SECOND AMENDED AND RESTATED LOAN AGREEMENT This Second Amended and Restated Loan Agreement is dated as of December 31, 1999 and is by and among Whitney National Bank ("Lender"), a national banking association, and Conrad Shipyard, Inc. ("Borrower"), a...

SECOND AMENDED AND RESTATED LOAN AGREEMENT

This Second Amended and Restated Loan Agreement is dated as of December 31,
1999 and is by and among Whitney National Bank ("Lender"), a national banking
association, and Xxxxxx Shipyard, Inc. ("Borrower"), a Louisiana corporation,
and Orange Shipbuilding Company, Inc. ("Orange"), a Texas corporation, and
Xxxxxx Industries, Inc.("Xxxxxx "), a Delaware corporation, (with Orange and
Xxxxxx collectively referred to as "Guarantor").

WITNESSETH:

WHEREAS, Lender, Borrower and Orange entered into a Loan Agreement, dated
as of March 19, 1998, which provided for a term loan in the sum of Twenty-Five
Million and No/100 ($25,000,000.00) Dollars (the "Initial Loan Agreement");

WHEREAS, Lender, Borrower and Orange entered into an amended and restated
Loan Agreement, dated as of May 22, 1998, as amended by First Amendment to Loan
Agreement dated as of April 30, 1999, which provided for a line of credit in the
amount of Ten Million and No/100 ($10,000,000) Dollars in addition to the term
loan of $25,000,000.00 and amended and restated the Initial Loan Agreement (the
"First Amended and Restated Loan Agreement");

WHEREAS, Borrower has requested Lender's consent to using up to $1,000,000
of the line of credit to repurchase shares of stock of Borrower upon terms and
conditions hereinafter set fort;

NOW THEREFORE, in consideration of the premises, and for other good and
valuable consideration, the receipt of which is hereby acknowledged, Borrower,
Guarantor and Lender agree to amend, restate and supercede the First Amended and
Restated Loan Agreement and all other prior loan agreements as follows:

SECTION I. DEFINITIONS

For the purpose of this Agreement, the following terms shall have the
meanings specified below:

"Advance" shall mean a disbursement under the Line of Credit.

"Advance Request" shall mean the Borrower's request for an Advance.

"Agreement" shall mean this Second Amended and Restated Loan Agreement, as
it may be amended from time to time.

"Base Rate" shall mean the Prime Rate minus the applicable margin of 50
basis points during any Interest Period. Prime Rate shall mean that rate of
interest as recorded by Whitney National Bank from time to time as its prime
lending rate with the rate of interest to change when and as said prime lending
rate changes. The Prime Rate is not necessarily the lowest interest rate charged
by Whitney National Bank. Each change in any interest rate provided for herein
based upon the Base Rate resulting from a change in the Prime Rate shall take
effect at the time of such change in the Prime Rate.

"Borrower" shall mean Xxxxxx Shipyard, Inc., a Louisiana corporation.

"Business Day" shall mean any day on which banks are required to be open to
carry on their normal business in the State of Louisiana.

"Cash Flow" shall mean for any period the sum of net income after taxes
(including any applicable reserves for such taxes), plus depreciation,
amortization and any adjustments for noncash expenses, plus interest expense,
all determined in accordance with GAAP.

"Closing Date" shall mean the effective date of this Agreement.

"Company Agent" shall mean Xxxxxxx X. Xxxxxxx or Xxxxx X. Xxxxxxxxx.

"Xxxxxx" shall mean, Xxxxxx Industries, Inc., a Delaware corporation, which
owns all of the capital stock of Borrower.

"Xxxxxx Shipyard" shall mean the approximately 11 acres of immovable
property on the Atchafalya River, Morgan City, Louisiana, owned by Xxxxxx and
which is the Borrower's shipyard in Morgan City, Louisiana, as described on
Exhibit A.

"Consolidated" refers to the consolidation of any Person, in accordance
with GAAP, with its properly consolidated subsidiaries. References herein to a
Person's consolidated financial statements, financial position, financial
condition, liabilities, etc. refer to the condition, liabilities, etc. of such
Person and its properly consolidated subsidiaries.

"Consolidated Funded Debt" shall mean all obligations for borrowed money,
whether as maker or endorser, of Borrower, Guarantor and all their Subsidiaries
(including without limitation, all notes, debentures, bonds or similar
instruments shown on a balance sheet or financial statement of Borrower,
Guarantor and all their Subsidiaries).

"Consolidated Funded Debt Payments" shall mean, for any period, all
principal and interest payments of Consolidated Funded Debt as required by the
terms of the documents evidencing such debt and other indebtedness and excluding
any prepayments of principal thereunder.

"Current Assets" means, at a particular date, all amounts which would, in
conformity with GAAP, be included under current assets on a balance sheet of the
Borrower, Guarantor and all their Subsidiaries at such date.

"Current Liabilities" means, at a particular date, all amounts which would,
in conformity with GAAP, be included under current liabilities on a balance
sheet of the Borrower, Guarantor and all their Subsidiaries as at such date.

"Debt" of a Person shall mean at a particular date, the sum (without
duplication and in conformity with GAAP of (i) all indebtedness or other
obligations for borrowed money or for the deferred purchase price of property or
services, whether as maker or endorser, (including without limitation, all
notes, debentures, bonds or similar instruments and all liabilities shown on a
balance sheet or financial statement of Borrower, Guarantor and all their
Subsidiaries), (ii) capitalized lease obligations of such Person or any
subsidiary thereof, (iii) obligations with respect to any installment sale or
conditional sale agreement or title retention agreement, (iv) indebtedness
arising under acceptance facilities, (v) reimbursement obligations arising in
connection with surety, or performance or other

similar bonds and in connection with letters of credit issued in lieu of such
bonds, (vi) the outstanding amount of all other letters of credit and (vii) any
withdrawal liability or obligation of such Person or an ERISA affiliate to a
multiemployer plan.

"Debt Service Coverage Ratio" shall mean the ratio calculated on a rolling
four (4) quarter basis over the life of the Loan of Cash Flow to Consolidated
Funded Debt Payments.

"Debt to Worth Ratio" shall mean the ratio for a given period of Debt to
Tangible Net Worth.

"Default" shall mean the occurrence of any of the events specified in
Section VI.

"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.

"Financial Covenants" shall mean all of the financial covenants to be met
by Borrower on a consolidated basis as described in Section 5.01.

"GAAP" shall mean generally accepted accounting principles in the United
States of America in effect from time to time and applied on a consistent basis.

"Governmental Authority" means any sovereign state or nation or government,
or any state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, including without limitation, the United States
Department of Defense, the United States Navy, the United States Coast Guard and
United States Army Corp of Engineers.

"Government Contracts" shall have the meaning as provided in Section
4.20.

"Guarantor" shall mean Orange Shipbuilding Company, Inc. and Xxxxxx
Industries, Inc., which term means individually, collectively, and
interchangeably any, each and/or all of them.

"Hazardous Materials" shall mean:

(a) any "hazardous waste" as defined by either the Resource Conservation
and Recovery Act of 1976 (42 U.S.C. (S)6901 et. seq.), as amended from
time to time, and regulations promulgated thereunder;

(b) any "hazardous substance" as defined by either the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (42
U.S.C. (S)9601 et. seq.) ("CERCLA"), as amended from time to time, and
regulations promulgated thereunder;

(d) polychlorinated biphenyls;

(e) any "regulated substance" as defined under Underground Storage Tank
Regulations, 53 Fed. Reg. 37196 (Sept. 23, 1988), codified as 40 C.F.R.
(S) 280.12, or La. Adm. Code 33:XI.103;

(f) any naturally occurring radioactive materials, the possession, use,
transfer, processing, distribution, or disposal of which is subject to
regulation by the Louisiana Department of Environmental Quality
pursuant to the provisions of La. Adm. Code 33:XV, Chapter 14, as
amended from time to time;

(g) any non-hazardous oil field wastes ("Now") defined and regulated by the
Commissioner of Conservation under La. R.S. 30:1, et seq., or the
Louisiana Abandoned Oil field Waste Site Law, La. R.S. 30:71 et seq.,
as amended from time to time, and regulations promulgated thereunder;

(h) any substance the presence of which on the Property is prohibited by
any lawful rules and regulations of legally constituted authorities
from time to time in force and effect relating to the Property,
including but not limited to any solid waste and underground storage
tanks subject to the regulations of the Louisiana Department of
Environmental Quality; and

(i) any other substance which by any such rule or regulation requires
special handling in its collection, storage, treatment, or disposal.

"Hazardous Materials Contamination" shall mean (i) the contamination
(whether presently existing or hereafter occurring) of the Property, including
the improvements, facilities, soil, ground, water, air or other elements on, or
of, the Property by Hazardous Materials, (ii) the contamination of the Property,
including the buildings, facilities, soil, ground, water, air or other elements
on, or of, any other property as a result of Hazardous Materials at any time
(whether before or after the date of this Loan Agreement) emanating from the
Property or (iii) the existence of an underground storage tank which is out-of-
service or must be removed in accordance with La. Adm. Code 33:XI, et seq.

"Interest Period" shall mean at the time the Borrower gives a Notice of
Conversion (as defined in Section 2.03) in respect of the making of, or
converting the interest rate on the Loan to accrue at Libor Rate or Base Rate on
the last Business Day prior to the expiration of the then applicable Interest
Period, the Borrower shall have the right to elect, by having the Borrower Agent
give Lender written notice of the interest period (each an "Interest Period")
applicable to Libor Rate or Base Rate, which Interest Period shall, at the
option of the Borrower, be one month, two month, three month or six month period
for Libor Rate or a thirty day period for Base Rate; provided that:

(i) the Loan shall at all times accrue interest at the rate chosen during
the applicable Interest Period;

(ii) the Interest Period for any Libor Rate or Base Rate shall commence on
the day on which the preceding Interest Period thereto expires;

(iii) if any Interest Period would otherwise expire on a day which is not a
Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided, however, that if any Interest
Period would otherwise expire on a day which is not a Business Day
but is a day of the month after which no further Business Day occurs
in such month, such Interest Period shall expire on the next
preceding Business Day;

(iv) no Interest Period may be selected nor the rate of interest be changed
at any time when a Default is then in existence; and

(v) no Interest Period shall be selected which extends beyond the
respective Maturity Date for the Loan.

If upon the expiration of any Interest Period, the Borrower have failed to
elect, or are not permitted to elect, a new Interest Period, the Borrower shall
be deemed to have elected to have the Loan accrue interest equal to the Base
Rate effective as of the expiration date of such current Interest Period.

"Libor Rate" shall mean, for any Interest Period, an interest rate per
annum (rounded upward to the nearest hundredths of a percent), as determined by
Lender, which is the offered quotation to Lender of the London interbank offered
rates for U.S. Dollar deposits of amounts in immediately available funds in the
London market for one month, two months, three months or six months as recorded
by the Dow Xxxxx Telerate Service (presently displayed on telerate page 3875) or
such other service as may be nominated by the British Bankers' Association as
the information vendor for the purpose of displaying British Bankers'
Association interest settlement rates for U.S. Dollar Deposits, as of the
opening of business of Lender or as soon thereafter as practicable, plus the
applicable margin of 200 basis points (2.00% percent).

"Lien" shall mean any mortgage, pledge, hypothecation, security interest,
encumbrance, lien, judgment, garnishment, seizure, tax lien or levy (statutory
or otherwise) or charge of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement, or any
capitalized lease, and the filing of or agreement to give any financing
statement under the Uniform Commercial Code of any jurisdiction).

"Line Note" shall mean the note evidencing the Line of Credit as described
in Article II.

"Line of Credit" shall mean the $10,000,000.00 line of credit as described
in Article II.

"Line of Credit Period" shall mean the period commencing on December 31,
1999 and ending on April 30, 2001.

"Loan" shall mean collectively the Line of Credit and the Term Loan and
shall include all principal, interest, attorney's fees and costs owed thereon.

"Net Tangible Assets" of any Person shall mean, as of any date, the
aggregate book value of the assets which would be reflected on a balance sheet
of such Person prepared as of such date in accordance with GAAP, less the
aggregate book value of such Person's intangible assets (i.e., patents,
copyrights, trademarks, trade names, goodwill, franchises and other similar
intangibles) as of such date.

"Note" shall mean collectively the Line Note and the note evidencing the
Term Loan.

"Obligations" shall mean all obligations (monetary or otherwise, including,
but not limited to, all representations, warranties and covenants contained in
this Agreement) of the Borrower to Lender, whether direct or contingent, due or
to become due, now existing or hereafter arising, including future advances,
with interest, attorneys' fees, expenses of collection and costs arising under
or in connection

with this Agreement, the Loan, the Note, the Collateral Documents, promissory
notes, checks, overdrafts, letter of credit agreements, endorsements and
continuing guaranties.

"Orange" shall mean Orange Shipbuilding Company, Inc., a Texas corporation.

"Orange Shipyard" shall mean the shipyard owned by Guarantor which contains
approximately 12 acres of real property on the Sabine River, Orange, Texas, as
described on Exhibit B.

"Permitted Liens" shall mean those presently outstanding Liens of the
Borrower in favor of Lender and (i) pledges or deposits by the Borrower under
workmen's compensation laws, unemployment insurance laws or similar legislation,
or good faith deposits in connection with bids, tenders, contracts (other than
for the payment of Debt of the Borrower) or leases (other than capitalized
leases) to which the Borrower is a party, or deposits to secure statutory
obligations of the Borrower or deposits of cash or U.S. Government Bonds to
secure surety or appeal bonds to which the Borrower is a party, or deposits as
security for contested taxes or import duties or for the payment of rent; (ii)
Liens imposed by law, such as carriers', warehousemen's, materialmen's and
mechanics' liens, incurred in the ordinary course of business for sums not
overdue or being contested in good faith by appropriate proceedings and for
which adequate reserves shall have been set aside on the Borrower's books; (iii)
judgment Liens in existence less than 30 days after the entry thereof or with
respect to which execution has been stayed or the payment of which is covered in
full (subject to a customary deductible) by insurance; (iv) Liens for property
taxes not yet delinquent and Liens for property taxes the payment of which is
being actively contested in good faith by appropriate proceedings and for which
adequate reserves shall have been set aside on the Borrower's books; and (v)
minor survey exceptions, minor encumbrances, easements or reservations of, or
rights of others for rights-of-way, highways and railroad crossings, sewers,
electric lines, telegraph and telephone lines and other similar purposes, or
zoning or other restrictions as to the use of real property or Liens incidental
to the conduct of the business of the Borrower or to the ownership of its
property which were not incurred in connection with Debt of the Borrower, which
Liens do not in the aggregate materially detract from the value of said
properties or materially impair their use in the operation of the business taken
as a whole of the Borrower.

"Person" shall mean and include an individual, a partnership, a joint
venture, a corporation (including the Borrower), a trust, an unincorporated
organization, government or any department or agency thereof, each Affiliate and
each Subsidiary.

"Plan" shall mean any employee benefit plan which is covered by ERISA and
in respect of which the Borrower is (or, if such plan were terminated at such
time, would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.

"Property" shall mean the Xxxxxx Shipyard and the Orange Shipyard and any
other immovable or real property owned by the Borrower, Guarantor or any of
their Subsidiaries.

"Subsidiary" shall mean, with respect to any Person, any corporation,
association, partnership, joint venture or other business or corporate entity,
enterprise or organization which is directly or indirectly (through one or more
intermediaries) controlled by or owned 50% or more by such Person.

"Tangible Net Worth" means, at a particular date, all amounts which would
be included under shareholders' equity on the balance sheet of Borrower,
Guarantor and all their Subsidiaries in conformity with generally accepted
accounting principles in the United States of America in effect from time to
time

and applied on a consistent basis excluding any amount attributable to goodwill
or other intangibles of Borrower, Guarantor and all their Subsidiaries.

"Term Loan" shall mean Borrower's existing term loan described in Section
2.02 (a).

"Unused Line of Credit" shall mean $10,000,000.00 minus the outstanding
principal balance of the Line of Credit.

SECTION II
THE CREDIT

SECTION 2.01. COMMITMENT TO LEND. Subject to and upon the terms and
conditions contained in this Agreement, and relying on the representations and
warranties contained in this Agreement, Lender agrees to make the Line of Credit
to the Borrower, said extension of credit being more particularly described
hereinafter.

SECTION 2.02. (A) TERM LOAN. On March 15, 1998, Lender lent to the Borrower
the principal sum of Twenty-five Million and No/100 ($25,000,000.00) Dollars
(the "Term Loan") which was evidenced by a promissory note payable to the order
of Lender in the amount of $25,000,000.00, with interest to accrue at the Libor
Rate or Base Rate in accordance with Section 2.03. The Term Loan was initially
payable interest only on the last day of each month commencing March 31, 1998
and thereafter on the last day of each month until May 31, 1998. Thereafter, the
Term Loan shall be payable in 70 equal monthly principal payments of
$209,000.00, plus accrued interest with a final payment of all unpaid principal
and interest then due payable on April 30, 2004. The first installment of
principal and interest on the Term Loan shall be payable on June 30, 1998 with
the succeeding installments payable on the last day of each month until the Term
Loan has been paid in full. Borrower hereby acknowledges and affirms the Term
Loan.

(B) LINE OF CREDIT. Subject to and upon the terms and conditions contained
in this Agreement, and relying on the representations and warranties contained
in this Agreement, the Lender agrees to make Advances to Borrower periodically
during the Line of Credit Period in an aggregate principal amount outstanding
not to exceed the sum of Ten Million and No/100 ($10,000,000.00) Dollars (the
"Line of Credit"). On April 30, 2001, Lender's obligations to make any Advance
on the Line of Credit shall cease. The Line of Credit shall be evidenced by a
promissory note executed by the Borrower in a form acceptable to Lender, dated
the Closing Date, in the principal sum of $10,000,000.00, payable to the order
of the Lender on April 30, 2001. During the Line of Credit Period, the Advances
shall accrue interest at Libor Rate or Base Rate in accordance with Section 2.03
and shall be payable interest only monthly in arrears on the last day of each
month, beginning the month of the initial Advance, and continuing on the last
day of each succeeding month until April 30, 2001.

(C) ADVANCES. Upon the terms and subject to the conditions hereof, Borrower
may request an Advance under the Line of Credit during Lender's regular business
hours in accordance with the provisions of Section 2.03. Borrower shall make a
request for an Advance under the Line of Credit by delivering to Lender by mail,
hand-delivery, facsimile or by telephonic notice to Lender's applicable officer
specifying (i) the amount to be borrowed, and (ii) the date the funds will be
borrowed, and all Advance Requests shall be made by the Borrower's Agent.
Borrower hereby authorizes Company's Agent to borrow money and contract
obligations with Lender. Until Borrower notifies Lender in writing

of the withdrawal of Company's Agent's rights and powers, Lender shall be able
to rely conclusively upon the right of Company's Agent to make Advances on
behalf of Borrower. Borrower agrees that only its duly authorized Company's
Agent shall make an Advance under the Line of Credit.

All proceeds of any Advance shall be deposited to Borrower's account at
Lender.

(D) CREDIT ADVICE. After the borrowing of any Advance in accordance with
this Agreement, Lender will mail to Borrower at the most recent address shown on
Lender's records a credit advice showing the amount of the Advance and the
amount of funds credited into Borrower's Account. Within ten (10) days after the
date of such advices, Borrower shall notify Lender of any inaccuracy in the
credit advices or the lack of authority to borrow the Advance. Failure by
Borrower to notify Lender timely shall preclude the Borrower from asserting
against Lender the inaccuracy of such advices and/or the lack of authorization
of such Advance. Lender's failure to mail the credit advice shall not alter
Borrower's obligation to repay the Line of Credit or make Lender liable to
Borrower for failure to mail the credit advice.

(E) INTERNAL RECORDS SHALL CONTROL. The principal amount shown on the face
of the Line Note evidences the maximum aggregate principal amount that may be
outstanding on the Line of Credit. Borrower agrees that the internal records of
Lender shall constitute for all purposes prima facie evidence of (i) the amount
of principal and interest owing on the Loan from time to time, (ii) the amount
of each Advance made to Borrower under the Line of Credit and (iii) the amount
of each principal and/or interest payment received by Lender on the Loan, unless
such internal records of Lender are manifestly erroneous.

SECTION 2.03. CONVERSION. (a) The Borrower has previously determined that
the Term Loan shall accrue interest at the Base Rate with an Interest Period to
expire on March 31, 2000. On the date of the initial Advance, Borrower will
determine the Interest Period and whether the Advance will accrue interest at
Libor Rate or the Base Period. Upon the expiration of such Interest Period and
any Interest Period thereafter, the Borrower shall have the option to convert
the interest rate accruing on all (but not less than all) of the outstanding
principal balance of the Term Loan or the Line of Credit, as applicable, into a
Libor Rate or Base Rate; provided that (i) a Loan can not be converted when any
Default has occurred and is continuing and in such event the Loan shall continue
to accrue interest at the rate in effect as of the date of such Default, and
(ii) no conversions of any Loan are allowed until the expiration of the Interest
Period applicable to the existing rate of interest has expired.

(b) Each conversion shall be enacted by the Company Agent by giving Lender
at its main office prior to 11:00 a. m. (New Orleans time) on or before the last
Business Day of the applicable Interest Period written or telephone notice of
the conversion (each a "Notice of Conversion") specifying if the applicable Loan
is to be converted into accruing interest at Libor Rate or Base Rate and the
Interest Period to be applicable thereto. In the absence of any specific rate
election by the Borrower or if Borrower fails to provide such notice to the
Lender in a timely manner, the Loan shall accrue interest at the Base Rate.
Borrower may prepay the Loan without payment of premium or penalty.

(c) Interest on the outstanding principal owed on the Loan shall be
computed and assessed on the basis of the actual number of days elapsed over a
year composed of 360 days.

SECTION 2.04. INCREASED COSTS, ILLEGALITY, ETC. (a) In the event that
Lender shall have determined in good faith (which determination shall, absent
manifest error, be final and conclusive and binding upon all parties hereto):

(i) on any Interest Period or date of conversion that, by reason of
any changes arising after the date of this Agreement affecting the
London interbank market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in
the definition of Libor Rate; or

(ii) at any time, that Lender shall incur increased costs or
reductions in the amounts received or receivable hereunder with
respect to any Libor Rate because of any change since the date of this
Agreement in any applicable law or governmental rule, regulation,
order, guideline or request or in the interpretation or administration
thereof and including the introduction of any new law or governmental
rule, regulation, order, guideline or request, such as, for example,
but not limited to: (A) a change in the basis of taxation of payment
to Lender of the principal or interest on such Libor Rate (except for
changes in the rate of tax on, or determined by reference to, the net
income or profits of Lender) or (B) a change in official reserve
requirements; or

(iii) at any time, that the making or continuance of any Libor Rate
has been made (x) unlawful by any law or governmental rule, regulation
or order, (y) impossible by compliance by Lender in good faith with
any governmental request (whether or not having force of law) or (z)
impracticable as a result of a contingency occurring after the date of
this Agreement which materially and adversely affects the London
interbank market;

then, and in any such event, Lender shall promptly give notice (by telephone
confirmed in writing) to the Borrower. Thereafter (x) in the case of clause (i)
above, Libor Rate shall no longer be available until such time as Lender
notifies the Borrower that the circumstances giving rise to such notice no
longer exist, and any Notice of Conversion given by the Borrower with respect to
Libor Rate which have not yet been incurred (including by way of conversion)
shall be deemed rescinded by the Borrower, (y) in the case of clause (ii) above,
the Borrower agrees to pay to Lender, upon written demand therefor, such
additional amounts (in the form of an increased rate of, or a different method
of calculating, interest or otherwise as agreed to by Lender and the Borrower)
as shall be required to compensate Lender for such increased costs or reductions
in amounts received or receivable hereunder (a written notice as to the
additional amounts owed to Lender, showing the basis for the calculation
thereof, submitted to the Borrower by Lender in good faith shall, absent
manifest error, be final and conclusive and binding on all the parties hereto)
and (z) in the case of clause (iii) above, the Loan shall accrue interest at the
Base Rate. Lender agrees that if it gives notice to the Borrower of any of the
events described in clause (i) or (iii) above, it shall promptly notify the
Borrower and if such event ceases to exist. If any such event described in
clause (iii) above ceases to exist as to Lender, Lender's obligations to convert
the interest accruing on the Loan into Libor Rate on the terms and conditions
contained herein shall be reinstated.

(b) At any time that any Libor Rate Loan is affected by the circumstances
described in Section 2.04 (a)(ii) or (iii), the Loan shall accrue interest at
the Base Rate.

SECTION 2.05. USE OF PROCEEDS. Subject to the compliance with the terms and
conditions of this Agreement, Borrower may use the Line of Credit to fund the
general corporate operating needs of

Borrower and/or the short term funding of Borrower's capital expenditures and
acquisitions on terms acceptable to Lender. In addition to the foregoing,
Borrower may use up to the aggregate principal amount of $1,000,000.00 of the
Line of Credit for the purchase by either Borrower or Xxxxxx of up to 200,000
shares of Xxxxxx'x outstanding stock, which shall be owned and held as treasury
stock by Borrower or Xxxxxx, whoever is the purchaser of such stock.

SECTION 2.06. PREPAYMENT. Borrower shall be entitled to prepay the Loan in
whole or in part, without payment of premium or penalty.

SECTION 2.07. COMMITMENT Fee. In consideration of Lender making the Line of
Credit, Borrower agrees to pay to Lender, in arrears, a fee within ten calendar
days of the last day of March, June, September and December in each year and on
the maturity day of the Line of Credit, a commitment fee per annum equal to one
quarter of one percent (1/4% or 25 basis points) of the average Unused Line of
Credit during the preceding fiscal quarter, or portion thereof. The average
Unused Line of Credit shall be determined by dividing the sum of the Unused Line
of Credit for each day of that quarter by 90.

ARTICLE III
SECURITY FOR THE OBLIGATIONS

SECTION 3.01. COLLATERAL. The Loan and the Obligations shall be secured by
a first Lien in favor of Lender on the following collateral (the "Collateral")
to be documented upon terms and conditions satisfactory to Lender (the
"Collateral Documents"):

(a) Continuing Guaranty by Guarantor whereby Guarantor solidarily
agrees to repay all of the Obligations;

XXXXXX SHIPYARD

(b) A Collateral Note by Borrower in amount of $50,000,000.00 secured
by and paraphed for identification with a first, valid and enforceable
collateral mortgage mortgaging the Xxxxxx Shipyard and all improvements and
component parts located thereon, which mortgage shall include an assignment of
leases and rents;

(d) A Security Agreement and Financing Statements by Borrower granting
a first lien and security interest in all furniture, equipment, inventory,
fixtures, accounts, documents and general intangibles, including without
limitation, franchise agreements, operating agreements, contract rights,
licenses, permits and parish and city ordinances and approvals relating to or
usable in connection with the use, occupancy, operation, ownership or
maintenance of the Xxxxxx Shipyard;

ORANGE SHIPYARD

(e) A deed of trust by Orange mortgaging the Orange Shipyard and all
improvements and component parts located thereon, which deed of trust shall
include an assignment of leases and rents; and

(f) A Security Agreement and Financing Statements by Orange granting a
first lien and security interest in all furniture, equipment, inventory,
fixtures, accounts, documents and general intangibles, including without
limitation, franchise agreements, operating agreements, contract rights,
licenses, permits and parish and city ordinances and approvals relating to or
usable in connection with the use, occupancy, operation, ownership or
maintenance of the Orange Shipyard.

XXXXXX INDUSTRIES

(a) A Security Agreement and Financing Statements by Xxxxxx granting a
first lien and security interest in all furniture, equipment, inventory,
accounts, documents and general intangibles.

SECTION 3.02. GUARANTIES. Xxxxxx and Orange shall jointly, severally and
solidarity guaranties the repayment of all Obligations of Borrower to Lender,
including but not limited to the Loan.

SECTION IV
REPRESENTATIONS AND WARRANTIES

In order to induce Lender to enter into this Agreement, the Borrower and
Guarantor represent and warrant to Lender as follows:

SECTION 4.01. CORPORATE EXISTENCE. (a) Borrower is a validly organized
corporation duly existing and in good standing under the laws of the State of
Louisiana and is duly qualified as a foreign corporation in all jurisdictions
wherein the property owned or the business transacted by it make such
qualifications necessary. Orange is a validly organized corporation duly
existing and in good standing under the laws of the State of Texas and is duly
qualified as a foreign corporation in all jurisdictions wherein the property
owned or the business transacted by it make such qualifications necessary.
Xxxxxx is a validly organized corporation duly existing and in good standing
under the laws of the State of Delaware and is duly qualified as a foreign
corporation in the State of Louisiana and in all jurisdictions wherein the
property owned or the business transacted by it make such qualifications
necessary.

(b) Borrower has never done business under any name other than the
name of the Borrower set forth above, and as Xxxxxx Industries, Inc. Borrower's
tax identification number is 00-0000000 and its principal place of business is
0000 Xxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxxxxx 00000.

(c) Orange has never done business under any name other than its name
set forth above and as Xxxxx Industries, Inc. Orange's tax identification number
is 00-0000000 and its principal place of business is 000 Xxxxxx Xxxxxx, Xxxxxx,
Xxxxx 00000.

(d) Xxxxxx has never done business under any name other than its name
set forth above. Xxxxxx'x tax identification number is 00-0000000 and its
principal place of business is 0000 Xxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxxxxx 00000.

SECTION 4.02. CORPORATE POWER AND AUTHORIZATION. The making and performance
by the Borrower of this Agreement, the borrowing by the Borrower and the
issuance of the Note and Collateral Documents by it hereunder, have been duly
authorized by all necessary corporate action and will not (i) violate any
provision of law or of the articles of incorporation or by-laws of the Borrower,
or (ii) result in

a breach of, or constitute a default under, any agreement, indenture or other
instrument to which the Borrower is a party or by which it is bound, the result
of which would be to have material and adverse effect on the business or
property of the Borrower. The making and performance by Guarantor of this
Agreement, the issuance of the Continuing Guaranty and the Collateral Documents
by it hereunder have been duly authorized by all necessary corporate action and
will not (i) violate any provision of law or of the articles of incorporation or
by-laws of Guarantor, or (ii) result in a breach of, or constitute a default
under, any agreement, indenture or other instrument to which Guarantor is a
party or by which it is bound, the result of which would be to have material and
adverse effect on the business or property of Guarantor.

SECTION 4.03. NO CONSENT. No consent or approval of any governmental agency
or authority is required in connection with the execution, delivery and
performance by Borrower or Guarantor of this Agreement, the Note, the Collateral
Documents and all other documents required hereunder.

SECTION 4.04. ENFORCEABLE OBLIGATIONS. This Agreement, the Collateral
Documents and the Note to which the Borrower and/or Guarantor, as applicable is
a party, when duly executed and delivered for value will be legal, valid and
binding obligations of the Borrower and/or Guarantor, as applicable, enforceable
against the Borrower and/or Guarantor, as applicable in accordance with their
respective terms.

SECTION 4.05. NO MATERIAL LIABILITIES OR LITIGATION. Except for liabilities
incurred in the normal course of business, the Borrower and Guarantor do not
have any material (individually or in the aggregate) liabilities, direct or
contingent. In addition, there are no pending or threatened actions or
proceedings before any court or administrative agency which may materially and
adversely affect the Borrower's and/or Guarantor's business, operations, assets
conditions or property, financial or otherwise.

SECTION 4.06. FINANCIAL CONDITION. The financial statements of Borrower as
heretofore furnished to Lender have been prepared in accordance with the
generally accepted accounting principles applied on a consistent basis and
fairly present the financial condition of Borrower as of those dates. To the
best of Borrower's knowledge and belief, Borrower does not have any contingent
obligation or liability for taxes not disclosed by or reserved against in said
financial statements, and there have been no material adverse changes in the
financial condition of Borrower from that set forth in said financial
statements. The financial statements of Guarantor as heretofore furnished to
Lender fairly present the financial condition of Guarantor as of the date
hereof. To the best of Guarantor's knowledge and belief, Guarantor has no
contingent obligation or liability for taxes not disclosed by or reserved
against in said financial statements, and there have been no material adverse
changes in the financial condition of Guarantor from that set forth in said
financial statements. Since the close of the period covered by the latest
financial statement delivered to Lender with respect to the Borrower and
Guarantor, there has been no material adverse change in the assets, liabilities
or financial condition of the Borrower or Guarantor. No event has occurred
(including, without limitation, any litigation or administrative proceedings)
and no condition exists or, to the knowledge of Borrower or Guarantor, is
threatened, which (i) might render Borrower or Guarantor unable to perform its
obligations under this Agreement, the Note or the Collateral Documents, or (ii)
would constitute a Default hereunder, or (iii) might adversely affect the
financial condition of the Borrower or Guarantor or the validity or priority of
the lien of the Collateral Documents. All parties acknowledge that Lender is
relying upon said financial statements in entering into this Agreement and the
Loan.

SECTION 4.07. LIABILITIES AND LITIGATION. There is no litigation, legal or
administrative proceeding, investigation or other action of any nature pending
or, to the knowledge of Borrower and/or Guarantor, threatened against or
affecting Borrower or Guarantor which involves the possibility of any judgment
or liability not fully covered by insurance, and which may materially and
adversely affect the business or assets of the Borrower or Guarantor or their
respective ability to carry on business as now conducted.

SECTION 4.08. TAXES AND GOVERNMENTAL CHARGES. Borrower and Guarantor have
filed all tax returns and reports required to be filed by all applicable
jurisdictions and have paid all taxes, assessments, fees and other governmental
charges levied upon it or upon any property owned by them or upon their income,
which are due and payable, including interest and penalties, or has provided
adequate reserves for the payment thereof.

SECTION 4.09. TITLE TO PROPERTY. Borrower and Guarantor, as applicable,
have good, valid and merchantable title to the Property, free of all Liens
except (i) those created by the Collateral Documents, or (ii) those disclosed to
Lender in writing prior to date hereof, including those reflected on the title
commitment covering portions of the Property. Furthermore, neither Borrower nor
Guarantor has heretofore conveyed or agreed to convey or encumber any Collateral
in any way, except in favor of the Lender or as disclosed to Lender in writing
prior to date hereof. Neither Borrower nor Guarantor have any Liens on any of
their assets except Permitted Liens.

SECTION 4.10. DEFAULT. Neither Borrower nor Guarantor is in default (in any
respect which materially and adversely affects its business, property,
operations or condition, financial or otherwise) under any indenture, mortgage,
deed of trust, agreement or other instrument to which Borrower and/or Guarantor
is a party or by which either is bound or subject to any charter or other
corporate restriction which materially and adversely affects its business,
properties or assets, operation or condition, whether financial or otherwise,
except as disclosed to the Lender in writing. No Default hereunder has occurred
and is continuing.

SECTION 4.11. NO CONSENT. Borrower's and Guarantor's execution, delivery
and performance of this Agreement, the Note and the Collateral Documents, as
applicable, do not require the consent or approval of any other Person,
including without limitation any regulatory authority or governmental body of
the United States or any state thereof or any political subdivision of the
United States or any state thereof.

SECTION 4.12. COMPLIANCE WITH THE LAW. Borrower and/or Guarantor (i) is not
in violation of any law, judgment, decree, order, ordinance or governmental rule
or regulation to which the Borrower or any of its property are subject; and (ii)
has not failed to obtain any license, permit, franchise or other governmental
authorization necessary to the ownership of any of its property or the conduct
of its business; in each case, which violation or failure could reasonably be
anticipated to materially and adversely affect the business, prospects, profits,
property or condition (financial or otherwise) of the Borrower.

SECTION 4.13. OTHER INFORMATION. All information, reports, papers and data
given to Lender by the Borrower and Guarantor pursuant to this Agreement and in
connection with the Borrower's application for the Loan are accurate and correct
in all material respects. All financial projections given to Lender were
prepared in good faith based on facts and circumstances existing at the time of

preparation and were believed by the Borrower to be accurate in all material
respects. No information, exhibit or report furnished by the Borrower to Lender
in connection with the negotiation of this Agreement contains any material
misstatement of fact or fails to state a material fact or any fact necessary to
make the statement contained therein not materially misleading.

SECTION 4.14. ENVIRONMENTAL MATTERS. (a) To the best of the Borrower's
knowledge, all operating facilities and property owned, leased, used, or
operated by the Borrower and/or Guarantor have been, and will continue to be,
owned, leased, used, or operated by the Borrower and/or Guarantor in substantial
compliance with applicable environmental laws, regulations, and guidelines.
There has been no claim, complaint, or notice received by the Borrower or
Guarantor with respect to a violation of environmental laws which remains
unsettled or unresolved as of the date hereof, including but not limited to, any
unsettled or unresolved liabilities relating to, arising out of or resulting
from (i) any emission, discharge or release of any pollutant, contaminant,
Hazardous Material, toxic material or other similar waste or (ii) any
processing, distribution, use, treatment, transport, removal, storage and/or
disposal of materials or wastes into or upon the ambient air, surface water,
ground water or land owned by the Borrower or any Guarantor or any alleged
violation of any federal, state, or local statute, regulation, or ordinance
relating to the environment. There has been no complaint or notice received by
the Borrower or Guarantor regarding potential liability under the Comprehensive
Environmental Response Compensation and Liability Act, as amended, the Resource
Conservation and Recovery Act, as amended, or any comparable state or local law
which is unsettled or remains unresolved as of the date hereof. To the
Borrower's knowledge, there has been no release of a Hazardous Material at any
facility or property owned, leased, used, or operated by the Borrower or
Guarantor which caused or could have cause a material adverse change in the
Borrower's financial condition, business or ability to pay or perform its
Obligations. For purposes of the last sentence of this Section III (k),
"release" shall have the meaning assigned to it under the Comprehensive
Environmental Response Compensation and Liability Act.

(b) Borrower and Guarantor have obtained all permits, licenses or
similar authorizations to construct, occupy, operate or use any buildings,
improvements, fixtures and equipment forming a part of the Property by reason of
any Hazardous Materials. The use which the Borrower and Guarantor makes and
intends to make of the Property will not result in any Hazardous Materials
Contamination.

SECTION 4.15. GOVERNMENTAL REQUIREMENTS. The Property is in compliance
with all current Governmental Requirements affecting the Property, including,
without limitation, all current zoning and land use regulations, building codes
and all restrictions and requirements imposed by applicable governmental
authorities with respect to the construction of any improvements on the Property
and the contemplated use of the Property.

SECTION 4.16. CONTINUING ACCURACY. All of the representations and
warranties contained in this article or elsewhere in this Agreement shall be
true through and until the Obligations are fully satisfied, and Borrower shall
promptly notify Lender of any event which would render any of said
representations and warranties untrue or misleading.

SECTION 4.17. AMERICANS WITH DISABILITIES ACT. The Property shall be
readily accessible to individuals with disabilities, and complies with all terms
and conditions of the Americans With Disabilities Act, 42 U.S.C. (S) 1210, et
seq. and all regulations and orders promulgated thereunder.

SECTION 4.18. CLEAN AIR ACT. The Property now complies with and upon
completion of the Improvements shall continue to comply with all terms and
conditions of 42 U.S.C. (S) 7401, et seq. and all regulations and orders
promulgated thereunder.

SECTION 4.19. LICENSES, PERMITS. The Borrower and Guarantor have all
permits, certificates, licenses (including patent and copyright licenses)
approvals and other authorizations required in connection with the operation of
their business.

SECTION 4.20. GOVERNMENT CONTRACTS. Neither Borrower nor Guarantor has ever
been debarred or suspended from contracting (as a first tier or any other level
of subcontractor) for or bidding on any Governmental Contract (as such term is
defined below). Neither Borrower nor Guarantor is currently debarred or
suspended from (or has received notice that it is under investigation with
respect to a possible debarment or suspension from) bidding on or entering into
any contract with or for any Governmental Authority ( a "Government Contract").
Neither Borrower nor Guarantor has been given notice (i) that any Government
Contract may be or will be terminated for the convenience of a Governmental
Authority or a default by Borrower or Guarantor, as the case may be, (ii) that a
major program or contract of Borrower or Guarantor will be eliminated or
substantially reduced or suspended, (iii) requiring or resulting in, loss of use
or substantial impairment or interference of use by Borrower or Guarantor, as
the case may be, of any facilities owned by a Governmental Authority, or (iv)
that any relevant budget authority or contract authority has been exceeded with
respect to any material Government Contract. Neither the Borrower or Guarantor
anticipates incurring cost overruns on any Government Contracts which would have
a material adverse effect on the financial condition of Borrower or Guarantor.

SECTION 4.21. FEDERAL REGULATIONS. No part of the proceeds of the Loan will
be used as "purpose credit" within the meaning of such term under Regulations U
or G of the Board of Governors of the Federal Reserve System as now and from
time to time hereafter in effect, if such use would violate the provisions of
Regulations U or G.

SECTION 4.22. SUBSIDIARIES. At the Effective Date, the Borrower has no
Subsidiaries except Guarantor, and the Borrower owns all of the capital stock of
Orange and Xxxxxx owns all of the capital stock of Borrower. There are no Liens
on any of the capital stock of Orange or of Borrower.

SECTION 4.23. GOVERNMENT CONTRACTS. Borrower and Guarantor have the right
under their Government Contracts to grant a security interest to the proceeds
therefrom under the Collateral Documents and the Collateral Documents create a
non-perfected security interest in the Government Contracts. To the best of
Borrower's and Guarantor's respective knowledge, there are no offsets, and there
are not currently threatened or pending any claims or offsets against Borrower
or Guarantor by any Governmental Authority.

SECTION 4.24. ASSETS MORTGAGED TO LENDER. All drydocks, barges and other
vessels and equipment of Borrower and Guarantor are not documented vessels with
the United States Coast Guard and are free and clear of any Liens, except the
Collateral Documents or Permitted Liens. In the event any asset of Borrower or
Guarantor becomes a documented vessel with the United States Coast Guard,
Borrower agrees to notify Lender and to execute a preferred maritime ship
mortgage encumbering such asset in favor of Lender upon terms and conditions
reasonably acceptable to Lender. All immovable and real property of Borrower and
Guarantor are mortgaged to Lender under the Collateral Documents,

except the shipyard owned by Borrower in Amelia, Louisiana. All equipment of
Borrower and Guarantor are subject to a perfected security interest in favor of
Lender in accordance with the terms of the Collateral Documents. Orange
acknowledges that the Collateral Documents executed by it continue to secure the
performance and payment of the Obligations, even though Borrower changed its
name from Xxxxxx Industries, Inc. to Xxxxxx Shipyard, Inc.

SECTION V
AFFIRMATIVE COVENANTS

The Borrower agrees that, so long the Loan remains unpaid, or any other
amount or any Obligations are owing to Lender hereunder, the Borrower and
Guarantor and all of its Subsidiaries, as applicable, shall comply with the
covenants in this Section.

SECTION 5.01. FINANCIAL COVENANTS. Borrower shall comply with the following
Financial Covenants until the Loan has been paid in full, except as provided
herein:

(a) DEBT TO TANGIBLE NET WORTH: The Borrower on a consolidated basis with
Guarantor and each Subsidiary shall maintain a Debt to Net Worth Ratio of no
greater than 1.75 to 1.0 until the Loan is paid in full.

(b) DEBT SERVICE COVERAGE RATIO. Borrower on a consolidated basis with
Guarantor and each Subsidiary shall maintain at all times during the existence
of the Loan a Debt Service Coverage Ratio of at least 1.25 to 1.0 as of the end
of each fiscal quarter.

(c) CURRENT RATIO. Borrower on a consolidated basis with Guarantor and each
Subsidiary shall maintain at all times during the existence of the Loan a ratio
of Current Assets (minus any prepaid expenses) to Current Liabilities of 1.25 to
1.0 or greater.

SECTION 5.02. FINANCIAL STATEMENTS. (a) Borrower shall, from time to time,
promptly furnish to Lender as soon as available, but in any event within ninety
(90) days after the close of Borrower's fiscal year a copy of the audited
financial statements of Borrower, Guarantor and all of its Subsidiaries on a
consolidated basis, as of the close of such fiscal year prepared in reasonable
detail and in accordance with generally accepted accounting principles in the
United States in effect from time to time and applied consistently throughout
the period reflected therein, with such financial statements to include a
balance sheet of the Borrower and Guarantor and all of its Subsidiaries on a
consolidated basis, as of the end of such year and the related statement of
operations, of stockholder's equity and of cash flow prepared in reasonable
detail and in conformity with generally accepted accounting principles in the
United States in effect from time to time and applied on a basis consistent with
that of the preceding fiscal year, and audited by independent certified public
accountants selected by Borrower and satisfactory to Lender.

(b) Borrower shall, from time to time, promptly furnish Lender as soon as
available, but in any event within sixty (60) days after the end of each quarter
of each fiscal year of Borrower, the consolidated unaudited balance sheet of
Borrower, Guarantor and all of its Subsidiaries as of the end of each such
quarter and the related unaudited statements of operations, of shareholder's
equity and of cash flow for such quarter and the portion of the fiscal year
throughout such date, all prepared in reasonable detail and in conformity with
good accounting practices in the United States in effect from time to time

and applied consistently throughout the period reflected therein and certified
by the chief financial officer of Borrower and Guarantor.

(c) Immediately upon becoming aware of the occurrence of any event which
constitutes a Default or which could constitute a Default with the passage of
time or the giving of notice, or both, Borrower shall give written notice to
Lender describing such occurrence together with a detailed statement by the
Company Agent of the steps being taken by Borrower to cure the effect of such
event.

(d) Borrower shall furnish to Lender concurrently with the delivery of the
financial statements referred to in subsections (a) and (b) above, a certificate
of the chief financial officer of Borrower (i) stating that such officer has no
knowledge of any Default, or any other event with which the passage of time
would become a Default under this Agreement or the Collateral Documents, except
as specified in such certificate and (ii) showing in detail the calculations
supporting such statements in respect to Section 5.01. The Borrower shall
furnish to Lender with reasonable promptness, such additional financial and
other information as Lender may from time to time reasonably request.

SECTION 5.03. CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Borrower
and Guarantor shall continue to engage principally in the business of the same
general type now conducted by it and preserve, renew and keep in full force and
effect its corporate existence and take all reasonable action to maintain all
rights, privileges and franchises necessary in the normal conduct of its
business and comply with all laws.

SECTION 5.04. INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. The
Borrower, Guarantor and their Subsidiaries shall keep proper books and records
in conformity in all material respects of GAAP and permit representatives of
Lender to visit and inspect any of its properties and examine the books and
records of the Borrower at any reasonable time during normal business hours and
as often as may reasonably be necessary, and to discuss the business,
operations, properties and financial and other condition of the Borrower,
Guarantor and their Subsidiaries with officers of the Borrower, Guarantor and
their Subsidiaries and with its independent certified public accountants.

SECTION 5.05. NOTICE OF CERTAIN EVENTS. (a) The Borrower shall promptly
notify Lender of any change in location of the Borrower's and/or Guarantor'
principal places of business or the office where Borrower and/or Guarantor keeps
its records concerning accounts and contract rights.

(b) The Borrower shall promptly notify Lender of the arising of any
litigation or dispute threatened against or affecting the Borrower, Guarantor
and/or any of their Subsidiaries or the Property which, if adversely determined,
would have a material adverse effect upon the financial condition or business of
the Borrower and/or Guarantor. In the event of such litigation, the Borrower
will cause such proceedings to be vigorously contested in good faith and, in the
event of any adverse ruling or decision, the Borrower shall prosecute all
allowable appeals. Lender may (but shall not be obligated to), without prior
notice to Borrower, commence, appear in or defend any action or proceeding
purporting to affect the Loan, or the respective rights and obligations of
Lender or Borrower and/or Guarantor pursuant to this Agreement. Lender may (but
shall not be obligated to) pay all necessary expenses, including reasonable
attorneys' fees and expenses incurred in connection with such proceedings or
actions, which Borrower agrees to repay to Lender upon demand.

SECTION 5.06. ENVIRONMENTAL INDEMNITY. (a) Borrower and Guarantor agree to
(i) give notice to Lender immediately upon its acquiring knowledge of the
violation of any Governmental Requirement

regarding the presence of any Hazardous Materials on the Property and/or of any
Hazardous Materials Contamination with a full description thereof; and (ii)
promptly comply with any Governmental Requirement requiring removal, treatment
or disposal of such Hazardous Materials or Hazardous Materials Contamination and
provide Lender with satisfactory evidence of such compliance. Upon the discovery
of any Hazardous Materials Contamination, or upon the occurrence of a Default
and the expiration of the cure period provided in Section 7.02, Lender shall
have the right to cause an environmental audit or review of the Property to be
performed by a firm acceptable to Lender at the sole cost and expense of
Borrower.

(b) Borrower and Guarantor shall solidarily defend, indemnify and hold
Lender, its directors, officers, agents and employees harmless from any and all
liabilities (including strict liability), actions, demands, penalties, losses,
costs or expenses (including, without limitation, reasonable attorneys' fees and
remedial costs), suits, costs of any settlement or judgment and claims of any
and every kind whatsoever which may now or in the future be paid, incurred, or
suffered by, or asserted against Lender by any person or entity or governmental
agency for, with respect to, or as a direct or indirect result of, the presence
on or under, or the escape, seepage, leakage, spillage, discharge, emission,
discharging or release from or onto the Property of any Hazardous Materials or
any Hazardous Materials Contamination, or arise out of, or result from, the
environmental condition of the Property or the applicability of any Governmental
Requirement relating to Hazardous Materials (including, without limitation,
CERCLA or any so called federal, state or local "super fund" or "super lien"
laws, statute, ordinance, code, rule, regulation, order or decree) regardless of
whether or not caused by or within the control of Borrower and/or Guarantor.
These representations, covenants and warranties contained in this Section 5.07
shall survive the termination of this Agreement.

SECTION 5.07. INDEMNIFICATION. (a) Borrower and Guarantor shall solidarily
defend, indemnify Lender and hold Lender harmless from claims of brokers with
whom the Borrower and/or Guarantor has dealt in the execution hereof or the
consummation of the transactions contemplated hereby.

(b) The Borrower and Guarantor shall solidarily defend, indemnify
Lender and hold Lender harmless from any and all liabilities, obligations,
losses, damages, penalties, claims, actions, suits, costs and expenses of
whatever kind or nature which may be imposed on, incurred by or asserted at any
time against Lender in any way relating to, or arising in connection with, the
use or occupancy of any of the Property.

(c) Borrower and Guarantor solidarily agree to defend, indemnify, hold
harmless and fully protect Lender from any allegation or charge whatsoever of
negligence, misfeasance or nonfeasance of Lender in whole or in part, pertaining
to any, defect in the Property, and particularly, any failure of Lender or any
agent, officer, employee or representative of Lender, to note any defect in
materials or workmanship or of physical conditions or failure to comply with any
ordinances, statutes or other governmental requirements, or to call to the
attention of any person whatsoever, or take any action, or to demand that any
action be taken, with regard to any such defect or failure or lack of
compliance.

SECTION 5.08. MAINTENANCE OF THE PROPERTY. Borrower and Guarantor shall
cause the Property to be maintained in good condition and repair and will not
commit or suffer to be committed any waste of the Property. The Property shall
not be removed, demolished or materially altered (except for normal
replacement), without the prior written consent of Lender. Borrower and
Guarantor shall promptly comply with all laws, orders, and ordinances affecting
the Property or the use thereof, and shall promptly repair, replace or rebuild
any part of the Property which may be damaged or destroyed by any casualty

(including any casualty for which insurance was not obtained or obtainable) and
shall complete and pay for, within a reasonable time, any structure at any time
in the process of construction or repair on the Property. Except with regard to
normal and customary utility servitudes, the Borrower and Guarantor will not,
without obtaining the prior written consent of Lender, initiate, join in, or
consent to any private restrictive covenant, zoning ordinance, or other public
or private restrictions, limiting or defining the uses which may be made of the
Property or any part thereof.

SECTION 5.09. AMERICANS WITH DISABILITIES ACT. (a) Borrower and Guarantor
shall (i) maintain the Property to be readily accessible to individuals with
disabilities, (ii) provide goods, services, accommodations, access and
facilities without discrimination on the basis of disability, and (iii) comply
with all terms and conditions of the Americans With Disabilities Act, 42 U.S.C.
(S) 1210, et seq. and all regulations and orders promulgated thereunder.

(b) Borrower and Guarantor shall defend, indemnify and hold Lender harmless
from any and all liabilities (including strict liability), actions, demands,
penalties, losses, costs or expenses (including, without limitation, reasonable
attorneys' fees and remedial costs), suits, costs of any settlement or judgment
and claims of any and every kind whatsoever which may now or in the future be
paid, incurred, or suffered by, or asserted against Lender by any person or
entity or governmental agency for, with respect to, or as a direct or indirect
result of, any violations of the Americans With Disabilities Act or any
regulations or orders promulgated thereunder resulting from the operation,
maintenance or renovation of the Property.

SECTION 5.10. CLEAN AIR ACT. (a) Borrower and Guarantor shall maintain the
Property in full compliance with all terms and conditions of the Clean Air Act
42 U.S.C. (S)7401, et seq. and all regulations and orders promulgated
thereunder.

(b) Borrower and Guarantor shall defend, indemnify and hold Lender harmless
from any and all liabilities (including strict liability), actions, demands,
penalties, losses, costs or expenses (including, without limitation, reasonable
attorneys' fees and remedial costs), suits, costs of any settlement or judgment
and claims of any and every kind whatsoever which may now or in the future be
paid, incurred, or suffered by, or asserted against Lender by any person or
entity or governmental agency for, with respect to, or as a direct or indirect
result of, any violations of the Clean Air Act or any regulations or orders
promulgated thereunder resulting from the operation, maintenance or renovation
of the Property.

SECTION 5.11. ERISA. Borrower shall fulfill its obligations under the
minimum funding standards of ERISA and the Internal Revenue Code of 1986, as
amended, with respect to each Plan, and neither the Borrower nor any Affiliate
or Subsidiary shall take any action that would result in the termination of a
Plan by the Pension Benefit Guaranty Corporation.

SECTION 5.12. TAXES AND OTHER LIENS. Borrower and Guarantor will pay and
discharge promptly when due all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or upon the Property as well as all
claims of any kind (including claims for labor, materials, supplies and rent)
which, if unpaid, might become a Lien upon any or all of the Property; provided,
however, the Borrower and/or Guarantor shall not be required to pay any such
tax, assessment, charge, levy or claim if the amount, applicability or validity
thereof shall currently be contested in good faith by appropriate proceedings
diligently conducted and if Borrower and/or Guarantor have set up reserves
therefor adequate under generally accepted accounting principles or if the claim
is covered by insurance or the payment or performance bonds. Borrower shall
furnish Lender with proof of payment of all taxes,

assessments, charges, levies or claims not later than the date on which
penalties might attach thereto, or in the event that the Borrower and/or
Guarantor contests any such taxes, assessments, charges, levies or claims in
accordance with this section, Borrower and/or Guarantor shall furnish Lender
with a description of the contested matter and all actions taken by Borrower
and/or Guarantor in connection with such contest.

SECTION 5.13. MAINTENANCE OF BORROWER'S AND ITS SUBSIDIARIES' EXISTENCE.
Borrower, Guarantor and their Subsidiaries will (i) maintain their respective
corporate existence and rights; (ii) observe and comply (to the extent necessary
so that any failure will not materially and adversely affect the business of the
Borrower, Guarantor and/or their Subsidiaries) with all applicable Governmental
Requirements applicable to Borrower, Guarantor and/or their Subsidiaries or the
Property (including without limitation applicable statutes, regulations, orders
and restrictions relating to environmental standards or controls or to energy
regulations); and (iii) maintain the Property in generally good and workable
condition at all times and make all repairs, replacements, additions,
betterments and improvements to the Property to the extent necessary so that any
failure will not materially and adversely affect the business of the Borrower,
Guarantor and/or their Subsidiaries.

SECTION 5.14. FURTHER ASSURANCES. Borrower and Guarantor will promptly (and
in no event later than 30 days after written notice from Lender is received)
cure any defects in the creation, execution and delivery of this Agreement, the
Note or the Collateral Documents. Borrower and/or Guarantor at Borrower's
expense will promptly execute and deliver to Lender upon request all such other
and further documents, agreements and instruments in compliance with or
accomplishment of the covenants and agreements of the Borrower and/or Guarantor
in this Agreement, the Note or in the Collateral Documents or to further
evidence and more fully describe the Collateral, or to correct any omissions in
the Collateral Documents, or more fully state the security obligations set out
herein or in any of the Collateral Documents, or to perfect, protect or preserve
any Liens created pursuant to any of the Collateral Documents, or to make any
recordings, to file any notices, or obtain any consents as may be necessary or
appropriate in connection with the transactions contemplated by this Agreement.

SECTION 5.15. REIMBURSEMENT OF EXPENSES. Borrower will pay all reasonable
legal fees incurred by Lender in connection with the preparation of this
Agreement, the Note and the Collateral Documents. Borrower will, upon request,
promptly reimburse Lender for all amounts expended, advanced or incurred by
Lender to satisfy any obligation of the Borrower under this Agreement, or to
protect the Property or business of the Borrower or to collect the Obligations,
or to enforce the rights of Lender under this Agreement, which amounts will
include all court costs, attorneys fees, fees of auditors and accountants and
investigation expenses reasonably incurred by Lender in connection with any such
matters, together with interest at the interest rate set forth in the Note on
each such amount from the date that the same is expended, advanced or incurred
by Lender until the date of reimbursement to Lender.

SECTION 5.16. INSURANCE. (a) The Borrower shall procure and maintain for
the benefit of Lender original paid-up insurance policies from companies
satisfactory to Lender, in amounts, in form and substance, and with expiration
dates acceptable to Lender and containing a noncontributory standard mortgagee
clause or its equivalent in a form satisfactory to Lender, or the statutory
mortgagee clause, if any, required in the state where the Property is located,
or a mortgagee's loss payable endorsement, in favor of Lender, providing the
following types of insurance on the Property:

(i) Multi-Peril Hazard Insurance. For the Property, multi-peril hazard
insurance. In each case, the policies will afford insurance against loss or
damage by fire, lightning, explosion,

earthquake, collapse, theft, sprinkler leakage, vandalism and malicious mischief
and such other perils as are included in so-called "all-risks" or "extended
coverage" and against such other insurable perils as, under good insurance
practices, from time to time are insured against for properties of similar
character and location; such insurance to be not less than 100% of the full
replacement cost of the improvements located on the Property, without deduction
for depreciation; said policies to contain replacement costs and stipulated
value endorsements.

(ii) Comprehensive General Liability Insurance. Comprehensive
public liability insurance with respect to the Property and the operations
related thereto, whether conducted on or off the Property, against liability for
personal injury (including bodily injury and death) and property damage, of not
less than a total of $5,000,000.00 combined single limit bodily injury and
property damage; such comprehensive public liability insurance to be on a per
occurrence basis and to specifically include but not limited to water damage
liability, products liability, motor vehicle liability for all owned and
nonowned vehicles, including rented and leased vehicles, and contractual
indemnification.

(iii) Workers' Compensation and General Liability. Workers'
compensation and general liability insurance against loss, damage or injury to
employees, agents or representatives of the Borrower, Guarantor and/or their
Subsidiaries or of any contractor and subcontractor, or insurance against loss,
damage or injury caused by any employees, agents or representatives of the
Borrower, Guarantor and/or their Subsidiaries or of any contractor or
subcontractor.

(iv) Flood Insurance. Flood Insurance Policy in the amount of the
Loan or the maximum amount obtainable, whichever is less, if the property is
located in a Flood Hazard Area as defined by the Federal Emergency Management
Agency.

(v) Other Insurance. Such other insurance on the Property or any
replacements or substitutions therefor and in such amounts as may from time to
time be reasonably required by Lender against other insurable casualties which
at the time are commonly insured against in the case of premises similarly
situated, due regard being given to the height and type of the improvements on
the Property, its construction, location, use and occupancy, or any replacements
or substitutions therefor.

(b) All of the foregoing policies shall contain an agreement by the
insurer not to cancel or amend the policies without giving Lender at least
thirty (30) days' prior written notice of its intention to do so and shall
provide that the policies shall be payable not withstanding the acts of
Borrower, Guarantor or their Subsidiaries, as applicable.

(c) At or before Closing, Borrower shall deliver original binders
evidencing the insurance and within 15 days of closing the original or certified
policies to Lender, and Borrower shall deliver original or certified renewal
policies with satisfactory evidence of payment not less than fifteen (15) days
in advance of the expiration date of the existing policy or policies. In the
event Borrower and/or its Subsidiaries should, for any reason whatsoever, fail
to keep the Property or any part thereof so insured, or to keep said policies so
payable, or fail to deliver to Lender the original or certified policies of
insurance and the renewals thereof upon demand, then Lender after giving written
notice to Borrower of that deficiency and if after 15 days after delivery of
such notice, there is still no insurance coverage, then Lender, if it so elects,
may itself have such insurance effected in such amounts and in such companies as
it may deem proper and may pay the premiums therefor. The Borrower shall
reimburse Lender upon demand for the amount of premium paid, together with
interest thereon at 15% percent per annum from date until paid.

(d) Borrower and Guarantor agree to notify Lender immediately in
writing of any material fire or other casualty to or accident involving any of
the Property, whether or not such fire, casualty or accident is covered by
insurance. Borrower and Guarantor further agree to notify promptly Borrower's
and/or Guarantor insurance company and to submit an appropriate claim and proof
of claim to the respective insurance company if any of the Property is damaged
or destroyed by fire or other casualty.

(e) Lender is hereby authorized and empowered, at its option, to
collect and receive the proceeds from any policy or policies of insurance, and
each insurance company is hereby authorized and directed to make payment of all
such losses directly to Lender instead of to the Borrower and/or Guarantor and
Lender jointly. Lender shall apply the net proceeds thereof, in accordance with
Subsections (f), (g) and/or (h) hereof.

(f) If there is a fire or casualty loss which damages a portion (but
not all) of the improvements on any of the Property and as long as no Default
has occurred and is continuing, then the Proceeds of the insurance shall be
deposited into a cash collateral account and such proceeds will be applied to
the payment of the cost of restoration of the improvements upon such terms and
conditions as Lender may deem necessary or appropriate in its reasonable
discretion; provided, however, that (i) such insurance proceeds must be adequate
to cover the cost of restoration of the improvements, or if the proceeds are
insufficient, then the Borrower shall give Lender such adequate protection and
assurance as Lender may, in its reasonable discretion require, that additional
funds will be provided by the Borrower in order to complete the restoration of
the Improvements (ii) the Borrower shall have provided Lender with such adequate
protection and assurance as Lender may, in its reasonable discretion require,
that the Borrower has sufficient funds on hand to pay interest and principal on
the Loan during the restoration period, and (iii) the first priority of the
Collateral Documents in the Property is not impaired. In connection with any
restoration of any of the improvements, the Borrower and/or Guarantor shall
provide Lender with a detailed cost breakdown showing by line item all costs
projected for such restoration and a revised and updated cost breakdown shall be
furnished by the Borrower and/or Guarantor to Lender on a monthly basis.

(g) If there is a fire or casualty loss which constitutes a total loss
or a constructive total loss of any of the Property, or if not all of the
conditions set forth in subclause (i) through (iv) of Subsection (f) above are
satisfied, then the insurance proceeds shall be applied to the payment of the
Obligations. If such insurance proceeds are not sufficient to pay the
Obligations in full, Lender shall have a right to accelerate the maturity of the
Obligations and proceed against the Borrower or the remainder of the property;
and if the proceeds exceed the amount necessary to pay the Obligations in full,
then such excess shall be paid to Borrower,

(h) Upon demand of Lender and after the occurrence of a Default, the
Borrower shall pay to Lender, together with, at the same time as and in addition
to the payments of principal and/or interest due on the Note, a pro rata portion
of the property taxes, assessments, governmental charges, levies and insurance
premiums relating to the Property next to become due, as estimated by Lender, so
that Lender will have sufficient funds on hand to pay such taxes, assessments,
governmental charges, levies and premiums not less than thirty (30) days prior
to the due date thereof. All such amounts shall be held by Lender (not in trust)
without interest as further security for the Obligations. Lender may apply all
or a portion of the amounts so paid at such time and in such order as Lender, in
its uncontrolled discretion shall determine, to the payment of the taxes,
assessments, governmental charges, levies and insurance premiums, as the case
may be.

SECTION VI
NEGATIVE COVENANTS

Borrower agrees that, so long as the Loan remain unpaid, or any other
amount or any Obligations are owing to Lender hereunder, the Borrower, Guarantor
and all of their Subsidiaries, as applicable, shall comply with the applicable
covenants contained in this Section.

SECTION 6.01. LIMITATIONS ON LIENS. Other than Permitted Liens, Borrower
and/or Guarantor or any of their Subsidiaries shall not create, encumber or
suffer any Lien, other than the Collateral Documents and Permitted Liens, to
exist on the Property, any other Collateral or upon any of the capital stock of
any Subsidiary of Borrower and/or Guarantor without the prior written consent of
Lender.

SECTION 6.02. ENVIRONMENTAL LIABILITIES. Borrower, Guarantor and/or any of
their Subsidiaries shall not violate any Governmental Requirement regarding
Hazardous Materials and shall not create or allow any Hazardous Materials
Contamination; and, without limiting the foregoing, or otherwise dispose of (or
permit any Person to dispose of) any Hazardous Material (except in accordance
with applicable law) into or onto or from, the Property, nor allow any Lien
imposed pursuant to any Governmental Requirement relating to Hazardous Materials
or the disposal thereof to be imposed or to remain on the Property.

SECTION 6.03. ERISA COMPLIANCE. Borrower, Guarantor and/or any of their
Subsidiaries shall not at any time permit any Plan maintained by it to engage in
any "prohibited transaction" as such term is defined in Section 4975 of the
Code; incur any "accumulated funding deficiency" as such term is defined in
Section 302 of ERISA; or terminate any such Plan in a manner which could result
in the imposition of a Lien on the property of the Borrower and/or Guarantor
pursuant to Section 4068 of ERISA.

SECTION 6.04. CONSOLIDATION/MERGER. Neither Borrower, Guarantor nor any of
their Subsidiaries shall merge or consolidate with any other Person without the
written consent of Lender.

SECTION 6.05. RESTRICTED PAYMENTS. Neither Borrower nor Xxxxxx shall
declare or pay any dividend on, or declare or make any other distribution on
account of, any shares of any class of its stock now or hereafter outstanding,
or set apart any sum for such purpose without the Lender's prior written
consent. Neither Borrower, Guarantor nor any of their Subsidiaries shall
purchase any of the capital stock of Xxxxxx other than the purchase of not more
than 200,000 shares of Xxxxxx as authorized by Section 2.05 for a purchase price
of not greater than $1,000,000.00, which share of Xxxxxx shall be held as
treasury stock by the purchaser thereof.

SECTION 6.06. TRANSACTION WITH AFFILIATES. Neither Borrower, Guarantor nor
any of their Subsidiaries shall enter into any transaction (including the
purchase, sale or exchange of property or the rendering of any service) with any
Affiliate except upon fair and reasonable terms which are at least as favorable
to the Borrower, Guarantor or any Subsidiary as would be obtained in a
comparable arm's length transaction with a non-Affiliate.

SECTION 6.07. TRANSFER OF BORROWER'S OR GUARANTOR'S STOCK. Neither the
capital stock of Borrower nor the capital stock of Orange shall be sold,
transferred, exchange, pledged or encumbered to or in favor of a third Person
without the prior written consent of Lender.

SECTION 6.08. PARENT COMPANY. Without the prior written consent of Lender,
Xxxxxx shall not ever have any employees, assets or liabilities (other than the
assets and liabilities of Borrower and its Subsidiaries on a consolidated basis)
and shall not ever create or incur any Debt.

ARTICLE VII
CONDITIONS OF LENDING

SECTION 7.01. CONDITIONS OF INITIAL ADVANCE. The obligation of the Lender
to make the initial Advance is subject to the accuracy of each and every
representation and warranty of the Borrower contained in this Agreement, and to
the receipt of the following on or before the Closing Date:

(a) Agreement. A duly executed counterpart of this Agreement signed by
all the parties thereto.

(b) Note. The duly executed Line Note signed by the Borrower.

(c) Corporate Authorization. Such authorization by the Board of
Directors of Borrower's in form and substance satisfactory to the Lender with
respect to the authorization of this Agreement, the Note and the Collateral
Documents, as the case may be and the individuals authorized to sign such
instruments.

(d) Fees. Pay all fees and expenses of Lender's counsel, appraisers,
inspectors and related experts.

(e) Collateral Documents. Duly executed counterparts or originals of
the Collateral Documents and receipt of the Collateral.

(f) Opinion. A legal opinion from counsel of Borrower addressed to
Lender in a form acceptable to Lender opining that this Agreement, the Note and
the Collateral Documents are the valid, legal and binding obligation of Borrower
enforceable in accordance with their terms, that the execution of this
Agreement, the Note, and the Collateral Documents are in conformity with and do
not violate any Governmental Requirements and that this Agreement, the Note and
the Collateral Documents were duly authorized and executed by the Borrower.

(g) Representations. Each of the representations and warranties of the
Borrower contained in this Agreement shall be true and correct on and as of the
date of the initial advance, except as such representations and warranties
relate to matters that are permitted by this Agreement.

SECTION 7.02. EACH ADDITIONAL ADVANCE. The obligation of the Lender to make
additional advances on the Line of Credit is subject to the satisfaction of each
of the following conditions:

(a) Each of the representations and warranties of the Borrower
contained in this Agreement shall be true and correct on and as of the date of
such subsequent advance, except as such representations and warranties relate to
matters that are permitted by this Agreement.

(b) At the time of each subsequent advance, no Default shall have
occurred and be continuing and no event with the passage of time or notice (or
both) would be a Default shall have occurred and be continuing.

(c) There shall have occurred no material adverse charges, either
individually or in the aggregate, in the assets, liabilities, financial
conditions, business operations, affairs or circumstances of the Borrower and/or
Guarantor from those reflected in the most recent financial statements furnished
to the Lender prior to the Closing Date, except to the extent that such changes
are permitted by this Agreement; and

(d) The satisfaction with any documentation or other conditions as
required herein.

SECTION VIII
EVENTS OF DEFAULT

SECTION 8.01. DEFAULTS. The occurrence of any one or more of the following
events shall constitute a default (a "Default") under this Agreement:

(a) the failure of Borrower to pay promptly when due any interest or
principal on any of the Obligations, including but not limited to the Loan;

(b) the failure of Borrower and/or Guarantor to observe or perform
promptly when due any covenant, agreement, or obligation due to the Lender;

(c) the failure to pay on demand any amounts advanced by Lender for
the payment of taxes and assessments or the cost of obtaining the release of any
Collateral from any seizure, Lien, or attachment;

(d) the inaccuracy at any time of any warranty, representation, or
statement made to Lender by Borrower and/or Guarantor, whether such warranty,
representation, or statement is made (i) in this Agreement, the Note, or the
Collateral Documents, or (ii) in any other agreement, document, or writing;

(e) any default on or in connection with any Obligation;

(f) any material discrepancy between any financial statement submitted
to Lender by Borrower and/or Guarantor and its actual financial condition;

(g) any garnishment, seizure, or attachment of, or any tax lien or tax
levy against, any assets of Borrower and/or Guarantor, including, without
limitation, those assets that are Collateral, unless the same is being contested
in good faith and is secured by adequate reserves in an amount sufficient to
satisfy same;

(h) one or more judgments, decrees, arbitration award, rulings or
decisions shall be entered against Borrower and/or Guarantor involving in the
aggregate a liability (not paid or fully covered by insurance including self-
insurance or the payment or performance bonds) of $100,000 or

more and all such judgments, decrees, awards and rulings shall not have been
vacated, paid, discharged, stayed or bonded pending appeal within 60 days from
the entry thereof;

(i) Borrower shall default in any payment of principal of or interest
on any Debt other than the Loan in the aggregate principal amount of more than
$100,000, in each instance, beyond the period of grace, if any, provided in the
instrument or agreement under which such Debt or observance or performance of
any other agreement or condition relating to any such Debt or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such Debt or
beneficiary or beneficiaries of such (or a trustee, agent or other Person acting
on behalf of such holder or holders or beneficiary or beneficiaries) to cause,
with the giving of notice if required, such Debt to become due prior to its
stated maturity;

(j) a receiver, conservator, liquidator or trustee of the Borrower
and/or Guarantor, or of any of their property (including the Property) is
appointed by order or decree of any court or agency or supervisory authority
having jurisdiction; or an order for relief is entered against the Borrower
and/or Guarantor under the Federal Bankruptcy Code; or the Borrower and/or
Guarantor is adjudicated bankrupt or insolvent; or any material portion of any
property of any of the Borrower and/or Guarantor (including the Property) is
sequestered by court order and such order remains in effect for more than thirty
(30) days after such party obtains knowledge thereof; or a petition is filed
against the Borrower and/or Guarantor under any state, reorganization,
arrangement, insolvency, readjustment of debt, dissolution, liquidation or
receivership law of any jurisdiction, whether now or hereafter in effect, and
such petition is not dismissed within sixty (60) days;

(k) the Borrower and/or Guarantor files a case under the Federal
Bankruptcy Code or seeks relief under any provision of any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction, whether now or hereafter in effect, or
consents to the filing of any case or petition against it under any such law;

(1) the Borrower and/or Guarantor makes an assignment for the benefit
of its creditors, or admits in writing its inability to pay its debts generally
as they become due, or consents to the appointment of a receiver, trustee or
liquidator of the Borrower and/or Guarantor or of all or any part of its
property;

(m) the entry of a final court order that enjoins or restrains
Borrower's and/or Guarantor's conduct of their business activities;

(n) the existence or future enactment of any law, by any federal,
state, parish, county, municipal, or other taxing authority, requiring or
permitting Borrower to deduct any amount from any payments to be made on the
Loan or any other Obligation;

(o) the failure of Borrower and/or Guarantor to pay any federal,
state, or local tax, fee, or duty, unless the same is being contested in good
faith and is secured by an adequate reserve in an amount sufficient to satisfy
same and enforcement proceedings have not begun;

(p) any material adverse change in Borrower's financial condition,
business, or ability to pay or perform its obligations to Lender; or

(q) the Collateral, or any material portion thereof, is condemned or
expropriated under power of eminent domain by any legally constituted
governmental authority.

SECTION 7.02. NOTICE OF DEFAULT AND REMEDIES. Upon the happening of any
event of Default and such Default continues for a period of ten (10) days for a
payment default under the Loan or the Obligations or thirty (30) days for any
other type of default, after Lender has mailed or sent written notice of such
Default to the Borrower (but with no notice required in the event of a Default
under paragraphs (j), (k), or (1) of Section 7.01), Lender may declare the
entire principal amount of all Obligations then outstanding, including the Loan
and interest accrued thereon, to be immediately due and payable without
presentment, demand, protest, notice of protest or dishonor or other notice of
default of any kind, all of which are hereby expressly waived by the Borrower
and Lender is then authorized to exercise any and all of its rights and remedies
under the Collateral Documents and/or the Obligations.

SECTION 7.03. RIGHT OF SET-OFF AND COMPENSATION. Upon the occurrence and
continuance of a Default and expiration of the notice provided in Section 7.02,
Lender is hereby authorized at any time and from time to time, without notice to
Borrower (any such notice being expressly waived by the Borrower) to set-off,
compensate and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held, and other indebtedness at any time owing
by the Lender to or for the credit or the account of the Borrower against any
and all of the Obligations of the Borrower, irrespective of whether or not the
Lender shall have made any demand under this Agreement or the Note and although
such Obligations may be unmatured. The Lender agrees promptly to notify the
Borrower after any such set-off, compensation and application, provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Lender under this Section are in addition to
other rights of set-off and compensation which the Lender may have under the
Collateral Documents or otherwise. Lender shall have the right to impute all
payments on the Obligations in any order as Lender may desire.

SECTION VIII
MISCELLANEOUS

SECTION 8.01. NOTICES. All notices and other communications given hereunder
or in connection herewith shall be in writing, shall be sent by registered or
certified mail, return receipt requested, postage prepaid, or by hand delivery
with acknowledged receipt of delivery, shall be deemed given on the date of
acceptance or refusal of acceptance shown on such receipt; and shall be
addressed to the party to receive such notice at the following applicable
addresses:

If to the Borrower: Xxxxxx Shipyard, Inc.
0000 Xxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx

If to Lender: Whitney National Bank
000 Xx. Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxx X. Santa Xxxx, III
Vice President

Any party may, by notice given as aforesaid, change its address for all
subsequent notices.

SECTION 8.02. AMENDMENTS AND WAIVERS. No amendment of any provision of this
Agreement or of the Note shall be effective unless the same shall be in writing
and signed by Lender and the Borrower. No waiver of Borrower's Obligations shall
be effective unless in writing and signed by Lender, and then such waiver shall
be effective only in the specific instance and for the specific purpose for
which given.

SECTION 8.03. NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of Lender, any right, remedy, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided
are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.

SECTION 8.04. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Agreement, the Collateral Documents and the
Note.

SECTION 8.05. HEADINGS. The section and other headings contained in this
Agreement are for reference purposes only and shall not control or affect the
construction of this Agreement or the interpretation hereof in any respect.

SECTION 8.06. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and shall inure to the benefit of Lender, the Borrower and their respective
successors and assigns.

SECTION 8.07. SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable under applicable law shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof.

SECTION 8.08. GOVERNING LAW. This Agreement, the Note and the rights and
obligations of the parties under this Agreement and the Note shall be governed
by, and construed and interpreted in accordance with, the law of the State of
Louisiana.

SECTION 8.09. TIME OF THE ESSENCE. Time shall be deemed of the essence with
respect to the performance of all of the terms, provisions and conditions on the
part of the Borrower and the Lender to be performed hereunder.

SECTION 8.10. SUCCESSORS AND ASSIGNS; PARTICIPANTS. (a) All covenants and
agreements contained by or on behalf of the Borrower in this Agreement, the Note
and the Collateral Documents shall bind its successors and assigns and shall
inure to the benefit of the Lender and its successors and assigns.

(b) This Agreement is for the benefit of the Lender and for such other
Person or Persons as may from time to time become or be the holders of any of
the Obligations, and this Agreement shall be transferable and negotiable, with
the same force and effect and to the same extent as the Obligations may

be transferable, it being understood that, upon the transfer or assignment by
the Lender of any of the Obligations, the legal holder of such Obligations shall
have all of the rights granted to the Lender under this Agreement.

(c) Borrower hereby recognizes and agrees that the Lender may, from time to
time, one or more times, transfer all or any portion of the Obligations to one
or more third parties. Such transfers may include, but are not limited to, sales
of participation interests in such Obligations in favor of one or more third-
party lenders. Borrower specifically (i) consents to all such transfers and
assignments, waives any subsequent notice of and right to consent to any such
transfers and assignments as may be provided under applicable Louisiana law;
(ii) agrees that the purchaser of a participation interest in the Obligations
will be considered as the absolute owner of a percentage interest of such
Obligations and that such a purchaser will have all of the rights granted to the
purchaser under any participation agreement governing the sale of such a
participation interest; (iii) waives any right of off-set that Borrower may have
against the Lender, and/or any purchaser of such a participation interest in the
Obligations and unconditionally agrees that either the Lender or such a
purchaser may enforce Borrower's Obligations under this Agreement, irrespective
of the failure or insolvency of the Lender or any such purchaser; (iv) agrees
that any purchaser of a participation interest in the Obligations may exercise
any and all rights of counterclaim, set-off, banker's lien and other liens with
respect to any and all monies owing to the Borrower in accordance with the terms
of the Obligations, including but not limited to this Agreement; and (v) agrees
that, upon any transfer of all or any portion of the Obligations, the Lender may
transfer and deliver any and all collateral securing repayment of such
Obligations to the transferee of such Obligations and such collateral shall
secure any and all of the Obligations in favor of such a transferee, and after
any such transfer has taken place, the Lender shall be fully discharged from any
and all future liability and responsibility to Borrower with respect to such
collateral, and the transferee thereafter shall be vested with all the powers,
rights and duties with respect to such collateral.

SECTION 8.11. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, and it shall not be necessary that the signatures of all parties
hereto be contained on any one counterpart hereof; each counterpart shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

SECTION 8.12. PAYMENT OF EXPENSES AND INDEMNITY.

(a) The Borrower agrees (i) to promptly pay or reimburse Lender for all of
Lender's reasonable out-of-pocket costs, expenses and attorneys' fees incurred
in connection with the preparation, execution and delivery of this Agreement,
the Note, the Collateral Documents and any other documents prepared in
connection herewith, and (ii) to promptly pay or reimburse Lender for all of
Lender's reasonable out-of-pocket costs and expenses incurred in connection with
the preparation, execution and delivery of any amendment, supplement or
modification to this Agreement, the Note, the Collateral Documents and any other
documents prepared in connection herewith, together with the reasonable fees and
disbursements of counsel to Lender and the reasonable costs and expenses
incurred in connection with the enforcement or preservation of any rights under
this Agreement, the Note, the Collateral Documents and any such other documents.

(b) In consideration of the execution and delivery of this Agreement by
Lender, the Borrower hereby indemnifies, exonerates and holds Lender and its
respective officers, directors, employees, and agents, (herein collectively
called the "Bank Parties" and individually called a "Bank Party") free and
harmless from and against any and all actions, causes of action, suits, losses,
costs, liabilities and damages, and expenses actually incurred in connection
therewith (irrespective of whether such Bank

Party is a party to the action for which indemnification hereunder is sought),
including reasonable attorneys' fees and disbursements (collectively, the
"Indemnification Liabilities"), incurred by the Bank Parties or any of them as a
result of, or arising out of, or relating to:

(i) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of the Loan; or

(ii) any investigation, litigation, or proceeding related to any
acquisition or proposed acquisition by the Borrower or any of its
Subsidiaries of all or any portion of the stock or all or
substantially all of the assets of any Person, regardless of whether
any Bank Party is a party thereto; or

(iii) the presence on or under, or the escape, seepage leakage,
spillage, discharge, emission, discharging or releases from, any real
property owned or operated by the Borrower or any Subsidiary of any
Hazardous Material (including, without limitation, any losses,
liabilities, damages, injuries, costs, expenses or claims asserted or
arising under the Comprehensive Environmental Response. Compensation
and Liability Act, any so-called "Superfund" or "Superlien" law, or
any other federal, state, local or other statute, law, ordinance,
code, rule, regulation, order or decree regulating, relating to or
imposing liability or standards on conduct concerning, any Hazardous
Material), regardless of whether caused by, or within the control of,
the Borrower or any Subsidiary;

except for any such Indemnification Liabilities arising for the account of a
particular Bank Party which a court of competent jurisdiction shall have
determined in a final proceeding to have arisen by reason of the relevant Bank
Party's gross negligence, bad faith, willful misconduct or breach of contractual
obligation arising under this Agreement and owed to the Borrower (which shall be
the sole responsibility of such Bank Party). The agreements in this Section
shall survive payment of the Loan and the Obligations and all other amounts
payable hereunder.

SECTION 8.13. ENTIRE AGREEMENT. This Agreement, the Note, the Collateral
Documents and the other documents executed in connection herewith constitute the
entire agreement between the parties hereto with respect to the subject matter
hereof. To the extent the terms of the Collateral Documents conflict with the
terms of this Agreement, the terms of this Agreement shall control.

[Intentionally left blank]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.

XXXXXX SHIPYARD, INC.

By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxx
Its: President

XXXXXX INDUSTRIES, INC.

By: /s/ Xxxxxxx X.Xxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxx
Its: President

ORANGE SHIPBUILDING COMPANY, INC.

By: /s/ Xxxxxxx X.Xxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxx
Its: President

WHITNEY NATIONAL BANK

By: /s/ Xxxxx X. Santa Xxxx, III
--------------------------------
Xxxxx X. Santa Xxxx, III
Its: Vice President

EXHIBIT A

1-a. That certain tract or parcel of land, lying and being situated in the CITY
OF XXXXXX CITY, PARISH OF ST. XXXX, State of Louisiana, commencing at a
point on the West boundary line of Front Street, One Hundred and Ten (110')
feet North of its intersection with the North boundary line of the right-
of-way owned by the municipal corporation of Morgan City, La., for
waterworks pipe line to Berwick Bay (or Atchafalaya River), and thence
extending northerly along the said west boundary line of Front Street a
distance of Fifty (50') feet, and between the boundaries so established
having a depth between parallel lines to the margin of Berwick Bay (or
Atchafalaya River). Said tract of land being bounded on the North by
property now or formerly Xxxxx Xxxx Xxxxxx, south by property of X. X.
Xxxxxxxxx, east by Front Street, and west by Berwick Bay (or Atchafalaya
River). Together with all the buildings and improvements, rights, ways,
privileges and servitudes thereon situated and appertaining.

1-b. That certain piece of land, together with all the buildings and
improvements thereon and all of the rights, ways, privileges, servitudes,
appurtenances and advantages thereunto belonging or in anywise
appertaining, being a portion of the property acquired by Xxxxx Xxxx Xxxxxx
from Xxxx Xxxxxx X. Xxxxxxxxx, by an Act of Sale executed before Xxxx
Xxxxxxxx, Notary Public, St. Xxxx Xxxxxx, on the lst day of April, 1941,
and duly recorded in the Conveyance Office of the Parish of St. Xxxx,
Louisiana, situated in the City of Morgan City, La., described as
commencing at a point on the north line of the property as acquired by
Xxxxx Xxxx Xxxxxx from Xxxx Xxxxxx X. Xxxxxxxxx One Hundred and Fifty
(150') feet west of Front Street, thence southerly at right angles a
distance of Fifty (50') feet and with such width the property has a depth
between parallel lines to the Atchafalaya River, being bounded on the North
by property now or formerly of Xxxxxx Xxxxx, east by remaining property of
Xxxxx Xxxx Xxxxxx or assigns, on the South by the property firstly
described herein and on the west by the Atchafalaya River.

Being the same property acquired by Xxxxxx Industries, Inc. by Act of Cash
Sale from Xxxxxxx Xxxxx dated February 23,1988 and recorded February
24,1988 in Book 31-D, Entry No. 222,156 of the Conveyance Records of St.
Xxxx Xxxxxx, Louisiana.

2. That certain tract or parcel of, together with all the buildings and
improvements thereon and all of the rights, ways, privileges, servitudes,
appurtenances and advantages thereunto belonging or in anywise
appertaining, land lying and being situated in the corporate limits of the
CITY OF XXXXXX CITY, PARISH OF ST. XXXX, State of Louisiana, commencing at
the intersection of the North boundary line of the right-of-way owned by
the corporation of Xxxxxx City, for waterworks pipe line to Berwick Bay (or
Atchafalaya River) and the West line of Front Street and from thence
extending northerly along the West line of Front Street for a distance of
One Hundred and Ten (110') feet, and with such frontage having a depth
between parallel lines to the margin of Berwick Bay (or Atchafalaya River).
Being bounded on the North by property of Xxxxxx, on the East by Front
Street on the South

by the City of Xxxxxx City right-of-way, and on the West by Berwick Bay (or
Atchafalaya River).

Being the same property acquired by Xxxxxx Industries, Inc. by Act of Cash
Deed from J. Xxxxxx Xxxxxx, et ux dated May 5, 1987 and recorded in Book
30-J, Entry No. 219,138 of the Conveyance Records of St. Xxxx Xxxxxx,
Louisiana.

3. That certain parcel of land, together with all the buildings and
improvements thereon and all of the rights, ways, privileges, servitudes,
appurtenances and advantages thereunto belonging or in anywise
appertaining, lying and being situated in the CITY OF XXXXXX CITY, ST. XXXX
XXXXXX, Louisiana, designated as a trip of land thirty (30') feet wide
being bound on the North now or formerly by property of Xxxxxx Xxxxx, being
bounded on the East by the floodside of Front Street, and being bounded on
the West by the Atchafalaya River; said property having a front of thirty
(30') feet on the West side of Front Street by a depth between parallel
lines to the Atchafalaya River, all as shown on the attached Plan of Land
attached hereto and made a part hereof; being the same property acquired as
follows:

The South Fifteen (S-15') feet being dedicated to the City of Xxxxxx City
as shown on Xxxxxx Survey and as shown on that plat by Xxxxxxxxx
Subdivision by X. X. Xxxxxxxx, P.E. & City Engineer, recorded June 10, 1910
at St. Xxxx Xxxxxx COB 3-B, Entry No. 38,853; the North fifteen (N-15')
feet being acquired by that Act of Sale with map attached thereto at St.
Xxxx Xxxxxx, COB 3-G, Entry No. 496, recorded July 16, 1912.

Being the same property acquired by Xxxxxx Industries, Inc. by Act of Cash
Sale from Mayor and Councilmen of the City of Xxxxxx City dated February
15, 1988 and recorded in Book 31-C, Entry No. 222,082 of the Conveyance
Records of St. Xxxx Xxxxxx, Louisiana.

4-a. That certain tract or parcel of land together with all buildings,
improvements and appurtenances thereon and thereunto belonging, and all
rights, ways, privileges and servitudes thereunto appertaining, lying and
being situated in the TOWN OF XXXXXX CITY, ST. XXXX XXXXXX, State of
Louisiana, more fully described as being LOT NUMBER ONE (1) IN SQUARE "B"
OF XXXXXXXXX SUBDIVISION, said lot having a frontage on the West side of
Front Street of Sixty-six and eight-tenths (66.8') feet, and extending to
the Atchafalaya River and being bounded on the North by property of unknown
owners, on the East by Front Street, on the South by Lot 2 and on the West
by the Atchafalaya River.

Being the same property acquired by Xxxxxx Industries, Inc. by Act of Cash
Sale from Xxxxxx Xxxxxx Vidos, et al recorded September 4, 1986 in Book 29-
T, Entry No. 216,761 of the Conveyance Records of St. Xxxx Xxxxxx,
Louisiana.

4-b. That certain tract or parcel of land together with all buildings and
improvements thereon and thereunto belonging, and all rights, ways,
privileges and servitudes thereunto appertaining,

lying and being situated in the CITY OF XXXXXX CITY, PARISH OF ST. XXXX,
State of Louisiana, and more particularly described as being the North
Sixteen (16') feet of LOT NUMBER TWO (2) OF SQUARE LETTER "B" OF XXXXXXXXX
SUBDIVISION of said City; the property having a frontage of sixteen (16')
feet on the West side of Front Street, by a depth to the Atchafalaya River,
and being bounded on the North by Lot Number One (1), on the East by Front
Street, on the South by remaining portion of Lot Two (2) and on the West by
the Atchafalaya River.

5. That certain tract or parcel of land, together with all the buildings and
improvements thereon and all of the rights, ways, privileges, servitudes,
appurtenances and advantages thereunto belonging or in anywise
appertaining, lying and being situated in the CITY OF XXXXXX CITY, ST. XXXX
XXXXXX, Louisiana, and more particularly described as being LOT NUMBER TWO
(2) IN SQUARE LETTER "B" OF THE XXXXXXXXX SUBDIVISION of said City, having
a front on the West side of Front Street by a depth to the Atchafalaya
River. Said property having a front of Fifty (50') feet more or less on the
West side of Front Street by a depth to the Atchafalaya River.

Being the same property acquired by Xxxxxx Industries, Inc. by Act of
Exchange from J. Xxxxxx Xxxxxx, et ux dated July 16, 1987 and recorded
July 17, 1987 in Book 30-N, Entry No. 219,839 of the Conveyance Records of
St. Xxxx Xxxxxx, Louisiana.

6. That certain tract of land, together with all the buildings and
improvements thereon and all of the rights, ways, privileges, servitudes,
appurtenances and advantages thereunto belonging or in anywise
appertaining, situated in lying and being situated in the CITY OF XXXXXX
CITY, PARISH OF ST. XXXX, State of Louisiana, and more fully described as
being LOT NUMBER THREE (3) IN SQUARE LETTER "B" OF XXXXXXXXX ANNEX to said
City. Said lot having a front of Sixty-six and 66/100 feet on the West side
of Front Street, and extending back between parallel lines to Berwick Bay.
Said lot or parcel of land being bounded on the North by Lot No. Two (2),
Square Letter "B" of Xxxxxxxxx Annex, on the East by Front Street, on the
South by Lot No. Four (4), Square Letter "B" of Xxxxxxxxx Annex and on the
West by Berwick Bay. Together with all buildings and improvements thereon
situated and all rights, ways, privileges and servitudes thereunto
belonging and appertaining.

Being the same property acquired in part by Xxxxxx Industries, Inc. by Act
of Cash Sale from Royal X. Xxxxx, et al recorded September 29, 1976 and
recorded in Book 19-Y, Entry No. 167,335 of the Conveyance Records of
St. Xxxx Xxxxxx, Louisiana; and by Xxxxxx Industries, Inc. by Act of Cash
Sale from Xxxxxxx Xxxxxxxx, et al recorded September 29, 1976 and recorded
in Book 19-Y, Entry No. 167,336 of the Conveyance Records of St. Xxxx
Xxxxxx, Louisiana.

7-a. That certain tract or parcel of land, lying and being situated in the
corporate limits of the City of Xxxxxx City, Parish of St. Xxxx, State of
Louisiana, known, designated and described as

being the South Thirty-three and Six-tenths (33.6') feet of Lot Number Five
(5) and all of. Lots Numbers Six (6) and Seven (7) in Square "B" of the
Xxxxxxxxx Subdivision of said City: The property having a front on the West
side of Front Street of One Hundred Sixty-seven and two-tenths (167.2')
feet, and having a depth between parallel lines to the Atchafalaya River of
Berwick Bay. Said property being bounded on the North by property herein
after described; on the South by property of Xxxxx Xxxxxxxxx or assigns.
Together with all the batture, accretions, alluvion, build up or filled
inland on or in Berwick Bay, adjoining and abutting upon the said lots, as
well as any and all rights, ways and privileges and servitudes of any kind
and every kind and character thereunto belonging or appertaining.

7-b. That certain tract or parcel of land, lying and being situated in the
corporate limits of the City of Xxxxxx City, Parish of St. Xxxx, State of
Louisiana, known, designated and described as being all of Lot Number
Four (4) and the North Thirty-three and two-tenths (33.2') feet of Lot
Number Five (5) in Square "B" of the Xxxxxxxxx Subdivision of said City.
The property having a front on the west side of Front Street of One Hundred
(100') feet and having a depth between parallel lines to the Atchafalaya
River or Berwick Bay. Said property being bounded on the North by Xxx Xx. 0
xx Xxxxxx "X" property of Xxxxxx Xxxxx, on the South by the remaining
portion of Lot No. 5 in Square "B" hereinabove described, on the East by
Front Street and on the West by Atchafalaya River or Berwick Bay.

Being the same property acquired by Xxxxxx Industries, Inc. by Act of Sale
recorded November 7, 1953 in Book 8-M, Entry No. 88,053 of the Conveyance
Records of St. Xxxx Xxxxxx, Louisiana.

8. That certain tract or parcel of land, together with all the buildings and
improvements thereon and all of the rights, ways, privileges, servitudes,
appurtenances and advantages thereunto belonging or in anywise
appertaining, lying and being situated in the CITY OF XXXXXX CITY, ST. XXXX
XXXXXX, Louisiana, known, designated and described as being LOT NO.
EIGHT (8) IN SQUARE "B" in the Xxxxxxxxx Annex to Xxxxxx City and having a
front on the West side of Front Street of Sixty-six feet and eight inches
(66'8") by a depth between said Front Street and Berwick Bay of Two Hundred
Eighty-five (285') feet, more or less, on the South line and Two Hundred
Seventy (270') feet, more or less, on the North line. Said Lot No. Eight
(8) in Square "B" of the Xxxxxxxxx Annex being more fully described as
being bounded on the North by Lot Seven (7) of Square "B", on the East by
Front Street, on the South by Lot Nine (9) of Square "B" and on the West by
Berwick Bay.

Being the same property acquired by Xxxxxx Industries, Inc. by Act of Cash
Sale from Xxxxx Xxxxxxxxx Xxxxxxxx, et al, dated December 29,1975 and
recorded January 5,1976 in Book 19-L, Entry No. 164,488 of the Conveyance
Records of St. Xxxx Xxxxxx, Louisiana.

CITY, PARISH OF ST. XXXX, State of Louisiana, and more particularly
described as LOT NUMBER NINE (9) IN SQUARE LETTER "B" IN XXXXXXXXX
SUBDIVISION of said town, according to a map thereof recorded in the
Recorder's Office at Franklin, Louisiana, in Book 3-B, Entry No. 38,855.

Said property having a front on the West side of the public road (now Front
Street of Morgan City, Louisiana) of Sixty-six and 8/10 (66.8') feet by a
depth between parallel lines of Three Hundred (300') feet on the South side
and Two Hundred Eighty Five (285') feet on the North line. Bounded North by
Lot Number Eight (8) of said Square, East by said public road (nor Front
Street of Morgan City, Louisiana) South by a lane, and West by Berwick Bay
or the Atchafalaya River.

Being the same property acquired by Xxxxxx Industries, Inc. by Act of Cash
Sale recorded January 13,1978 in Book 20-X, Entry No. 173,263 of the
Conveyance Records of St. Xxxx Xxxxxx, Louisiana.

10. That certain lot or parcel of land, together with all the buildings and
improvements thereon and all of the rights, ways, privileges, servitudes,
appurtenances and advantages thereunto belonging or in anywise
appertaining, lying and being situated in the CITY OF XXXXXX CITY, ST. XXXX
XXXXXX, State of Louisiana and more particularly described as having a
front of fifteen (15') feet on the xxxx xxxx xx Xxxxx Xxxxxx by a depth
between parallel lines extending to Berwick Bay (Atchafalaya River). Said
tract of land being shown and designated on the map of Xxxxxxxxx
Subdivision to the City of Xxxxxx City dated June 10, 1910 and recorded on
June 10, 1910 in Book 3-B, Page 244, Entry No. 38,853 of the Conveyance
Records of St. Xxxx Xxxxxx, Louisiana, and DESIGNATED THEREON AS A FIFTEEN
(15') FOOT RIGHT-OF-WAY OR ALLEY ADJACENT TO AND IMMEDIATELY SOUTH OF LOT
NINE (9) BLOCK B OF THE XXXXXXXXX SUBDIVISION. The said tract of land being
bounded on the west by Front Street on the East by Berwick Bay (Atchafalaya
River), on the north by Lot Nine (9), Square B of Xxxxxxxxx Subdivision
(now the property of Xxxxxx Industries, Inc.) and on the south by property
of Xxxxxx Industries, Inc. acquired by Act of Sale recorded in Book 35-F,
Entry No. 238,092 of the Conveyance Records of St. Xxxx Xxxxxx, Louisiana.

Being the same property acquired by Xxxxxx Industries, Inc. by an Ordinance
of Abandonment adopted by the City of Xxxxxx City on the 28th day of
September, 1993, being Ordinance 93-10 of the City of Xxxxxx City, which
Ordinance is recorded in Book 36-K, Entry No. 248,156 of the Conveyance
Records of St. Xxxx Xxxxxx, Louisiana and being the same property described
in an Affidavit of Xxxxxx Industries, Inc. recorded Book 36-K, Entry
No. 243, 185 of the Conveyance Records of St. Xxxx Xxxxxx, Louisiana.

as Tiger Island Plantation, measuring Eighty-six (86') feet on Front
Street, by a depth of Two Hundred Eighty-six (286') feet, between parallel
lines, more or less, from said Front Street to Berwick Bay; the tract being
bounded, now or formerly, on the North by lands of X. X. Xxxxxxxxx, on the
East by Front Street, on the South by the Xxxxxxxx Xxxxxx Subdivision,
formerly Xxxxxxxx, and West by Berwick Bay, together with all improvements
and appurtenances thereon situated, and thereunto belonging.

Being the same property acquired by Xxxxxx Industries, Inc. by Act of Cash
Sale from Stella Gloriosa Xxxxx, et al., recorded May 13, 1992 in Book
35-F, Entry No. 238,092 of the Conveyance Records of St. Xxxx Xxxxxx,
Louisiana.

12. That certain lot or parcel of land, together with all the buildings and
improvements thereon and all of the rights, ways, privileges, servitudes,
appurtenances and advantages thereunto belonging or in anywise
appertaining, known, designated and described as LOT "F" IN BLOCK NUMBER
THREE (3), XXXXXX ANNEX TO THE TOWN OF XXXXXX CITY, PARISH OF ST. XXXX,
State of Louisiana, according to the map or plan of survey, of said
subdivision of file and of record in the Recorder's Office in Book 22 of
Conveyances at Page 516 and according to which said lot has a front on the
North side of Xxxxxxxx Street of Fifty (50') feet by a depth between
parallel lines of One Hundred (100') feet; and

That certain tract or parcel of land, together with all the buildings and
improvements thereon and all of the rights, ways, privileges, servitudes,
appurtenances and advantages thereunto belonging or in anywise
appertaining, lying and being situated in the CITY OF XXXXXX CITY, PARISH
OF ST. XXXX, State of Louisiana, more fully described as being situated on
the West side of Lot "F" in Block 3 of the Xxxxxx Annex to Xxxxxx City and
extending West to the Atchafalaya River; bounded on the North by property
now or formerly of Xxxxxxx Xxxxx and extending South to a point Six and
One-half (6 1/2') feet front on the North side of Xxxxxxxx Street, bounded
on the East by the said Lot F, Block 3 of the Xxxxxx Annex and West by the
Atchafalaya River (Berwick Bay).

Being the same property acquired by Xxxxxx Industries, Inc. by Act of Cash
Sale from Xxxxxx X. Xxxxxxxxx, et ux., dated July 9, 1993 and recorded July
14, 1993 in Book 36-F, Entry No. 242,330 of the Conveyance Records of St.
Xxxx Xxxxxx, Louisiana.

13. That certain tract or parcel of land, together with all buildings and
improvements thereon situated, and all rights, ways, privileges and
appurtenances thereunto belonging or in anywise appertaining, lying and
being situated in the CITY OF XXXXXX CITY, ST. XXXX XXXXXX, Louisiana, on
the East side of the Atchafalaya River, and more fully described as being
lot lettered "A" in Block No. Three (3) of Xxxxxx'x Annex to the City,
according to the survey thereof as made by X. X. Xxxxxxxx; the lot herein
measuring Fifty (50') feet, fronting on the xxxx xxxx xx Xxxxx Xxxxxx by a
uniform depth of One Hundred (100') feet.

Being the same property acquired by Xxxxxx Industries, Inc. by Act of Cash
Sale from Xxxx X. Xxxxxx dated October 21,1993 and recorded October 22,
1993 in Book 36-K, Entry No. 242,271 of the Conveyance Records of St. Xxxx
Xxxxxx, Louisiana.

14. That certain tract or parcel of land, together with all the buildings and
improvements thereon and all of the rights, ways, privileges, servitudes,
appurtenances and advantages thereunto belonging or in anywise
appertaining, lying and being situated in the lower end of the PARISH OF
ST. XXXX, in Section 00, Xxxxxxxx 00 Xxxxx, Xxxxx 13 East, Southeastern
Land District of Louisiana, forming part of the tract acquired by Xxxxxxx
Xxxxxx from the Jeanerette Lumber & Shingle Company, Ltd., by act dated
August 6, 1918 and duly recorded in Book 3-T, Page 304, Entry No. 45,346 of
Conveyance Records, St. Xxxx Xxxxxx, Louisiana. The tract herein being more
particularly described as follows: Beginning at a Point "A" at the
northeast corner thereof, on the west side of the right-of-way limits of
U.S. Highway 90, thence a distance of 544.7' feet, more or less, to Point
"F" on the water's edge of Bayou Boeuf; thence along the water's edge of
Bayou Boeuf in a southeasterly direction to Point "E"; thence North 49
degrees east 300 feet, more or less, to Point "D"; thence South 30 degrees
27 minutes East 42 feet, more or less, to Point "C"; thence North 53
degrees 28 minutes east 445.5 feet, more or less, to Point "B" on the
right-of-way limits of U.S. Highway 90; thence North 41 degrees West along
said right-of-way limits 1075.7 feet, more or less, to Point "A".

The said tract containing a total acreage of 15.63 acres, all as shown and
designated on survey of X.X. Xxxxxx dated May 7, 1946 attached to that act
recorded May 21, 1946 in St. Xxxx Xxxxxx COB 6-V, Folio 77, under Entry
No. 74,242.

Together with all of the property which Mortgagor owns to the water's edge.
This includes the property which lies within the extension of the line
between Points "D" and "E" to the water's edge and the extension of the
line between Points "A" and "F" to the water's edge.

Together with whatever reversionary rights Mortgagor may have in and to the
old roadbed running across said property as shown on the survey described
above.

Municipal address of the above described property is: 0000 X.X. Xxxxxxx 00
Xxxx, Xxxxxx, Xxxxxxxxx.

Being the same property acquired by Xxxxxx Industries, Inc. from Marine
Shale Processors, Inc., as per act registered on July 17, 1996, in
Conveyance Book 00-X, xxxxx 000, Xxxxx Xx. 000000.

LOUISIANA, the said lot having a front on the north side of Xxxxxxxx Street
of Fifty (50') feet by a depth between parallel lines of One Hundred (100')
feet; to include all buildings and improvements situated thereon.

This property bears municipal number 000 Xxxxxxxx Xxxxxx, Xxxxxx Xxxx,
Xxxxxxxxx 00000.

Being the same property acquired by Xxxxxx Industries, Inc. from Xxxxx
Xxxxxx Xxxxx and Xxxxxx Xxxxx Crochet, as per act passed before Xxxx X.
Xxxxx, Notary Public, registered on November 20, 1996, in Conveyance Book
00-0, Xxxxx Xx. 000,000, Xx. Xxxx Xxxxxx, Xxxxxxxxx.

16. That certain lot of ground, together with all the buildings and
improvements thereon and all of the rights, ways, privileges, servitudes,
appurtenances and advantages thereunto belonging or in, anywise
appertaining, lying and being situated in the PARISH OF ST. XXXX, State of
Louisiana, on the East side of Atchafalaya River, and more particularly
described as being LOT NUMBERED LETTER "D" OF XXXXXX'X ANNEX TO THE TOWN OF
XXXXXX CITY, according to the Map and Plan of Survey thereof recorded in
Conveyance Book "SS" Entry No. 34,598, of the records of the Parish of St.
Xxxx, LOT D measuring fifty (50') feet in width by a depth between parallel
lines of one hundred (100') feet; and subject to the following correction
of the plat of survey of said subdivision hereinabove referred to, to-wit:
That the street marked on said map "Xxxxxxxx Street" extends and is opened
as a public thoroughfare only from the river on the west to the west
boundary lines of Lots Number 38 in Block Two, and of Lot 10 in Block One
of said subdivision.

Being the same property acquired by Xxxxxx Industries, Inc. from Xxxxxx X.
Xxxxxxx, Xx., et al., as per act passed before Xxxxxx X. Xxxxxxx, Xx.,
Notary Public, registered on June 6, 1994, in Conveyance Book 00-X, Xxxxx
Xx. 000,000, Xx. Xxxx Xxxxxx, Xxxxxxxxx.

17. That certain tract or parcel of ground, together with all the buildings and
improvements thereon and all of the rights, ways, privileges, servitudes,
appurtenances and advantages thereunto belonging or in anywise
appertaining, lying and being situated in the corporate limits of the City
of Xxxxxx City, PARISH OF ST. XXXX, State of Louisiana, on the East side of
the Atchafalaya River, known, designated and described as being LOT
NUMBERED LETTER "C" OF XXXXXX ANNEX TO THE TOWN OF XXXXXX CITY (now City of
Xxxxxx City) according to the plan of survey thereof, of record in the
Parish, in Conveyance Book SS, Entry No. 34,498. The said lot measures
Fifty (50') feet in width by a depth between parallel lines of One Hundred
(100') feet; and subject to the following correction of the. plan of survey
and subdivision hereinabove mentioned, to-wit: That the street marked on
said map "Xxxxxxxx Street" extends and is opened as a public thoroughfare
only from the river on the west, to the west boundary line of Lot No.
Thirty-eight (38) in Block Two (2) and of Lot Ten (10) in Block One (1) of
said subdivision.

Being the same property acquired by Xxxxxx Industries, Inc. from Xxxxxxx X.
Xxxxxx and Xxxxx Xxx Xxxxxx Xxxxxx, as per act passed before Xxxx X. Xxxxx,
Notary Public, dated July 21, 1997, registered in Conveyance Book 00-X,
Xxxxx Xx. 000,000, Xx. Xxxx Xxxxxx, Xxxxxxxxx.

EXHIBIT B

TRACT NO. ONE:

West One half (1/2) of Lots Nos. Five (5) and Six (6), Block No. (1) of the
Calder Survey of the City of Orange, Orange County, Texas. SAVE AND EXCEPT
THEREFROM the 70 foot x 70 foot tract conveyed to Xxxxx Xxxxxx by deed
dated March 9, 1945 of record in Volume 82, page 377, Deed Records of
Orange County, Texas.

TRACT NO. TWO:

Being a part of Lots Five (5) and Six (6) in Block Number One (1), of the
CALDER SURVEY to the City of Orange, Orange County, Texas, according to the
plat thereof on file in the County Clerk's office in Orange County, Texas,
and such part being described as follows:

BEGINNING at an iron stake in the Southeast corner of the above described
tract of land;

THENCE West along and parallel with Georgia Street seventy (70) feet to an
iron stake for corner;

THENCE North seventy (70) feet to an iron stake for corner;

THENCE East seventy (70) feet to an iron stake for corner;

THENCE South seventy (70) feet to an iron stake for corner and to the PLACE
OF BEGINNING.

TRACT NO. THREE-A:

All that certain tract or parcel of land lying and being situated in Orange
County, Texas, a part of the XXXXXX XXXXXXX SURVEY, ABSTRACT NO. 59 and
being a part of that certain "portion of the right-of-way of Xxxxxxxx
Avenue located between Border Street and Market Street" which was
"abandoned and vacated as a street" by the City of Orange Ordinance No.
1982-2 "passed, approved and adopted on final reading" January 26, 1982,
and the said tract herein described being more particularly described as
follows:

COMMENCING at an iron pin found for the westerly corner of Xxx 0, Xxxxx 0
xx Xxxxxx Addition and northerly corner of Xxx 0 xx xxx xxxx Xxxxx 0 xx
Xxxxxx Addition, the said corner being in the southeasterly right-of-way
line of the said Xxxx Avenue, the said Calder Addition being indicated on
that, certain plat of record in Volume 1, Page 76 of the Map Records of
Orange County, Texas, and the said iron pin being South 43 deg. 21 min.
30 sec. West along and with the northwesterly line of the said Lot 1,
northwesterly line of the said Block 1, and said southeasterly right-of-way
line of Xxxx Avenue a distance of 140.02 feet from another iron pin found
for reference at the northerly corner of the said Lot 1 and northerly
corner of the said Block 1 at the intersection of the said southeasterly
right-of-way line of Xxxx Avenue with the southwesterly right-of-way line
of Water Street;

THENCE South 43 deg. 21 min. 30 sec. West along and with the northwesterly line
of the said Xxx 0, xxxx xxxxxxxxxxxxx xxxx xx Xxxxx 0, and said southeasterly
right-of-way line of Xxxx Avenue a distance of 140.00 feet to a point for the
westerly corner of the said Lot 8 and westerly corner of the said Block 1 at the
intersection of the said southeasterly right-of-way line of Xxxx Avenue with the
northeasterly right-of-way line of the said Market Street, the said point for
corner being North 46 deg. 47 min. 36 sec. West a distance of 279.27 feet from a
3/4-inch pipe found for reference;

THENCE North 46 deg. 38 min. 30 sec. West along and with a northwesterly
extension of the southwesterly line of the said Lot 8, southwesterly line of the
said Block 1 and said northeasterly right-of-way line of Market Street a
distance of 60.00 feet to an iron pin set for a corner at the intersection of
the said northeasterly right-of-way line of Market Street with the northwesterly
right-of-way line of the said Xxxx Avenue;

THENCE South 43 deg. 21 min. 30 sec. West along and with the said northwesterly
right-of-way line of Xxxx Avenue (as extended across the said Market Street) a
distance of 60.00 feet to an iron pin set for the easterly corner of Lot, 6,
Block 18 of the said Calder Addition and easterly corner of the said Block 18 at
the intersection of the said northwesterly right-of-way line of Xxxx Avenue with
the southwesterly right-of-way line of the said Market Street;

THENCE North 46 deg. 38 min. 30 sec. West along and with the northeasterly line
of the said Block 18 and said southwesterly right-of-way line of Market Street a
distance of 417.19 feet to an iron pin set for the southeast corner and POINT OF
BEGINNING of the said tract herein described, the said corner being a northerly
corner of Xxx 0 xx xxx xxxx Xxxxx 00 xx Xxxxxx Addition and northeast corner of
the said Block 18 and the southeast corner of the hereinbefore said portion of
the right-of-way of Xxxxxxxx Avenue located between Border Street and Market
Street which was "abandoned and vacated as a street" by the City of Orange
Ordinance No. 1982-2, the said corner being at the intersection of the said
southwesterly right-of-way line of Market Street with the southerly right-of-way
line of the said Xxxxxxxx Xxxxxx;

XXXXXX Xxxxx 00 deg. 46 min. 45 sec. West along and with the northerly lines of
the said Xxx 0, Xxx 00 of the said Block 18, Lot 14 of the said Block 18 and the
said Block 18 and said southerly right-of-way line of Xxxxxxxx Avenue a distance
of 195.71 feet to an iron pin set for the southwest corner of the said tract
herein described, the said corner being the northwest corner of the said Lot 14
and easterly corner of Lot 15 of the said Block 18;

THENCE North 43 deg. 21 min. 30 sec, East along and with a northeasterly
extension of the northwesterly line of the said Lot 14 and southeasterly line of
the said Lot 15 a distance of 13.70 feet to an iron pin set for an angle point
and an interior corner of the said tract herein described, the said corner being
50.00 feet southerly from (measured perpendicularly to) the northerly right-of-
way line of the said Xxxxxxxx Xxxxxx;

XXXXXX Xxxxx 00 deg. 36 min. 32 sec. West a distance of 62.47 feet to an iron
pin set for the northwest corner of the said tract herein described, the said
corner being in the said northerly right-of-way line of Xxxxxxxx Avenue, and the
said corner being the southwest corner of Xxx 0 xx Xxxxx 0 xx xxx X. X. Xxxxxxx
Subdivision and southeast corner of Lot 9 of the said Block 3, the said X. X.
Xxxxxxx Subdivision being indicated on that certain plat titled "Xxxxxx'x
Subdivision of

the Xxxxxxx & Gates Surveys" of record in Volume 1, Page 10 of the Map
Records of Orange County, Texas, and the said iron pin being South 0 deg.
13 min. 15 sec. West along and with the westerly line of the said Lot 8 and
easterly line of the said Lot 9 a distance of 50.00 feet from a square
headed bolt found for the northwest corner of the said Lot 8, northeast
xxxxx of the said Xxx 0, xxxxxxxxx xxxxx xx Xxx 00 of the said Block 3,
southwest xxxxx of Lot 7 of the said Block 3 and southwest xxxxx of that
certain tract of land hereinafter referred to as the "Xxxxxxx" tract, which
said Xxxxxxx tract being described in that certain instrument from Xxxx
Xxxx Xxxxxxx to Xxxxxxx X. Xxxxxxx dated June 24, 1988 and recorded in
Volume 691, Page 717 of the Official Public Records of Real Property of
Orange County, Texas, the said square headed bolt found for the southwest
corner of the said Xxxxxxx tract being South 0 deg. 19 min. 15 sec. West
along and with the westerly line of the said Xxxxxxx tract, westerly line
of the said Xxx 0, Xxx 0 of the said Block 3 and Lot 5 of the said Block 3
and easterly lines of the said Xxx 00, Xxx 00 of the said Block 3 and Lot
12 of the said Block 3 a total distance of 150.09 feet from another square
headed bolt found for reference at the northwest corner of the said Xxxxxxx
tract, the said northwest corner of the Xxxxxxx tract being the northwest
xxxxx of the said Xxx 0, xxxxxxxxx xxxxxx xx Xxx 0 of the said Block 5,
southeast xxxxx of Lot 13 of the said Block 3 and northeast corner of the
said Lot 12;

THENCE South 89 deg. 46 min. 45 sec. East along and with the southerly line
of the said Lot 8, southerly line of the said Block 3 and said northerly
right-of-way line of Xxxxxxxx Avenue a distance of 165.00 feet to an iron
pin set for the northeast corner of the said tract herein described, the
said xxxxx being the southeast corner of the said Lot 8, southeast xxxxx of
the said Block 3 and northeast corner of the said portion of the right-of-
way of Xxxxxxxx Avenue "abandoned and vacated as a street" by the City of
Orange Ordinance No. 1982-2, the said corner being at the intersection of
the said northerly right-of-way line of Xxxxxxxx Avenue with the westerly
right-of-way line of the hereinbefore said Market Street;

THENCE South 0 deg. 13 min. 15 sec. West along and with a southerly
extension of the easterly line of the said Block 3 and said westerly right-
of-way line of Market Street a distance of 4.92 feet to an iron pin set for
an angle point and an interior corner of the said tract herein described,
the said xxxxx being at the intersection of the said southerly extension of
the easterly line of Block 3 and westerly right-of-way line of Market
Street with the northwesterly extension of the hereinbefore said
northeasterly line of Block 18 and southwesterly right-of-way line of
Market Street;

THENCE South 46 deg. 38 min. 30 sec. East along and with the said
northwesterly extension of the northeasterly line of Block 18 and
southwesterly right-of-way lice of Market Street a distance of 80.55 feet
to the POINT OF BEGINNING and Containing 0.235 acre of land, more or less.

TRACT NO. THREE-B:

All that certain tract or parcel of land lying and being situated in Orange
County, Texas, a part of the XXXXXXXXX XXXXXX SURVEY, ABSTRACT NO. 56 and a
part of the XXXXXX XXXXXXX SURVEY, ABSTRACT NO. 59 and being a part of
Market Street, and the said tract herein described being all of that
portion of Market Street right-of-way which is located southerly from an
easterly extension of the northerly line of Xxx 0, Xxxxx 0 of the X. X.
Xxxxxxx Subdivision and also northwesterly from the northwesterly right-of-
way line of Xxxx Avenue (as

extended across the said Market Street right-of-way), the said X. X. Xxxxxxx
Subdivision being indicated on that certain plat titled "Xxxxxx'x Subdivision of
the Xxxxxxx & Xxxxx Surveys" of record in Volume 1, Page 10 of the Map Records
of Orange County, Texas, and the said tract herein described being more
particularly described as follows:

COMMENCING at an iron pin found for the westerly corner of Xxx 0, Xxxxx 0 xx
Xxxxxx Addition and northerly corner of Xxx 0 xx xxx xxxx Xxxxx 0 xx Xxxxxx
Addition, the said xxxxx being in the southeasterly right-of-way line of the
said Xxxx Avenue, the said Calder Addition being indicated on that certain plat
of record in Volume 1, Page 76 of the Map Records of Orange County, Texas, and
the said iron pin being South 43 deg. 21 min. 30 sec. West along and with the
northwesterly line of the said Lot 1, northwesterly line of the said Block 1,
and said southeasterly right-of-way line of Xxxx Avenue a distance of 140.02
feet from another iron pin found for reference at the northerly corner of the
said Lot 1 and northerly corner of the said Block 1 at the intersection of the
said southeasterly right-of-way line of Xxxx Avenue with the southwesterly
right-of-way line of Water Street;

THENCE South 43 deg. 21 min. 30 sec. West along and with the northwesterly line
of the said Xxx 0, xxxx xxxxxxxxxxxxx xxxx xx Xxxxx 0, and said southeasterly
right-of-way line of Xxxx Avenue a distance of 140.00 feet to a point for the
westerly xxxxx of the said Lot 8 and westerly corner of the said Block 1 at the
intersection of the said southeasterly right-of-way line of Xxxx Avenue with the
northeasterly right-of-way line of the said Market Street, the said point for
corner being North 46 deg. 47 min. 36 sec. West a distance of 279.27 feet from a
3/4-inch pipe found for reference;

THENCE North 46 deg. 38 min. 30 sec. West along and with a northwesterly
extension of the southwesterly line of the said Lot 8, southwesterly of the said
Block 1 and said northeasterly right-of-way line of Market Street a distance of
60.00 feet to an iron pin set for the most easterly corner and POINT OF
BEGINNING of the said tract herein described, the said corner being at the
intersection of the said northeasterly right-of-way line of Market Street with
the hereinbefore said northwesterly right-of-way line of Xxxx Avenue;

THENCE South 43 deg. 21 min. 30 sec. West along and with the said northwesterly
right-of-way line of Xxxx Avenue (as extended across the said Market Street) a
distance of 60.00 feet to an iron pin set for the most southerly corner of the
said tract herein described, the said corner being the easterly corner of Xxx 0,
Xxxxx 00 of the said Calder Addition and easterly corner of the said Block 18 at
the intersection of the said northwesterly right-of-way line of Xxxx Avenue with
the southwesterly right-of-way line of the said Market Street; .

THENCE North 46 deg. 38 min. 30 sec. West along and with the northeasterly line
of the said Block 18 and said southwesterly right-of-way line of Market Street
passing at a distance of 417.19 feet an iron pin set. for a northerly corner of
Xxx 0 xx xxx xxxx Xxxxx 00 xx Xxxxxx Addition and northeast corner of the said
Block 18 and southeast corner of that certain portion of the right-of-way of
Xxxxxxxx Avenue located between Border Street and Market Street which was
"abandoned and vacated as a street" by the City of Orange Ordinance No. 1982-2
passed, approved and adopted on final reading January 26, 1982, the said corner
being at the intersection of the said southwesterly right-of-way line of Market
Street with the southerly right-of-way line of the said Xxxxxxxx Avenue, and
continuing (North 46 deg. 38 min. 30 sec. West) along and with

a northwesterly extension of said northeasterly line of Block 18 and said
southwesterly right-of-way line of Market Street a total distance of 497.74
feet to an iron pin set an angle point and the most westerly corner of the
said tract herein described, the said angle point and corner being at the
intersection of the said northwesterly extension of the northeasterly line
of Block 18 and southwesterly right-of-way line of Market Street with a
southerly extension of the easterly line of the herein before said Block 3
of the X. X. Xxxxxxx Subdivision and westerly right-of-way line of Market
Street;

THENCE North 0 deg. 13 min. 15 sec. East along and with the said extension
of the easterly line of Block 3 and westerly right-of-way line of Market
Street a distance of 4.92 feet to an iron pin set for the southeast corner
of Lot 8 of the said Block 3, southeast corner of the said Block 3 and
northeast corner of the said portion of the right-of-way of Xxxxxxxx Avenue
"abandoned and vacated as a street" by the City of Orange Ordinance No.
1982-2, the said corner being at the intersection of the said westerly
right-of-way line of Market Street with the northerly right-of-way line of
the said Xxxxxxxx Xxxxxx;

XXXXXX Xxxxx 00 deg. 44 min. 22 sec. East a distance of 63.60 feet to an
iron pin set for a corner and an angle point, the said corner and angle
point being at the intersection of the said easterly right-of-way line of
Market Street with the northeasterly right-of-way line of the said Market
Street;

THENCE South 46 deg. 38 min. 30 sec. East along and with the said
northeasterly right-of-way line of Market Street a distance of 471.74 feet
to the POINT OF BEGINNING and containing 0.672 acre of land, more or less.

TRACT NO. FOUR:

(KNOWN AS OR-5)

Being a part of the XXXXXXXXX XXXXXX SURVEY, ABSTRACT NO. 56, Orange
County, Texas, and known as a part of the Xxxxxx-Link Mill Tract, as
described in a deed dated December 10, 1940, from the Xxxxx Xxxxx Lumber
Company to The Lutcher and Xxxxx Lumber Company, recorded in Volume 66,
page 260, Deed Records of Orange County, Texas, and being known as Xxxxx
XX-0 in that certain deed dated November 3, 1970, from The Lutcher and
Xxxxx Lumber Company to Boise Southern Company and recorded in Volume 403,
page 1, Deed Records of Orange County, Texas, reference being hereby made
to said deeds for descriptive purposes, said Xxxxx XX-0 containing 2.099
acres of land.

(KNOWN AS OR-6)

Being a part of the XXXXXX CORDUROY HEADRIGHT SURVEY, ABSTRACT NO. 59,
Orange County, Texas, and known as a part of the Xxxxxx-Link Mill Tract, as
described in a deed dated December 10, 1940, from Xxxxx-Xxxxx Lumber
Company to the Lutcher and Xxxxx Lumber Company, and recorded in Volume 66,
page 260, Deed Records of Orange County, Texas, SAVE AND EXCEPT:

(a) That 107.35 feet x 25 feet tract described in deed dated October 31, 1952,
from the Lutcher and Xxxxx Lumber Company to Xxxxxx Towing Company, and recorded
in Volume 149, page 42, Deed Records of Orange County, Texas;

(b) That 3.781 acre tract as described in deed dated February 7, 1957, from The
Lutcher and Xxxxx Lumber Company to W. E. Xxxxxxx and X. X. Xxxxxx and recorded
in Volume 202, page 556, Deed Records of Orange County, Texas;

(c) That 0.012 acre tract as described in deed dated March 5, 1957, from The
Lutcher and Xxxxx Lumber Company to Xxxxxx Towing Company, and recorded in
Volume 211, page 105, Deed Records of Orange County, Texas:

said tract herein described containing 6.035 acres of land and being known as
Xxxxx XX-0 in that certain deed dated November 3, 1970, from The Lutcher and
Xxxxx Lumber Company to Boise Southern Company and recorded in Volume 403, page
1, Deed Records of Orange County, Texas, reference to said deed being hereby
made for descriptive purposes.

Said tracts of land hereinabove described as OR-5 and OR-6 are more particularly
described by metes and bounds as follows:

BEGINNING at the southeast corner of that certain tract or parcel of land
heretofore conveyed to X. X. Xxxxxx and W. E. Xxxxxxx by The Lutcher and Xxxxx
Lumber Company by deed dated February 7, 1957, recorded in Volume 202, page 556,
Deed Records of Orange County, Texas, a two-inch iron pipe re-set on February
15, 1972;

THENCE South 77 degrees 00 minutes West, along the south line of said X. X.
Xxxxxx and W. E. Xxxxxxx tract, a distance of 419.25 feet to point for corner in
the west right-of-way line of Market Street, a 1" iron pipe for xxxxx;

THENCE South 442.23 feet to point for corner, a 1" iron pipe;

THENCE South 46 degrees 57 minutes 30 seconds East, continuing along an Easterly
line of said Market Street, a distance of 474.0 feet to a 1" iron pipe for
corner;

THENCE North 43 degrees 21 minutes 30 seconds East, a distance of 415.45 feet to
point for 4" iron pipe in concrete with brass plaque, for the northeast corner
of the X. Xxxxxx Survey and the southeast corner of the Xxxxxx Xxxxxxx,Survey,
at its intersection with the west bank of the Sabine River;

THENCE meandering along and with the west bank of the Sabine River, as follows:

North 23 degrees 28 minutes West, 158.32 feet to a 3" iron pipe in
concrete;

North 26 degrees 16 minutes 30 seconds West 152.89 feet to a 4" iron pipe
in concrete;

North 18 degrees 29 minutes 30 seconds West, a distance of 290.98 feet to
the PLACE OF BEGINNING of the tract herein conveyed;

containing 8.226 acres, more or less, lying xxxx xx Xxxxxx Xxxxxx right of
way.

TRACT NO. FIVE-A:

Being a part of the XXXXXXXXX XXXXXX SURVEY, ABS. 56, Orange County, Texas
and being more particularly described as Block No. 18, Lots 1, 2, 3, 4, 9,
10, 11, 12, 13 and 14, as described in Tract 1, and, Block 18, Lots 5, 6, 7
and 8, as described in Tract 2, in Deed dated Dec. 17, 1964, from H. J. L.
Xxxxx to The Lutcher and Xxxxx Lumber Co., recorded in Vol. 330, page 61 of
the Deed Records of Orange County, Texas, said tract being the same as OR-3
in Deed from Lutcher and Xxxxx Lumber Co. to Boise So. Co., dated Nov. 3,
1970, recorded in Vol. 403, page 1, Deed Records of Orange County, Texas.

TRACT NO. FIVE-B:

Being a part of the X. XXXXXXX SURVEY, ABS. NO. 59, Orange County, Texas,
and being Xxxxx 0, Xxxx 0, 0 xxx 0, X. X. XXXXXXX SUBDIVISION, as described
in a Sheriff's deed dated May 15, 1945, from X. X. Xxxxxxxxx, Sheriff, to
The Lutcher and Xxxxx Lumber Company and recorded in Vol. 84, page 105 of
the Deed Records of Orange County, Texas, said tract being the same as OR-7
in that deed from the Xxxxxxx Xxxxx Lbr. Co., recorded in Vol. 403, page 1
of the Deed Records of Orange County, Texas.

SAVE AND EXCEPT from the above described Tract No. Five-B that certain
conveyance from X. X. Xxxxx, and wife, Xxxxx Xxxxx, to Xxxxxxx Xxxxxxx, and
wife, Xxxx Xxxxxxx, dated June 29, 1987, and recorded in Volume 659, Page
673, Official Public Records of Real Property of Orange County, Texas, and
conveying Xxxx 0 & 0, xxxxx 0, X. X. Xxxxxxx Subdivision.

TRACT NO. SIX:

140' x 140' tract being lots 7 and 8, Block 1 of CALDER ADDITION, a
subdivision in the city of Orange, Orange County, Texas, according to the
map thereof of record in Vol. 1, page 76 of the Map Records of
Orange County, Texas to which reference is made.

Being the same property described in conveyance from Xxxxxx Xxxxxx to
X. X. Xxxxx dated March 20, 1969 of record in Vol. 388 page 244 of the Deed
Records of Orange County, Texas, to which reference is made and is further
described in Decree of Divorce between the said X. X. Xxxxx and Virginia
Xxxx Xxxxx of record in Vol. 626, page 427 of the Deed Records of Orange
County, Texas.
7

[LOGO OF WHITNEY APPEARS HERE]

CONTINUING GUARANTY

The undersigned (hereinafter sometimes referred to as "Guarantor", which
term means individually, collectively, and interchangeably any, each and/or all
of them) hereby gives to Whitney National Bank ("Bank") this Continuing Guaranty
(this "Guaranty") for the purpose of guarantying the obligations of XXXXXX
SHIPYARD, INC. (FORMERLY KNOWN AS XXXXXX INDUSTRIES, INC.), a Louisiana
corporation,(hereinafter referred to as "Borrower", which term means
individually, collectively, and interchangeably any, each and/or all of them).
Guarantor agrees as follows:

1. Guarantor jointly, severally, solidarily, and unconditionally guarantees to
Bank the prompt payment in full of all obligations and liabilities of
Borrower to Bank, direct or contingent, due or to become due, now existing
or hereafter arising, including, without limitation, all future advances,
with interest, attorneys' fees, expenses of collection and costs, and
further including, without limitation, obligations to Bank on promissory
notes, checks, overdrafts, letter-of-credit agreements, loan agreements,
security documents, endorsements and continuing guaranties (collectively,
the "Obligations"). Parties obligated on the Obligations are referred to
herein as "Obligor", which term means individually, collectively, and
interchangeably any, each and/or all of them.

2. Guarantor shall be bound by all of the terms and conditions of any notes,
agreements, or other obligations in favor of Bank signed or incurred by
Borrower. Guarantor hereby waives all notice and pleas of presentment,
demand, dishonor, protest, discussion and division. Guarantor shall not
have any rights of subrogation until the payment in full of all Obligations
and any subrogation rights shall relate only to the collateral then held by
Bank.

3. Notice of termination of this Guaranty WILL not be effective until ten (10)
days after the notice is delivered to an officer of Bank at the office
where the Obligations were borrowed and such officer acknowledges in
writing receipt of the notice (the "Effective Date"). This Guaranty shall
be continuing and binding on the person delivering such notice as to (a)
any Obligations incurred or arising prior to the Effective Date of written
notice of termination of this Guaranty, (b) all renewals, extensions, and
modifications of Obligations existing prior to the Effective Date of
written notice of termination of this Guaranty and (c) Obligations Bank is
bound to permit to be incurred by agreement entered into prior to the
Effective Date of written notice of termination of this Guaranty. A notice
of termination shall not affect the liability of any person not giving such
notice.

4. To secure this Guaranty, Guarantor pledges, pawns and delivers to Bank, and
grants to Bank a continuing security interest in, and a right of set-off
and compensation against, all property of Guarantor or in which Guarantor
has an interest that is now or hereafter on deposit with, in the possession
of, under the control of or held by Bank, including, without limitation,
all cash, deposit accounts, funds on deposit, stocks, bonds, treasury
obligations and other securities, investment property, financial assets,
securities accounts, notes, documents, instruments, certificates of
deposit, items, chattel paper, and other property (except XXX, pension, and
other tax-deferred retirement accounts), together with all property added
to or substituted for any of the foregoing, and all interest, dividends,
income, fruits, accessions and proceeds of any of the foregoing. The terms
"deposit accounts," "instruments," "investment property," "documents,"
"chattel paper," "securities accounts," "financial assets" and "proceeds"
shall have the meanings provided in the Louisiana Commercial Laws.

5. If this Guaranty is executed by more than one person, each person is bound
by all of the provisions of this Guaranty and is jointly, severally and
solidarily liable for the payment in full of the Obligations as if such
person was the only person executing this Guaranty. This Guaranty is
exclusive of and in addition to any other endorsements, guaranties, or
obligations with respect to Borrower that are separate and apart from this
instrument, whether signed by Guarantor or by any other Obligor. This
Guaranty shall not be affected or limited by the amount of any other such
endorsements, guaranties, or obligations with respect to Borrower. To the
extent permitted by law, Guarantor's obligations under this Guaranty shall
continue notwithstanding any set-off, counterclaim, reduction, or
diminution of the Obligations or any defense of any kind or nature (other
than performance by Guarantor of its obligations hereunder) that Borrower
may have or assert against Bank.

6. Without releasing or affecting Guarantor's obligations hereunder, Bank may,
one or more times, in its sole discretion, without notice to or the consent
of Guarantor or any other Obligor, take any one or more of the following
actions: (a) release, renew or modify the obligations of Borrower or any
other Obligor; (b) release, exchange, modify, or surrender in whole or in
part Bank's rights with respect to any collateral for the Obligations; (c)
modify or alter the term, interest rate or due date of any payment of any
of the Obligations; (d) grant any postponements, compromises, indulgences,
waivers, surrenders or discharges or modify the terms of its agreements
with Guarantor, Borrower or any other Obligor; (e) change its manner of
doing business with Guarantor, Borrower or any other party; (f) impute
payments or proceeds of any collateral furnished for any of the
Obligations, in whole or in part, to any of the Obligations, or retain the
payments or proceeds as collateral for the Obligations without applying
same toward payment of the Obligations; or (g) make loans to Borrower in
excess of the present amount of the Obligations, and Guarantor hereby
expressly waives any defenses arising from any such actions. The release of
liability of any person shall not affect the liability hereunder of any
person who is not specifically released.

7. This Guaranty shall be binding on Guarantor and Guarantor's successors and
assigns and shall inure to the benefit of Bank, its successors, assigns,
endorsees, and any person or persons, or entities, including, without
limitation, any banking or other financial institution, to whom Bank may
grant an interest in the Obligations, or any of them, and this Guaranty
shall be binding on Guarantor to the extent of such assignment or interest.
Any such assignment or grant of interest shall not operate to release
Guarantor from any obligation to Bank hereunder with respect to any
unassigned Obligations.

8. If Bank receives any payment or proceeds of collateral, which payment or
proceeds or any part thereof are subsequently required, by any court of
competent jurisdiction, to be repaid to Borrower, Borrower's estate,
trustee, or any other party, then to the extent of such repayment by Bank,
the Obligations or part thereof which has been paid, reduced or satisfied
by such amount shall be reinstated and continued in full force and effect
as of the date the initial payment, reduction or satisfaction occurred, and
Guarantor shall remain solidarily liable to Bank for the repayment of such
amount reinstated. Guarantor shall defend and indemnify Bank from any claim
or loss to Bank arising under this paragraph, including, without
limitation, Bank's attorneys' fees and expenses in the defense of any such
action or suit.

9. This Guaranty shall be governed and interpreted under the internal laws of
the State of Louisiana. If any provision of this Guaranty shall be held to
be legally invalid or unenforceable by any court of competent jurisdiction,
all remaining provisions of this Guaranty shall remain in full force and
effect. This Guaranty is effective as of the date shown below.

ORANGE SHIPBUILDING COMPANY, INC.

By /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxx
Its: President
Date: December 31, 0000

XXXXX XX XXXXXXXXX

XXXXXX XX XX. XXXX

BEFORE ME, the undersigned Notary Public duly commissioned and qualified in
and for the aforesaid State and Parish (County), personally came and appeared
Xxxxxxx X. Xxxxxxx, who being first duly sworn, declared and acknowledged unto
me, Notary, and the undersigned witnesses, that he is the President of ORANGE
SHIPBUILDING COMPANY, INC., a corporation, and that as such officer and on
behalf of such corporation, he signed and executed the above and foregoing
Continuing Guaranty, by authority of the Board of Directors of said corporation,
and said appearer acknowledged said instrument to be the free act and deed of
said corporation, for the purposes and considerations therein expressed.

IN WITNESS WHEREOF, this instrument is executed in the presence of the
undersigned witnesses and me, Notary, on this 3rd day of May, 2000.

WITNESSES:

/s/ XXXXXX X. XXXXXXXX /s/ XXXXXXX X. XXXXXXX
----------------------------- --------------------------------
Xxxxxx X. Xxxxxxxx Xxxxxxx X. Xxxxxxx

/s/ XXXXXX AVCON
-----------------------------
Xxxxxx Avcon /s/ XXXX X. XXXXX
--------------------------------
Xxxx X. Xxxxx

NOTARY PUBLIC
My Commission expires at death

[LOGO OF WHITNEY APPEARS HERE]

SECURITY AGREEMENT

This Security Agreement is made this 1st day of May, 2000, by XXXXXX INDUSTRIES,
INC. (hereinafter referred to as "Grantor," which term means individually,
collectively, and interchangeably any, each and/or all of them) in favor of
WHITNEY NATIONAL BANK ("Secured Party"). Grantor's social security number or
taxpayer identification number is 00-0000000. Additional information relating to
Grantor is set forth on Schedule 1 to this Security Agreement. "Borrower" shall
mean individually, collectively, and interchangeably any, each and/or all of
XXXXXX SHIPYARD, INC.

To secure payment of all obligations and liabilities of Grantor and Borrower,
and of any one or more of them, to Secured Party, direct or contingent, due or
to become due, now existing or hereafter arising, including, without limitation,
all future advances, with interest, attorneys' fees, expenses of collection and
costs, and further including, without limitation, obligations to Secured Party
on promissory notes, checks, overdrafts, letter-of-credit agreements, loan
agreements, security documents, endorsements, continuing guaranties and this
Security Agreement (collectively, the "Obligations"), Grantor pledges and pawns
to Secured Party, and grants to Secured Party a continuing security interest in,
and a right of set-off and compensation against, (a) all property of Grantor or
in which Grantor has an interest that is now or hereafter on deposit with, in
the possession of, under the control of or held by Secured Party, including,
without limitation, all cash, deposit accounts, funds on deposit, stocks, bonds,
treasury obligations, and other securities, investment property, financial
assets, securities accounts, notes, documents, instruments, certificates of
deposit, items, chattel paper, and other property (except XXX, pension, and
other tax-deferred retirement accounts) and (b) the following described
property, now or hereafter owned by Grantor and wherever located:

[X] ALL ACCOUNTS, ALL INVENTORY AND [ ] all chattel paper
ALL CHATTEL PAPER

[X] ALL EQUIPMENT [X] ALL GENERAL INTANGIBLES

[X] ALL DOCUMENTS [ ] all property described on
Exhibit A

[ ] all fixtures located on the property described
on Exhibit B

together with all property added to or substituted for any of the foregoing, and
all interest, dividends, income, fruits, returns, accessions, profits, corporate
distributions (including, without limitation, stock splits and stock dividends),
products and proceeds of any of the foregoing (collectively, "Collateral"). The
terms "accounts," "instruments," "account debtor," "documents," "equipment,"
"general intangibles," "inventory," "chattel paper," "investment property,"
"deposit accounts," "securities accounts," "financial assets," "fixtures" and
"proceeds" shall have the meanings provided in the Louisiana Commercial Laws.
The term "Loan Agreement" shall mean that Second Amended and Restated Loan
Agreement dated as of December 31, 1999 by and among Whitney National Bank and
Xxxxxx Shipyard, Inc. and Orange Shipbuilding Company, Inc. and Xxxxxx
Industries, Inc. (Guarantors), as it may be amended from time to time.

Grantor further authorizes secured party at any time and without further consent
from Grantor to file a carbon, photographic, facsimile, or other reproduction of
this Security Agreement or Grantor's financing statement as a financing
statement. All Collateral shall remain subject to this Security Agreement until
all of the Obligations have been paid and any financing statements filed in
connection with this Security Agreement have been terminated. Secured Party may
renew certificates of deposit or other renewable items included in the
Collateral. All interest, dividends, income, fruits, returns, accessions,
profits, corporate distributions (including, without limitation, stock splits
and stock dividends), and proceeds with respect to the Collateral shall be
delivered upon receipt to Secured Party in negotiable form. Grantor shall
execute any endorsements, assignments, stock powers and financing statements
with respect to the Collateral, in form and substance satisfactory to Secured
Party, that Secured Party may request. Grantor represents and warrants that (a)
Secured Party shall at all times have a perfected first priority security
interest in the Collateral free of all other security interests, liens and
claims, and (b) the description and identification of the Collateral and
Grantor's name, social security or taxpayer identification number, and principal
residence or chief executive office are correctly stated herein. Grantor shall
prevent the accrual of prescription or statute of limitations with respect to
the Collateral no later than sixty (60) days prior to the date on which
enforcement would be barred, and shall execute any additional documents
reasonably required to perfect the security interest of Secured Party in the
Collateral. Should any Collateral decline in value after the date of this
Security Agreement, Grantor shall, within five (5) days after receiving notice
from Secured Party of such decline in value, grant a security interest in
additional property satisfactory to Secured Party. Grantor authorizes Secured
Party, in its sole discretion (a) to notify the obligor on any Collateral to
make payments directly to Secured Party; (b) to receive and recover any money or
other property at any time due with respect to the Collateral and in connection
therewith, endorse notes, checks, drafts or other evidence of payments; and (c)
to settle, adjust and compromise, in Secured Party's sole discretion, all
present and future claims arising with respect to the Collateral. To the extent
that any stocks, bonds or other securities are included in the Collateral,
Grantor (a) covenants not to vote any Collateral in any manner that would
adversely affect Secured Party's rights and (b) authorizes Secured Party, in its
discretion, to transfer to or register in its name or the name of its nominee
any of the Collateral, with or without indication of the security interest
herein created. Secured Party is not obligated to take any of the foregoing
actions or to preserve Grantor's rights with respect to the Collateral
including, without limitation, rights against prior parties and shall not be
liable in any manner with respect to the Collateral. Any responsibility of
Secured Party with respect to the Collateral, whether arising contractually or
as a matter of law, is hereby expressly waived.

If Grantor's accounts are subject to this Security Agreement, Grantor agrees to
administer its accounts and the proceeds thereof in a fiduciary capacity for
Secured Party, take all actions necessary to collect the accounts, and
immediately deposit all proceeds of the accounts into Grantor's deposit account
with Secured Party. Upon request, Grantor shall at any time (a) furnish to
Secured Party within ten (10) days a list of the accounts, showing the name,
address and the amount owed by each account debtor, and (b) xxxx on all bills,
invoices and statements issued in connection with the accounts that the account
is subject to a security agreement with Secured Party and is payable to Secured
Party at Secured Party's address. If Grantor accepts chattel paper or
instruments in payment of accounts, goods or services, Grantor shall promptly
deliver all such chattel paper and instruments to Secured Party in negotiable
form.

Grantor shall at all times permit Secured Party, its officers and agents, access
to the Collateral and to all books, records and data relating to the Collateral,
for inspection and for verification of the existence, condition and value of the
Collateral. Grantor shall furnish all assistance and information that Secured
Party may require to conduct such inspections and verifications. Upon request,
Grantor, at its expense, shall cause or permit an independent certified public
accountant, appraiser or other expert selected by Secured Party to prepare and
deliver to Secured Party a verification of the existence, condition or value of
the Collateral.

All corporeal Collateral shall be insured by solvent insurance companies for
full replacement value under policies acceptable to Secured Party, designating
Secured Party as lender loss payee. Grantor shall not alienate or encumber the
Collateral, except for sales of inventory, goods or services in the ordinary
course of Grantor's business. Grantor shall not create or permit to exist any
lien, claim or security interest on the Collateral except in favor of Secured
Party. Grantor shall not, without the prior written consent of Secured Party (a)
change Grantor's domicile, name, legal form or taxpayer identification number,
(b) move the location of its principal place of business or chief executive
office, or (c) move the Collateral from the locations disclosed on Schedule 1.

If Grantor or Borrower defaults in the timely payment or performance of any of
the Obligations, or if any warranty or representation of Grantor or Borrower to
Secured Party should br untrue at any time, then after the expiration of any
applicable notice and cure provision

contained in the Loan Agreement, at the option of Secured Party, the Obligations
shall be immediately due and payable in full without notice or demand, and
Secured Party (a) may sell, assign, transfer and effectively deliver all or any
part of the Collateral at public or private sale, without recourse to judicial
proceedings and without demand, appraisement or advertisement, all of which are
hereby expressly waived by Grantor to the fullest extent permitted by law, and
(b) may cause all or any part of the Collateral to be seized and sold, under
executory process, under writ of fieri facias issued in execution of an ordinary
judgment obtained upon the Obligations, or under other legal procedure. For
purposes of executory process, Grantor acknowledges the indebtedness owed under
the Obligations, confesses judgment in favor of Secured Party for the full
amount of the Obligations, and agrees to enforcement by executory process.
Grantor waives (a) the benefit of appraisal provided in Art. 2723 of the
Louisiana Code of Civil Procedure and (b) the demand and three (3) days delay
provided by Articles 2639 and 2721, Louisiana Code of Civil Procedure. Secured
Party may, at its option, enforce any mortgage note pledged hereby and cause the
mortgaged property to be seized and sold by executory or other process in
accordance with law and the terms of the mortgage. Grantor grants to Secured
Party an irrevocable mandate and power of attorney (coupled with an interest) to
exercise, after default, at Secured Party's sole discretionary option and
without any obligation to do so, all rights that Grantor has with respect to the
Collateral, including, without limitation, the right to exercise all rights of
inspection, deriving from Grantor's ownership of or other interest in the
Collateral. If the proceeds from the sale or enforcement of the Collateral are
insufficient to satisfy all of the Obligations in full, all parties obligated
thereon shall remain fully obligated for any deficiency. The rights and remedies
of Secured Party hereunder are cumulative, may be exercised singly or
concurrently, and are in addition to any rights and remedies of Secured Party
under applicable law. Additionally, after the occurrence of a Default under the
Loan Agreement and the expiration of any applicable notice and cure provision
contained in the Loan Agreement.

Pursuant to Louisiana Revised Statutes 9:5136, et seq., Grantor hereby
designates Secured Party or any employee, agent, or other person named by
Secured Party at the time any seizure of the Collateral is effected by Secured
Party to serve as a keeper of the Collateral pending the judicial sale thereof.
The keeper's fees shall be determined by the Court before which the proceedings
are pending, and the payment of such fees shall be secured by this security
agreement.

Without releasing or affecting any of its rights, Secured Party may, one or more
times, in its sole discretion, without notice to or the consent of Grantor or
Borrower, take any one or more of the following actions: (a) release, renew or
modify the obligations of Grantor, Borrower or any other party; (b) release,
exchange, modify, or surrender in whole or in part Secured Party's rights with
respect to any collateral for the Obligations; (c) modify or alter the term,
interest rate or due date of any payment of any of the Obligations; (d) grant
any postponements, compromises, indulgences, waivers, surrenders or discharges
or modify the terms of its agreements with Grantor or Borrower; (e) change its
manner of doing business with Grantor, Borrower or any other party; or (f)
impute payments or proceeds of any collateral furnished for any of the
Obligations, in whole or in part, to any of the Obligations, or retain the
payments or proceeds as collateral for the Obligations without applying same
toward payment of the Obligations, and Grantor hereby expressly waives any
defenses arising from any such actions. The obligations of Grantor hereunder
shall be joint, several and solidary and shall bind and obligate Grantor's
successors, heirs and assigns. Secured Party may assign and transfer the
Collateral to an assignee of any of the Obligations, whereupon such transferee
shall become vested with all powers and rights granted to Secured Party under
this Security Agreement. This Security Agreement shall be governed by the
internal laws of the State of Louisiana, provided that where Collateral is
located in a jurisdiction other than Louisiana, remedies available to Secured
Party hereunder and under the laws of such jurisdiction shall be available to
Secured Party without regard to any restriction of Louisiana law. If any
provision of this Security Agreement shall be held to be legally invalid or
unenforceable by any court of competent jurisdiction, all remaining provisions
of this Security Agreement shall remain in full force and effect.

Secured Party hereby accepts this Security Agreement.

WHITNEY NATIONAL BANK, GRANTOR:
SECURED PARTY XXXXXX INDUSTRIES, INC.

BY: /s/ XXXXX X. SANTA XXXX III BY: XXXXXXX X. XXXXXXX
---------------------------- -------------------------------
XXXXX X. SANTA XXXX, III XXXXXXX X. XXXXXXX
Title: Vice President Title: President

SCHEDULE 1

Grantor's legal status: A Louisiana corporation

State or jurisdiction of Grantor's organization: Louisiana

Grantor's mailing address: 0000 Xxxxx Xx., Xxxxxx Xxxx, XX. 00000

Grantor's chief executive office: 0000 Xxxxx Xx., Xxxxxx Xxxx, XX. 00000

Location of Grantor's books and records: 0000 Xxxxx Xx., Xxxxxx Xxxx, XX. 00000

Location of Grantor's inventory and equipment: 0000 Xxxxx Xx., Xxxxxx Xxxx, XX.
00000

Other names and legal forms used by Grantor to conduct business within last ten
years: NONE

EXHIBIT A
---------

NONE

[LOGO OF WHITNEY APPEARS HERE]

SECURITY AGREEMENT

This Security Agreement is made this 1st day of May, 2000, by XXXXXX SHIPYARD,
INC. (hereinafter referred to as "Grantor," which term means individually,
collectively, and interchangeably any, each and/or all of them) in favor of
WHITNEY NATIONAL BANK ("Secured Party"). Grantor's social security number or
taxpayer Identification number is 00-0000000. Additional information relating to
Grantor is set forth on Schedule 1 to this Security Agreement. "Borrower" shall
mean individually, collectively, and interchangeably any, each and/or all of
XXXXXX SHIPYARD, INC.

To secure payment of all obligations and liabilities of Grantor and Borrower,
and of any one or more of them, to Secured Party, direct or contingent, due or
to become due, now existing or hereafter arising, including, without limitation,
all future advances, with interest, attorneys' fees, expenses of collection and
costs, and further including, without limitation, obligations to Secured Party
on promissory notes, checks, overdrafts, letter-of-credit agreements, loan
agreements, security documents, endorsements, continuing guaranties and this
Security Agreement (collectively, the "Obligations"), Grantor pledges and pawns
to SECURED PARTY, AND GRANTS to Secured Party a continuing security interest in,
and a right of set-off and compensation against, (a) all property of Grantor or
in which Grantor has an interest that is now or hereafter on deposit with, in
the possession of, under the control of or held by Secured Party, including,
without limitation, all cash, deposit accounts, funds on deposit, stocks, bonds,
treasury obligations, and other securities, Investment property, financial
assets, securities accounts, notes, documents, instruments, certificates of
deposit, items, chattel paper, and other property (except XXX, pension, and
other tax-deferred retirement accounts) and (b) the following described
property, now or hereafter owned by Grantor and wherever located:

[X] ALL ACCOUNTS, ALL INVENTORY AND ALL CHATTEL PAPER [ ] all chattel paper

[X] ALL EQUIPMENT [X] ALL GENERAL INTANGIBLES

[X] ALL DOCUMENTS [ ] all property described on Exhibit A

[X] ALL FIXTURES LOCATED ON THE PROPERTY DESCRIBED
ON EXHIBIT B

together with all property added to or substituted for any of the foregoing, and
all interest, dividends, income, fruits, returns, accessions, profits, corporate
distributions (including, without limitation, stock splits and stock dividends),
products and proceeds of any of the foregoing (collectively, "Collateral"). The
terms "accounts," "Instruments," "account debtor," "documents," "equipment,"
"general Intangibles," "Inventory, "chattel paper," "Investment property,"
"deposit accounts;' "securities accounts," "financial assets," "fixtures" and
"proceeds" shall have the meanings provided in the Louisiana Commercial Laws.
The term "Loan Agreement" shall mean that Second Amended and Restated Loan
Agreement dated as of December 31, 1999 by and among Whitney National Bank and
Xxxxxx Shipyard, Inc. and Orange Shipbuilding Company, Inc. and Xxxxxx
Industries, Inc. (Guarantors), as it may be amended from time to time.

Grantor further authorizes secured party at any time and without further consent
from Grantor to file a carbon, photographic, facsimile, or other reproduction of
this Security Agreement or Grantor's financing statement as a financing
statement. All Collateral shall remain subject to this Security Agreement until
all of the Obligations have been paid and any financing statements filed in
connection with this Security Agreement have been terminated. Secured Party may
renew certificates of deposit or other renewable items included in the
Collateral. All interest, dividends, income fruits, returns, accessions,
profits, corporate distributions (including, without limitation, stock splits
and stock dividends), and proceeds with respect to the Collateral shall be
delivered upon receipt to Secured Party in negotiable form. Grantor shall
execute any endorsements, assignments, stock powers and financing statements
with respect to the Collateral, in form and substance satisfactory to Secured
Party, that Secured Party may request. Grantor represents and warrants that (a)
Secured Party shall at all times have a perfected first priority security
interest in the Collateral free of all other security interests, liens and
claims, and (b) the description and identification of the Collateral and
Grantor's name, social security or taxpayer identification number, and principal
residence or chief executive office are correctly stated herein. Grantor shall
prevent the accrual of prescription or statute of limitations with respect to
the Collateral no later than sixty (60) days prior to the date on which
enforcement would be barred, and shall execute any additional documents
reasonably required to perfect the security interest of Secured Party in the
Collateral. Should any Collateral decline in value after the date of this
Security Agreement, Grantor shall, within five (5) days after receiving notice
from Secured Party of such decline in value, grant a security interest in
additional property satisfactory to Secured Party. Grantor authorizes Secured
Party, in its sole discretion (a) to notify the obligor on any Collateral to
make payments directly to Secured Party; (b) to receive and recover any money or
other property at any time due with respect to the Collateral and in connection
therewith, endorse notes, checks, drafts or other evidence of payments; and (c)
to settle, adjust and compromise, in Secured Party's sole discretion, all
present and future claims arising with respect to the Collateral. To the extent
that any stocks, bonds or other securities are included in the Collateral,
Grantor (a) covenants not to vote any Collateral in any manner that would
adversely affect Secured Party's rights and (b) authorizes Secured Party, in its
discretion, to transfer to or register in its name or the name of its nominee
any of the Collateral, with or without indication of the security interest
herein created. Secured Party is not obligated to take any of the foregoing
actions or to preserve Grantor's rights with respect to the Collateral
including, without limitation, rights against prior parties and shall not be
liable in any manner with respect to the Collateral. Any responsibility of
Secured Party with respect to the Collateral, whether arising contractually or
as a matter of law, is hereby expressly waived.

All corporeal Collateral shall be insured by solvent insurance companies for
full replacement value under policies acceptable to Secured Party, designating
Secured Party as lender loss payee. Grantor shall not alienate or encumber the
Collateral, except for sales of inventory, goods or services in the ordinary
course of Grantors business. Grantor shall not create or permit to exist any
lien, claim or security interest on the Collateral except in favor of Secured
Party. Grantor shall not, without the prior written consent of Secured Party (a)
change Grantor's domicile, name, legal form or taxpayer identification number,
(b) move the location of its principal place of business or chief executive
office, or (c) move the Collateral from the locations disclosed on Schedule 1.

If Grantor or Borrower defaults to the timely payment or performance of any of
the Obligations, or if any warranty or representation of Grantor or Borrower to
Secured Party should be untrue at any time, then after the expiration of any
applicable notice and cure provision

contained in the Loan Agreement, at the option of Secured Party, the Obligations
shall be Immediately due and payable in full without notice or demand, and
Secured Party (a) may sell, assign, transfer and effectively deliver all or any
part of the Collateral at public or private sale, without recourse to judicial
proceedings and without demand, appraisement or advertisement, all of which are
hereby expressly waived by Grantor to the fullest extent permitted by law, and
(b) may cause all or any part of the Collateral to be seized and sold, under
executory process, under writ of fieri facias issued in execution of an ordinary
judgment obtained upon the Obligations, or under other legal procedure. For
purposes of executory process, Grantor acknowledges the indebtedness owed under
the Obligations, confesses judgment in favor of Secured Party for the full
amount of the Obligations, and agrees to enforcement by executory process.
Grantor waives (a) the benefit of appraisal provided in Art. 2723 of the
Louisiana Code of Civil Procedure and (b) the demand and three (3) days delay
provided by Articles 2639 and 2721, Louisiana Code of Civil Procedure. Secured
Party may, at its option, enforce any mortgage note pledged hereby and cause the
mortgaged property to be seized and sold by executory or other process in
accordance with law and the terms of the mortgage. Grantor grants to Secured
Party an irrevocable mandate and power of attorney (coupled with an interest) to
exercise, after default, at Secured Party's sole discretionary option and
without any obligation to do so, all rights that Grantor has with respect to the
Collateral, including, without limitation, the right to exercise all rights of
inspection, deriving from Grantor's ownership of or other interest in the
Collateral. If the proceeds from the sale or enforcement of the Collateral are
insufficient to satisfy all of the Obligations in full, all parties obligated
thereon shall remain fully obligated for any deficiency. The rights and remedies
of Secured Party hereunder are cumulative, may be exercised singly or
concurrently, and are in addition to any rights and remedies of Secured Party
under applicable law. Additionally, after the occurrence of a Default under the
Loan Agreement and the expiration of any applicable notice and cure provision
contained in the Loan Agreement.

Secured Party hereby accepts this Security Agreement.

WHITNEY NATIONAL BANK, GRANTOR:
SECURED PARTY XXXXXX SHIPYARD, INC.

BY: /s/ XXXXX X. SANTA XXXX, III BY: /s/ XXXXXXX X. XXXXXXX
------------------------------ -----------------------------
XXXXX X. SANTA XXXX, III XXXXXXX X. XXXXXXX
Title: Vice President Title: President

SCHEDULE I

Grantor's legal status: A Louisiana corporation

State or jurisdiction of Grantor's organization: Louisiana

Grantor's mailing address: 0000 Xxxxx Xx., Xxxxxx Xxxx, XX. 00000

Grantor's chief executive office: 0000 Xxxxx Xx., Xxxxxx Xxxx, XX. 00000

Location of Grantor's books and records: 0000 Xxxxx Xx., Xxxxxx Xxxx, XX. 00000

Location of Grantor's inventory and equipment: 0000 Xxxxx Xx., Xxxxxx Xxxx, XX.
00000

Other names and legal forms used by Grantor to conduct business within last ten
years: XXXXXX INDUSTRIES, INC.

EXHIBIT A

NONE

EXHIBIT B

(Real Property Description for Fixture Filing)

Page 2

and west by Berwick Bay (or Atchafalaya River). Together with all the
buildings and improvements, rights, ways, privileges and servitudes thereon
situated and appertaining.

1-b. That certain piece of land, together with all the buildings and
improvements thereon and all of the rights, ways, privileges, servitudes,
appurtenances and advantages thereunto belonging or in anywise
appertaining, being a portion of the property acquired by Xxxxx Xxxx Xxxxxx
from Xxxx Xxxxxx X. Xxxxxxxxx, by an Act of Sale executed before Xxxx
Xxxxxxxx, Notary Public, St. Xxxx Xxxxxx, on the 1st day of April, 1941,
and duly recorded in the Conveyance Office of the Parish of St. Xxxx,
Louisiana, situated in the City of Morgan City, La., described as
commencing at a point on the north line of the property as acquired by
Xxxxx Xxxx Xxxxxx from Xxxx Xxxxxx X. Xxxxxxxxx One Hundred and Fifty
(150') feet west of Front Street, thence southerly at right angles a
distance of Fifty (50') feet and with such width the property has a depth
between parallel lines to the Atchafalaya River, being bounded on the North
by property now or formerly of Xxxxxx Xxxxx, east by remaining property of
Xxxxx Xxxx Xxxxxx or assigns, on the South by the property firstly
described herein and on the west by the Atchafalaya River.

Being the same property acquired by Xxxxxx Industries, Inc. by Act of Cash
Sate from Xxxxxxx Xxxxx dated February 23, 1988 and recorded February 24,
1988 in Book 31-D, Entry No. 222,156 of the Conveyance Records of St. Xxxx
Xxxxxx, Louisiana.

3. That certain parcel of land, together with all the buildings and
improvements thereon and all of the rights, ways, privileges, servitudes,
appurtenances and advantages thereunto belonging or in anywise
appertaining, lying and being situated in the CITY OF XXXXXX CITY, ST. XXXX
XXXXXX, Louisiana, designated as a strip of land thirty (30') feet wide
being bound on the North now or formerly by property of Xxxxxx Xxxxx, being
bounded on the East by the floodside of Front Street, and being bounded on
the West by the Atchafalaya River; said property having a front of thirty
(30') feet on the West side of Front Street by a depth between parallel
lines to the Atchafalaya River, all as shown on the attached Plan of Land
attached hereto and made a part hereof; being the same property acquired as
follows:

Being the same property acquired by Xxxxxx Industries, Inc. by Act of Cash
Sale from Xxxxxx Xxxxxx Vidos, et al recorded September 4, 1986 in Book
29-T, Entry No. 216,761 of the Conveyance Records of St. Xxxx Xxxxxx,
Louisiana.

4-b. That certain tract or parcel of land together with all buildings and
improvements thereon and thereunto belonging, and all rights, ways,
privileges and servitudes thereunto appertaining, lying and being situated
in the CITY OF XXXXXX CITY, PARISH OF ST. XXXX, State of Louisiana, and
more particularly described as being the North Sixteen (16') feet of LOT
NUMBER TWO (2) OF SQUARE LETTER "B" OF XXXXXXXXX SUBDIVISION of said City;
the property having a frontage of sixteen (16') feet on the West side of
Front Street, by a depth to the Atchafalaya River, and being bounded on the
North by Lot Number One (1), on the East by Front Street, on the South by
remaining portion of Lot Two (2) and on the West by the Atchafalaya River.

Page 3

Being the same property acquired in part by Xxxxxx Industries, Inc. by Act
of Cash Sale from Royal X. Xxxxx, et al recorded September 29, 1976 and
recorded in Book 19-Y, Entry No. 167,335 of the Conveyance Records of St.
Xxxx Xxxxxx, Louisiana; and by Xxxxxx Industries, Inc. by Act of Cash Sale
from Xxxxxxx Xxxxxxxx, et al recorded September 29, 1976 and recorded In
Book 19-Y, Entry No. 167,336 of the Conveyance Records of St. Xxxx Xxxxxx,
Louisiana.

7-a. That certain tract or parcel of land, lying and being situated in the
corporate limits of the City of Xxxxxx City, Parish of St. Xxxx, State of
Louisiana, known, designated and described as being the South Thirty-three
and Six-tenths (33.6') feet of Lot Number Five (5) and all of Lots Numbers
Six (6) and Seven (7) in Square "B" of the Xxxxxxxxx Subdivision of said
City. The property having a front on the West side of Front Street of One
Hundred Sixty-seven and two-tenths (167.2') feet, and having a depth
between parallel lines to the Atchafalaya River of Berwick Bay. Said
property being bounded on the North by property herein after described; on
the South by property of Xxxxx Xxxxxxxxx or assigns. Together with all the
batture, accretions, alluvion, build up or filled inland on or in Berwick
Bay, adjoining and abutting upon the said lots, as well as any and all
rights, ways and privileges and servitudes of any kind and every kind and
character thereunto belonging or appertaining.

7-b. That certain tract or parcel of land, lying and being situated in the
corporate limits of the City of Xxxxxx City, Parish of St. Xxxx, State of
Louisiana, known, designated and described as being all of Lot Number Four
(4) and the North Thirty-three and two-tenths (33.2') feet of Lot Number
Five (5) in Square "B" of the Xxxxxxxxx Subdivision of said City. The
property having a front on the west side of Front Street of One Hundred
(100') feet and having a depth between parallel lines to the Atchafalaya
River or Berwick Bay. Said property being bounded on the North by Xxx Xx. 0
xx Xxxxxx "X" property of Xxxxxx Xxxxx, on the South by the remaining
portion of Lot No. 5 in Square "B" hereinabove described, on the East by
Front Street and on the West by Atchafalaya River, or Berwick Bay.

Being the same property acquired by Xxxxxx Industries, Inc. by Act of Sale
recorded November 7, 1953 in Book 8-M, Entry No. 88,053 of the Conveyance
Records of St. Xxxx Xxxxxx, Louisiana.

8. That certain tract or parcel of land, together with all the buildings and
improvements thereon and all of the rights, ways, privileges, servitudes,
appurtenances and advantages thereunto belonging or in anywise
appertaining, lying and being situated in the CITY OF XXXXXX CITY, ST. XXXX
XXXXXX, Louisiana, known, designated and described as being LOT NO. EIGHT
(8) IN SQUARE "B" in the Xxxxxxxxx Annex to Xxxxxx City and having a front
on the West side of Front Street of Sixty-six feet and eight inches (66'8")
by a depth between said Front Street and Berwick Bay of Two Hundred Eighty-
five (285') feet, more or less, on the South line and Two Hundred Seventy
(270') feet, more or less, on the North line. Said Lot No. Eight (8) in
Square "B" of the Xxxxxxxxx Annex being more fully described as being
bounded on the North by Lot Seven (7) of Square "B", on the East by Front
Street, on the South by Lot Nine (9) of Square "B" and on the West by
Berwick Bay.

Being the same property acquired by Xxxxxx Industries, Inc. by Act of Cash
Sale from Xxxxx Xxxxxxxxx Xxxxxxxx, et al, dated December 29, 1975 and
recorded January 5, 1976 in Book 19-L, Entry No. 164,488 of the Conveyance
Records of St. Xxxx Xxxxxx, Louisiana.

9-a. That certain tract or parcel of land, together with all the buildings and
improvements thereon and all of the rights, ways, privileges, servitudes,
appurtenances and advantages thereunto belonging or in anywise
appertaining, lying and being situated in the TOWN OF XXXXXX CITY, PARISH
OF ST. XXXX, State of Louisiana, and more particularly described as LOT
NUMBER NINE (9) IN SQUARE LETTER "B" IN XXXXXXXXX SUBDIVISION of said town,
according to a map thereof recorded in the Recorder's Office at Franklin,
Louisiana, in Book 3-B, Entry No. 38,855.

Being the same property acquired by Xxxxxx Industries, Inc. by Act of Cash
Sale recorded January 13, 1978 in Book 20-X, Entry No. 173,263 of the
Conveyance Records of St. Xxxx Xxxxxx, Louisiana.

10. That certain lot or parcel of land, together with all the buildings and
improvements thereon and all of the rights, ways, privileges, servitudes,
appurtenances and advantages thereunto belonging or in anywise
appertaining, lying and being situated in the CITY OF XXXXXX CITY, ST. XXXX
XXXXXX, State of Louisiana and more particularly described as having a
front of fifteen (15') feet on the xxxx xxxx xx Xxxxx Xxxxxx by a depth
between parallel lines extending to Berwick Bay (Atchafalaya River). Said
tract of land being shown and designated on the map of Xxxxxxxxx
Subdivision to the City of Xxxxxx City dated June 10, 1910 and recorded on
June 10, 1910 in Book 3-B, Page 244, Entry No. 38,853 of the Conveyance
Records of St. Xxxx Xxxxxx, Louisiana, and designated thereon as a fifteen
(15') foot right-of-way or alley adjacent to and immediately south of Lot
Nine (9) Block B of the Xxxxxxxxx Subdivision. The said tract of land being
bounded on the west by Front Street on the East by Berwick Bay (Atchafalaya
River), on the north by Lot Nine (9), Square B of Xxxxxxxxx Subdivision
(now the property of Xxxxxx Industries, Inc.) and on the south by property
of Xxxxxx Industries, Inc. acquired by Act of Sale recorded in Book 35-F,
Entry No. 238,092 of the Conveyance Records of St. Xxxx Xxxxxx, Louisiana.

Page 4

Being the same property acquired by Xxxxxx Industries, Inc. by an Ordinance
of Abandonment adopted by the City of Xxxxxx City on the 28th day of
September, 1993, being Ordinance 93-10 of the City of Xxxxxx City, which
Ordinance is recorded in Book 36-K, Entry No. 248,156 of the Conveyance
Records of St. Xxxx Xxxxxx, Louisiana and being the same property described
in an Affidavit of Xxxxxx Industries, Inc. recorded Book 36-K, Entry No.
243,185 of the Conveyance Records of St. Xxxx Xxxxxx, Louisiana.

11. That certain tract of land, together with all the buildings and improvements
thereon and all of the rights, ways, privileges, servitudes, appurtenances
and advantages thereunto belonging or in anywise appertaining, lying and
being situated in the CITY OF XXXXXX CITY, PARISH OF ST. XXXX, State of
Louisiana, and forming part of what was formerly known as Tiger Island
Plantation, measuring Eighty-six (86') feet on Front Street, by a depth of
Two Hundred Eighty-six (286') feet, between parallel lines, more or less,
from said Front Street to Berwick Bay; the tract being bounded, now or
formerly, on the North by lands of X. X. Xxxxxxxxx, on the East by Front
Street, on the South by the Xxxxxxxx Xxxxxx Subdivision, formerly Xxxxxxxx,
and West by Berwick Bay, together with all improvements and appurtenances
thereon situated, and thereunto belonging.

Being the same property acquired by Xxxxxx Industries, Inc. by Act of Cash
Sale from Stella Gloriosa Xxxxx, et al., recorded May 13, 1992 in Book 35-F,
Entry No. 238,092 of the Conveyance Records of St. Xxxx Xxxxxx, Louisiana.

12. That certain lot or parcel of land, together with all the buildings and
improvements thereon and all of the rights, ways, privileges, servitudes,
appurtenances and advantages thereunto belonging or in anywise appertaining,
known, designated and described as LOT "F" IN BLOCK NUMBER THREE (3), XXXXXX
ANNEX TO THE TOWN OF XXXXXX CITY, PARISH OF ST. XXXX, State of Louisiana,
according to the map or plan of survey, of said subdivision of file and of
record in the Recorder's Office in Book 22 of Conveyances at Page 516 and
according to which said lot has a front on the North side of Xxxxxxxx Street
of Fifty (50') feet by a depth between parallel lines of One Hundred (100')
feet; and

That certain tract or parcel of land, together with all the buildings and
improvements thereon and all of the rights, ways, privileges, servitudes,
appurtenances and advantages thereunto belonging or in anywise appertaining,
lying and being situated in the CITY OF XXXXXX CITY, PARISH OF ST. XXXX,
State of Louisiana, more fully described as being situated on the West side
of Lot "F" in Block 3 of the Xxxxxx Annex to Xxxxxx City and extending West
to the Atchafalaya River; bounded on the North by property now or formerly
of Xxxxxxx Xxxxx and extending South to a point Six and One-half (6-1/2')
feet front on the North side of Xxxxxxxx Street, bounded on the East by the
said Lot F, Block 3 of the Xxxxxx Annex and West by the Atchafalaya River
(Berwick Bay).

Being the same property acquired by Xxxxxx Industries, Inc. by Act of Cash
Sale from Xxxxxx X. Xxxxxxxxx, et ux., dated July 9, 1993 and recorded
July 14, 1993 in Book 36-F, Entry No. 242,330 of the Conveyance Records of
St. Xxxx Xxxxxx, Louisiana.

Being the same property acquired by Xxxxxx Industries, Inc. by Act of Cash
Sale from Xxxx X. Xxxxxx dated October 21, 1993 and recorded October 22,
1993 in Book 36-K, Entry No. 242,271 of the Conveyance Records of St. Xxxx
Xxxxxx, Louisiana.

14. That certain tract or parcel of land, together with all the buildings and
improvements thereon and all of the rights, ways, privileges, servitudes,
appurtenances and advantages thereunto belonging or in anywise appertaining,
lying and being situated in the lower end of the PARISH OF ST. XXXX, in
Section 00, Xxxxxxxx 00 Xxxxx, Xxxxx 13 East, Southeastern Land District of
Louisiana, forming part of the tract acquired by Xxxxxxx Xxxxxx from the
Jeanerette Lumber & Shingle Company, Ltd., by act dated August 6, 1918 and
duly recorded in Book 3-T, Page 304, Entry No. 45,346 of Conveyance Records,
St. Xxxx Xxxxxx, Louisiana. The tract herein being more particularly
described as follows: Beginning at a Point "A" at the northeast corner
thereof, on the west side of the right-of-way limits of U.S. Highway 90,
thence a distance of 544.7' feet, more or less, to Point "F" on the water's
edge of Bayou Boeuf; thence along the water's edge of Bayou Boeuf in a
southeasterly direction to Point "E"; thence North 49 degrees east 300 feet,
more or less, to Point "D"; thence South 30 degrees 27 minutes East 42 feet,
more or less, to Point "C"; thence North 53 degrees 28 minutes east 445.5
feet, more or less, to Point "B" on the right-of-way limits of U.S. Highway
90; thence North 41 degrees West along said right-of-way limits 1075.7 feet,
more or less, to Point "A".

Together with all of the property which Mortgagor owns to the water's edge.
This includes the property which lies within the extension of the line
between Points "D" and "E" to the water's edge and the extension of the line
between Points "A" and "F" to the water's edge.

Together with whatever reversionary rights Mortgagor may have in and to the
old roadbed running across said property as shown on the survey described
above.

Municipal address of the above described property is: 0000 X.X. Xxxxxxx 00
Xxxx, Xxxxxx, Xxxxxxxxx.

Being the same property acquired by Xxxxxx Industries, Inc. from Marine
Shale Processors, Inc., as per act registered on July 17, 1996, in
Conveyance Book 39-C, folio 335, Entry No. 253,379.

Page 5

15. THAT CERTAIN LOT OF GROUND, together with all the buildings and improvements
thereon and all of the rights, ways, privileges, servitudes, appurtenances
and advantages thereunto belonging or in anywise appertaining, designated as
XXX X, XXXXX 0, XXXXXX XXXXX TO THE CITY OF XXXXXX CITY, ST. XXXX XXXXXX,
LOUISIANA, the said lot having a front on the north side of Xxxxxxxx Street
of Fifty (50') feet by a depth between parallel lines of One Hundred (100')
feet; to include all buildings and improvements situated thereon.

This property bears municipal number 000 Xxxxxxxx Xxxxxx, Xxxxxx Xxxx,
Xxxxxxxxx 00000.

16. That certain lot of ground, together with all the buildings and improvements
thereon and all of the rights, ways, privileges, servitudes, appurtenances
and advantages thereunto belonging or in anywise appertaining, lying and
being situated in the PARISH OF ST. XXXX, State of Louisiana, on the East
side of Atchafalaya River, and more particularly described as being LOT
NUMBERED LETTER "D" OF XXXXXX'X ANNEX TO THE TOWN OF XXXXXX CITY, according
to the Map and Plan of Survey thereof recorded in Conveyance Book "SS" Entry
No. 34,598, of the records of the Parish of St. Xxxx, LOT D measuring fifty
(50') feet in width by a depth between parallel lines of one hundred (100')
feet; and subject to the following correction of the plat of survey of said
subdivision hereinabove referred to, to-wit: That the street marked on said
map "Xxxxxxxx Street" extends and is opened as a public thoroughfare only
from the river on the west to the west boundary lines of Lots Number 38 in
Block Two, and of Lot 10 in Block One of said subdivision.

17. That certain tract or parcel of ground, together with all the buildings
and improvements thereon and all of the rights, ways, privileges,
servitudes, appurtenances and advantages thereunto belonging or in anywise
appertaining, lying and being situated in the corporate limits of the City
of Xxxxxx City, PARISH OF ST. XXXX, State of Louisiana, on the East side of
the Atchafalaya River, known, designated and described as being LOT NUMBERED
LETTER "C" OF XXXXXX ANNEX TO THE TOWN OF XXXXXX CITY (now City of Xxxxxx
City) according to the plan of survey thereof, of record in the Parish, in
Conveyance Book SS, Entry No. 34,498. The said lot measures Fifty (50') feet
in width by a depth between parallel lines of One Hundred (100') feet; and
subject to the following correction of the plan of survey and subdivision
hereinabove mentioned, to-wit: That the street marked on said map "Xxxxxxxx
Street" extends and is opened as a public thoroughfare only from the river
on the west, to the west boundary line of Lot No. Thirty-eight (38) in Block
Two (2) and of Lot Ten (10) in Block One (1) of said subdivision.

Page 6

SOS 0008

LOUISIANA SECRETARY OF STATE
OFFICE OF UNIFORM COMMERCIAL CODE/CENTER OF REGISTRY
CONFIRMATION OF FILING

CARVER, DARDEN, KORZETKY, TESSIER, FINN, BLOSSMAN & AREAUX
0000 XXXXXXX XXXXXX, XXXXX 0000
XXX XXXXXXX, XX 00000
ATTN. XXXXXX X. XXXXXXXXX, NOTARIAL ASSISTANT

Pursuant to La.R.S.10:9-403(6), this is a confirmation that the following
information has been received and included within the Secretary of State's
master index of Uniform Commercial Code filings. Note that this confirmation
does not constitute a determination of the legal sufficiency of the filing.

This filing will lapse on 5-11-2005 unless continued or terminated. We encourage
filers to take full advantage of the six-month window of opportunity in which to
file UCC-3 continuations. Submission of your documents at the onset of the six-
month window will allow ample time to rectify potential filing errors and help
to assure timely recording of your filing.

Any questions regarding the filing information contained herein should be
directed to the filing officer which accepted and recorded the filing. General
UCC assistance may be obtained by contacting our UCC Division at (000)000-0000.

X. Xxx XxXxxxxxx

================================================================================
ORIGINAL FILE NUMBER 36-148215 FILED 5/11/00 2:52 PM
PARISH IN WHICH FILED: ORLEANS
DEBTOR(S)
---------
XXXXXX SHIPYARD, INC. 720456758
0000 XXXXX XXXXXX
XXXXXX XXXX, XX 00000

XXXXXX INDUSTRIES, INC. 720456758
0000 XXXXX XXXXXX
XXXXXX XXXX, XX 00000

ORIGINAL SECURED PARTY
----------------------
WHITNEY NATIONAL BANK 720352101
000 XX. XXXXXXX XXXXXX
XXX XXXXXXX, XX 00000
ATTN. LOAN DOCUMENTATION DEPARTMENT

SOS 0009

CARVER, DARDEN, KORZETKY, TESSIER, FINN, BLOSSMAN & AREAUX (36-148215 ) PAGE 2

PROPERTY
--------

THE FOLLOWING DESCRIBED PROPERTY, NOW OR HEREAFTER OWNED BY DEBTOR AND
WHEREVER LOCATED: ALL ACCOUNTS, ALL INVENTORY AND CHATTEL PAPER; ALL
EQUIPMENT; ALL GENERAL INTANGIBLES; ALL DOCUMENTS; ALL FIXTURES LOCATED ON
THE PROPERTY (SEE ORIG.)

This FINANCING STATEMENT is presented for filing pursuant to Chapter 9 of the Louisiana Commercial Laws
---------------------------------------------------------------------------------------------------------------------
1A. DEBTOR (LAST NAME, FIRST, MIDDLE-IF AN INDIVIDUAL) 1B. SS# OR EMPLOYER I.D.#
XXXXXX SHIPYARD, INC. 00-0000000
-------------------------------------- --------------------------------------- -------------------------------
1C. MAILING ADDRESS
0000 XXXXX XXXXXX, XXXXXX XXXX, XX. 00000
---------------------------------------------------------------------------------------------------------------------
2A. ADDITIONAL DEBTOR (IF ANY) (LAST NAME, FIRST, MIDDLE-IF AN INDIVIDUAL) 0X.XX# OR EMPLOYER I.D.#
XXXXXX INDUSTRIES, INC. 00-0000000
---------------------------------------------------------------------------------------------------------------------
2C. MAILING ADDRESS
0000 XXXXX XXXXXX, XXXXXX XXXX, XX. 00000
---------------------------------------------------------------------------------------------------------------------
3A. ADDITIONAL DEBTOR OR DEBTOR'S TRADE NAME OR STYLES (IF ANY) 3B. SS# OR EMPLOYER I.D.#

---------------------------------------------------------------------------------------------------------------------
3C. MAILING ADDRESS

=======================================SECURED PARTY INFORMATION=====================================================
4A. SECURED PARTY 4B. SS# OR EMPLOYER I.D.#
WHITNEY NATIONAL BANK 00-0000000
---------------------------------------------------------------------------------------------------------------------
4C. MAILING ADDRESS
000 Xx. Xxxxxxx Xxxxxx, Xxx Xxxxxxx, XX 00000 Attn. Loan Documentation Department 5B. SS# OR EMPLOYER I.D.#
---------------------------------------------------------------------------------------------------------------------
5A. ASSIGNEE OF SECURED PARTY (IF ANY)

---------------------------------------------------------------------------------------------------------------------
5C. MAILING ADDRESS

=======================================PROPERTY INFORMATION==========================================================
6A. This FINANCING STATEMENT covers the following types or items of property:
the following described property, now or hereafter owned by Debtor and wherever located:
ALL ACCOUNTS, ALL INVENTORY AND ALL CHATTEL PAPER; ALL EQUIPMENT; ALL GENERAL INTANGIBLES; ALL DOCUMENTS; ALL
FIXTURES LOCATED ON THE PROPERTY DESCRIBED ON THE ATTACHMENT HERETO; together with all property added to or
substituted for any of the foregoing, and all interest, dividends, income, fruits, returns, accessions, profits,
corporate distributions (including, without limitation, stock splits and stock dividends), products and proceeds
of any of the foregoing

6B. X Products of collateral are also covered.
___
---------------------------------------------------------------------------------------------------------------------
7A. Check if applicable and attach legal description of real property:
X Fixture filing under R.S. 10:9-313.
_____
_____ Minerals or the like (including oil and gas) or accounts subject to R.S.>10:9-103(5) will be financed at the
wellhead or minehead of the well or mine.
_____ THE DEBTOR(S) DO NOT HAVE AN INTEREST OF RECORD IN THE REAL PROPERTY. (ENTER NAME AND SOCIAL SECURITY/EMPLOYER
I.D. # OR AN OWNER OF RECORD IN 7B AND 7C).
---------------------------------------------------------------------------------------------------------------------
7B. OWNER OF REAL PROPERTY (if other than named debtor) 7C. SS#/EMPLOYER I.D.#
(Enter name and S#/Employer I.D.# of an owner of record

---------------------------------------------------------------------------------------------------------------------
8A. This statement is filed without the debtor's signature to perfect a security interest in collateral (check if any)
_____ already subject to a security interest in another jurisdiction when it was brought into this state or debtor's
location changed to this state.
_____ which is proceeds of the original collateral described above in which a security interest was perfected.
_____ as to which the filing has lapsed.
_____ acquired after a change of debtor's name, identity or corporate structure AND social security/employer
i.d. #.
---------------------------------------------------------------------------------------------------------------------
8B. _____ DEBTOR is a Transmitting Utility, Filing is effective until terminated pursuant to R. S. 10:9-403(8).
---------------------------------------------------------------------------------------------------------------------
9. SIGNATURE OF DEBTOR(S)
XXXXXX SHIPYARD, INC.

BY: /s/ XXXXXXX X. XXXXXXX
---------------------------------------
XXXXXXX X. XXXXXXX, President
---------------------------------------------------------------------------------------------------------------------
10. SIGNATURE(S) OF SECURED PARTY(IES) (if applicable)
WHITNEY NATIONAL BANK

BY: /s/ XXXXX SANTA XXXX, III
---------------------------------------
XXXXX SANTA XXXX, III, Vice President
=====================================================================================================================
11. Return Copy to:
CARVER, DARDEN, KORETZKY, TESSIER, FINN, BLOSSMAN & AREAUX, L.L.C.
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxxx, Notarial Assistant
---------------------------------------------------------------------------------------------------------------------
12. FOR USE OF FILING OFFICER (DATE, TIME, ENTRY# AND FILING OFFICER) 13. NUMBER OF ADDITIONAL SHEETS 5
-------

lA. DEBTOR (LAST NAME, FIRST, MIDDLE- 1B. SS# OR EMPLOYER I.D. #
IF AN INDIVIDUAL) 00-0000000
XXXXXX SHIPYARD, INC.

7A. DESCRIPTION OF REAL PROPERTY FOR FIXTURE FILING

Being the same property acquired by Xxxxxx Industries, Inc. by Act of Cash
Sale from Xxxxxxx Xxxxx dated February 23, 1988 and recorded February 24,
1988 in Book 31-D, Entry No. 222,156 of the Conveyance Records of St. Xxxx
Xxxxxx, Louisiana.

Being the same property acquired by Xxxxxx Industries, Inc. by Act of Cash
Deed from J. Xxxxxx Xxxxxx, et ux dated May 5, 1987 and recorded in
Book 30-J, Entry No. 219,138 of the Conveyance Records of St. Xxxx Xxxxxx,
Louisiana.

4-a. That certain tract or parcel of land together with all buildings,
improvements and appurtenances thereon and thereunto belonging, and all
rights, ways, privileges and Servitudes thereunto appertaining, lying and
being situated in the TOWN OF XXXXXX CITY, ST. XXXX XXXXXX, State of
Louisiana, more fully described as being LOT NUMBER ONE (1) IN SQUARE "B"
OF XXXXXXXXX SUBDIVISION, said lot having a frontage on the West side of
Front Street of Sixty-six and eight-tenths (66.8') feet, and extending to
the Atchafalaya River and being bounded on the North by property of unknown
owners, on the East by Front Street, on the South by Lot 2 and on the West
by the Atchafalaya River.

Sheet 1 of 5

lA. DEBTOR (LAST NAME, FIRST, MIDDLE- 1B. SS# OR EMPLOYER I.D. #
IF AN INDIVIDUAL) 00-0000000
XXXXXX SHIPYARD, INC.

Being the same property acquired by Xxxxxx Industries, Inc. by Act of cash
sale from Xxxxxx Xxxxxx Vidos, et al recorded September 4, 1986 in Book
29-T, Entry No. 216,761 of the Conveyance Records of St. Xxxx Xxxxxx,
Louisiana.

4-b. That certain tract or parcel of land together with all buildings and
improvements thereon and thereunto belonging, and all rights, ways,
privileges and servitudes thereunto appertaining, lying and being situated
in the CITY OF XXXXXX CITY, PARISH OF ST. XXXX, State of Louisiana, and
more particularly described as being the North Sixteen (16") feet of LOT
NUMBER TYPO (2) OF SQUARE LETTER "B" OF XXXXXXXXX SUBDIVISION of said City;
the property having a frontage of sixteen (16') feet on the West side of
Front Street, by a depth to the Atchafalaya River, and being bounded on the
North by Lot Number one (1), on the East by Front Street, on the South by
remaining portion of Lot Two (2) and on the West by the Atchafalaya River.

Being the same property acquired by Xxxxxx Industries, Inc. by Act of
Exchange from J. Xxxxxx Xxxxxx, et ux dated July 16, 1987 and recorded July
17, 1987 in Book 30-N, Entry No. 219,839 of the Conveyance Records of St.
Xxxx Xxxxxx, Louisiana.

6. That certain tract of land, together with all the buildings and
improvements thereon and all of the rights, ways, privileges, servitudes,
appurtenances and advantages thereunto belonging or in anywise
appertaining, situated in lying and being situated in the CITY OF XXXXXX
CITY, PARISH OF ST. XXXX, State .of Louisiana, and more fully described as
being LOT NUMBER THREE (3) IN SQUARE LETTER "B" OF XXXXXXXXX ANNEX to said
City. Said lot having a front of Sixty-six and 66/100 feet on the West side
of Front Street, and extending back between parallel lines to Berwick Bay.
Said lot or parcel of land being bounded on the North by Lot No. Two
(2), Square Letter "B" of Xxxxxxxxx Annex, on the East by Front Street, on
the South by Lot No. Four (4), Square Letter "B" of Xxxxxxxxx Annex and on
the West by Berwick Bay. Together with all buildings and improvements
thereon situated and all rights, ways, privileges and servitudes thereunto
belonging and appertaining.

Being the same property acquired in part by Xxxxxx Industries, Inc. by Act
of Cash Sale from Royal X. Xxxxx, et al recorded September 29, 1976 and
recorded in Book 19-Y, Entry No. 167,335 of the Conveyance Records of St.
Xxxx Xxxxxx, Louisiana; and by Xxxxxx Industries, Inc. by Act of Cash Sale
from Xxxxxxx Xxxxxxxx, et al recorded September 29, 1976 and recorded in
Book 19-Y, Entry No. 167,336 of the Conveyance Records of St. Xxxx Xxxxxx,
Louisiana.

7-a. That certain tract or parcel of land, lying and being situated in the
corporate limits of the City of Xxxxxx City, Parish of St. Xxxx, State of
Louisiana, known, designated and described as being the South Thirty-three
and Six-tenths (33.6') feet. of Lot Number Five (5) and all of Lots Numbers
Six (6) and seven (7) in square "B" of the Xxxxxxxxx Subdivision of said
City. The property having a front on the West side of Front Street of One
Hundred Sixty-seven and two-tenths (167.2') feet, and having a depth
between parallel lines to the Atchafalaya River of Berwick Bay. Said
property being bounded on the North by property herein after described; on
the South by property of Xxxxx Xxxxxxxxx or assigns. Together with all the
batture, accretions, alluvion, build up or filled inland on or in Berwick
Bay, adjoining and abutting upon the said lots, as well as any and all
rights, ways and privileges and servitudes of any kind and every kind and
character thereunto belonging or appertaining.

7-b. That certain tract or parcel of land, lying and being situated in the
corporate limits of the City of Xxxxxx City, Parish of St. Xxxx, State of
Louisiana, known, designated and described as being all of Lot Number Four
(4) and the North Thirty-three and two-tenths (33.2') feet of Lot Number
Five (5) in Square "B" of the Xxxxxxxxx Subdivision of said City. The
property having a front on the west side of Front Street of One Hundred
(100') feet and having a depth between parallel lines to the Atchafalaya
River or Berwick Bay. Said property being bounded on the North by Xxx Xx. 0
xx Xxxxxx "X" property of Xxxxxx Xxxxx, on the South by the remaining
portion of Lot No. 5 in Square "B" hereinabove described, on the East by
Front Street and on the West by Atchafalaya River or Berwick Bay.

Being the same property acquired by Xxxxxx Industries, Inc. by Act of Sale
recorded November 7, 1953 in Book 8-M, Entry No. 88,053 of the Conveyance
Records of St. Xxxx Xxxxxx, Louisiana.

8. That certain tract or parcel of land, together with all the buildings and
improvements thereon and all of the rights, ways, privileges, servitudes,
appurtenances and advantages thereunto belonging or in anywise
appertaining, lying and being situated in the CITY OF XXXXXX CITY, ST. XXXX
XXXXXX, Louisiana, known, designated and described as being LOT NO. EIGHT
(8) IN SQUARE "B" in the Xxxxxxxxx Annex to Xxxxxx City and having a front
on the West side of Front Street of Sixty-six feet and eight inches (66'8")
by a depth between said Front Street and Berwick Bay of Two Hundred Eighty-
five (285') feet, more or less, on the South line and Two Hundred Seventy
(270') feet, more or less, on the North line.

Sheet 2 of 5

lA. DEBTOR (LAST NAME, FIRST, MIDDLE- 1B. SS# OR EMPLOYER I.D. #
IF AN INDIVIDUAL) 00-0000000
XXXXXX SHIPYARD, INC.

Said Lot No. Eight (8) in Square "B" of the Xxxxxxxxx Annex being more
fully described as being bounded on the North by Lot Seven (7) of Square
"B", on the East by Front Street, on the South by Lot Nine (9) of Square
"B" and on the West by Berwick Bay.

Being the same property acquired by Xxxxxx Industries, Inc. by Act of Cash
Sale from xxxxx Xxxxxxxxx Xxxxxxxx, et al, dated December 29, 1975 and
recorded January 5, 1976 in Book 19-L, Entry No. 164,488 of the Conveyance
Records of St. Xxxx Xxxxxx, Louisiana.

9-a. That certain tract or parcel of land, together with all the buildings and
improvements thereon and all of the rights, ways, privileges, servitudes,
appurtenances and advantages thereunto belonging or in anywise
appertaining, lying and being situated in the TOWN OF XXXXXX CITY, PARISH
OF ST. XXXX, State of Louisiana, and more particularly described as LOT
NUMBER NINE (9) IN SQUARE LETTER "B" IN XXXXXXXXX SUBDIVISION of said town,
according to a map thereof recorded in the Recorder's office at Franklin,
Louisiana, in Book 3-B, Entry No. 38,855.

Being the same property acquired by Xxxxxx Industries, Inc. by Act of Cash
Sale recorded January 13, 1978 in Book 20-X, Entry No. 173,263 of the
Conveyance Records of St. Xxxx Xxxxxx, Louisiana.

10. That certain lot or parcel of land, together with all the buildings and
improvements thereon and all of the rights, ways, privileges, servitudes,
appurtenances and advantages thereunto belonging or in anywise
appertaining, lying and being situated in the CITY OF XXXXXX CITY, ST. XXXX
XXXXXX, State of Louisiana and more particularly described as having a
front of fifteen (15') feet on the west side of Front street by a depth
between parallel lines extending to Berwick Bay (Atchafalaya River). Said
tract of land being shown and designated on the map of Xxxxxxxxx
subdivision to the City of Xxxxxx City dated June 10, 1910 and recorded on
June 10, 1910 in Book 3-B, Page 244, Entry No. 38,853 of the Conveyance
Records of St. Xxxx Xxxxxx, Louisiana, and DESIGNATED THEREON AS A FIFTEEN
(15') FOOT RIGHT OF-WAY OR ALLEY ADJACENT TO AND IMMEDIATELY SOUTH OF LOT
NINE (9) BLOCK B OF THE XXXXXXXXX SUBDIVISION. The said tract of land being
bounded on the west by Front Street on the East by Berwick Bay (Atchafalaya
River), on the north by Lot Nine (9), Square B of Xxxxxxxxx subdivision
(now the property of Xxxxxx Industries, Inc.) and on the south by property
of Xxxxxx Industries, Inc. acquired by Act of Sale recorded in Book 35-F,
Entry No. 238,092 of the Conveyance Records of St. Xxxx Xxxxxx, Louisiana.

Being the same property acquired by Xxxxxx Industries, Inc. by an Ordinance
of Abandonment adopted by the city of Xxxxxx City on the 28th day of
September, 1993, being Ordinance 93-10 of the City of Xxxxxx City, which
Ordinance is recorded in Book 36-K, Entry No. 248,156 of the Conveyance
Records of St. Xxxx Xxxxxx, Louisiana and being the same property described
in an Affidavit of Xxxxxx Industries, Inc. recorded Book 36-K, Entry No.
243, 185 of the Conveyance Records of St. Xxxx Xxxxxx, Louisiana.

11. That certain tract of land, together with all the buildings and
improvements thereon and all of the rights, ways, privileges, servitudes,
appurtenances and advantages thereunto belonging or in anywise
appertaining, lying and being situated in the CITY OF XXXXXX CITY, PARISH
OF ST. XXXX, State of Louisiana, and forming part of what was formerly
known as Tiger Island Plantation, measuring Eighty-six (86') feet on Front
Street, by a depth of Two Hundred Eighty-six (286') feet, between parallel
lines, more or less, from said Front Street to Berwick Bay; the tract being
bounded, now or formerly, on the North by lands of X. X. Xxxxxxxxx, on the
Xxxx by Front Street, on the South by the Xxxxxxxx Xxxxxx Subdivision,
formerly Lawrence, and West by Berwick Bay, together with all improvements
and appurtenances thereon situated, and thereunto belonging.

Being the same property acquired by Conrad Industries, Inc. by Act of Cash
Sale from Stella Gloriosa Henry, et al., recorded May 13, 1992 in Book 35-
F, Entry No. 238,092 of the Conveyance Records of St. Mary Parish,
Louisiana.

12. That certain lot or parcel of land, together with all the buildings and
improvements thereon and all of the rights, ways, privileges, servitudes,
appurtenances and advantages thereunto belonging or in anywise
appertaining, known, designated and described as LOT "F" IN BLOCK NUMBER
THREE (3), HANSON ANNEX TO THE TOWN OF MORGAN CITY, PARISH OF ST. MARY,
State of Louisiana, according to the map or plan of survey, of said
subdivision of file and of record in the Recorder's Office in Book 22 of
Conveyances at Page 516 and according to which said lot has a front on the
North side of Belanger Street of Fifty (50') feet by a depth between
parallel lines of One Hundred (100') feet; and

Sheet 3 of 5

lA. DEBTOR (LAST NAME, FIRST, MIDDLE- 1B. SS# OR EMPLOYER I.D. #
IF AN INDIVIDUAL) 72-0456758
CONRAD SHIPYARD, INC.

property now or formerly of Chester Henry and extending South to a point
Six and One-half (6 1/2') feet front he North side of Belanger Street,
bounded on the East by the said Lot F, Block 3 of the Hanson Annex and West
by the Atchafalaya River (Berwick Bay).

Being the same property acquired by Conrad Industries, Inc. by Act of Cash
Sale from Ronald J. Overhultz, et ux., dated July 9, 1993 and recorded July
14, 1993 in Book 36-F, Entry No. 242,330 of the Conveyance Records of St.
Mary Parish, Louisiana.

13. That certain tract or parcel of land, together with all buildings and
improvements thereon situated, and all rights, ways, privileges and
appurtenances thereunto belonging or in anywise appertaining, lying and
being situated in the CITY OF MORGAN CITY, ST. MARY PARISH, Louisiana, on
the East side of the Atchafalaya River, and more fully described as being
lot lettered "A" in Block No. Three (3) of Hanson's Annex to the City,
according to the survey thereof as made by S. A. Bradford; the lot herein
measuring Fifty (50') feet, fronting on the west side of Front Street by a
uniform depth of One Hundred (100') feet.

Being the same property acquired by Conrad Industries, Inc. by Act of Cash
Sale from Dale A. Beadle dated October 21, 1993 and recorded October 22,
1993 in Book 36-K, Entry No. 242,271 of the Conveyance Records of St. Mary
Parish, Louisiana.

14. That certain tract or parcel of land, together with all the buildings and
improvements thereon and all of the rights, ways, privileges, servitudes,
appurtenances and advantages thereunto belonging or in anywise
appertaining, lying and being situated in the lower end of the PARISH OF
ST. MARY, in Section 42, Township 16 South, Range 13 East, Southeastern
Land District of Louisiana, forming part of the tract acquired by Biaggio
Domino from the Jeanerette Lumber & Shingle Company, Ltd., by act dated
August 6, 1918 and duly recorded in Book 3-T, Page 304, Entry No. 45,346 of
Conveyance Records, St. Mary Parish, Louisiana. The tract herein being more
particularly described as follows: Beginning at a Point "A" at the
northeast corner thereof, on the west side of the right-of-way limits of
U.S. Highway 90, thence a distance of 544.7' feet, more or less, to Point
"F" on the water's edge of Bayou Boeuf; thence along the water's edge of
Bayou Boeuf in a southeasterly direction to Point "E"; thence North 49
degrees east 300 feet, more or less, to Point "D"; thence South 30 degrees
27 minutes East 42 feet, more or less, to Point "C"; thence North 53
degrees 28 minutes east 445.5 feet, more or less, to Point "B" on the
right-of-way limits of U.S. Highway 90; thence North 41 degrees West along
said right-of-way limits 1075.7 feet, more or less, to Point "A".

The said tract containing a total acreage of 15.63 acres, all as shown and
designated on survey of T.F. Kramer dated May 7, 1946 attached to that act
recorded May 21, 1946 in St. Mary Parish COB 6-V, Folio 77, under Entry No.
74,242.

Together with whatever reversionary rights Mortgagor may have in and to the
old roadbed running across said property as shown on the survey described
above.

Municipal address of the above described property is: 9752 U.S. Highway 90
East, Amelia, Louisiana.

Being the same property acquired by Conrad Industries, Inc. from Marine
Shale Processors, Inc., as per act registered on July 17, 1996, in
Conveyance Book 39-C, folio 335, Entry No.253379.

15. THAT CERTAIN LOT OF GROUND, together with all the buildings and improvements
thereon and all of the rights, ways, privileges, servitudes, appurtenances
and advantages thereunto belonging or in anywise appertaining, designated as
LOT E, BLOCK 3, HANSON ANNEX TO THE CITY OF MORGAN CITY, ST. MARY PARISH,
LOUISIANA, the said lot having a front on the north side of Belanger Street
of Fifty (50') feet by a depth between parallel lines of One Hundred (100')
feet; to include all buildings and improvements situated thereon.

This property bears municipal number 103 Belanger Street, Morgan City,
Louisiana 70380.

Being the same property acquired by Conrad Industries, Inc. from Lydia
Anslem Mayon and Evella Mayon Crochet, as per act passed before Dale H.
Hayes, Notary Public, registered on November 20, 1996, in Conveyance Book
39-0, Entry No. 254,965, St. Mary Parish, Louisiana.

16. That certain lot of ground, together with all the buildings and
improvements thereon and all of the rights, ways, privileges, servitudes,
appurtenances and advantages thereunto belonging or in anywise
appertaining, lying and being situated in the PARISH OF ST. MARY, State of
Louisiana, on the East side of Atchafalaya River, and more particularly
described as being LOT NUMBERED LETTER "D" OF HANSON'S ANNEX TO THE TOWN OF
MORGAN CITY, according to the Map and Plan of Survey thereof recorded in
Conveyance Book "SS" Entry No. 34,598, of the records of the Parish of St.
Mary, LOT D measuring fifty (50') feet in width by a depth between parallel
lines of one hundred (100') feet; and subject to the following correction
of the plat of survey of said subdivision hereinabove referred to, to-wit:
That

Sheet 4 of 5

lA. DEBTOR (LAST NAME, FIRST, MIDDLE- 1B. SS# OR EMPLOYER I.D. #
IF AN INDIVIDUAL) 72-0456758
CONRAD SHIPYARD, INC.

the street marked on said map "Belanger Street" extends and is opened as a
public thoroughfare only from the river on the west to the west boundary
lines of Lots Number 38 in Block Two, and of Lot 10 in Block One of said
subdivision.

Being the same property acquired by Conrad Industries, Inc. from Howard L.
Freeman, Sr., et al., as per act passed before Edward M. Leonard, Jr.,
Notary Public, registered on June 6, 1994, in conveyance Book 36-Z, Entry
No. 245,401, St. Mary Parish, Louisiana.

17. That certain tract or parcel of ground, together with all the buildings and
improvements thereon and all of the rights, ways, privileges, servitudes,
appurtenances and advantages thereunto belonging or in anywise
appertaining, lying and being situated in the corporate limits of the City
of Morgan City, PARISH OF ST. MARY, State of Louisiana, on the East side of
the Atchafalaya River, known, designated and described as being LOT
NUMBERED LETTER "C" OF HANSON ANNEX TO THE TOWN OF MORGAN CITY (now City of
Morgan City) according to the plan of survey thereof, of record in the
Parish, in Conveyance Book SS, Entry No. 34,498. The said lot measures
Fifty (50') feet in width by a depth between parallel lines of one Hundred
(100') feet; and subject to the following correction of the plan of survey
and subdivision hereinabove mentioned, to-wit: That the street marked on
said map "Belanger Street" extends and is opened as a public thoroughfare
only from the river on the west, to the west boundary line of Lot No.
Thirty-eight (38) in Block Two (2) and of Lot Ten (10) in Block One (1) of
said subdivision.

Being the same property acquired by Conrad Industries, Inc. from Garrett H.
Gaudet and Beryl Lee Landry Gaudet, as per act passed before Dale H. Hayes,
Notary Public, dated July 21, 1997, registered in Conveyance Book 40-L,
Entry No. 258,180, St. Mary Parish, Louisiana.

Sheet 5 of 5

LOUISIANA SECRETARY OF STATE
UCC SEARCH
CONRAD SHIPYARD, INC.
FILE NO. 2.11683
DATE OF SEARCH: MAY 12, 2000

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===) - [KCONRAD SHIPYARD-[2J-[H

1 CONRAD SHIPYARD, INC.
2 CONRAD'S CRITTERS
3 CONSELLTANT ADVERTISING & PUBLISHING LLC
4 CONSELLTANT ADVERTISING AND PUBLISHING L L C
5 CONSELLTANT GROUP CORPORATION
6 CONSIDER IT DONE HAIR SALON
7 CONSIGNEE: FRIEDMAN'S INC.
8 CONSO, INC.
9 CONSOER TOWNSEND ENVIRODYNE ENGINEERS INC

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--------------------------------------------------------------------------------
1 CONRAD SHIPYARD, INC.
===) - [K1- [2J- [H
NOTICE: ALL FILINGS AFTER 05-09-00 ARE SUBJECT TO CHANGE OR REMOVAL.
ORIGINAL FILE NUMBER 36-148215 STATUS: Active
FINANCING STATEMENT 36-148215 FILED 05-11-00 02:52P
DEBTOR: CONRAD SHIPYARD, INC./720456758
1501 FRONT STREET/ MORGAN CITY, LA 70380
DEBTOR: CONRAD INDUSTRIES, INC./720456758
1501 FRONT STREET/ MORGAN CITY, LA 70380
SECURED PTY: WHITNEY NATIONAL BANK/720352101
228 ST. CHARLES AVENUE/ NEW ORLEANS, LA 70130/ ATTN. LOAN
DOCUMENTATION DEPARTMENT
PROPERTY: THE FOLLOWING DESCRIBED PROPERTY, NOW OR HEREAFTER OWNED BY
DEBTOR AND WHEREVER LOCATED: ALL ACCOUNTS, ALL INVENTORY AND
CHATTEL PAPER; ALL EQUIPMENT; ALL GENERAL INTANGIBLES; ALL
DOCUMENTS; ALL FIXTURES LOCATED ON THE PROPERTY (SEE ORIG.)

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PAGE 1

DATE: May 12, 2000

STATE OF LOUISIANA
UCC CERTIFICATE

NAME: CONRAD SHIPYARD, INC. FORMERLY CONRAD INDUSTRIES,INC.
TIN/SSN: 72-0456758
FROM: January 1, 1990
THROUGH: May 12, 2000

================================================================================

FILINGS:

NOTICE: ALL FILINGS AFTER 05-09-00 ARE SUBJECT TO CHANGE OR REMOVAL.
ORIGINAL FILE NUMBER 51-11465 STATUS: Active
FINANCING STATEMENT 51-11465 FILED 09-02-97 08:40A
DEBTOR: CONRAD INDUSTRIES, INC/720456758
1501 FRONT STREET/ MORGAN CITY, LA. 70381
SECURED PTY: SAFECO CREDIT COMPANY, INC./910840847
4909 156TH AVE. N.E./ REDMOND, WA 98052
PROPERTY: ONE (1) 230' X 54' X 12' STEEL DECK BARGE, SHIPBUILDER'S
HULL NO. C-655
(FOR ADDITIONAL INFORMATION SEE ORIGINAL FILING)

PROPERTY: ALL EQUIPMENT, ACCOUNTS RECEIVABLE, INVENTORY, CHATTEL PAPER
AND GENERAL INTANGIBLES TOGETHER WITH ALL PROPERTY ADDED TO OR
SUBSTITUTED FOR ANY OF THE FOREGOING, AND ALL INTEREST,
DIVIDENDS, INCOME, FRUITS, RETURNS, ACCESSIONS (SEE ORIG.)

--------------------------------------------------------------------------------
NOTICE: ALL FILINGS AFTER 05-09-00 ARE SUBJECT TO CHANGE OR REMOVAL.
ORIGINAL FILE NUMBER 36-127130 STATUS: Active
FINANCING STATEMENT 36-127130 FILED 03-20-98 02:50P
DEBTOR: CONRAD INDUSTRIES, INC./720456758
1501 FRONT STREET/ MORGAN CITY, LA 70380
SECURED PTY: WHITNEY NATIONAL BANK/720352101
228 ST. CHARLES AVENUE/ NEW ORLEANS, LA 70130/ ATTN: LOAN
DOCUMENTATION DEPARTMENT
PROPERTY: THE FOLLOWING DESCRIBED PROPERTY, NOW OR HEREAFTER OWNED BY
DEBTOR AND WHEREVER LOCATED: ALL ACCOUNTS, ALL INVENTORY AND
ALL CHATTEL PAPER; ALL EQUIPMENT; ALL GENERAL INTANGIBLES; ALL
DOCUMENTS; ALL FIXTURES LOCATED ON THE (SEE ORIGINAL) Fixture
Filing

PAGE 2
--------------------------------------------------------------------------------
NOTICE: ALL FILINGS AFTER 05-09-00 ARE SUBJECT TO CHANGE OR REMOVAL.
ORIGINAL FILE NUMBER 36-148214 STATUS: Active
FINANCING STATEMENT 36-148214 FILED 05-11-00 02:51P
DEBTOR: CONRAD INDUSTRIES, INC./760475815
1501 FRONT STREET/ MORGAN CITY, LA 70380
SECURED PTY: WHITNEY NATIONAL BANK/720352101
228 ST. CHARLES AVENUE/ NEW ORLEANS, LA 70130/ ATTN. LOAN
DOCUMENTATION DEPARTMENT
PROPERTY: THE FOLLOWING DESCRIBED PROPERTY, NOW OR HEREAFTER OWNED BY
DEBTOR AND WHEREVER LOCATED: ALL ACCOUNTS, ALL INVENTORY AND
ALL CHATTEL PAPER; ALL EQUIPMENT; ALL GENERAL INTANGIBLES; ALL
DOCUMENTS TOGETHER WITH ALL (SEE ORIGINAL)

DEBTOR: CONRAD SHIPYARD, INC./720456758
1501 FRONT STREET/ MORGAN CITY, LA 70380
DEBTOR: CONRAD INDUSTRIES, INC./720456758
1501 FRONT STREET/ MORGAN CITY, LA 70380
SECURED PTY: WHITNEY NATIONAL BANK/720352101
228 ST. CHARLES AVENUE/ NEW ORLEANS, LA 70130/ ATTN. LOAN
DOCUMENTATION DEPARTMENT
PROPERTY: THE FOLLOWING DESCRIBED PROPERTY, NOW OR HEREAFTER OWNED BY
DEBTOR AND WHEREVER LOCATED: ALL ACCOUNTS, ALL INVENTORY AND
CHATTEL PAPER; ALL EQUIPMENT; ALL GENERAL INTANGIBLES; ALL
DOCUMENTS; ALL FIXTURES LOCATED ON THE PROPERTY (SEE ORIG.)
--------------------------------------------------------------------------------
NOTICE: ALL FILINGS AFTER 05-09-00 ARE SUBJECT TO CHANGE OR REMOVAL.
ORIGINAL FILE NUMBER 51-11464 STATUS: Active
FINANCING STATEMENT 51-11464 FILED 09-02-97 08:35A
DEBTOR: CONRAD INDUSTRIES, INC./720456758
1501 FRONT STREET/ MORGAN CITY, LA. 70381
SECURED PTY: SAFECO CREDIT COMPANY, INC./910840847
4909 156TH AVE., N.E./ REDMOND, WA 98052
PROPERTY: ONE (1) 150' X 50' X 7' STEEL DECK BARGE, SHIPBUILDER'S
HULL NO. C-656
(FOR ADDITIONAL INFORMATION SEE ORIGINAL FILING)
--------------------------------------------------------------------------------
NOTICE: ALL FILINGS AFTER 05-09-00 ARE SUBJECT TO CHANGE OR REMOVAL.
ORIGINAL FILE NUMBER 51-7592 STATUS: Active
FINANCING STATEMENT 51-7592 FILED 09-25-95 08:50A
DEBTOR: CONRAD INDUSTRIES, INC./720456758
1501 FRONT STREET/ MORGAN CITY, LA. 70380
SECURED PTY: EDWARD DON AND COMPANY/362081964
2500 S. HARLEM AVE./ NORTH RIVERSIDE, IL 60546
PROPERTY: ALL KITCHEN EQUIPMENT AS FURTHER DESCRIBED IN THE ATTACHED
EXHIBIT.
(FOR ADDITIONAL INFORMATION SEE ORIGINAL FILING)

PAGE 3
DATE: May 12, 2000

STATE OF LOUISIANA
UCC SUPPLEMENTAL LISTING

NAME: CONRAD INDUSTRIES, INC.
TIN/SSN: 76-0475815
FROM: January 1, 1990
THROUGH: May 12, 2000

================================================================================

The search for information under the above name also revealed the following
filings for debtors with similar names and/or taxpayer identification numbers.

FILINGS:

760475815 05-11-00 02:51 PM ORLEANS 36-148214
NOTICE: ALL FILINGS AFTER 05-09-00 ARE SUBJECT TO CHANGE OR REMOVAL.
ORIGINAL FILE NUMBER 36-148214 STATUS: Active
FINANCING STATEMENT 36-148214 FILED 05-11-00 02:51P
DEBTOR: CONRAD INDUSTRIES, INC./760475815
1501 FRONT STREET/ MORGAN CITY, LA 70380
SECURED PTY: WHITNEY NATIONAL BANK/720352101
228 ST. CHARLES AVENUE/ NEW ORLEANS, LA 70130/ ATTN. LOAN
DOCUMENTATION DEPARTMENT
PROPERTY: THE FOLLOWING DESCRIBED PROPERTY, NOW OR HEREAFTER OWNED BY THE
DEBTOR AND WHEREVER LOCATED: ALL ACCOUNTS, ALL INVENTORY AND
ALL CHATTEL PAPER; ALL EQUIPMENT; ALL GENERAL INTANGIBLES; ALL
DOCUMENTS; TOGETHER WITH ALL (SEE ORIGINAL)

CONTINUING GUARANTY

The undersigned (hereinafter sometimes referred to as "Guarantor", which
term means individually, collectively, and interchangeably any, each and/or all
of them) hereby gives to Whitney National Bank ("Bank") this Continuing Guaranty
(this "Guaranty") for the purpose of guarantying the obligations of CONRAD
SHIPYARD, INC. (FORMERLY KNOWN AS CONRAD INDUSTRIES, INC.), a Louisiana
corporation, (hereinafter referred to as "Borrower", which term means
individually, collectively, and interchangeably any, each and/or all of them).
Guarantor agrees as follows:

3. Notice of termination of this Guaranty will not be effective until ten (10)
days after the notice is delivered to an officer of Bank at the office
where the Obligations were borrowed and such officer acknowledges in
writing receipt of the notice (the "Effective Date"). This Guaranty shall
be continuing and binding on the person delivering such notice as to (a)
any Obligations incurred or arising prior to the Effective Date of written
notice of termination of this Guaranty, (b) all renewals, extensions, and
modifications of Obligations existing prior to the Effective Date of
written notice of termination of this Guaranty and (c) Obligations Bank is
bound to permit to be incurred by agreement entered into prior to the
Effective Date of written notice of termination of this Guaranty. A notice
of termination shall not affect the liability of any person not giving
such notice.

4. To secure this Guaranty, Guarantor pledges, pawns and delivers to Bank, and
grants to Bank a continuing security interest in, and a right of set-off
and compensation against, all property of Guarantor or in which Guarantor
has an interest that is now or hereafter on deposit with, in the possession
of, under the control of or held by Bank, including, without limitation,
all cash, deposit accounts, funds on deposit, stocks, bonds, treasury
obligations and other securities, investment property, financial assets,
securities accounts, notes, documents, instruments, certificates of
deposit, items, chattel paper, and other property (except IRA, pension, and
other tax-deferred retirement accounts), together with all property added
to or substituted for any of the foregoing, and all interest, dividends,
income, fruits, accessions and proceeds of any of the foregoing. The terms
"deposit accounts," "instruments," "investment property," "documents,"
"chattel paper" "securities accounts," "financial assets" and "proceeds"
shall have the meanings provided in the Louisiana Commercial Laws.

6. Without releasing or affecting Guarantor's obligations hereunder, Bank may,
one or more times, in its sole discretion, without notice to or the consent
of Guarantor or any other Obligor, take any one or more of the following
actions: (a) release, renew or modify the obligations of Borrower or any
other Obligor; (b) release, exchange, modify, or surrender in whole or in
part Bank's rights with respect to any collateral for the Obligations; (c)
modify or alter the term, interest rate or due date of any payment of any
of the Obligations; (d) grant any postponements, compromises, indulgences,
waivers, surrenders or discharges or modify the terms of its agreements
with Guarantor, Borrower or any other Obligor, (e) change its manner of
doing business with Guarantor, Borrower or any other party; (f) impute
payments or proceeds of any collateral furnished for any of the
Obligations, in whole or in part, to any of the Obligations, or retain the
payments or proceeds as collateral for the Obligations without applying
same toward payment of the Obligations; or (g) make loans to Borrower in
excess of the present amount of the Obligations, and Guarantor hereby
expressly waives any defenses arising from any such actions. The release of
liability of any person shall not affect the liability hereunder of any
person who is not specifically released.

CONRAD INDUSTRIES, INC.

By: /s/ WILLIAM H. HIDALGO
--------------------------
William H. Hidalgo
Its: President
Date: December 31, 1999

STATE OF LOUISIANA

PARISH OF ST. MARY

BEFORE ME, the undersigned Notary Public duly commissioned and qualified in
and for the aforesaid State and Parish (County), personally came and appeared
WILLIAM H. HIDALGO, who being first duly sworn, declared and acknowledged unto
me, Notary, and the undersigned witnesses, that he is the President of CONRAD
INDUSTRIES, INC., a corporation, and that as such officer and on behalf of such
corporation, he signed and executed the above and foregoing Continuing Guaranty,
by authority of the Board of Directors of said corporation, and said appearer
acknowledged said instrument to be the free act and deed of said corporation,
for the purposes and considerations therein expressed.

IN WITNESS WHEREOF, this instrument is executed in the presence of the
undersigned witnesses and me, Notary, on this 3rd day of May, 2000.

WITNESSES:

/s/ JANICE A. RATCLIFF /s/ WILLIAM H. HIDALGO
--------------------------- --------------------------
Janice A. Ratcliff William H. Hidalgo

/s/ DENISE AVCON
---------------------------
Denise Avcon
/s/ DALE H. HAYES
-----------------------
Dale H. Hayes

NOTARY PUBLIC
My Commission expires at death

LOUISIANA SECRETARY OF STATE
OFFICE OF UNIFORM COMMERCIAL CODE/CENTER OF REGISTRY
CONFIRMATION OF FILING

CARVER, DARDEN, KORETZKY, TESSIER, FINN, BLOSSMAN & AREAUX
1100 POYDRAS STREET, SUITE 2700
NEW ORLEANS, LA 70163
ATTN: JUDITH E. ZIMMERMAN, NOTARIAL ASSISTANT

This filing will lapse on 5-11-2005 unless continued or terminated. We encourage
filers to take full advantage of the six-month window of opportunity in which to
file UCC-3 continuations. Submission of your documents at the onset of the
six-month window will allow ample time to rectify potential filing errors and
help to assure timely recording of your filing.

W. Fox McKeithen

================================================================================
ORIGINAL FILE NUMBER 36-148214 FILED 5/11/00 2:51 PM
PARISH IN WHICH FILED: ORLEANS
DEBTOR(S)
---------
CONRAD INDUSTRIES, INC. 760475815
1501 FRONT STREET
MORGAN CITY, LA 70380

ORIGINAL SECURED PARTY
----------------------
WHITNEY NATIONAL BANK 720352101
228 ST. CHARLES AVENUE
NEW ORLEANS, LA 70130
ATTN. LOAN DOCUMENTATION DEPARTMENT

PROPERTY
--------
THE FOLLOWING DESCRIBED PROPERTY, NOW OR HEREAFTER OWNED BY
THE DEBTOR AND WHEREVER LOCATED: ALL ACCOUNTS, ALL INVENTORY
AND ALL CHATTEL PAPER; ALL EQUIPMENT; ALL GENERAL INTANGIBLES;
ALL DOCUMENTS; TOGETHER WITH ALL (SEE ORIGINAL)

This FINANCING STATEMENT is presented for filing pursuant to Delaware Commercial Laws
---------------------------------------------------------------------------------------------------------------------
1A. DEBTOR (LAST NAME, FIRST, MIDDLE-IF AN INDIVIDUAL) 1B. SS# OR EMPLOYER I.D.#
CONRAD INDUSTRIES, INC. 76-0475815
---------------------------------------------------------------------------------------------------------------------
1C. MAILING ADDRESS
1501 FRONT STREET, MORGAN CITY, LA. 70380
---------------------------------------------------------------------------------------------------------------------
2A. ADDITIONAL DEBTOR (IF ANY) (LAST NAME, FIRST, MIDDLE-IF AN INDIVIDUAL) 2B.SS# OR EMPLOYER I.D.#

---------------------------------------------------------------------------------------------------------------------
2C. MAILING ADDRESS

---------------------------------------------------------------------------------------------------------------------
3A. ADDITIONAL DEBTOR OR DEBTOR'S TRADE NAME OR STYLES (IF ANY) 3B. SS# OR EMPLOYER I.D.#

---------------------------------------------------------------------------------------------------------------------
3C. MAILING ADDRESS

=======================================SECURED PARTY INFORMATION=====================================================
4A. SECURED PARTY 4B. SS# OR EMPLOYER I.D.#
WHITNEY NATIONAL BANK 72-0352101
---------------------------------------------------------------------------------------------------------------------
4C. MAILING ADDRESS
228 St. Charles Avenue, New Orleans, LA 70130 Attn. Loan Documentation Department
---------------------------------------------------------------------------------------------------------------------
5A. ASSIGNEE OF SECURED PARTY (IF ANY) 5B. SS# OR EMPLOYER I.D.#

---------------------------------------------------------------------------------------------------------------------
5C. MAILING ADDRESS

=======================================PROPERTY INFORMATION==========================================================
6A. This FINANCING STATEMENT covers the following types or items of property:
the following described property, now or hereafter owned by Debtor and wherever located:
ALL ACCOUNTS, ALL INVENTORY AND ALL CHATTEL PAPER; ALL EQUIPMENT; ALL GENERAL INTANGIBLES; ALL DOCUMENTS;
together with all property added to or substituted for any of the foregoing, and all interest, dividends, income,
fruits, returns, accessions, profits, corporate distributions (including, without limitation, stock splits and
stock dividends), products and proceeds of any of the foregoing

BY: /s/ WILLIAM H. HIDALGO
---------------------------------------
WILLIAM H. HIDALGO, President
---------------------------------------------------------------------------------------------------------------------
10. SIGNATURE(S) OF SECURED PARTY(IES) (if applicable)
WHITNEY NATIONAL BANK

BY: /s/ EDGAR SANTA CRUZ, III
---------------------------------------
EDGAR SANTA CRUZ, III, Vice President
=====================================================================================================================
11. Return Copy to:
CARVER, DARDEN, KORETZKY, TESSIER, FINN, BLOSSMAN & AREAUX, L.L.C.
1100 Poydras Street, Suite 2700
New Orleans, LA 70163
Attn: Judith E. Zimmerman, Notarial Assistant
---------------------------------------------------------------------------------------------------------------------
12. FOR USE OF FILING OFFICER (DATE, TIME, ENTRY# AND FILING OFFICER) 13. NUMBER OF ADDITIONAL SHEETS
-------

LOUISIANA SECRETARY OF STATE
UCC SEARCH
CONRAD INDUSTRIES, INC.
FILE NO. 2.11683
DATE OF SEARCH: MAY 12, 2000

Business Name Search

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1 CONRAD INDUSTRIES, INC
2 CONRAD INDUSTRIES, INC.
3 CONRAD L. CATHEY, INC.
4 CONRAD L NEIL TTE
5 CONRAD L NEIL TTEE
6 CONRAD L NEIL TTTE
7 CONRAD RICE MILL INC
8 CONRAD RICE MILL, INC.
9 CONRAD RIVERS & SON INC

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1 CONRAD INDUSTRIES, INC
===) - [K1- [2J- [H
NOTICE: ALL FILINGS AFTER 05-09-00 ARE SUBJECT TO CHANGE OR REMOVAL.
ORIGINAL FILE NUMBER 51-11465 STATUS: Active
FINANCING STATEMENT 51-11465 FILED 09-02-97 08:40A
DEBTOR: CONRAD INDUSTRIES, INC/720456758
1501 FRONT STREET/ MORGAN CITY, LA. 70381
SECURED PTY: SAFECO CREDIT COMPANY, INC./910840847
4909 156TH AVE. N.E./ REDMOND, WA 98052
PROPERTY: ONE (1) 230' X 54' X 12' STEEL DECK BARGE, SHIPBUILDER'S
HULL NO. C-655
(FOR ADDITIONAL INFORMATION SEE ORIGINAL FILING)

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2 CONRAD INDUSTRIES, INC.
===) - [K2- [2 J- [H

6 FILINGS FOR CONRAD INDUSTRIES, INC.
NOTICE: ALL FILINGS AFTER 05-09-00 ARE SUBJECT TO CHANGE OR REMOVAL.
TAX ID DATE TIME PARISH ORIG. FILE NUMBER
1 720456758 12-15-97 02:56 PM ORLEANS 36-124217
2 720456758 03-20-98 02:50 PM ORLEANS 36-127130
3 760475815 05-11-00 02:51 PM ORLEANS 36-148214
4 720456758 05-11-00 02:52 PM ORLEANS 36-148215
5 720456758 09-02-97 08:35 AM ST. MARY 51-11464
6 720456758 09-25-95 08:50 AM ST. MARY 51-7592

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6 FILINGS FOR CONRAD INDUSTRIES, INC.
NOTICE: ALL FILINGS AFTER 05-09-00 ARE SUBJECT TO CHANGE OR REMOVAL.
TAX ID DATE TIME PARISH ORIG. FILE NUMBER
1 720456758 12-15-97 02:56 PM ORLEANS 36-124217
===) - [K1- [2J- [H
NOTICE: ALL FILINGS AFTER 05-09-00 ARE SUBJECT TO CHANGE OR REMOVAL.
ORIGINAL FILE NUMBER 36-124217 STATUS: Active
FINANCING STATEMENT 36-124217 FILED 12-15-97 02:56P
DEBTOR: CONRAD INDUSTRIES, INC./720456758
1501 FRONT STREET/ MORGAN CITY, LA 70380
SECURED PTY: WHITNEY NATIONAL BANK/720352101
228 ST. CHARLES AVENUE/ NEW ORLEANS, LA 70130/ ATTN: LOAN
DOCUMENTATION DEPARTMENT
PROPERTY: ALL EQUIPMENT, ACCOUNTS RECEIVABLE, INVENTORY, CHATTEL PAPER
AND GENERAL INTANGIBLES TOGETHER WITH ALL PROPERTY ADDED TO
OR SUBSTITUTED FOR ANY OF THE FOREGOING, AND ALL INTEREST,
DIVIDENDS, INCOME, FRUITS, RETURNS, ACCESSIONS (SEE ORIG.)

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6 FILINGS FOR CONRAD INDUSTRIES, INC.
NOTICE: ALL FILINGS AFTER 05-09-00 ARE SUBJECT TO CHANGE OR REMOVAL.
TAX ID DATE TIME PARISH ORIG. FILE NUMBER
2 720456758 03-20-98 02:50 PM ORLEANS 36-127130
===) - [K2- [2J- [H
NOTICE: ALL FILINGS AFTER 05-09-00 ARE SUBJECT TO CHANGE OR REMOVAL.
ORIGINAL FILE NUMBER 36-127130 STATUS: Active
FINANCING STATEMENT 36-127130 FILED 03-20-98 02:50P
DEBTOR: CONRAD INDUSTRIES, INC./720456758
1501 FRONT STREET/ MORGAN CITY, LA 70380
SECURED PTY: WHITNEY NATIONAL BANK/720352101
228 ST. CHARLES AVENUE/ NEW ORLEANS, LA 70130/ ATTN: LOAN
DOCUMENTATION DEPARTMENT
PROPERTY: THE FOLLOWING DESCRIBED PROPERTY, NOW OR HEREAFTER OWNED BY
DEBTOR AND WHEREVER LOCATED: ALL ACCOUNTS, ALL INVENTORY AND
ALL CHATTEL PAPER; ALL EQUIPMENT; ALL GENERAL INTANGIBLES;
ALL DOCUMENTS; ALIT FIXTURES LOCATED ON THE (SEE ORIGINAL)
Fixture Filing

SECURED PTY: WHITNEY NATIONAL BANK/720352101
228 ST. CHARLES AVENUE/ NEW ORLEANS, LA 70130/ ATTN. LOAN
DOCUMENTATION DEPARTMENT
PROPERTY: THE FOLLOWING DESCRIBED PROPERTY, NOW OR HEREAFTER OWNED BY
THE DEBTOR AND WHEREVER LOCATED: ALL ACCOUNTS, ALL INVENTORY
AND ALL CHATTEL PAPER; ALL EQUIPMENT; ALL GENERAL
INTANGIBLES; ALL DOCUMENTS; TOGETHER WITH ALL (SEE ORIGINAL)

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6 FILINGS FOR CONRAD INDUSTRIES, INC.
NOTICE: ALL FILINGS AFTER 05-09-00 ARE SUBJECT TO CHANGE OR REMOVAL.
TAX ID DATE TIME PARISH ORIG. FILE NUMBER
4 720456758 05-11-00 02:52 PM ORLEANS 36-148215
===) - [K4- [2J- [H
NOTICE: ALL FILINGS AFTER 05-09-00 ARE SUBJECT TO CHANGE OR REMOVAL.
ORIGINAL FILE NUMBER 36-148215 STATUS: Active
FINANCING STATEMENT 36-148215 FILED 05-11-00 02:52P
DEBTOR: CONRAD SHIPYARD, INC./720456758
1501 FRONT STREET/ MORGAN CITY, LA 70380
DEBTOR: CONRAD INDUSTRIES, INC./720456758
1501 FRONT STREET/ MORGAN CITY, LA 70380
SECURED PTY: WHITNEY NATIONAL BANK/720352101
228 ST. CHARLES AVENUE/ NEW ORLEANS, LA 70130/ ATTN. LOAN
DOCUMENTATION DEPARTMENT
PROPERTY: THE FOLLOWING DESCRIBED PROPERTY, NOW OR HEREAFTER OWNED BY
DEBTOR AND WHEREVER LOCATED: ALL ACCOUNTS, ALL INVENTORY AND
CHATTEL PAPER; ALL EQUIPMENT; ALL GENERAL INTANGIBLES; ALL
DOCUMENTS; ALL FIXTURES LOCATED ON THE PROPERTY (SEE ORIG.)

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6 FILINGS FOR CONRAD INDUSTRIES, INC.
NOTICE: ALL FILINGS AFTER 05-09-00 ARE SUBJECT TO CHANGE OR REMOVAL.
TAX ID DATE TIME PARISH ORIG. FILE NUMBER
5 720456758 09-02-97 08:35 AM ST. MARY 51-11464
===) - [K5- [2J- [H
NOTICE: ALL FILINGS AFTER 05-09-00 ARE SUBJECT TO CHANGE OR REMOVAL.
ORIGINAL FILE NUMBER 51-11464 STATUS: Active
FINANCING STATEMENT 51-11464 FILED 09-02-97 08:35A
DEBTOR: CONRAD INDUSTRIES, INC./720456758
1501 FRONT STREET/ MORGAN CITY, LA. 70381
SECURED PTY: SAFECO CREDIT COMPANY, INC./910840847
4909 156TH AVE., N.E./ REDMOND, WA 98052
PROPERTY: ONE (1) 150' X 50' X 7' STEEL DECK BARGE, SHIPBUILDER'S
HULL NO. C-656
(FOR ADDITIONAL INFORMATION SEE ORIGINAL FILING)

TAX ID DATE TIME PARISH ORIG. FILE NUMBER
6 720456758 09-25-95 08:50 AM ST. MARY 51-7592
===) - [K6- [2J- [H
NOTICE: ALL FILINGS AFTER 05-09-00 ARE SUBJECT TO CHANGE OR REMOVAL.
ORIGINAL FILE NUMBER 51-7592 STATUS: Active
FINANCING STATEMENT 51-7592 FILED 09-25-95 08:50A
DEBTOR: CONRAD INDUSTRIES,INC./720456758
1501 FRONT STREET/ MORGAN CITY, LA. 70380
SECURED PTY: EDWARD DON AND COMPANY/362081964
2500 S. HARLEM AVE./ NORTH RIVERSIDE, IL 60546
PROPERTY: ALL KITCHEN EQUIPMENT AS FURTHER DESCRIBED IN THE ATTACHED
EXHIBIT.
(FOR ADDITIONAL INFORMATION SEE ORIGINAL FILING)
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================================================================================

PAGE 1
DATE: May 12, 2000
STATE OF LOUISIANA
UCC CERTIFICATE

NAME: CONRAD INDUSTRIES, INC.
TIN/SSN: 76-0475815
FROM: January 1, 1990
THROUGH: May 12, 2000

===============================================================================

FILINGS:

PAGE 2
DATE: May 12, 2000
STATE OF LOUISIANA
UCC SUPPLEMENTAL LISTING

NAME: CONRAD SHIPYARD FORMERLY CONRAD INDUSTRIES, INC.
TIN/SSN: 72-0456758
FROM: January 1, 1990
THROUGH: May 12, 2000

================================================================================

The search for information under the above name also revealed the following
filings for debtors with similar names and/or taxpayer identification numbers.

FILINGS:

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Table of Contents

SECOND AMENDED AND RESTATED LOAN AGREEMENT This Second Amended and Restated Loan Agreement is dated as of December 31, 1999 and is by and among Whitney National Bank ("Lender"), a national banking association, and Conrad Shipyard, Inc. ("Borrower"), a...

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