as "incentive stock options" under
the provision of Section 422 of the Code, stock options which do not qualify for
special tax treatment under Section 422, restricted stock and other stock awards
pursuant  to  such  bonus  and  incentive   plans  as  the  Committee  may  deem
appropriate.

            4.1 Award  Limitation.  In any calendar year  beginning with January
31, 1997, the Committee may not award stock options or stock appreciation rights
on more  than  300,000  Shares in the  aggregate  to any  Participant  who is an
employee  of the  Company at the time of such  award.  This  award  limit may be
adjusted in accordance  with the  provisions  of Section 15. This  limitation is
intended  to  qualify  the award of  options  and stock  appreciation  rights as
performance-based compensation within the meaning of Section 162(m) of the Code.

      5. Shares  Subject to Plan.  The shares that may be issued  under the Plan
shall not exceed in the aggregate  5,212,500 common shares,  $1.00 par value, of
the  Company.  Except as otherwise  provided  herein,  any shares  subject to an
option or right or other  awards  which for any  reason  expires  or  terminates
without  issuance or final vesting of such shares shall again be available under
the Plan. No fractional shares shall be issued under the Plan.

      6.  Stock  Options.  Stock  options  shall be  evidenced  by stock  option
agreements in such form not  inconsistent  with the Plan as the Committee  shall
approve from time to time,  which  agreements  shall  contain in  substance  the
following terms and conditions.

            6.1.  Option Price.  The purchase price per common share deliverable
upon the  exercise of an option  shall not be less  than 100% of the fair market
value  of  the stock  on the day  the option is  granted, as  determined by  the
Committee.

            6.2. Exercise of Option. Each stock option agreement shall state the
period or  periods of time  within  which the  option  may be  exercised  by the
participant,  in whole or in part, which shall be such period or periods of time
as may be determined by the Committee, provided that the option period shall not
end later than ten years after the date of the grant of the option.

            6.3. Payment of Shares.  An optionee  electing to exercise an option
shall give written  notice to the Company of such  election and of the number of
shares subject to such exercise. The full purchase price of such shares shall be
tendered with such notice of exercise or, at the  discretion  of the  Committee,
pursuant to any  arrangements  satisfactory  to the Committee which provide that
the Company will be paid at the time the shares are delivered to the optionee or
his designee.  Payment shall be made either in cash (including check, bank draft
or money order) or, at the  discretion of the  Committee,  (i) by delivering the
Company's common shares already owned by the optionee having a fair market value
equal to the full purchase  price of the shares,  or (ii) a combination  of cash
and such shares.

            6.4.  Special Rule for Incentive  Stock Options.  The aggregate fair
market  value  (determined  as of the time the option is  granted) of the common
shares with respect to which all incentive  stock options  granted after January
1, 1987 are exercisable for the first time by any individual during any calendar
year  (under  all option  plans of the  Company  and its  parent and  subsidiary
corporations) shall not exceed $100,000.

      7. Restricted Stock Awards.  Restricted stock awards shall be evidenced by
restricted stock  agreements in such form not inconsistent  with the Plan as the
Committee  shall approve from time to time,  which  agreements  shall contain in
substance the following terms and conditions.

            7.1. Restriction Period. Shares awarded pursuant to restricted stock
awards shall be subject to such conditions,  terms and  restrictions  (including
continued  employment,   achievement  of  performance  targets,  forfeiture  and
transfer)  and for  such  period  or  periods  as  shall  be  determined  by the
Committee.  The Committee shall have the power, in its discretion,  to permit an
acceleration of the expiration of the applicable restriction period with respect
to any part of all of the shares awarded to a participant.

            7.2  Restrictions  Upon  Transfer.  The common shares  subject to an
award, may not be sold, assigned, transferred, exchanged, pledged, hypothecated,
or  otherwise  encumbered,  except as herein  provided,  during the  restriction
period  applicable to such shares,  but a  participant  shall have all the other
rights of a  stockholder,  including the right to receive cash dividends and the
right to vote such shares,  until such time as the  restrictions  have lapsed or
the shares have been forfeited.

            7.3  Certificates.  Each  certificate  issued in  respect  of common
shares  awarded to a  participant  shall be deposited  with the Company,  or its
designee,  and  shall  bear  an  appropriate  legend  noting  the  existence  of
restrictions upon the transfer of such Common Stock.

            7.4 Lapse of Restrictions.  The agreement governing the awards shall
specify the conditions and terms upon which any restrictions upon shares awarded
under the Plan shall lapse,  as determined by the Committee.  Upon lapse of such
restrictions, common shares free of any restrictive legend, other than as may be
required  under  Section  9  hereof,  shall  be  issued  and  delivered  to  the
participant of his legal representative.

      8. Fair Market  Value.  The fair market value of a share of the  Company's
common stock is the last sale price  reported on the  composite  tape by the New
York Stock  Exchange on the business day  immediately  preceding  the date as of
which fair market value is being determined or, if there were no sales of shares
of the Company's common stock reported on the composite tape on such day, on the
most recently  preceding day on which there were sales,  or if the shares of the
Company's  stock are not  listed or  admitted  to  trading on the New York Stock
Exchange on the day as of which the determination is made, the amount determined
by the Board or its delegate to be the fair market value of a share on such day.

      9. General Restrictions. Each award under the Plan shall be subject to the
requirement  that,  if at anytime the  Committee  shall  determine  that (a) the
listing,  registration or  qualification of the common shares subject or related
thereto upon any  securities  exchange or under any state or federal law, or (b)
the consent or approval of any government  regulatory  body, or (c) an agreement
by the recipient of an award with respect to the  disposition  of common shares,
is necessary or desirable in connection  with, the granting of such award or the
issue or purchase of common shares thereunder, such award may not be consummated
in whole or in part unless such listing, registration,  qualification,  consent,
approval  or  agreement  shall  have  been  effected  or  obtained  free  of any
conditions  not  acceptable to the Committee.  A participant  shall agree,  as a
condition of receiving any award under the Plan, to execute any documents,  make
any representations, agree to restrictions on stock transferability and take any
actions  which in the opinion of legal counsel to the Company is required by any
applicable law, ruling or regulation.

      10.  Rights of a  Shareholder.  The recipient of any award under the Plan,
unless  otherwise  provided by the Plan,  shall have no rights as a  shareholder
with respect thereto unless and until  certificates for common shares are issued
to the recipient.

      11. Right to Terminate Employment. Nothing in the Plan or in any agreement
entered into pursuant to the Plan shall confer upon any participant the right to
continue in the  employment  of the Company or its  subsidiaries,  or affect any
right  which  the  Company  or  such  subsidiaries  may  have to  terminate  the
employment of the participant.

      12.  Withholding.

            12.1. Payment of Withholding Taxes. Whenever the Company proposes or
is required to issue or transfer common shares under the Plan, the Company shall
have the right to require  the  recipient  to remit to the  Company,  or provide
indemnification satisfactory to the Company for, an amount sufficient to satisfy
any federal,  state or local withholding tax requirements  prior to the issuance
or delivery of any certificate or certificates for such shares.

            12.2.  Use of Common Shares to Satisfy Tax  Obligation.  In order to
assist an optionee or grantee in paying all federal, state and local taxes to be
withheld or collected  upon  exercise of an option or the grant of a stock award
or the lapse of restrictions relating to a restricted stock award hereunder, the
Committee in its sole discretion and subject to such rules as it may adopt,  may
permit the  optionee or grantee to satisfy such tax  obligation,  in whole or in
part, by (i) electing to have the Company withhold common shares otherwise to be
delivered  with a fair market value equal to the amount of such tax  obligation,
or (ii) electing to surrender to the Company previously owned common shares with
a fair market  value equal to the amount of such tax  obligation.  The  election
must be made on or before  the date that the  amount  of tax to be  withheld  is
determined.

      13.  Non-Assignability.  No award  under the Plan shall be  assignable  or
transferable  by the  participant  except  by will or by  laws  of  descent  and
distribution.  During the life of a participant, such award shall be exercisable
only  by  the   participant   or  by  the   participant's   guardian   or  legal
representative.

      14. Non-Uniform  Determinations.  The Committee's determinations under the
Plan (including,  without  limitation,  determinations of the persons to receive
awards,  the form, amount and timing of such awards, the terms and provisions of
awards and the agreements evidencing the awards, and the establishment of values
and  performance  targets) need not be uniform and may be made by it selectively
among  persons who receive,  or are  eligible to receive,  awards under the Plan
whether or not such persons are similarly situated.

      15.  Adjustments in Shares.  In the event of any change in the outstanding
common  shares of the  Company by reason of a stock  dividend  or  distribution,
recapitalization,  merger,  consolidation,  split-up,  combination,  exchange of
shares or  otherwise,  the Board shall  adjust the number of shares which may be
issued under the Plan and the Board shall provide for an equitable adjustment of
any shares issuable pursuant to awards outstanding under the Plan.

      16.  Adoption, Amendment and Termination.

            16.1. Adoption.  This Plan was  originally adopted in  February 1982
as the Graco Inc. Incentive Stock Option Plan. The Plan was amended and restated
as  the Graco Inc.  Long Term Stock Incentive Plan  by the Board of Directors on
March 4,  1988 and  was  further  amended  by the  Board on  December 13,  1991,
February 21, 1992, February 23, 1996 and May 7, 1996, which amendments requiring
shareholder approval were approved by the shareholders on May 5, 1992 and May 7,
1996, respectively.

            16.2 Amendment.  The Board may amend, suspend, or terminate the Plan
at any time, but without  shareholder  approval,  no amendment shall  materially
increase the maximum  number of shares which may be issued under the Plan (other
than increases pursuant to Section 15 hereof),  materially increase the benefits
accruing to participants  under the Plan,  materially modify the requirements as
to eligibility for participation, or extend the term of the Plan.

            16.3.  Termination.  Unless the Plan shall have been discontinued at
an earlier  date,  the Plan shall  terminate on December  13,  2001.  No option,
restricted  stock award or stock awards may be granted  after such  termination,
but  termination  of the Plan shall not,  without the consent of the optionee or
grantee,  alter or impair any rights or obligations  under any award theretofore
granted.

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