UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                   Washington, D.C.  20549
                    ____________________

                          FORM 8-K

                       CURRENT REPORT

 Pursuant to Section 13 or 15(d) of the Securities Exchange
                         Act of 1934

      Date of Report (Date of earliest event reported):
            January 18, 2005 (January 12, 2005)
                     ___________________

                    TORCH OFFSHORE, INC.
   (Exact Name of Registrant as Specified in its Charter)

                         000-32855
                  (Commission File Number)

         Delaware                         74-2982117
(State or Other Jurisdiction            (IRS Employer
    of Incorporation)                 Identification No.)

   401 Whitney Avenue, Suite 400
         Gretna, Louisiana                 70056-2596
(Address of Principal Executive Offices)   (Zip Code)

      Registrant's Telephone Number, Including Area Code:
                       (504) 367-7030
                     ___________________

Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of
the Registrant under any of the following provisions:

     [  ] Written communications pursuant to Rule 425 under
          the Securities Act (17 CFR 230.425)

     [  ] Soliciting material pursuant to Rule 14a-12 under
          the Exchange Act (17 CFR 240.14a-12)

     [  ] Pre-commencement communications pursuant to Rule
          14d-2(b) under the Exchange Act (17 CFR
          240.14d-2(b))

     [  ] Pre-commencement communications pursuant to Rule
          13e-4(c) under the Exchange Act (17 CFR
          240.13e-4(c)


Item 1.01 Entry into a Material Definitive Agreement.

On January 12, 2005, Torch Offshore, Inc. (the "Company"),
and its wholly-owned subsidiaries, Torch Offshore, L.L.C.
and Torch Express, L.L.C., each debtors-in-possession under
Chapter 11 of the U.S. Bankruptcy Code, entered into an
agreement with Regions Bank and Export Development Canada
("EDC") (collectively, the "Lenders") for debtor-in-
possession financing (the "DIP Facility").

The DIP Facility provides a $6.9 million revolving credit
facility and a $2.0 million discretionary letter of credit
facility to fund the Company's working capital requirements
and other corporate purposes during the Company's Chapter 11
proceedings. The credit facilities are equally shared
between Regions Bank and EDC. The interest rate on the DIP
Facility is the prime rate plus 4.00% per annum.

The DIP Facility requires the Company to meet certain
obligations, including the delivery of a weekly written
report with respect to the cash flow forecast compared to
actual results, quarterly and annual financial statements,
and certificates of compliance on a quarterly and annual
basis. The Company is also subject to limitations on paying
indebtedness, creating liens against their property, and the
weekly actual borrowing base test (as defined) cannot vary
by more than 5% (in the negative) from the Company's
forecasted borrowing base test (as defined).

Amounts owed by the Company under the DIP Facility may be
accelerated following certain events of default, including,
but not limited to: failure of the Company to make principal
or interest payments under the DIP Facility; breaches of
certain covenants, representations and warranties set forth
in the DIP Facility; the conversion of the Company's Chapter
11 case to a Chapter 7 case under the U.S. Bankruptcy Code
or the appointment of a trustee pursuant to Chapter 7 or
Chapter 11 of the U.S. Bankruptcy Code; default under any
post-petition indebtedness; failure of the U.S. Bankruptcy
Court to approve a Final Order before January 31, 2005; and
a material adverse effect impacting the business or property
of the Company and its wholly-owned subsidiaries, taken as a
whole.

The DIP Facility has received interim approval (the "Interim
Order") from the U.S. Bankruptcy Court for the Eastern
District of Louisiana. Pursuant to the terms of the DIP
Facility, the Company will have access to the interim
funding through April 1, 2005, subject to a budget and other
restrictions. In addition, the DIP Facility and Interim Order
permit the use of cash collateral (defined as cash plus cash
receipts on receivables) by the Company.

A copy of the Debtor-in-Possession Credit Agreement is filed
as Exhibit 10.1 and is incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or an
          Obligation under an Off-Balance Sheet Arrangement
          of a Registrant.

The information provided in Item 1.01 of this Current Report
regarding the DIP Facility is incorporated into this Item
2.03 by reference.

Item 9.01 Financial Statements and Exhibits.

     (c)  Exhibits.

Exhibit Number                Description
--------------                -----------
    10.1       Debtor-in-Possession Credit Agreement dated
               January 12, 2005 by and among Torch Offshore,
               Inc., Torch Offshore, L.L.C. and Torch
               Express, L.L.C. and the Undersigned Lenders,
               including Regions Bank as Agent for the
               Lenders.

                          SIGNATURE

Pursuant to the requirements of the Securities Exchange  Act
of  1934, the Registrant has duly caused this report  to  be
signed  on  its  behalf  by  the undersigned  hereunto  duly
authorized.

                              TORCH OFFSHORE, INC.

                              By: /s/ ROBERT E. FULTON
Date: January 18, 2005        -------------------------
                              Robert E. Fulton
                              Chief Financial Officer


                        EXHIBIT INDEX

Exhibit Number                Description
--------------                -----------
    10.1       Debtor-in-Possession Credit Agreement dated
               January 12, 2005 by and among Torch Offshore,
               Inc., Torch Offshore, L.L.C. and Torch
               Express, L.L.C. and the Undersigned Lenders,
               including Regions Bank as Agent for the
               Lenders.

                                                Exhibit 10.1

            DEBTOR-IN-POSSESSION CREDIT AGREEMENT

       THIS   DEBTOR-IN-POSSESSION  CREDIT  AGREEMENT  (this
"Agreement") is effective the 12th day of January, 2005 (the
"Effective Date"), and is made and entered into by and among
TORCH  OFFSHORE, INC., a Delaware corporation  ("Borrower"),
TORCH  OFFSHORE,  LLC  ("TOLLC")  and  TORCH  EXPRESS,   LLC
("TELLC"  and, together with TOLLC, the "Guarantors"),  each
debtors-in-possession in cases pending under chapter  11  of
the Bankruptcy Code (defined below), the undersigned Lenders
(as  hereinafter  defined), including Regions  Bank  in  its
capacity as a Lender hereunder and as Agent for the  Lenders
under this Agreement.

                           WITNESSETH:

      WHEREAS, on January 7, 2005 (the "Petition Date"), the
Borrower  and  the other Loan Parties (defined below)  filed
voluntary petitions with the United States Bankruptcy  Court
for  the Eastern District of Louisiana (including any  other
court  having  jurisdiction over the Cases, the  "Bankruptcy
Court")  initiating cases under chapter 11 of the Bankruptcy
Code,  Case  Nos. 05-10137, 05-10138 and 05-10140  (each,  a
"Case" and, collectively, the "Cases"), and the Loan Parties
have continued in the possession of their assets and in  the
management of their businesses pursuant to Sections 1107 and
1108 of the Bankruptcy Code;

      WHEREAS,  the Borrower has requested that the  Lenders
and  the  Agent enter into this Agreement to provide  (i)  a
$6,900,000  committed revolving credit facility and  (ii)  a
$2,000,000 discretionary letter of credit facility,  all  of
the  Borrower's obligations under which are to be guaranteed
by  the  other Loan Parties and secured as provided  in  the
Interim  Order  (defined below) or the Final Order  (defined
below), when applicable, and in the Security Documents,  and
the  proceeds  of  which  may  only  be  used  as  expressly
permitted by the terms of this Agreement;

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

     SECTION l. DEFINITIONS.

      1.1   Definitions.  In addition to the  terms  defined
elsewhere  in this Agreement or in any Exhibit  or  Schedule
hereto,  when  used in this Agreement, the  following  terms
shall  have the following meanings (such meanings  shall  be
equally applicable to the singular and plural forms  of  the
terms used, as the context requires):

      Agent means Regions Bank in its capacity as agent  for
the Lenders hereunder and its successors in such capacity.

      Applicable  Rate means the Base Rate  plus  4.00%  per
annum.

       Assignment  Agreement  means  any  of  those  certain
Assignment Agreements described in Section 11.13 herein.

     Assignment of Earnings has the meaning ascribed thereto
     in Section 5.6(b).

      Bankruptcy  Code means Title 11 of the  United  States
Code,  as heretofore and hereafter amended, and codified  as
11 U.S.C. section 101, et seq.

      Base  Rate means the "prime rate" as published in  the
The  Wall  Street Journal on a daily basis, or, if The  Wall
Street Journal suspends publication of the "prime rate", the
interest rate announced from time to time by Regions at  its
main  office  as  its "commercial base rate"  on  commercial
loans   (which  rate  shall  fluctuate  as  and  when   said
commercial  base  rate shall change). Such  commercial  base
rate  is not the lowest interest rate offered by Regions  to
its customers.

      Borrower's  Representative means any one  of  Lyle  G.
Stockstill   or  Robert  E.  Fulton  or  any  other   person
subsequently  authorized  by  a corporate  resolution,  duly
authorized and adopted by the board of directors of Borrower
in form acceptable to Lenders.

     Budget has the meaning set forth in Section 8.3.

      Business Day means any day except a Saturday,  Sunday,
or legal holiday observed by any Lender.

      Capitalized Lease means any lease of Property, whether
real  and/or  personal,  by  a Person  as  lessee  which  as
determined  in  accordance  with  GAAP  is  required  to  be
capitalized on the balance sheet of such Person.

      Capitalized Lease Obligations of any Person means,  as
of  the  date  of any determination thereof, the  amount  at
which the aggregate rental obligations due and to become due
under  all Capitalized Leases under which such Person  is  a
lessee would be reflected as a liability on a balance  sheet
of such Person as determined in accordance with GAAP.

      Carve Out means, solely effective after receipt by the
Borrower  of  written  notice  from  the  Lenders   of   the
occurrence (and solely during the continuance) of  an  Event
of  Default  hereunder, the aggregate  sum  of:  (i)  unpaid
Bankruptcy  Court costs and U.S. Trustee's  fees,  (ii)  the
fees  and  costs incurred by professionals retained  by  the
Loan   Parties,  retained  by  any  official  committee   of
unsecured creditors or other similar committee appointed  by
the  Bankruptcy  Court, or otherwise paid by the  bankruptcy
estate  of  the  Loan  Parties in the Cases,  in  each  case
incurred  or  paid prior to the receipt by the  Borrower  of
written notice of such Event of Default, and (iii) fees  and
costs incurred by professionals retained by the Loan Parties
from and after the receipt by the Borrower of written notice
of such Event of Default, not to exceed the aggregate sum of
$100,000.   Notwithstanding  anything  contained   in   this
definition    to    the    contrary,    all    such     fees
and costs described in the foregoing sentence, shall not  be
paid in excess of the amounts relating thereto set forth  in
the  Budget  for the periods that correspond to the  periods
during which such fees were earned and costs incurred.

      Change  in  Control means (i) an event  or  series  of
events as a result of which any "person" or "group" (as such
terms  are  used  in  Sections 13(d)(3)  and  14(d)  of  the
Exchange  Act)  (excluding  Borrower  or  any  wholly  owned
Subsidiary  thereof) is or becomes, directly or  indirectly,
the  "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under  the Exchange Act, whether or not applicable) of  more
than   45%  of  the  combined  voting  power  of  the   then
outstanding   securities  entitled  to  vote  generally   in
elections of directors, managers or trustees, as applicable,
of  Borrower or any successor entity ("Voting Stock"),  (ii)
the  completion  of  any consolidation  with  or  merger  of
Borrower into any other Person, or sale (it being understood
that  the  vessel  sales  and related transactions  required
under Section 9.10 of this Agreement shall not be considered
a "sale" for purposes of a "Change of Control"), conveyance,
transfer or lease by Borrower of all or substantially all of
its  assets to any Person, or any merger of any other Person
into  Borrower in a single transaction or series of  related
transactions,  and, in the case of any such  transaction  or
series of related transactions, the outstanding common stock
of  Borrower is changed or exchanged as a result, unless the
stockholders  of  the  Borrower  immediately   before   such
transaction   own,   directly  or  indirectly,   immediately
following  such  transaction, at least 55% of  the  combined
voting  power  of the outstanding voting securities  of  the
Person resulting from such transaction in substantially  the
same  proportion  as  their ownership of  the  Voting  Stock
immediately before such transaction, or (iii) the occurrence
of  any event whereby less than a majority of the members of
the  Board  of  Directors of Borrower shall be  persons  who
either  (a) were serving as directors on the Effective  Date
or  (b) were nominated as directors and approved by the vote
of  the majority of the directors who are directors referred
to in clause (a) or this clause (b).

      Code  means  the  Internal Revenue Code  of  1986,  as
amended,  and  any  successor  statute  of  similar  import,
together with the regulations thereunder, in each case as in
effect  from  time to time.  References to sections  of  the
Code  shall  be  construed to also refer  to  any  successor
sections.

      Collateral means all of the following Property now  or
hereafter owned by any one or more of the Loan Parties:  (i)
all Property in respect of which a Lien has been granted  by
any  one  or more of the Loan Parties in favor of the  Agent
for the benefit of the Secured Parties pursuant to the terms
of  the Orders, (ii) all Property in respect of which a Lien
has  been granted by any one or more of the Loan Parties  in
favor  of  the Agent for the benefit of the Secured  Parties
under  the  terms  of  the  Preferred  Ship  Mortgages   and
Assignments of Earnings, including, without limitation,  the
Vessels,  (iii) all Property in respect of which a Lien  has
been granted by any one or more of the Loan Parties in favor
of  the  Agent for the benefit of the Secured Parties  under
the  terms  of  the Security Agreements, including,  without
limitation,  all  accounts,  inventory,  chattel  paper  and
general  intangibles  (including,  without  limitation,  all
patents)  of any one or more of the Loan Parties,  and  (iv)
all Property in respect of which a Lien has been granted  by
any  one  or more of the Loan Parties in favor of the  Agent
for the benefit of the Secured Parties pursuant to the terms
of the other Security Documents and other Loan Documents.

      Commitment  means, with respect to each  Lender,  such
Lender's Line of Credit Commitment.

      Committee  means any statutory committee or committees
appointed in the Cases.

      Company  Business  means  (i)  the  offshore  pipeline
installation and sub-sea construction for the  oil  and  gas
industry  and  (ii) any other activities  ancillary  to  the
foregoing.

      Consummation  Date means the date of  the  substantial
consummation   (as  defined  in  Section  1101(2)   of   the
Bankruptcy  Code and which, for purposes of this  Agreement,
shall   be   no  later  than  the  effective  date)   of   a
Reorganization  Plan  of any Loan Party  that  is  confirmed
pursuant to an order of the Bankruptcy Court in the Cases.

      Continuing  Guarantee  means  a  Continuing  Guarantee
substantially in the form of Exhibit B executed  now  or  at
any time hereafter by a Guarantor and delivered to Agent, as
the  same may be amended, supplemented or otherwise modified
from time to time.

     EDC means Export Development Canada.

      Default means the occurrence of any event or condition
specified   in  Section  9  hereof,  whether  or   not   any
requirement  for notice or lapse of time or other  condition
precedent has been satisfied.

      Disbursement Date has the meaning ascribed thereto  in
Section 4.3.

      Distribution  in  respect  of  any  Person  means  (a)
dividends  or other distributions of cash, stock, assets  or
other  property  on or in respect of any  shares  of  stock,
membership interest or other equity interest in such Person;
and  (b) the redemption, repurchase or other acquisition  of
any  shares  of stock, membership interest or  other  equity
interest in such Person or of any warrants, rights or  other
options  to purchase any such stock, membership interest  or
other  equity  interest (except when solely in exchange  for
such  stock, membership interest or other equity  interest);
provided  that, the issuance or granting of stock, warrants,
rights or other options to purchase stock of Borrower  shall
not be considered a Distribution.

      Dollars and $ means, unless otherwise provided herein,
dollars of the United States of America.

      Effective Date has the meaning set forth in the  first
paragraph of this Agreement.

      Environmental  Law means any federal, state  or  local
statute,  law,  rule,  regulation,  order,  consent  decree,
judgment,  permit,  license, code, deed restriction,  common
law,  treaty,  convention, ordinance or  other  governmental
requirement, domestic or foreign, relating to public health,
safety  or  the environment, including, without  limitation,
those relating to releases, discharges or emissions to  air,
water,  land  or groundwater, to the use of groundwater,  to
the  use  and  handling  of  polychlorinated  biphenyls   or
asbestos,  to the disposal, treatment, storage or management
of  hazardous or solid waste, hazardous substances or  crude
oil,  or  any  fraction  thereof, to exposure  to  toxic  or
hazardous   materials,  to  the  handling,   transportation,
discharge   or  release  of  gaseous  or  liquid   hazardous
substances,  in each case applicable to any of the  Property
owned,  leased or operated by Borrower or any Subsidiary  or
the  operation,  construction or modification  of  any  such
Property, including, without limitation, the following:  the
Comprehensive   Environmental  Response,  Compensation   and
Liability   Act  of  1980,  as  amended  by  the   Superfund
Amendments  and  Reauthorization  Act  of  1986,  42  U.S.C.
9601  et  seq., the Solid Waste Disposal Act, as amended  by
the  Resource  Conservation and Recovery  Act  of  1976  and
Hazardous  and  Solid Waste Amendments of  1984,  42  U.S.C.
556901 et seq., the Hazardous Materials Transportation  Act,
the  Federal Water Pollution Control Act, as amended by  the
Clean  Water  Act of 1976, the Safe Drinking  Water  Control
Act, the Clean Air Act of 1966, the Toxic Substances Control
Act of 1976, the Occupational Safety and Health Act of 1977,
the  Emergency Planning and Community Right-to-Know  Act  of
1986, the National Environmental Policy Act of 1975, the Oil
Pollution  Act of 1990, the Louisiana Environmental  Quality
Act  (La. R.S. 30:2001 et seq.), and the Louisiana Abandoned
Oil  field  Waste Site Law, La. R.S. 30:71 et seq.  and  any
amendments  to  these  laws and any  rules  and  regulations
promulgated thereunder.

     ERISA means the Employee Retirement Income Security Act
of  1974,  as amended, and any successor statute of  similar
import,  together with the regulations thereunder,  in  each
case as in effect from time to time.

      Event  of Default has the meaning ascribed thereto  in
Section 9.

     Exchange Act means the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated by the
Securities Exchange Commission.

      Fees  means all fees payable by Borrower under Section
5.2.

      Fed  Funds Rate means, for any day, the rate per annum
(rounded upwards, if necessary to the nearest 1/100th of 1%)
equal  to  the  weighted average of the rates  on  overnight
Federal  funds  transactions with  members  of  the  Federal
Reserve  System  arranged by Federal funds brokers  on  such
day, as published by the Federal Reserve Bank of New York on
the Business Day next succeeding such day, provided that (a)
if  such  day is not a Business Day, the Federal Funds  Rate
for  such day shall be such rate on such transactions on the
next  preceding  Business Day as so published  on  the  next
succeeding  Business Day, and (b) if  no  such  rate  is  so
published on such next succeeding Business Day, the  Federal
Funds Rate for such day shall be the average rate charged to
the Agent on such day on such transactions.

      Final  DIP  Payment Date means the date when  (i)  all
Commitments shall have expired or been terminated, (ii)  the
principal  of and interest on each Loan and Fees shall  have
been  paid  in full, (iii) all Letters of Credit shall  have
expired, been cancelled or been cash collateralized or other
arrangements satisfactory to the Agent and the Lenders shall
have  been  made,  and all amounts drawn  under  Letters  of
Credit shall have been reimbursed (together with any allowed
interest  thereon),  and (iv) all other  Obligations  (other
than  any  unmatured indemnity obligations) shall have  been
satisfied.

      Final  Order  means an order of the Bankruptcy  Court,
satisfactory  to  the Agent and the Lenders  in  their  sole
discretion,  approving the Loan Documents and  granting  the
Superpriority  Claim  status  and  the  Liens  described  in
Section  3.1, which Final Order (i) shall have been  entered
upon  an  application or motion of the Borrower satisfactory
in  form and substance to the Agent and the Lenders  in  all
material  respects, on such prior notice to such parties  as
may in each case be reasonably satisfactory to the Agent and
the  Lenders,  (ii) shall be in full force  and  effect  and
(iii)  shall  not  have been stayed, reversed,  modified  or
amended  in  any  respect; and, if the Final  Order  is  the
subject  of  a  pending appeal in any respect,  neither  the
making  of  any  Loans nor the issuance of  any  Letters  of
Credit  nor the performance by any Loan Party of any of  its
obligations hereunder or under the Loan Documents  or  under
any  other instrument or agreement referred to herein  shall
be the subject of a presently effective stay pending appeal.

      Final  Order Closing Date means the date on which  the
following  conditions  shall have been  satisfied:  (i)  the
Final  Order shall have been entered by the Bankruptcy Court
and  (ii)  the Agent and the Lenders shall have  received  a
favorable  written opinion of counsel to the  Loan  Parties,
dated the Final Order Closing Date and in substantially  the
form  of  the opinion delivered with respect to the  Interim
Order on the Effective Date.

      First  Day  Orders  means all orders  entered  by  the
Bankruptcy  Court  on the Petition Date,  within  five  days
thereafter or based on motions filed thereon or within three
Business Days thereafter.

      GAAP means generally accepted accounting principles at
the time in the United States of America.

      Guarantors  has  the meaning set forth  in  the  first
paragraph of this Agreement.

      Guarantor  Pledge Agreement has the  meaning  ascribed
thereto in the defined term Guarantor Pledge Documents.

     Guarantor Pledge Documents  means, with respect to each
Guarantor, the following documents: (a) a security agreement
(a  "Guarantor  Pledge  Agreement") in  form  and  substance
required  by the Required Lenders granting Lenders a  pledge
of  and  a  security  interest in all of the  common  stock,
membership  interest, partnership interest or  other  equity
interest  in such Guarantor owned directly or indirectly  by
Borrower  and/or  any one or more Guarantors,  (b)  executed
stock  powers  covering  all of the  common  stock  of  such
Guarantor  owned  directly or indirectly by Borrower  and/or
any one or more Guarantors, (c) such opinions of counsel for
Borrower  and/or any Guarantors as the Required Lenders  may
reasonably  require,  and  (d)  such  financing  statements,
resolutions,   certificates,   approvals,   documents    and
instruments as the Required Lenders may reasonably require.

     Indebtedness means, with respect to any Person, without
duplication,  all indebtedness, liabilities and  obligations
of   such  Person,  but  in  any  event  including,  without
limitation, all (i) obligations of such Person for  borrowed
money  or  for  the deferred purchase price of  Property  or
services  (including, without limitation, all notes  payable
and all obligations evidenced by bonds, debentures, notes or
other similar instruments), (ii) obligations secured by  any
Lien  on, or payable out of the proceeds of production from,
any  Property or assets owned by such Person, whether or not
such Person has assumed or become liable for the payment  of
such   obligations,  (iii)  indebtedness,  liabilities   and
obligations  of third parties, including joint ventures  and
partnerships of which such Person is a venturer  or  general
partner,  recourse to which may be had against such  Person,
(iv)  obligations created or arising under  any  conditional
sale  or  other  title retention agreement with  respect  to
Property  acquired by such Person, notwithstanding the  fact
that the rights and remedies of the seller, lender or lessor
under such agreement in the event of default are limited  to
repossession or sale of such Property, (v) Capitalized Lease
Obligations  of such Person, (vi) all accounts  payables  of
such   Person,  (vii)  all  indebtedness,  liabilities   and
obligations of such Person under guarantees or endorsements,
and  (viii)  all obligations of such Person,  contingent  or
otherwise, relative to the face amount of letters of  credit
(as  may be reduced pursuant to their terms), whether or not
drawn.

     Indemnitees has the meaning ascribed thereto in Section
11.4.

      Interim Order means an interim order of the Bankruptcy
Court,  as  filed  and approved by the Bankruptcy  Court  on
January 11, 2005, approving the Loans and Letters of  Credit
made  or  to be made to the Borrower by Lenders on or  after
the Effective Date in accordance with this Agreement, as the
same  may  be  amended, restated, supplemented or  otherwise
modified from time to time with the express written  consent
of   the  Agent  and  Required  Lenders  and  granting   the
Superpriority  Claim  status  and  the  Liens  described  in
Section 3.1, which Interim Order (i) shall be in full  force
and  effect  and (ii) shall not have been stayed,  reversed,
modified  or  amended in any respect; and,  if  the  Interim
Order  is  the  subject of a pending appeal in any  respect,
neither  the  making of any Loans nor the  issuance  of  any
Letters  of Credit nor the performance by any Loan Party  of
any of its obligations hereunder or under the Loan Documents
or  under  any  other  instrument or agreement  referred  to
herein  shall  be the subject of a presently effective  stay
pending appeal.

      Investment  means any investment by  Borrower  or  any
Guarantor in any Person, whether payment therefor is made in
cash  or  capital  stock of Borrower or any  Guarantor,  and
whether  such  investment  is by  acquisition  of  stock  or
Indebtedness, or by loan, advance, transfer of property  out
of  the  ordinary course of business, capital  contribution,
equity  or  profit sharing interest, extension of credit  on
terms  other  than  those normal in the ordinary  course  of
business,    guarantee   or   otherwise   becoming    liable
(contingently  or otherwise) in respect of the  Indebtedness
of any Person, or otherwise.

      Interest Rate Protection Agreement means any  interest
rate  exchange,  collar, cap or similar agreement  providing
interest  rate  protection,  entered  into  by  Borrower  in
respect of the Loans.

      Lenders  shall collectively mean Regions and EDC,  and
their  respective successors and assigns, with each being  a
Lender.

      Lenders'  Pre-Petition Collateral has the meaning  set
forth in Section 3.1.

      Lenders'  Pre-Petition Indebtedness means Indebtedness
of  the  Loan Parties under the following credit facilities:
(i)  a $15,000,000 revolving credit facility pursuant to the
terms of the Regions Loan Agreement, (ii) a $5,000,000  non-
revolving credit facility pursuant to the terms of the Sixth
Amendment  to  the  Regions  Loan  Agreement  and  (iii)   a
$79,000,000  construction credit facility  pursuant  to  the
terms of the Regions/EDC Credit Agreement.

     Lenders' Pre-Petition Loan Documents means the loan and
credit  agreements,  security  agreements,  ship  mortgages,
assignments,  pledge agreements and other loan and  security
documents  relating to, evidencing or securing the  Lenders'
Pre-Petition Indebtedness.

     Letter of Credit and Letters of Credit has the meanings
ascribed thereto in Section 4.1(a).

      Letter of Credit Application means an application  and
agreement  for letters of credit substantially in  the  form
attached  to  the Regions/EDC Credit Agreement, executed  by
Borrower  or by Borrower and a Guarantor (if the  Letter  of
Credit  is  to  be  for  the account  of  a  Guarantor)  and
delivered to Regions pursuant to Section 4.1(a), as the same
may  from  time  to time be amended, modified,  extended  or
renewed.

      Letter  of  Credit Maximum Amount means  an  aggregate
amount not exceeding $2,000,000.00.

      Letter  of Credit Loan and Letter of Credit Loans  has
the meaning ascribed thereto in Section 4.3.

      Letter  of  Credit Period means, with respect  to  any
Letter  of  Credit, the period commencing on  the  Effective
Date  and  ending no later than the fifth day prior  to  the
Termination Date.

      Letter  of  Credit  Request has the  meaning  ascribed
thereto in Section 4.1(a).

      Lien  means  any  interest  in  Property  securing  an
obligation owed to, or a claim by, a Person other  than  the
owner  of  the Property, whether such interest is  based  on
common   law,   statute  or  contract,  including,   without
limitation, any security interest, mortgage, deed of  trust,
hypothec, prior claim, right of retention, maritime lien  or
right  in  rem,  pledge, assignment, judgment  lien,  deemed
trust  or  other lien or encumbrance of any kind  or  nature
whatsoever, any conditional sale or trust receipt,  and  any
consignment  or  bailment for security purposes.   The  term
"Lien"     shall    include    reservations,     exceptions,
encroachments,    easements,   servitudes,    rights-of-way,
covenants, conditions, restrictions, leases and other  title
exceptions and encumbrances affecting Property.

      Line  of  Credit Commitment means for all Lenders  the
aggregate principal amount of $6,900,000.00.

      Line of Credit Loan and Line of Credit Loans have  the
meanings ascribed thereto in Section 2.1.

      Line  of Credit Notes has the meaning ascribed thereto
in Section 2.4.

      Line  of Credit Period means the period commencing  on
the Effective Date and ending on the Termination Date.

      Loans shall collectively mean the Line of Credit Loans
and  the Letter of Credit Loans, with each being a Loan, and
shall  include all principal, interest, attorneys' fees  and
costs owed thereon.

      Loan  Documents means this Agreement, the  Notes,  the
Letter  of Credit Application(s), the Continuing Guarantees,
the  Security Documents and all other agreements,  documents
and  instruments heretofore, now or hereafter  delivered  to
the  Agent  or  any  of the Lenders with respect  to  or  in
connection  with  or pursuant to this Agreement,  any  Loans
made  hereunder  or  thereunder, or any  Letters  of  Credit
issued hereunder or thereunder, and executed by or on behalf
of  Borrower and/or any Guarantor, all as the same may  from
time to time be amended, modified, extended or renewed.

      Loan Parties means, collectively, the Borrower and the
Guarantors.

     Material Adverse Effect means a material adverse effect
on    the   Properties,   assets,   liabilities,   business,
operations, income or condition (financial or otherwise)  of
Borrower and the Guarantors taken as a whole.

      Note  means  each Line of Credit Note, with  all  such
notes being collectively referred to as the Notes.

     Notice of Borrowing has the meaning ascribed thereto in
Section 2.3(a).

      Obligations means, without duplication,  any  and  all
present   and   future   Indebtedness  (including,   without
limitation, principal of the Loans, interest thereon,  Fees,
collection  costs and expenses, attorneys'  fees  and  other
amounts),  liabilities and obligations  (including,  without
limitation,  reimbursement  obligations  with   respect   to
Letters of Credit issued by Regions under this Agreement and
charge  backs  owed by Borrower with respect to  checks  and
other items of payment returned for insufficient funds under
Section 2.6) of Borrower and each Guarantor, and of any  one
or  more  of them, to any one or more of the Secured Parties
evidenced  by  or arising under or in connection  with  this
Agreement,  the  Notes, the Letter of Credit Application(s),
and/or  any of the other Loan Documents, whether  direct  or
contingent,  due  or  to  become  due  or  now  existing  or
hereafter arising.

      Obligor means Borrower, each Guarantor and each  other
Person  who  is  or  shall  at  any  time  hereafter  become
primarily or secondarily liable on any of the Obligations.

     Orders means the Interim Order and the Final Order.

     Overadvance has the meaning ascribed thereto in Section
2.2.

      Permitted Liens means any of the following: (a)  Liens
for  property taxes and assessments or governmental  charges
or  levies, provided that payment thereof is not at the time
required  by Section 8.1(d); (b) (i) deposits to secure  the
performance  of  bids, tenders, trade  contracts  or  leases
(other  than  Capitalized Leases)  or  to  secure  statutory
obligations, surety or appeal bonds or other Liens  of  like
general  nature incurred in the ordinary course of  business
and  not  in connection with the borrowing of money  or  the
acquisition  of inventory or other Property and  (ii)  Liens
(other  than  any  Liens imposed by ERISA)  arising  in  the
ordinary  course of business or incidental to the  ownership
of Properties and assets (including Liens in connection with
worker's compensation, unemployment insurance and other like
laws,  carrier's,  mechanic's,  materialmen's,  repairmen's,
vendor's,  warehousemen's and attorneys' liens and statutory
landlords'  liens);  provided  in  each  case  that  payment
thereof  is  not at the time required by Section  8.1(d)  or
8.1(e);  (c)  Survey exceptions, issues with regard  to  the
merchantability  of  title, easements  or  reservations,  or
rights  of  others for rights-of-way, servitudes,  utilities
and  other similar purposes, or zoning or other restrictions
as to the use of real properties, which could not reasonably
be  expected  to have a Material Adverse Effect;  (d)  Liens
permitted by the Required Lenders in writing; (e)  Liens  on
Properties   in   respect  of  judgments  or   awards,   the
Indebtedness with respect to which is permitted  by  Section
8.2(a)(v);  (f) Liens on Schedule 1.1A attached hereto;  (g)
leases  of  or  purchase  money security  interests  against
specific  equipment  securing Indebtedness  permitted  under
Section  8.2(a)(xiii);  (h) Liens under  the  Lenders'  Pre-
Petition  Loan  Documents; (i) Liens granted  in  connection
with  Pre-Petition  Indebtedness relating  to  the  MIDNIGHT
WRANGLER  and  MIDNIGHT  GATOR in  a  principal  amount  not
exceeding  $15,000,000.00 in the aggregate at any  one  time
outstanding;  (j)  Liens  granted in  connection  with  Pre-
Petition  Indebtedness relating to the MIDNIGHT EAGLE  in  a
principal   amount  not  exceeding  $9,250,000.00   in   the
aggregate  at  any one time outstanding; (k)  Liens  granted
with  respect to Post-Petition Indebtedness relating to  the
MIDNIGHT  WRANGLER, MIDNIGHT GATOR and MIDNIGHT  EAGLE,  and
all   Post-Petition  accounts  receivables  generated   with
respect  thereto;  (l)  Liens  with  respect  to  all  other
property  or assets of the Debtors that does not  constitute
part of the Collateral; and (m) Liens created under the Loan
Documents.

      Person  means  any  individual,  sole  proprietorship,
partnership,    joint    venture,   trust,    unincorporated
organization,  association, corporation,  limited  liability
company,   institution,   entity  or   government   (whether
national,   federal,  state,  county,  city,  municipal   or
otherwise,     including,    without     limitation,     any
instrumentality,  division,  agency,  body   or   department
thereof).
      Post-Petition  means, when used with  respect  to  any
Indebtedness, obligation, liability, claim or  other  matter
with  respect  to  any Loan Party, that  such  Indebtedness,
obligation,  liability, claim or other matter  arose  on  or
after the Petition Date.

      Pre-Petition  means, when used  with  respect  to  any
Indebtedness, obligation, liability, claim or  other  matter
with  respect  to  any Loan Party, that  such  Indebtedness,
obligation, liability, claim or other matter arose prior  to
the Petition Date.

      Pre-Petition  Payment means any  payment  (by  way  of
adequate  protection or otherwise), directly or  indirectly,
of principal or interest or otherwise on account of any Pre-
Petition  Indebtedness  or  trade  payables  or  other  Pre-
Petition  claims  against any Loan Party, including  without
limitation,  the  providing of a letter of credit  or  other
security to provide assurance of any such payment.

      Preferred  Ship  Mortgages has  the  meaning  ascribed
thereto in Section 5.6(b).

      Property means any interest in any kind of property or
asset,  whether  real,  personal or mixed,  or  tangible  or
intangible.  Properties means the plural of Property.

      Pro  Rata Share means with respect to each Lender with
respect  to  Line of Credit Loans or Letters of Credit,  the
percentage amount equal to the quotient of (x) such Lender's
share of the Line of Credit Commitment set forth (i) next to
such Lender's signature to this Agreement or (ii) after  the
Effective Date, in any Assignment Agreement, divided by  (y)
the  aggregate amount of Line of Credit Commitments. On  the
Effective Date, the Pro Rata Share of Regions and EDC is 50%
each.

      Regions means Regions Bank, an Alabama state bank,  in
its  individual  corporate capacity as a Lender   hereunder,
including,  without  limitation, its capacity  as  a  Lender
hereunder with respect to its Pro-Rata Share of the Line  of
Credit Loans and with respect to its issuance of Letters  of
Credit.

      Regions Loan Agreement means that certain Amended  and
Restated  Loan  Agreement dated as  of  December  20,  2002,
between Regions and Borrower, as previously amended.

      Regions/EDC Credit Agreement means that certain Credit
Agreement  dated as of April 23, 2003, among  the  Borrower,
Regions and EDC, as previously amended.

      Required  Lenders  means at any  time  Lenders  having
Fifty-One (51%) Percent of the aggregate amount of the  Line
of  Credit  Loans, the Letter of Credit Loans and  the  face
amount  (or  participation interest in the face  amount)  of
Letters  of Credit then outstanding or, if no such Loans  or
Letters  of  Credit  are then outstanding,  Fifty-One  (51%)
Percent  of  the  total Commitments of all of  the  Lenders;
provided  further  that the Required  Lenders  must  in  all
instances be at least two Lenders.

      Restricted  Investment means any  Investment,  or  any
expenditure or any incurrence of any liability to  make  any
expenditure for an Investment, other than:

        (a)  Guarantees, loans or advances by Borrower to  a
Guarantor or a Guarantor to Borrower;

       (b) Investments made Pre-Petition;

        (c) Investments permitted by the First Day Orders or
any  other  order  of the Bankruptcy Court approved  by  the
Lenders; and

       (d) Investments in the Subsidiaries of Borrower as of
the Effective Date.

      Secured Parties shall collectively mean Agent and  the
Lenders.

     Security Agreements has the meaning ascribed thereto in
Section 5.6(a).

      Security Documents means the Preferred Ship Mortgages,
the  Assignments  of Earnings, the Security Agreements,  the
Guarantor  Pledge Documents and any other Loan Documents  in
respect of which a Lien has been granted by the Loan Parties
in  favor  of  the  Agent  for the benefit  of  the  Secured
Parties.

     Subsidiary means (a) any corporation of which more than
fifty  percent  (50%) of the issued and outstanding  capital
stock  entitled to vote for the election of directors is  at
the time owned directly or indirectly by Borrower and/or any
one  or  more Subsidiaries, or (b) any partnership,  limited
liability  company,  business trust, or  any  other  similar
entity  of which more than fifty percent (50%) of the voting
interests  is  at the time owned directly or  indirectly  by
Borrower   and/or   any  one  or  more   Subsidiaries,   and
specifically  including, but not limited  to,  each  of  the
entities described on Schedule 7.13.

      Superpriority  Claim means a claim  against  any  Loan
Party   in   any  of  the  Cases  that  is  a  superpriority
administrative expense claim having priority  over  any  and
all administrative expenses, diminution claims and all other
claims,  now  existing  or hereafter arising,  of  any  kind
whatsoever  (other  than the Carve Out), including,  without
limitation, any and all administrative expenses of the  kind
specified  in  Sections 503(b) and 507(b) of the  Bankruptcy
Code,  and  any  and  all administrative expenses  or  other
claims  arising  under Sections 105,  326,  328,  330,  331,
503(b),  506(c), 507(a), 507(b), 726, 1113 or  1114  of  the
Bankruptcy Code), whether or not such claims or expenses may
become  secured  by a judgment lien or other  non-consensual
lien, levy or attachment.

      TELLC has the meaning set forth in the first paragraph
of this Agreement

      Termination  Date means the earlier to  occur  of  (i)
April  1,  2005  (which  date  may  be  extended  up  to  90
additional  days  thereafter upon  the  written  consent  of
Lenders  in  the  exercise of their  sole  discretion,  such
consent, if any, to be conditioned, among other things, upon
receipt  of  a  new Budget and the Agent's and the  Lenders'
complete  satisfaction  therewith),  (ii)  the  Consummation
Date,  and  (iii)  the acceleration of  the  Loans  and  the
termination of the Line of Credit Commitments in  accordance
with the terms hereof.

      TOLLC has the meaning set forth in the first paragraph
of this Agreement.

      US Vessels means the following vessels registered with
the  United  States of America and owned by the  Loan  Party
mentioned below: (i) Midnight Brave, Official Number 529263,
owned  by TOLLC, (ii) Midnight Fox, Official Number 1065954,
owned  by  TOLLC,  (iii)  Midnight Dancer,  Official  Number
586595, owned by TOLLC, (iv) Midnight Rider, Official Number
1035377,  owned by TOLLC, together with all masts,  boilers,
cables,   engines,  machinery,  bowsprits,  sails,  rigging,
boats,   anchors,   chains,  tackle,   apparel,   furniture,
fittings,  tools,  pumps, equipment, fuel,  supplies,  spare
parts and all other attachments, appurtenances, accessories,
additions, fixtures, equipment, appliances, improvements and
replacements  now  or hereafter belonging  thereto,  affixed
thereto, or used in connection therewith, whether because of
repairs or otherwise, whether or not removed therefrom.

      Vanuatu Vessels means the following vessels registered
with  the  Republic of Vanuatu and owned by the  Loan  Party
mentioned below: (i) Midnight Express, Official Number 1450,
owned by TELLC, (ii) Midnight Carrier, Official Number 1208,
owned  by  TOLLC,  (iii) and Midnight Star, Official  Number
398,  owned  by  TOLLC, together with  all  masts,  boilers,
cables,   engines,  machinery,  bowsprits,  sails,  rigging,
boats,   anchors,   chains,  tackle,   apparel,   furniture,
fittings,  tools,  pumps, equipment, fuel,  supplies,  spare
parts and all other attachments, appurtenances, accessories,
additions, fixtures, equipment, appliances, improvements and
replacements  now  or hereafter belonging  thereto,  affixed
thereto, or used in connection therewith, whether because of
repairs or otherwise, whether or not removed therefrom.

     Vessels means, collectively, the US Vessels and Vanuatu
Vessels.  References to the name of a Vessel shall refer  to
such vessel described in either the definition of US Vessels
or Vanuatu Vessels.

      1.2   Accounting Terms and Determinations.  Except  as
otherwise specified herein, all accounting terms used herein
shall   be   interpreted,   all  accounting   determinations
hereunder   shall  be  made  and  all  financial  statements
required  to  be  delivered hereunder shall be  prepared  in
accordance with GAAP as in effect from time to time, applied
on  a basis consistent (except for changes accompanied by  a
concurrence  from  Borrower's independent  certified  public
accountants)   with   the  most  recent  audited   financial
statements of Borrower delivered to the Lenders.

     SECTION 2.  LINE OF CREDIT LOANS.

      2.1  Line of Credit Commitments.  Subject to the terms
and conditions set forth in this Agreement and so long as no
Default  or Event of Default has occurred and is continuing,
during the Line of Credit Period, each Lender severally (and
not jointly) agrees to lend to Borrower from time to time on
a revolving basis (individually, a "Line of Credit Loan" and
collectively,  the "Line of Credit Loans")  amounts  not  to
exceed,  in the aggregate at any one time outstanding,  such
Lender's Pro Rata Share of (x) the Line of Credit Commitment
minus  (y) the aggregate principal amount of all outstanding
Line  of  Credit  Loans.  Within the foregoing  limitations,
Borrower  may  borrow under this Section 2.1,  prepay  under
Section  5.3  and reborrow at any time during  the  Line  of
Credit  Period  under  this Section 2.1.  Loans  under  this
Section  2.1 shall be made from the several Lenders  ratably
in  proportion  to  their respective Pro Rata  Shares.   The
failure  of  any  Lender to make any  Line  of  Credit  Loan
required  under this Agreement shall not release  any  other
Lender  from its obligation to make Line of Credit Loans  as
provided  herein.   Each  Line of  Credit  Loan  shall  bear
interest  on  the outstanding principal amount thereof,  for
each  day  from the date such Loan is made until it  becomes
due, at a rate per annum equal to the Applicable Rate.  Such
interest  shall be payable on all such Line of Credit  Loans
monthly  in  arrears on the last day of each month  (or  the
immediate  subsequent Business Day if any such last  day  is
not  a Business Day) and at maturity.  Any overdue principal
of and, to the extent permitted by law, overdue interest on,
any  Line  of  Credit Loan shall bear interest,  payable  on
demand, for each day until paid at a rate per annum equal to
the sum of three percent (3%) plus the Applicable Rate.

      2.2   Total  Line  of Credit Loans  Shall  Not  Exceed
Commitments.  If the Line of Credit Loans outstanding should
at any time exceed $6,900,000.00 (such excess Loans being an
"Overadvance"),   such   Overadvance   shall    nevertheless
constitute  Indebtedness that is secured by  the  Collateral
and  entitled  to all of the benefits of this Agreement  and
the  other  Loan Documents.  Any such Overadvance  shall  be
payable  by  the Borrower on demand by the Agent  and  shall
bear  interest at the Applicable Rate.  The Agent shall  not
be  responsible or liable for failure to make any demand for
payment under this Section 2.2.

     2.3  Method of Borrowing.

        (a)  With  respect  to  each Line  of  Credit  Loan,
Borrower's  Representative shall give notice (a  "Notice  of
Borrowing") to each Lender by 10:30 a.m. (New Orleans  time)
at  least  one (1) Business Day before each Line  of  Credit
Loan, specifying:

       (i) the date of such Line of Credit Loan, which shall
be a Business Day,

        (ii) the aggregate principal amount of such Line  of
Credit Loan,

        (iii)  that on the date of, and after giving  effect
to, such Line of Credit Loan, no Default or Event of Default
has occurred and is continuing, and

       (iv) that on the date of, and after giving effect to,
such  Line  of  Credit Loan, all of the representations  and
warranties  of  Borrower contained  in  Section  7  of  this
Agreement  and of Borrower and the Guarantors  contained  in
the  other  Loan  Documents are  true  and  correct  in  all
material respects as if made on and as of the date  of  such
Line  of  Credit  Loan  (except  to  the  extent  that  such
representations and warranties expressly relate solely to an
earlier  date  (in  which  case  such  representations   and
warranties  shall have been true and correct on  and  as  of
such earlier date)).

        (b) A Notice of Borrowing shall not be revocable  by
Borrower.

        (c)  Not later than 3:00 p.m. (New Orleans time)  on
the date of each Line of Credit Loan, each Lender shall make
available its Pro Rata Share of such Line of Credit Loan, in
federal or other funds immediately available in New Orleans,
Louisiana,  to  the  Borrower at  the  Borrower's  operating
account  at  Regions (or such other account mutually  agreed
upon  in  writing  between each Lender  and  Borrower).  The
parties hereto agree that no Lender is obligated to send any
proceeds  via  wire  transfer after 2:00 p.m.  (New  Orleans
time).  In  any event, each Lender shall remain  responsible
with  respect to making its Pro Rata Share of each  Line  of
Credit  Loan  available  to Borrower.  Agent  shall  not  be
required  to make any amount available to Borrower hereunder
except  to the extent that Agent and such Lender shall  have
made  alternative arrangements to fund Line of Credit  Loans
as  mutually  agreed between them, provided,  however,  that
under  such alternative arrangement, unless the Agent  shall
have  been notified in writing by a Lender prior to the date
a  Line  of  Credit Loan is to be made hereunder  that  such
Lender  does not intend to make its Pro Rata Share  of  such
Line  of Credit Loan available to the Agent, the Agent  may,
after  notice to such Lender, assume that such  Lender  will
make  such  Pro  Rata Share available to the Agent  on  such
date, and the Agent may, but has no obligation to do so,  in
reliance  upon such assumption, make available  to  Borrower
the  corresponding amount.  If such corresponding amount  is
not  in fact made available to the Agent by such Lender  and
the  Agent  has made such amount available to Borrower,  the
Agent  shall  be entitled to receive such amount  from  such
Lender  or the Borrower forthwith upon its demand,  together
with  interest  thereon in respect of each  day  during  the
period  commencing on the date such amount was  advanced  to
Borrower  and  ending on but excluding the  date  the  Agent
recovers such amount from (i) the Lender at a rate per annum
equal to the Fed Funds Rate or (ii) from the Borrower at the
Applicable Rate.

     2.4  Line of Credit Notes.

        (a)  The  Line  of Credit Loans of  each  Lender  to
Borrower shall be evidenced by a promissory note of Borrower
dated  the Effective Date and payable to the order  of  such
Lender  in  a principal amount equal to its Line  of  Credit
Commitment  in  substantially the form of  Exhibit  A  (with
appropriate insertions) (as such promissory notes  may  from
time  to time be amended, modified extended or renewed,  the
"Line of Credit Notes").

        (b)   Each  Lender  may record,  and  prior  to  any
transfer  of  its  Line of Credit Note may  endorse  on  the
schedules  forming a part thereof, appropriate notations  to
evidence  the  date and amount of each Line of  Credit  Loan
made  by  it  and  the date and amount of  each  payment  of
principal  made  by  Borrower with  respect  thereto.   Each
Lender  is hereby irrevocably authorized by Borrower  so  to
endorse its Line of Credit Note and to attach to and make  a
part  of any such Line of Credit Note a continuation of  any
such  schedule as and when required; provided, however  that
the obligation of Borrower to repay each Line of Credit Loan
actually made hereunder shall be absolute and unconditional,
notwithstanding any failure of any Lender to endorse or  any
mistake by any Lender in connection with endorsement on  the
schedules  attached to its respective Line of  Credit  Note.
The internal records of each Lender shall constitute for all
purposes prima facie evidence of (i) the amount of principal
and  interest  owing to such Lender on its  Line  of  Credit
Loans  from  time to time, (ii) the amount of each  Line  of
Credit  Loan made by such Lender to Borrower and  (iii)  the
amount of each principal and/or interest payment received by
such Lender on its Line of Credit Loans.

     2.5  Maturity.  All Line of Credit Loans not paid prior
to  the last day of the Line of Credit Period, together with
all  accrued  and unpaid interest thereon and all  fees  and
other  amounts owing by Borrower to the Lenders with respect
thereto,  shall be due and payable by Borrower on  the  last
day of the Line of Credit Period.

      2.6   Collections Account.   (a) All payments  on  all
accounts  receivable of the Loan Parties shall be  deposited
by  the Loan Parties on each Business Day such payments  are
received   to  a  collections  account  with  Regions   (the
"Collections Account").  Borrower shall pay all of  Regions'
standard  fees and charges in connection with the Collection
Account  as  such fees and charges may change from  time  to
time.   Borrower hereby grants to Agent, for the benefit  of
the  Lenders,  a  security interest in  and  lien  upon  the
Collections Account and all checks, items of payment and all
funds  deposited  and  collected in the Collections  Account
from  time  to  time  as  collateral  for  the  Obligations.
Borrower acknowledges and agrees that (i) neither the  Agent
nor  any Lender has any obligation to monitor or apply funds
in   the   Collections  Account  to  the  payment   of   the
Obligations,  (ii) Borrower retains the full  responsibility
(except  during  the existence of an Event  of  Default)  to
direct Regions from time to time in writing (or as otherwise
agreed)  as  to the disbursement of funds in the Collections
Account (including, without limitation, disbursements to pay
down the Line of Credit Loans, interest thereon or Fees)  in
accordance with the terms of this Agreement, the Budget  and
the  Orders,  (iii)  neither Agent nor any  Lender  has  any
obligation  to fund any overdrafts drawn on the  Collections
Account or any other account of a Loan Party with the  Agent
or  any  of the Lenders, (iv) notwithstanding the foregoing,
during  the  existence of an Event of Default,  and  without
limiting the Agent's other rights and remedies, Agent  shall
have  sole  authority to disburse funds in  the  Collections
Account and Borrower may not direct disbursements as to,  or
withdraw funds from, the Collections Account and (v) Regions
shall  have  the  right to charge back  to  the  Collections
Account any item which is returned for inability to collect,
plus  accrued interest (at the Applicable Rate)  during  the
period of Regions' provisional credit for such item prior to
receiving  notice of dishonor, or, in the  exercise  of  the
Lenders' sole discretion, make a Line of Credit Loan  to  be
applied to such charge back amount.

      (b)  Upon the deposit of any items of payment into the
Collections Account, Borrower shall provide Lenders  with  a
detailed   written  backup  report  in  form   and   content
satisfactory to the Lenders.

      2.7  Midnight Express Application of Proceeds of Sale.
(a)   Proceeds  from  the sale of the Midnight  Express  (as
described  in  Section 9.9) shall be applied  first  to  the
payment of reasonable transaction costs directly incurred in
connection  with  such sale as approved by  the  Lenders  in
writing (including, without limitation, attorneys' fees  and
expenses,  and broker and other professional fees),  second,
to  the  payment of the Obligations, and, third, subject  to
(b)  of  this  Section  2.7,  to pay  Lenders'  Pre-Petition
Indebtedness  described  in clause (ii)  of  the  definition
thereof, and the balance, if any, to such of the Obligations
and  Lenders'  Pre-Petition Indebtedness  as  Lenders  shall
direct, the extent, manner and amount of such application to
be  at  Lenders' sole discretion (proceeds from the sale  of
any other Vessels  shall be applied first to the payment  of
reasonable transaction costs directly incurred in connection
with  such  sale (including, without limitation,  attorneys'
fees  and expenses, and broker and other professional fees),
second,  to  the  payment  of such of  the  Obligations  and
Lenders' Pre-Petition Indebtedness as Lenders shall  direct,
the  extent, manner and amount of such application to be  at
Lenders'  sole discretion); provided, however, in the  event
and  to  the extent any maritime Lien or claim is determined
by a final order of the Bankruptcy Court (or any other court
of  competent jurisdiction) to prime or otherwise be  senior
in  priority to the Liens securing the Lenders' Pre-Petition
Indebtedness,  then, in such event and to such  extent,  the
proceeds from the sale of the Midnight Express or any  other
Vessel  shall  be  applied to the payment of  such  maritime
Liens  before  being  applied to the  Lenders'  Pre-Petition
Indebtedness.

        (b)    After payment of transactions costs  and  the
Obligations  pursuant  to clause (a) of  this  Section  2.7,
following  receipt by Debtors or Lenders, as applicable,  of
sale  proceeds  pursuant to subsection (a) of  this  Section
2.7,  Debtors or Lenders, as applicable, shall  establish  a
reserve account at Regions and deposit such amounts received
from  the sale proceeds before being applied to the Lenders'
Per-Petition Indebtedness as necessary to pay any bona  fide
maritime  Liens  or  claims determined by  the  Debtors  and
Lenders to prime or otherwise be senior in priority  to  the
Liens securing the Lenders' Pre-Petition Indebtedness, which
funds  shall be disbursed at the earlier of (i) entry  of  a
final  order  determining that such maritime Lien  or  claim
primes  or  is otherwise senior in priority to the  Lenders'
Pre-Petition  Indebtedness  to  such  claimant  and  (ii)  a
further order of the Bankruptcy Court with respect thereto.

      SECTION 3. SUPERPRIORITY STATUS OF OBLIGATIONS AND  OF
LIENS

      3.1  Priority  and  Liens.   Each  Loan  Party  hereby
covenants, represents and warrants that, upon entry  of  the
Interim  Order,  the Obligations and the Liens  against  the
Collateral  securing  the Obligations shall,  in  each  case
subject to the Carve Out: (i) be Superpriority Claims,  (ii)
pursuant  to  section  364(c)(2)  of  the  Bankruptcy  Code,
constitute  perfected first priority (except that  the  Lien
against  the  Midnight  Rider shall not  have  Superpriority
Claim  status  solely with respect to the Lien  against  the
Midnight    Rider   securing   the   Lenders'   Pre-Petition
Indebtedness under the Regions Loan Agreement) liens on  (1)
all  of the Loan Parties' assets that were pledged to secure
the   Lenders'  Pre-Petition  Indebtedness  (the   "Lenders'
Prepetition   Collateral"),  (2)  all  accounts   receivable
generated  by the Debtors postpetition from the  Prepetition
Collateral and (3) avoided liens or security interests under
section  551  of the Bankruptcy Code, and (iii) pursuant  to
Section   364(d)(1)  of  the  Bankruptcy  Code,   constitute
perfected  first  priority priming liens on the  Prepetition
Collateral, which shall prime any maritime liens that may be
senior   to  liens  of  the  Lenders  against  the  Lenders'
Prepetition  Collateral with respect to  the  Lenders'  Pre-
Petition Indebtedness.

       3.2   Payment  of  Obligations.   Upon  the  maturity
(whether  by  acceleration  or  otherwise)  of  any  of  the
Obligations,  the  Lenders shall be  entitled  to  immediate
payment  of such Obligations without further application  to
or order of the Bankruptcy Court.

     3.3  No Discharge: Survival of Claims.  Each Loan Party
agrees  that  (i) its obligations hereunder  and  under  the
other Loan Documents shall not be discharged by the entry of
an  order confirming any Reorganization Plan, dismissing any
Case or converting any Case to a case under Chapter 7 of the
Bankruptcy  Code (and each Loan Party, pursuant  to  Section
1141(d)(4)  of the Bankruptcy Code, hereby waives  any  such
discharge  with respect to such obligations)  and  (ii)  the
Superpriority  Claims granted to the Agent and  the  Lenders
pursuant to the Orders and described in Section 3.1 and  the
Liens  granted  to  the Agent pursuant  to  the  Orders  and
described  in Sections 3.1 and 5.7 shall not be affected  in
any   manner  by  the  entry  of  an  order  confirming  any
Reorganization  Plan, dismissing any Case or converting  any
Case to a case under Chapter 7 of the Bankruptcy Code.

      3.4  Use of Cash Collateral.  Notwithstanding anything
to the contrary contained herein, (x) the Borrower shall not
be  permitted to request a Line of Credit Loan under Section
2.1,  or  request the issuance of a Letter of  Credit  under
Section  4.1  unless  (i) the Bankruptcy  Court  shall  have
entered the Interim Order and (ii) the Loan Parties shall at
that  time  have the use of all Cash Collateral (defined  in
the   Orders)  subject  to  any  limitations  or  conditions
contained  in the Orders for the purposes described  in  the
Interim  Order  and (y) upon the occurrence and  during  the
continuation  of an Event of Default, the Loan  Parties  may
not use any Cash Collateral.

     SECTION 4.  LETTERS OF CREDIT.

     4.1  Letter of Credit Discretionary Facility.

        (a)  Subject  to  the terms and conditions  of  this
Agreement, during the Letter of Credit Period, and  so  long
as  no  Default  or  Event of Default has  occurred  and  is
continuing  (provided, however, that Regions shall  have  no
liability to any of the other Lenders for issuing  a  Letter
of  Credit after the occurrence of any Default or  Event  of
Default  unless  Regions has previously received  notice  in
writing  by Borrower, the Agent (if not Regions) or  any  of
the other Lenders of the occurrence of such Default or Event
of  Default), Regions hereby agrees to consider requests  in
the  exercise of its sole discretion from Borrower to  issue
commercial letters of credit and irrevocable standby letters
of  credit for the account of Borrower or for the account of
Borrower  and any other Loan Party (individually, a  "Letter
of  Credit" and collectively, the "Letters of Credit") in an
amount not exceeding the Letter of Credit Maximum Amount and
for the term specifically requested by Borrower by notice in
writing to Regions substantially in the form attached to the
Regions/EDC Credit Agreement (a "Letter of Credit  Request")
at  least  three  (3) Business Days prior to  the  requested
issuance thereof; provided, however, that:

           (i)  Regions shall have no commitment under  this
Agreement to issue any Letter of Credit and may reject,  for
any  reason, any request for the issuance of any  Letter  of
Credit in the exercise of its sole discretion;

           (ii)  Borrower, and if the Letter of Credit is to
be  issued for the account of Borrower and a Guarantor, such
Guarantor,  shall have executed and delivered to  Regions  a
Letter of Credit Application with respect to such Letter  of
Credit,  with Borrower and such Guarantor (if the Letter  of
Credit  will  be  issued for the account of Borrower  and  a
Guarantor)  to  be jointly, severally and solidarily  liable
thereunder;

           (iii) the term of any such Letter of Credit shall
not  extend  beyond  the last day of the  Letter  of  Credit
Period;

           (iv) any Letter of Credit may only be utilized in
the  ordinary course of business for the requirements of the
Company Business;

           (v)  the  sum  of (A) the aggregate undrawn  face
amount  of all outstanding Letter(s) of Credit plus (B)  the
aggregate  principal  amount of all  outstanding  Letter  of
Credit Loans shall not at any one time exceed the Letter  of
Credit Maximum Amount; and

           (vi)  the  text of any such Letter of  Credit  is
provided  to  Regions no less than three (3)  Business  Days
prior  to  the  requested  issuance  date,  the  terms   and
conditions of which must be acceptable to Regions.

        (b) Regions will make available the original of each
Letter  of  Credit  to  the beneficiary  thereof  (and  will
promptly  provide each of the other Lenders  and  the  Agent
with a copy of such Letter of Credit).

       (c) Borrower hereby further agrees to pay (or arrange
for  a  Guarantor,  if  it executed  the  Letter  of  Credit
Application, to pay) to Regions, solely for the  account  of
the Regions, a facing fee in the amount of 0.12% of the face
amount  of each Letter of Credit upon the issuance  thereof.
Borrower  further agrees to pay Regions standard negotiation
charges upon demand from time to time.  No Lender other than
Regions shall have any right to share in any facing fees  or
negotiation  fees  paid  by Borrower  (or  a  Guarantor)  to
Regions in connection with any of the Letters of Credit.

     4.2  Participation by Other Lenders.

        (a)  Upon  the issuance of a Letter of Credit,  each
Lender  shall share the obligation represented by each  such
Letter  of  Credit  so issued, in an amount  equal  to  such
Lender's  Pro Rata Share.  The participation of each  Lender
in  each  Letter of Credit shall be automatic.   Each  other
Lender  shall  make  available  to  Regions,  regardless  of
whether  any Default or Event of Default shall have occurred
and  is  continuing, an amount equal to its  respective  Pro
Rata  Share of each drawing on each Letter of Credit in same
day or immediately available funds not later than 11:00 a.m.
New  Orleans  time on each Disbursement Date (as hereinafter
defined)  for  each  such drawing.  In the  event  that  any
Lender fails to make available to Regions the amount of such
Lender's Pro Rata Share of any drawing on a Letter of Credit
as  provided  herein, Regions shall be entitled  to  recover
such  amount  on  demand  from  such  Lender  together  with
interest  at  the daily average Federal Funds Rate  for  the
first  two  Business  Days after the Disbursement  Date  and
thereafter at the Applicable Rate.

        (b) Regions shall distribute to each Lender that has
paid  all amounts payable by it under this Section 4.2  with
respect  to  any  Letter of Credit issued  by  Regions  such
Lender's Pro Rata Share of all payments received by  Regions
from  Borrower  in  reimbursement  of  drawings  honored  by
Regions  under such Letter of Credit when such payments  are
received  (to  the extent that such Lender has  not  already
received such amounts).

      4.3   Disbursements.   Regions shall  notify  Borrower
promptly  of  the presentment for payment of any  Letter  of
Credit  (on  the  date  of  presentment,  if  possible,  and
otherwise  on  the next Business Day, it being  agreed  that
such  notice may be made by phone), together with notice  of
the  date  (the "Disbursement Date") such payment  shall  be
made, and Regions will promptly notify the other Lenders  of
such  matters.  Subject to the terms and provisions of  such
Letter  of  Credit, Regions shall make such payment  to  the
beneficiary (or its designee) of such Letter of Credit.   On
the   Disbursement  Date,  Borrower  shall,  prior   to   or
contemporaneous  with a payment on such  Letter  of  Credit,
reimburse  (or cause any Guarantor for which the  Letter  of
Credit  was  issued  to  reimburse) Regions  and  the  other
Lenders  (to  the extent each Lender has paid its  Pro  Rata
Share of such drawing) for all amounts which will be or have
been disbursed under such Letter of Credit.  In the event  a
payment   under   a  Letter  of  Credit  is   made   without
contemporaneous   receipt  of  payment  from   Borrower   in
accordance  with  this  Section  4.3,  such  payment   shall
constitute  a  loan (individually a "Letter of Credit  Loan"
and  collectively, the "Letter of Credit Loans") by  Regions
and/or the other Lenders (to the extent each Lender has paid
its Pro Rata Share of such drawing) to Borrower.  All Letter
of Credit Loans shall accrue interest at the Applicable Rate
and shall be payable on demand.  Regions shall distribute to
each  Lender that has paid all amounts payable by  it  under
Section 4.2 with respect to a Letter of Credit such Lender's
Pro Rata share of all interest and other amounts received by
Regions from Borrower (or any Guarantor) under the Letter of
Credit Loan relating to such Letter of Credit (to the extent
that such Lender has not already received such amounts).

       4.4    Reimbursement.   Borrower's  obligation  under
Section 4.3 to reimburse Regions and the other Lenders  with
respect  to  each  drawing  under  each  Letter  of   Credit
(including interest thereon) (to the extent each Lender  has
paid  its Pro Rata Share of such drawing), and each Lender's
obligation  to  fund each drawing shall,  absent  the  gross
negligence or willful misconduct of Regions, be absolute and
unconditional   under   any  and   all   circumstances   and
irrespective  of  any setoff, counterclaim,  or  defense  to
payment  which Borrower or any Lender may have or  have  had
against any Lender, Borrower or any beneficiary of a  Letter
of  Credit, including, without limitation, any defense based
upon the occurrence of any Default or Event of Default,  any
draft,  demand  or  certificate or other document  presented
under  a  Letter of Credit proving to be forged, fraudulent,
invalid  or  insufficient,  or  any  failure  to  apply   or
misapplication  by the beneficiary of the  proceeds  of  any
disbursement,  or the legality, validity, form,  regularity,
or enforceability of such Letter of Credit.

      4.5   Replacement or Collateralization of  Letters  of
Credit.   Notwithstanding any provision  contained  in  this
Agreement or any of the Letter of Credit Applications to the
contrary,  upon the occurrence of any Event of  Default,  at
Agent's option, Borrower shall, upon Agent's demand, deliver
to Agent cash or other collateral acceptable to Agent having
a  value,  as  determined by Agent, at least  equal  to  the
aggregate undrawn face amount of all outstanding Letters  of
Credit  issued by Regions.  Any such collateral  and/or  any
amounts received by Agent pursuant to this Section 4.5 shall
be   held   by  Agent  in  a  separate  account   at   Agent
appropriately  designated as a cash  collateral  account  in
relation  to  this Agreement and the Letters of  Credit  and
retained by Agent as collateral security for the payment  of
the  Obligations.  Cash amounts delivered to Agent  pursuant
to  the foregoing requirements of this Section 4.5 shall  be
invested, at the request and for the account of Borrower, in
investments of a type and nature and with a term  acceptable
to  Agent.   Such  amounts, including in the  case  of  cash
amounts  invested  in  the  manner  set  forth  above,   any
investment realized thereon, shall not be used by  Agent  to
pay  any  amounts  drawn or paid under or  pursuant  to  any
Letter  of  Credit, but may be applied to reimburse  Regions
for drawings or payments under or pursuant to the Letters of
Credit  which  Regions has paid, or if no such reimbursement
is  required shall be used by Agent for application to  such
other  of  the  Obligations as Agent shall  determine.   Any
amounts remaining in any cash collateral account established
pursuant  to this Section 4.5 after the payment in  full  of
all of the Obligations and the expiration or cancellation of
all of the Letters of Credit shall be returned to Borrower.

     SECTION 5.  GENERAL PROVISIONS FOR ALL LOANS.

      5.1  Determination of Interest Rates.  The Agent shall
(in  accordance with this Agreement) determine each interest
rate  applicable to the Loans hereunder. Upon  request,  the
Agent  shall give prompt notice to Borrower and the  Lenders
of   each   rate   of  interest  so  determined,   and   its
determination thereof shall be conclusive in the absence  of
manifest error.

     5.2  Fees.

        (a)  Borrower  shall pay to Agent  for  the  ratable
account  of  the  Lenders, a commitment fee which  is  fully
earned  and non-refundable on the Effective Date  but  which
shall become payable on the Termination Date, of 1.5% of the
Line of Credit Commitment, equal to $103,500.00.

        (b)  Borrower  shall pay to Agent  for  the  ratable
account  of  the  Lenders, a letter of credit  issuance  fee
which  is  fully earned and non-refundable on  the  date  of
issuance  of  any  Letter of Credit but which  shall  become
payable  on the Termination Date, of 1.5% of the  full  face
amount of each Letter of Credit when issued.

     5.3  Early Payments.

        (a)  Borrower may, upon notice to the  Agent,  which
notice  shall be irrevocable, specifying that it  is  paying
its  Line  of Credit Loans, pay without penalty  or  premium
such  Line of Credit Loans in whole or in part at any  time,
or  from time to time.  Each such optional payment shall  be
applied  to  pay  the Line of Credit Loans  of  the  several
Lenders in proportion to their respective Pro Rata Shares.

        (b) Upon receipt of a notice of payment pursuant  to
Section 5.3(a), the Agent shall promptly notify each  Lender
of  the contents thereof and of such Lender's ratable  share
of such payment.

     5.4  General Provisions as to Payments.  Borrower shall
make  each  payment of principal of, and  interest  on,  the
Loans  and  of fees and all other amounts payable hereunder,
not  later  than 12:00 noon (New Orleans time) on  the  date
when due, in federal or other funds immediately available in
New Orleans, Louisiana, to the Agent at its address referred
to  in Section 11.7.  The Agent will promptly distribute  to
each Lender in immediately available funds its ratable share
of  each  such payment received by the Agent for the account
of  the  Lenders.  Whenever any payment of principal of,  or
interest  on,  the Loans or of fees shall be due  on  a  day
which  is  not a Business Day, the date for payment  thereof
shall  be extended to the next succeeding Business Day.   If
the  date  for  any  payment  of principal  is  extended  by
operation of law or otherwise, interest thereon, at the then
applicable rate, shall be payable for such extended time.

      5.5   Computation  of  Interest.   Interest  on  Loans
hereunder  shall be computed on the basis of a year  of  360
days  and  paid  for  the  actual  number  of  days  elapsed
(including the first day but excluding the last day).

      5.6  Security.  In order to secure payment when due of
the Obligations:

        (a)  Security Documents.  Borrower shall cause  each
Guarantor  to execute a Security Agreement substantially  in
the  form  of  Exhibit D (with appropriate insertions)  (the
"Security Agreement") in favor of the Agent for the  benefit
of the Secured Parties.  Borrower shall cause each Guarantor
to  execute  any and all financing statements,  continuation
statements and such other documents as may from time to time
be  requested by Agent or the Required Lenders in  order  to
create,  perfect and maintain the security interest  created
by the Security Agreement.

         (b)   Preferred  Ship  Mortgages;  Assignments   of
Earnings.  Borrower  shall cause each Guarantor  to  execute
preferred  fleet mortgage(s) and preferred ship  mortgage(s)
(the  "Preferred Ship Mortgages") granting  Agent,  for  the
benefit  of  the  Lenders,  preferred  mortgages  on   their
respective Vessels together with all proceeds thereof and to
execute  Assignments of Earnings with respect to the Vessels
(the  "Assignments  of  Earnings"), together  with  a  UCC-1
Financing  Statement filed in connection therewith,  all  of
the   foregoing  to  be  substantially  in  the  same   form
previously  executed in order to secure  the  Lenders'  Pre-
Petition Indebtedness.

        (c)   Continuing Guarantees.  Borrower  shall  cause
each  Guarantor to execute and deliver to Agent a Continuing
Guarantee  substantially  in the form  of  Exhibit  B  (with
appropriate insertions).

        (c)  Guarantor  Pledge  Documents.   Borrower  shall
execute and deliver, and cause each Guarantor to execute and
deliver,  to Agent Guarantor Pledge Documents pertaining  to
the  outstanding  stock  or other equity  interest  of  each
Guarantor.

        (d)   Patent and Trademark Office Filing.   Borrower
shall  execute  and  deliver, and cause  each  Guarantor  to
execute and deliver, to Agent on or before the date which is
20   days   after   the  Effective  Date,  patent   security
agreements,  in  form  and  substance  satisfactory  to  the
Lenders, to be recorded at Borrower's expense (not to exceed
$1,000) with the U.S. Patent and Trademark Office.

        (e)  Further Documents.  Borrower shall execute, and
shall cause each Guarantor to execute, any and all documents
as may from time to time be reasonably requested by Agent or
the  Required  Lenders  in  order  to  create,  perfect  and
maintain  the  Liens created by the Loan  Documents  subject
only to Permitted Liens.  Upon demand, Borrower shall pay to
Agent  or to any other party designated by Agent all  filing
fees  incurred  by  Agent  in the perfection  of  the  Liens
contemplated by the Loan Documents.

      5.7   Guaranty of Obligations of Guarantors.  Borrower
hereby unconditionally, irrevocably, jointly, severally  and
solidarily  guarantees the due and punctual payment  to  the
Agent for the benefit of the Secured Parties when stated  to
be due of all present and future obligations and liabilities
of  each  Guarantor  evidenced by or  arising  under  or  in
connection  with  the  Security  Agreement,  Preferred  Ship
Mortgages  and/or any other security documents  executed  by
such  Guarantor  in favor of Agent for the  benefit  of  the
Secured  Parties, whether direct or contingent,  due  or  to
become due or now existing or hereafter arising.

      5.8   Form  of  Loan  Documents.   Borrower  and  each
Guarantor  will agree to such modifications to the  form  of
the  Continuing  Guarantees, Security  Agreement,  Preferred
Ship  Mortgages, Guarantor Pledge Agreements and  the  other
Loan  Documents that are reasonably necessary to comply with
applicable  law  or  that  Agent  may  otherwise  reasonably
require.

       5.9    Deposit   Accounts.   As  security   for   the
Obligations, Borrower shall, and Borrower shall  cause  each
Guarantor, to maintain all of its primary operating accounts
with Agent.

     5.10 Insurance Proceeds.

        (a)   All  policies of insurance on  the  Collateral
shall  designate  Agent,  for the  benefit  of  the  Secured
Parties, as lender loss payee pursuant to a mortgagee's loss
payable  endorsement acceptable to Lenders.  Such  insurance
policies  shall contain an agreement by the insurer  not  to
cancel  or reduce coverage under the policies without giving
Agent at least thirty (30) days prior written notice of  its
intention  to  do  so.   Agent  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 Agent instead  of  to
Borrower or any Guarantor and Lenders jointly to be  applied
first  to the payment of the Obligations and second  to  the
Lenders' Pre-Petition Indebtedness; provided, that, so  long
as no default or Event of Default shall have occurred and be
continuing,  payments in respect of any hull  losses  for  a
Vessel  under $100,000 may be paid directly to  Borrower  or
Guarantors  as appropriate to be applied either  toward  the
repair  costs  to  such  Vessel or  toward  payment  of  the
Obligations.

      SECTION  6.   PRECONDITIONS TO LOANS  AND  LETTERS  OF
CREDIT.

      6.1  Initial Line of Credit Loan or Initial Letter  of
Credit.   Notwithstanding any provision contained herein  to
the  contrary, none of the Lenders shall have any obligation
to  make  the  initial  Line of Credit  Loan  hereunder  and
Regions shall have no obligation to issue a Letter of Credit
hereunder  unless  each  of  the following  requirements  is
satisfied  and  Lender has received each  of  the  following
documents:

          (a)  This Agreement, the Line of Credit Notes, the
Security Documents, the Continuing Guarantees and the  other
Loan Documents required by Section 5.6, each duly authorized
and executed;

           (b)   A  copy  of  resolutions of  the  Board  of
Directors  of  Borrower, duly adopted, which  authorize  the
execution,  delivery and performance of the  Loan  Documents
executed  by Borrower and each Guarantor, certified  by  the
Secretary or an Assistant Secretary of Borrower;

           (c)   A copy of the unanimous consent of the sole
member  of  each Guarantor, which authorizes the  execution,
delivery  and performance of the Loan Documents executed  by
such Guarantor;

           (d)  An incumbency certificate, executed  by  the
Secretary or an Assistant Secretary of Borrower, which shall
identify by name and title and bear the signatures of all of
the officers of Borrower executing any of the Loan Documents
delivered at or prior to the closing;

           (e)  Opinions  of  counsel for Borrower  and  the
Guarantors satisfactory to Agent relating to the  Cases  and
the Loan Documents and such other matters as the Lenders may
reasonably require;

           (f)  Payment  of  Agent's  reasonable  costs  and
expenses  as  provided for in Section 11.3  and  payment  to
Agent  for  the ratable benefit of the Lenders of  the  fees
required under Section 5.2(b);

           (g)  The Agent and Lenders shall have received  a
copy of the signed and entered Interim Order;

           (h)    All  of  the  First Day  Orders  shall  be
satisfactory  in  form and substance to the  Agent  and  the
Lenders in their sole discretion in all material respects;

           (i)  Evidence that appropriate insurance for  the
Vessels is in force;

           (j)   All  information, approvals,  documents  or
other  instruments  as the Required Lenders  may  reasonably
request;

           (k)   On the date of and immediately after giving
effect  to such Line of Credit Loan or Letter of Credit,  no
Default  or  Event  of Default shall have  occurred  and  be
continuing;

           (l) No material adverse change in the Properties,
assets,   liabilities,  business,  operations,   income   or
condition  (financial  or otherwise)  of  Borrower  and  the
Guarantors  taken as a whole shall have occurred  since  the
Effective Date and be continuing;

           (m) Except for subsequent changes consented to in
writing by the Required Lenders after the Effective Date, or
as  permitted pursuant to this Agreement or the  other  Loan
Documents,   all  of  the  representations  and   warranties
contained in Section 7 of this Agreement and of Borrower and
the Guarantors contained in the Loan Documents shall be true
and  correct in all material respects on and as of the  date
of such Line of Credit Loan or Letter of Credit, as the case
may  be,  as if made on and as of the date of such  Line  of
Credit  Loan or Letter of Credit (except to the extent  that
such  representations and warranties expressly relate solely
to  an earlier date (in which case such representations  and
warranties  shall have been true and correct on  and  as  of
such earlier date)); and

          (n)  The Agent and the Lenders shall have received
the  Budget which shall be satisfactory to the Agent and the
Lenders in their sole discretion.

        A  request  for  a Line of Credit Loan  or  for  the
issuance  of a Letter of Credit by Borrower hereunder  shall
be deemed to be a representation and warranty by Borrower on
the date of such Line of Credit Loan or Letter of Credit, as
the  case may be, as to the facts specified in clauses  (k),
(l) and (m) of this Section 6.1.

         Unless  otherwise  expressly  provided  above,  all
documents described above must be in form and substance  and
upon  terms  and  conditions satisfactory  to  the  Required
Lenders in their reasonable discretion.

        6.2      All  Line of Credit Loans.  Notwithstanding
any  provision contained herein to the contrary, none of the
Lenders  shall have any obligation to make any further  Line
of  Credit  Loan  hereunder, unless each  of  the  following
requirements is satisfied:

           (a)  With respect to any new Line of Credit Loan,
the  Agent shall have received a Borrowing Notice  for  such
Line of Credit Loan as required by Section 2.3;

           (b)   On the date of and immediately after giving
effect  to such Line of Credit Loan, no Default or Event  of
Default shall have occurred and be continuing;

           (c) No material adverse change in the Properties,
assets,   liabilities,  business,  operations,   income   or
condition  (financial  or otherwise)  of  Borrower  and  the
Guarantors  taken as a whole shall have occurred  since  the
Effective Date and be continuing; and

           (d) Except for subsequent changes consented to in
writing by the Required Lenders after the Effective Date, or
as  permitted pursuant to this Agreement or the  other  Loan
Documents,   all  of  the  representations  and   warranties
contained in Section 7 of this Agreement and of Borrower and
the Guarantors contained in the Loan Documents shall be true
and  correct in all material respects on and as of the  date
of such Line of Credit Loan as if made on and as of the date
of  such Line of Credit Loan (except to the extent that such
representations and warranties expressly relate solely to an
earlier  date  (in  which  case  such  representations   and
warranties  shall have been true and correct on  and  as  of
such earlier date)).

          (e)  On any date on which a Line of Credit Loan is
made, the Interim Order or the Final Order, as the case  may
be,  shall have been entered and shall not have been stayed,
amended,  vacated, reversed or rescinded without  the  prior
written consent of the Lenders.

        Each  request for a Line of Credit Loan by  Borrower
hereunder  shall  be  deemed  to  be  a  representation  and
warranty by Borrower on the date of such Line of Credit Loan
as  to the facts specified in clauses (b). (c), (d) and  (e)
of this Section 6.2.

        6.3      Letters  of  Credit.   Notwithstanding  any
provision  contained herein to the contrary,  Regions  shall
have  no obligation to consider a request from Borrower that
Regions issue any Letter of Credit hereunder unless each  of
the following requirements is satisfied:

          (a) Regions shall have received a Letter of Credit
Request  for  such Letter of Credit as required  by  Section
4.1(a);

          (b) Regions shall have received a Letter of Credit
Application for such Letter of Credit as required by Section
4.1(a),  duly executed by an authorized officer of  Borrower
and  of  a  Guarantor (if such Letter of Credit is  for  the
account of Borrower and a Guarantor) as account party;

           (c) Borrower shall have complied with all of  the
procedures and requirements set forth in Section 4.1;

           (d)  On  the  date of and immediately  after  the
issuance  of such Letter of Credit, no Default or  Event  of
Default shall have occurred and be continuing;

           (e) No material adverse change in the Properties,
assets,   liabilities,  business,  operations,   income   or
condition  (financial  or otherwise)  of  Borrower  and  the
Guarantors  taken as a whole shall have occurred  since  the
Effective Date and be continuing;

           (f) Except for subsequent changes consented to in
writing by the Required Lenders after the Effective Date, or
as  permitted pursuant to this Agreement or the  other  Loan
Documents,  all  of  the representations and  warranties  of
Borrower  contained in Section 7 of this  Agreement  and  of
Borrower  and  the Guarantors contained in  the  other  Loan
Documents shall be true and correct in all material respects
on  and  as  of the date of the issuance of such  Letter  of
Credit  as if made on and as of the date of the issuance  of
such  Letter  of  Credit (except to  the  extent  that  such
representations and warranties expressly relate solely to an
earlier  date  (in  which  case  such  representations   and
warranties  shall have been true and correct on  and  as  of
such earlier date));

            (g)  Regions  shall  have  received  such  other
documents,  certificates and agreements as it may reasonably
request; and

           (h)   On any date on which a Letter of Credit  is
issued,  the Interim Order or the Final Order, as  the  case
may  be,  shall  have been entered and shall not  have  been
stayed, amended, vacated, reversed or rescinded without  the
prior written consent of the Lenders.

        Each  request for the issuance of a Letter of Credit
by Borrower hereunder shall be deemed to be a representation
and warranty by Borrower on the date of the issuance of such
Letter  of Credit as to the facts specified in clauses  (d),
(e), (f) and (h) of this Section 6.3.

       SECTION 7.  REPRESENTATIONS AND WARRANTIES.

        Borrower hereby represents and warrants to  each  of
the Lenders that:

        7.1      Existence  and Power.   Borrower  and  each
Guarantor:  (i) is duly organized, validly existing  and  in
good  standing  under  the laws of the jurisdiction  of  its
organization;  (ii)  has  all  requisite  powers   and   all
governmental   and   regulatory  licenses,   authorizations,
consents and approvals required to carry on its business  as
now  conducted; and (iii) is qualified to transact  business
as  a  foreign entity in, and is in good standing under  the
laws  of,  all states in which it is required by  applicable
law  to maintain such qualification and good standing except
for those states in which the failure to qualify or maintain
good  standing could not reasonably be expected  to  have  a
Material Adverse Effect.

        7.2     Authorization.  The execution, delivery  and
performance by Borrower of this Agreement and the other Loan
Documents  and the commencement of the Cases are within  the
powers  of  Borrower and have been duly  authorized  by  all
necessary  action.  The execution, delivery and  performance
by  each Guarantor of any Continuing Guarantee and any other
Loan   Documents   executed  by  such  Guarantor   and   the
commencement  of  the Cases are within the  powers  of  such
Guarantor  and  have been duly authorized by  all  necessary
action.

       7.3     Governmental Approvals.  Except for the entry
of  the  Interim  Order  (and, where applicable,  the  Final
Order), no consent or approval of any governmental agency or
authority  is   required in connection with  the  execution,
delivery  and performance by Borrower and the Guarantors  of
the Loan Documents.

       7.4      Binding Effect.  Subject in each case to the
entry  of the Interim Order (or, where applicable, the Final
Order),  all  Loan  Documents are legal, valid  and  binding
obligations  of Borrower and each Guarantor, as  applicable,
enforceable according to their terms and conditions, and all
statements made in this Agreement are true and correct as of
the date hereof in all material respects, and the Letter  of
Credit  Application(s)  and any future  Loan  Documents  not
executed  contemporaneously  with  the  execution  of   this
Agreement,  when  executed and delivered in accordance  with
this Agreement, will constitute the legal, valid and binding
obligations  of Borrower and each Guarantor, as  applicable,
enforceable in accordance with their respective terms.

        7.5  ERISA.  To the extent applicable, Borrower  and
each  Guarantor  has  fulfilled its  obligations  under  the
minimum funding standards of ERISA and the Code with respect
to  each  plan and is in compliance in all material respects
with  the presently applicable provisions of ERISA  and  the
Code,  and  has  not incurred any liability to  the  Pension
Benefit Guaranty Corporation or to a plan under Title IV  of
ERISA which the failure to comply with could have a Material
Adverse Effect.

        7.6       No  Defaults.  Neither  Borrower  nor  any
Guarantor  is  in default in the performance, observance  or
fulfillment of any Post-Petition (i) obligations,  covenants
or conditions contained in any indenture, agreement or other
instrument  to which it is a party, and which could  have  a
Material  Adverse  Effect  or (ii)  judgment,  order,  writ,
injunction, decree or decision of any government  agency  or
authority.

        7.7      Liabilities, Litigation.  Neither  Borrower
nor  any Guarantor has any material (individually or in  the
aggregate)  liabilities,  direct or  contingent,  except  as
disclosed or referred to in the most recent balance sheet of
Borrower  delivered to the Lenders and, except as  described
in  the  most recent balance sheet of Borrower delivered  to
the  Lenders or in the most recent quarterly 10Q  or  annual
10K  filing  of  Borrower with the Securities  and  Exchange
Commission,  there is no material (individually  or  in  the
aggregate)  litigation, legal or administrative  proceeding,
investigation or other action of any nature pending  or,  to
the  knowledge of Borrower, threatened against or  affecting
Borrower or any Guarantor.

       7.8     Tax Payment.  Borrower and each Guarantor has
filed  all  tax returns and reports required  to  be  filed,
which  the  failure  to file could have a  Material  Adverse
Effect, and has paid all taxes, assessments, fees and  other
governmental  charges levied upon Borrower or any  Guarantor
or  upon any property owned by Borrower or any Guarantor  or
upon any income of Borrower or any Guarantor, which are  due
and  payable,  including interest and penalties,  which  the
failure to pay could have a Material Adverse Effect, or  has
provided adequate reserves for the payment thereof.

         7.9      Title  to  Property.   Borrower  and  each
Guarantor  is  the sole and absolute owner of,  or  has  the
legal right to use and occupy, all Property it claims to own
or  which  is  necessary for Borrower or such  Guarantor  to
conduct its material businesses free and clear of all  Liens
other  than Permitted Liens and subject to the turnover  and
release from arrest of the Midnight Express, Midnight  Eagle
and  Midnight Wrangler.  Borrower and each Guarantor  enjoys
peaceful and undisturbed possession in all material respects
under  all  leases  under which its is operating  as  lessee
which is necessary for Borrower or such Guarantor to conduct
its  material businesses free and clear of all  Liens  other
than Permitted Liens.

        7.10   Compliance  With  Laws.   Borrower  and  each
Guarantor  has  complied in all material respects  with  all
valid  laws,  statutes,  codes,  acts,  ordinances,  orders,
judgments,   decrees,   injunctions,   rules,   regulations,
certificates, franchises, permits, licenses, authorizations,
directions  and requirements of all federal, state,  county,
municipal  and  other  governments,  agencies,  departments,
divisions,   commissions,   boards,   courts,   authorities,
officials  and  officers, domestic  or  foreign,  including,
without  limitation, (i) all laws regarding the  collection,
payment,  and  deposit  of employees' income,  unemployment,
social  security, sales, and excise taxes  (subject  to  any
Bankruptcy  Court  orders  limiting  or  conditioning   such
compliance),  (ii)  all requirements  of  ERISA,  (iii)  all
Environmental   Laws  and  (iv)  all  laws   pertaining   to
occupational safety and health.

        7.11   Other Instruments; None Burdensome.   Neither
Borrower  nor  any  Guarantor is a party to  any  indenture,
agreement   or  other  instrument  affecting  its  business,
properties  or  assets,  operation  or  condition,   whether
financial or otherwise, which could have a Material  Adverse
Effect  except as disclosed in the balance sheet of Borrower
delivered  to  the Lenders and, except as described  in  the
most  recent  balance  sheet of Borrower  delivered  to  the
Lenders  or  in the most recent quarterly 10Q or annual  10K
filing   of  Borrower  with  the  Securities  and   Exchange
Commission.

        7.12   Investments.  Except as may be  permitted  by
Section  8.2(g) neither Borrower nor any Guarantor  has  any
Restricted Investments.

        7.13  Subsidiaries.  There are no Subsidiaries other
than as specifically set forth in Schedule 7.13.  As of  the
Effective Date, the stock or other equity interest  of  each
Guarantor is owned solely by Borrower.  Borrower may at  any
time  amend, modify or supplement Schedule 7.13 by notifying
Agent in writing of any changes with respect to a Subsidiary
that   is   not   a  Guarantor,  including  any   formation,
acquisition, merger or liquidation of any Subsidiary that is
not  a Guarantor or any change in the capitalization of  any
Subsidiary  that  is  not  a Guarantor,  in  each  case,  in
accordance  with  the terms of this Agreement  and  provided
that any such new Subsidiary shall, within fifteen (15) days
of  the  creation or acquisition of such Subsidiary, execute
and deliver to Agent all documents required by Section 5.6

       SECTION 8.  COVENANTS.

        8.1     Affirmative Covenants of Borrower.  Borrower
covenants and agrees that until the Final DIP Payment Date:

          (a) Information.  Borrower will deliver to Agent:

                    (i)   within 45 days after the close  of
                    each  quarter of Borrower's fiscal year,
                    consolidated  financial  statements   of
                    Borrower and its Subsidiaries consisting
                    of a balance sheet as of the end of such
                    fiscal  quarter, a statement of earnings
                    and surplus for such fiscal quarter, and
                    a statement of cash flow for such fiscal
                    quarter   certified  by  the  Borrower's
                    Chief Financial Officer;

                              (ii) within 120 days after the
                    close of Borrower's fiscal year, a  copy
                    of    annual    consolidated   financial
                    statements   of   Borrower    and    its
                    Subsidiaries, including a balance  sheet
                    as  of the end of each such fiscal year,
                    a  statement of earnings and surplus for
                    such  fiscal  year, and a  statement  of
                    cash  flow  for such fiscal year,  which
                    statements  shall  be  audited   by   an
                    independent certified public  accounting
                    firm acceptable to the Required Lenders;

                    (iii)       simultaneously   with    the
                    delivery   of  each  set  of   financial
                    statements   of  Borrower  referred   to
                    above,  a  certificate of the Borrower's
                    Chief Financial Officer substantially in
                    the  form  attached to  the  Regions/EDC
                    Credit   Agreement   (with   appropriate
                    insertions),  accompanied by  supporting
                    financial work sheets where appropriate,
                    stating whether there exists on the date
                    of  such certificate any Default, and if
                    a Default then exists, setting forth the
                    details  thereof  and the  action  which
                    Borrower is taking or proposes  to  take
                    with respect thereto;

               (iv) within   thirty  (30)  days  of  filing,
                    furnish Lenders with copies of the state
                    and   federal  tax  returns   filed   by
                    Borrower,   with   all   schedules   and
                    supporting documentation;

               (v)  promptly  upon, and in any event  within
                    three  business days of, becoming  aware
                    of  the  occurrence of any  event  which
                    constitutes  a Default, notice  of  such
                    occurrence  together  with  a   detailed
                    statement  by a responsible  officer  of
                    Borrower  of  the steps being  taken  by
                    Borrower  to  cure the  effect  of  such
                    event;

               (vi) on  or before 3:00 p.m. eastern time  on
                    each Tuesday, Borrower shall provide the
                    Agent  and  the  Lenders with  a  weekly
                    written  report  with  respect  to   the
                    Budget    setting   forth   the   actual
                    performance of the Borrower against  the
                    forecasts in the Budget and an  analysis
                    of  any material variance of such actual
                    performance   against  such   forecasted
                    performance in the Budget; and

                    (vii)      with  reasonable  promptness,
                    such  further information regarding  the
                    business,    affairs    and    financial
                    condition  of Borrower or any  Guarantor
                    as the Required Lenders may from time to
                    time reasonably request.

           (b)  Compliance with Laws.  Borrower will observe
and  comply, and cause each Guarantor to observe and comply,
with  all  valid  laws, statutes, codes,  acts,  ordinances,
orders, judgments, decrees, injunctions, rules, regulations,
certificates, franchises, permits, licenses, authorizations,
directions  and requirements of all federal, state,  county,
municipal  and  other  governments,  agencies,  departments,
divisions,   commissions,   boards,   courts,   authorities,
officials  and  officers, domestic  or  foreign,  including,
without  limitation, (i) all laws regarding the  collection,
payment,  and  deposit  of employees' income,  unemployment,
social  security, sales, and excise taxes  (subject  to  any
Bankruptcy  Court  orders  limiting  or  conditioning   such
compliance),  (ii)  all  applicable requirements  of  ERISA,
(iii)  all applicable Environmental Laws and (iv)  all  laws
pertaining  to  occupational safety and  health,  which  the
failure to comply with could have Material Adverse Effect.

           (c)  Payment of Indebtedness.  In addition to the
Borrower's obligations to pay the Obligations from  time  to
time,  the  Borrower will, and it will cause each  Guarantor
to,  pay  and  discharge  any and  all  other  Post-Petition
Indebtedness  (unless  prohibited by  any  Bankruptcy  Court
orders    with   respect   to   such   other   Post-Petition
Indebtedness)  payable by Borrower or a  Guarantor,  as  the
case  may be, and any interest or premium thereon, when  due
in  accordance  with the agreement, document  or  instrument
relating  to  such  Indebtedness,  provided,  however,  that
neither Borrower nor any Guarantor shall be required to  pay
any  such Indebtedness (excluding the Obligations) which  is
being contested in good faith and by appropriate proceedings
being  diligently conducted and for which adequate provision
in  accordance with GAAP has been made, except that Borrower
or such Guarantor, as the case may be, shall pay or cause to
be   paid   any   such  Indebtedness  forthwith   upon   the
commencement of proceedings to foreclose any Lien  which  is
attached  as  security therefor, unless such foreclosure  is
stayed by the filing of an appropriate bond.

           (d)   Payment of Taxes.  Borrower will, and  will
cause each Guarantor to, pay and discharge all Post-Petition
taxes,   assessments  and  governmental  charges  or  levies
imposed  upon it, or upon its income and profits,  prior  to
the  date  on which penalties might attach thereto  and  all
lawful claims which, if unpaid, might become a Lien upon the
assets of Borrower or any Guarantor; provided, however, that
neither Borrower nor any Guarantor shall be required to  pay
and  discharge  any such tax, assessment,  charge,  levy  or
claim so long as the legality thereof shall be contested  in
good  faith  and by appropriate proceedings  and  for  which
adequate  provision in accordance with GAAP has  been  made,
except that Borrower or such Guarantor, as the case may  be,
shall  pay  or cause to be paid all such taxes,  assessments
and governmental charges forthwith upon the commencement  of
proceedings to sell, seize or collect any Property  attached
as   security  therefor,  unless  such  sale,   seizure   or
collection is stayed by the filing of an appropriate bond.

           (e)   Payment of Claims.  Borrower will,  and  it
will  cause each of Guarantor to, promptly pay and discharge
all  Post-Petition (i) trade accounts payable in  accordance
with  usual and customary business practices and (ii) claims
for work, labor or materials which if unpaid might become  a
Lien  upon any of its Property or assets; provided, however,
that neither Borrower nor any Guarantor shall be required to
pay  any such account payable or claim the payment of  which
is   being  contested  in  good  faith  and  by  appropriate
proceedings  and for which adequate provision as  determined
in  accordance with GAAP has been made, except that Borrower
or such Guarantor, as the case may be, shall pay or cause to
be  paid all such accounts payable and claims forthwith upon
the  commencement of proceedings to foreclose any Lien which
is attached as security therefor, unless such foreclosure is
stayed by the filing of an appropriate bond.

           (f)   Insurance.   Borrower shall  maintain,  and
shall  cause  each  of its Subsidiaries  to  maintain,  with
financially   sound   and  reputable  insurance   companies,
insurance  on all its Property in at least such amounts  and
against  at least such risks as are usually insured  against
in the same general area by companies engaged in the same or
a  similar  business.  All such insurance may be subject  to
reasonable  deductible amounts.  Borrower shall  deliver  to
Agent  certificate(s) of insurance on the  date  hereof  and
upon the annual (or other shorter period of time) renewal of
such  policies specifying the details of all insurance  then
in  effect;  together with a certificate of  an  officer  of
Borrower  that  all  premiums  then  due  have  been   paid.
Borrower  shall notify Agent immediately in writing  of  any
material fire or other casualty to or accident involving any
of  the  Collateral,  whether or not such fire, casualty  or
accident  is  covered by insurance.  Borrower shall  notify,
and  shall  cause  each  Guarantor to notify,  promptly  the
insurance  company  and to submit an appropriate  claim  and
proof of claim to the insurance company if any Collateral is
damaged  or  destroyed by fire or other casualty.   Borrower
shall not, and shall not allow any Guarantor to, declare  or
agree   with   underwriters  that  any   Collateral   is   a
constructive or compromised, agreed or arranged constructive
total loss without the prior written consent of the Required
Lenders.

           (g)  Maintenance of Property.  Borrower will, and
will  cause  each  of its Subsidiaries  to,  at  all  times,
maintain, protect and keep in good repair, working order and
condition  (ordinary wear and tear excepted),  all  Property
necessary to the operation of Borrower and its Subsidiaries'
material businesses.

            (h)    Maintenance  of  Intellectual   Property.
Borrower  will, and will cause each of its Subsidiaries  to,
obtain  or  maintain in full force and effect, all licenses,
franchises,  intellectual property, permits,  authorizations
and  other  rights as are necessary for the conduct  of  its
business.

           (i)  Corporate Existence.  Borrower will, and  it
will  cause  each  of its Subsidiaries  to,  do  all  things
necessary to (i) preserve and keep in full force and  effect
at  all  times its corporate or other existence and (ii)  be
duly qualified to do business in all jurisdictions where the
nature of its business or its ownership of Property requires
such  qualification except for those jurisdictions in  which
the  failure to qualify could not reasonably be expected  to
have a Material Adverse Effect.

           (j)   Notice of Claim.  Borrower will,  and  will
cause  each  of its Subsidiaries to, promptly,  and  in  any
event within three business days, notify Lenders of (i)  the
arising   of   any  Post-Petition  litigation  or   dispute,
threatened  against or affecting assets of Borrower  or  any
Guarantor,  which,  if adversely determined,  could  have  a
Material Adverse Effect or (ii) any default under any  Post-
Petition  contract to which Borrower or any Guarantor  is  a
party.  Receipt of notice by Agent of any such litigation in
the  Cases  shall  constitute notice for  purposes  of  this
Section 8.1(j).

            (k)    Maintenance   of   Books   and   Records,
Consultations and Inspections.  Borrower will, and  it  will
cause  each  of  its  Subsidiaries to,  maintain  books  and
records in accordance with GAAP and in which full, true  and
correct   entries  shall  be  made  of  all   dealings   and
transactions  in  relation to its business  and  activities.
Borrower  will,  and it will cause each of its  Subsidiaries
to, permit Lenders (and any Person appointed by the Required
Lenders  to  whom  Borrower does not reasonably  object)  to
discuss  the affairs, finances and accounts of Borrower  and
each  Guarantor  with  the officers  of  Borrower  and  each
Guarantor and their independent public accountants,  all  at
such  reasonable times and as often as the Required  Lenders
may  from  time  to time reasonably request.  Borrower  will
also  permit,  and  will  cause each  Guarantor  to  permit,
inspection  of  its Property, books and records  by  Lenders
(and  any Person appointed by the Required Lenders  to  whom
Borrower  does not reasonably object) during normal business
hours and at other reasonable times.

           (l)   Further Assurances.  Borrower will, and  it
will  cause  each  Guarantor  to,  execute  and  deliver  to
Lenders,  at  any time and from time to time,  any  and  all
further agreements, documents and instruments, and take  any
and   all  further  actions  which  may  be  required  under
applicable  law,  or which Lenders may  from  time  to  time
reasonably  request, in order to effectuate the transactions
contemplated by this Agreement and the other Loan Documents.

            (m)   Agreements.   Neither  Borrower  nor   any
Guarantor  will  default under any Post-Petition  indenture,
contract,  agreement,  lease or other  instrument  to  which
Borrower  or any Guarantor is a party or by which  Borrower,
any  Guarantor or any Property of Borrower or any  Guarantor
is bound or affected.

           (n)   State  of Organization; Location  of  Chief
Executive Office and Collateral.  Neither Borrower  nor  any
Guarantor  will change its state of incorporation  or  other
organization, principal place of business or chief executive
office,  unless  Borrower or such Guarantor, as  applicable,
has  obtained  Agent's prior written consent and  has  taken
such  action as is necessary to cause the security  interest
of  Secured Parties in the Collateral to continue  to  be  a
first  priority perfected security interest subject only  to
Permitted  Liens,  which consent shall not  be  unreasonably
conditioned, delayed or withheld.

           (o)  Accountant.  Borrower shall give each of the
Lenders   prompt   notice  of  any  change   of   Borrower's
independent certified public accountants.  Borrower shall at
all  times  utilize independent certified public accountants
of  nationally recognized standing reasonably acceptable  to
the Required Lenders.

           (p)   Midnight  Hunter.  In the  event  that  the
Borrower  or  the other Loan Parties have not contracted  or
otherwise  arranged for a profitable job that  utilizes  the
Midnight  Hunter  with the result that the  Midnight  Hunter
remains  idle  for  a consecutive two (2) week  period,  the
Borrower  shall  notify the Agent in  writing  and,  upon  a
request  from the Agent with respect thereto, shall  file  a
motion  seeking, and take all necessary step to obtain,  the
rejection of the lease for the Midnight Hunter in the Case.

           (q)   Pursuit  of Accounts Receivable.   Borrower
shall, and shall cause each Guarantor to, pursue payment  on
all  accounts  receivable,  and,  in  connection  therewith,
Borrower  may  not,  and will not allow  any  Guarantor  to,
settle or compromise any account receivable by an amount  in
excess  of $100,000 per account debtor without the  Lenders'
prior written consent.

        8.2      Negative  Covenants of Borrower.   Borrower
covenants and agrees that until the Final DIP Payment Date:

           (a)   Limitation on Indebtedness.  Borrower  will
not, and it will not cause or permit any Guarantor to, incur
or  be  obligated on any Indebtedness other  than:  (i)  the
Obligations  to the Agent and the Lenders; (ii) Indebtedness
relating  to  employee  benefit  plans;  (iii)  Indebtedness
described  in  clause  (a)  or  (b)  of  the  defined   term
Restricted  Investment;  (iv)  Indebtedness  in  respect  of
taxes,  assessments,  governmental  charges  or  levies  and
claims for labor, materials and supplies to the extent  that
payment  therefor shall not at the time be  required  to  be
made in accordance with the provisions of Section 8.1(d)  or
Section 8.1(e); (v) Indebtedness in respect of judgments  or
awards  (which  do not constitute an Event of Default  under
Section  9.8)  that  have been in force for  less  than  the
applicable  period  for  taking  an  appeal  and  for  which
adequate provision as determined in accordance with GAAP has
been made so long as execution is not levied thereunder  and
in  respect of which Borrower or any Guarantor shall at  the
time  in  good faith be prosecuting an appeal or proceedings
for  review and a suspensive appeal bond in the full  amount
of  such  judgment  or  award shall have  been  obtained  by
Borrower  or  such  Guarantor  with  respect  thereto;  (vi)
current liabilities of Borrower or any Guarantor incurred in
the ordinary course of business not incurred through (A) the
borrowing  of  money, or (B) the obtaining of credit  except
for credit on an open account basis customarily extended and
in  fact  extended  in connection with normal  purchases  of
goods  and  services;  (vii)  endorsements  for  collection,
deposits  or  negotiation  and  warranties  of  products  or
services,  in each case incurred in the ordinary  course  of
business;  (viii)  Indebtedness in respect  of  performance,
surety  or  appeal bonds obtained in the ordinary course  of
Borrower's  or  any Guarantor's business; (xi)  Indebtedness
existing   as   of  the  Petition  Date;  (x)   Pre-Petition
Indebtedness relating to the MIDNIGHT WRANGLER and  MIDNIGHT
GATOR in a principal amount not exceeding $15,000,000.00  in
the  aggregate  at  any  one time  outstanding;  (xii)  Pre-
Petition  Indebtedness relating to the MIDNIGHT EAGLE  in  a
principal   amount  not  exceeding  $9,250,000.00   in   the
aggregate  at any one time outstanding; (xiii) Post-Petition
Indebtedness  relating  to the MIDNIGHT  WRANGLER,  MIDNIGHT
GATOR  and  MIDNIGHT  EAGLE, and all Post-Petition  accounts
receivables  generated  with respect  thereto;  (xiv)  Post-
Petition Indebtedness with respect to all other property  or
assets  of the Debtors that does not constitute part of  the
Collateral;   and  (xv)  guarantees  by  Borrower   of   the
performance of contracts by Guarantors entered into  in  the
ordinary course of business.

            (b)   Consolidation,  Merger,  Sale  of  Assets,
Dissolution, Etc.  Borrower will not, and will not cause  or
permit  any Guarantor to, (i) directly or indirectly,  merge
into  or with or consolidate with any other Person or permit
any  other Person to merge into or with or consolidate  with
it  provided that Borrower may cause a Guarantor to merge or
consolidate into Borrower or any other Guarantor, (ii) sell,
assign, lease, transfer, abandon or otherwise dispose of any
of  its  Property (including, without limitation, any shares
of  capital  stock or other equity interest of  a  Guarantor
owned  by  Borrower or another Guarantor),  except  for  (A)
sales  in  the  ordinary course of business of  those  items
excluded from the definition of Restricted Investments,  (B)
sales  of inventory in the ordinary course of business,  (C)
sales   of   the  Midnight  Express  or  other  Vessels   as
contemplated in Section 9.10 of this Agreement or (C)  sales
of  vessels that are not Collateral so long as the  proceeds
thereof are used to pay Indebtedness or purchase replacement
vessels or equipment or (iii) undertake any major expansion.

          (c)  Changes in Nature of Business.  Borrower will
not,  and  it will not cause or permit any of Guarantor  to,
engage  in any business if, as a result, the general  nature
of  the  business which would then be engaged in by Borrower
and  the  Guarantors,  considered  as  a  whole,  would   be
substantially changed from the Company Business.

           (d)  Change in Control.  Borrower shall not allow
any Change in Control to occur.

          (e)  Ownership of Subsidiaries.  Borrower will not
cause or permit any of its Subsidiaries to (i) authorize  or
issue  any new types, varieties or classes of capital stock,
membership  interest  or any other equity  interest  or  any
bonds  or  debentures,  subordinated or  otherwise,  or  any
warrants  or  options  to  purchase  any  stock,  membership
interest  or  any other equity interest, (ii)  authorize  or
issue  any  additional shares of capital  stock,  membership
interest  or  any other equity interest, (iii)  declare  any
stock,   membership  interest  or  other   equity   interest
Distributions or stock, membership interest or other  equity
interest  splits or (iv) take any other action which  could,
directly   or  indirectly,  decrease  Borrower's   ownership
interest in any of its Subsidiaries.

          (f)  Liens.  Borrower will not, and will not cause
or  permit any Guarantor to, mortgage or encumber any of its
Property or suffer any Liens to exist on any of its Property
without  the  prior written consent of the Required  Lenders
other than Permitted Liens.

           (g)   Restricted Investments.  Borrower will not,
and  it  will not cause or permit any Guarantor to, directly
or  indirectly,  make  or hold any Post-Petition  Restricted
Investments.

          (h)  Change in Management.  Borrower will not, and
will  not  cause  or  permit any  of  its  Subsidiaries  to,
terminate  or make any substantial change in the duties,  as
of the Effective Date, of Lyle G. Stockstill.

          (i)  Critical Vendors.  Borrower may not, and will
not  allow  any Loan Party to, pay any critical vendors  for
Pre-Petition  Date claims without the prior written  consent
of the Agent and the Lenders.

           (j)   Accounts Receivable Ending Balance.  Tested
as  of  the  end of each week, Borrower's (x) weekly  actual
"borrowing base test" shall not vary by more than 5% (in the
negative)   from   the  Borrower's  (y)  weekly   forecasted
"borrowing  base test" (the term "borrowing  base  test"  to
mean the line item in the Budget similarly named).

        8.3  Use of Proceeds.  Borrower covenants and agrees
that  the proceeds of the Line of Credit Loans will be  used
solely  as  set forth in the 13 week cash flow  forecast  as
agreed from time to time between the Borrower, the Agent and
the  Lenders (the "Budget"), but shall not be used in direct
connection with or to directly support the operation of  the
Midnight  Gator, Midnight Wrangler or Midnight  Eagle,  but,
for  the  absence  of  doubt, may be used  for  general  and
administrative expenses of the Borrower and the  other  Loan
Parties.   Immediately  upon the sale  of  any  Vessel,  the
Budget  then in effect shall be amended as agreed among  the
Borrower,   the  Agent  and  the  Lenders  to  reflect   the
elimination  of expenses associated with such  sold  Vessel.
The   Letters  of  Credit  will  be  used  solely  for   the
requirements of the Company Business in the ordinary  course
of  business. In no event may the proceeds of  any  Loan  or
Letter of Credit be used in violation of any applicable  law
or regulation.

       SECTION 9.  EVENTS OF DEFAULT.

       If any of the following (each of the following herein
sometimes called an "Event of Default") shall occur  and  be
continuing:

         9.1   Borrower  shall  fail  to  pay  any  of   the
Obligations   (or  interest  on  the  Lenders'  Pre-Petition
Indebtedness)  when  due  and such  failure  shall  continue
unremedied  for  five (5) days after written or  telegraphic
notice thereof shall have been given to Borrower by Agent;

        9.2   Any representation or warranty of Borrower  or
any  Guarantor  made in this Agreement, in  any  other  Loan
Document to which Borrower or any Guarantor is a party or in
any   certificate,   agreement,  instrument   or   statement
furnished or made or delivered pursuant hereto or thereto by
Borrower  or  any  Guarantor or in  connection  herewith  or
therewith,  shall prove to have been untrue or incorrect  in
any material respect when made or effected;

        9.3  Borrower or any Guarantor shall fail to perform
or  observe  any  term, covenant, or agreement  (other  than
failure to pay when due any of the Obligations) contained in
this  Agreement  or  in any other Loan  Document,  and  such
failure shall continue unremedied for twenty (20) days after
the earlier to occur of (x) actual knowledge by Borrower  or
Guarantor or (y) written or telegraphic notice thereof shall
have been given to Borrower by Agent, or if Borrower or  any
Loan  Party  shall  fail to perform, or otherwise  cause  or
permit  a  default under, any term, condition, provision  or
requirement contained in any Order;

        9.4   This  Agreement  or  any  of  the  other  Loan
Documents  shall  at  any time for any  reason  (other  than
cancellation by Agent) cease to be in full force and  effect
or  shall  be  declared to be null and void by  a  court  of
competent jurisdiction, or if the validity or enforceability
thereof  shall  be contested or denied by  Borrower  or  any
Guarantor,  or  if the transactions completed  hereunder  or
thereunder  shall be contested by Borrower or any  Guarantor
or  if Borrower or any Guarantor shall deny that it has  any
or further liability or obligation hereunder or thereunder;

        9.5 Any of the Cases shall be dismissed or converted
to a case under chapter 7 of the Bankruptcy Code or any Loan
Party  shall  file  a motion or other pleading  seeking  the
dismissal  of  any of the Cases under Section  1112  of  the
Bankruptcy Code or otherwise; a trustee under chapter  7  or
chapter 11 of the Bankruptcy Code, a responsible officer  or
an  examiner with enlarged powers relating to the  operation
of  the  business (powers beyond those set forth in  Section
1106(a)(3)  and  (4) of the Bankruptcy Code)  under  Section
1106(b) of the Bankruptcy Code shall be appointed in any  of
the Cases and the order appointing such trustee, responsible
officer or examiner shall not be reversed or vacated  within
30  days after the entry thereof; or an application shall be
filed  by  any  Loan  Party for the approval  of  any  other
Superpriority Claim (other than the Carve Out) in any of the
Cases  which is pari passu with or senior to the  claims  of
the  Agents  and the Lenders with respect to the  Collateral
against any Loan Party hereunder, or there shall arise or be
granted  any  such pari passu or senior Superpriority  Claim
with respect to the Collateral;

        9.6  The  Bankruptcy Court shall enter an  order  or
orders  granting  relief from the automatic stay  applicable
under  Section 362 of the Bankruptcy Code to the  holder  or
holders  of any security interest to permit foreclosure  (or
the  granting of a deed in lieu of foreclosure or the  like)
on  any  of  the  Collateral, or an order of the  Bankruptcy
Court  shall  be entered reversing, amending, supplementing,
staying,  vacating or otherwise modifying the Interim  Order
or the Final Order, as applicable;

        9.7   Borrower, any Guarantor or any  other  Obligor
shall be in default under any Post-Petition Indebtedness;

        9.8  One  or  more  judgments, decrees,  arbitration
awards  or rulings shall be entered against Borrower or  any
Guarantor  involving in the aggregate a liability (not  paid
or  covered by insurance) of $10,000.00 or more arising from
a  Post-Petition  event  and all  such  judgments,  decrees,
awards,  and  rulings  shall not have  been  vacated,  paid,
discharged,  stayed or suspensively appealed  within  thirty
(30) days from the entry thereof;

        9.9  The  Final  Order has not been entered  by  the
Bankruptcy Court on or before January 31, 2005 or such other
date  as  agreed to in writing by the Agent and  Lenders  in
their sole discretion;

       9.10 If the Loan Parties have failed to (i) execute a
binding  agreement for the sale of the Midnight Express  and
file a motion with the Bankruptcy Court seeking to establish
bid  procedures for such sale on or prior to a  date  to  be
agreed upon among the Borrower, the Agent and the Lenders or
(ii) file a motion on or before February 10, 2005 to approve
the  employment  of  a broker designated  by  Borrower  (and
approved by the Agent and the Lenders, such approval not  to
be   unreasonably  withheld)  to  sell  all  other   Vessels
comprising part of the Collateral, such Vessels to be listed
for  an  aggregate sale amount, together with the reasonably
anticipated proceeds from the sale of the Midnight  Express,
of  not  less than an amount sufficient to pay in  full  the
Obligations and the Lenders' Pre-Petition Indebtedness;

        9.11  Except as permitted by the Orders or the First
Day  Orders,  any  Loan  Party shall make  any  Pre-Petition
Payment other than Pre-Petition Payments authorized  by  the
Bankruptcy Court;

       9.12   Borrowers' chief restructuring advisor, Bridge
Associates  LLC, shall no longer provide such  services  for
any  reason  (whether such services are  terminated  by  any
Borrower, Bridge Associates LLC or otherwise);

        9.13   The  Loan Parties shall (or any successor  in
interest  to  any Loan Party, including, without limitation,
any  trustee  in  the  Cases or any other  cases  under  the
Bankruptcy Code in which any of the Loan Parties is a debtor
therein)   assert  any  claim  for  costs  or  expenses   of
administration  of the Cases against any of the  Collateral,
pursuant  to  Section  506(c)  of  the  Bankruptcy  Code  or
otherwise; or

        9.14  A material adverse change with respect to  the
Properties,   assets,  liabilities,  business,   operations,
income or condition (financial or otherwise) of Borrower and
the  Guarantors  taken as a whole shall have occurred  since
the Effective Date.

        THEN,  and  in each such event, and without  further
order  of or application to the Bankruptcy Court, the  Agent
shall, if requested in writing by the Required Lenders,  and
may,  in  its  sole and absolute discretion, upon  the  oral
request   of   the  Required  Lenders,  declare   that   the
obligations  of  the  Lenders  to  make  Loans  under   this
Agreement  and  to  issue  Letters  of  Credit  under   this
Agreement have terminated, whereupon such obligations of the
Lenders  shall be immediately and forthwith terminated,  and
the  Agent  shall, if requested in writing by  the  Required
Lenders, and may, in its sole and absolute discretion,  upon
the oral request of the Required Lenders, declare the entire
outstanding principal balance of and all accrued and  unpaid
interest on the Notes and all of the other Loans under  this
Agreement  and all of the other Obligations to be  forthwith
due  and  payable,  whereupon all of  the  unpaid  principal
balance of and all accrued and unpaid interest on the  Notes
and all of the other Loans under this Agreement and all such
other  Obligations shall become and be immediately  due  and
payable,  without  presentment, demand, protest  or  further
notice of any kind, all of which are hereby expressly waived
by  Borrower,  and  the Agent and each of  the  Lenders  may
terminate the Borrower's use of Cash Collateral and exercise
any  and  all other rights and remedies which they may  have
under  any  of  the Loan Documents or under applicable  law;
provided,  however, that upon the occurrence  of  any  event
described in Sections 9.5, the obligations of the Lenders to
make  Loans  under  this Agreement and to issue  Letters  of
Credit  under  this Agreement shall automatically  terminate
and  the  entire outstanding principal balance  of  and  all
accrued  and  unpaid interest on the Notes and  all  of  the
other  Loans  under  this Agreement and  all  of  the  other
Obligations shall automatically become immediately  due  and
payable,  without  presentment, demand, protest  or  further
notice of any kind, all of which are hereby expressly waived
by  Borrower,  and  the Agent and each of  the  Lenders  may
exercise  any and all other rights and remedies  which  they
may have under any of the Loan Documents or under applicable
law.

       SECTION 10.  AGENT.

        10.1   Appointment.  Regions is hereby appointed  by
the  Lenders  as  Agent  under  and  for  purposes  of  this
Agreement,  the  Notes and the other  Loan  Documents.   The
Agent  agrees  to  act as such upon the  express  conditions
contained  in  this Agreement and the other Loan  Documents.
The Agent shall hold all Collateral as the agent for all  of
the Lenders and all net proceeds of the Collateral shall  be
shared  by  the  Lenders  ratably in accordance  with  their
respective Pro Rata Shares.

       10.2  Powers.

           (a)   The Agent shall have and may exercise  such
powers hereunder as are specifically delegated to the  Agent
by the terms of this Agreement and the other Loan Documents,
together  with  such  powers  as are  reasonably  incidental
thereto.   Each  Lender and the Agent hereby authorizes  the
Agent to enter into the Loan Documents to which Agent  is  a
party  and  to  take  all actions contemplated  thereby  and
confirms its appointment of Regions Bank as Agent under  the
terms  and  conditions of the Loan Documents.   Each  Lender
hereby  confirms its agreement to be bound by the terms  and
conditions  of  the security documents included  within  the
Loan  Documents.  The Agent shall have no implied duties  to
the  Lenders, nor any obligation to the Lenders to take  any
action  under  this  Agreement or  any  of  the  other  Loan
Documents, except any action specifically provided  by  this
Agreement or any of the other Loan Documents to be taken  by
the   Agent.   Without  limiting  the  generality   of   the
foregoing,  the  Agent  shall not be required  to  take  any
action  with  respect to any Default or  Event  of  Default,
except as expressly provided in Section 9.  Each Lender  and
the  Agent  agree  that  no  Lender  shall  have  any  right
individually to seek to realize upon the Collateral  granted
for the benefit of the Agent and the Lenders pursuant to any
of  the Loan Documents, it being understood and agreed  that
such  rights and remedies may be exercised by the  Agent  as
Agent  for the benefit of the Secured Parties upon the terms
of the Loan Documents.

           (b)  Each  of the Lenders also hereby irrevocably
appoints and authorizes the Agent to act as security trustee
on  its  behalf  with  regard to (i) the  security,  powers,
rights,  titles,  benefits and interests (both  present  and
future)  constituted  by and conferred  on  it  or  for  its
benefit  under or pursuant to this Agreement or any  of  the
Loan  Documents (including, without limitation, the  benefit
of  all covenants, undertakings, representations, warranties
and  obligations given, made or undertaken  to  it  in  this
Agreement or in any of the other Loan Documents),  (ii)  all
monies, property and other assets paid or transferred to  or
vested  in  it or any agent thereof or received or recovered
by  it  or  any agent thereof pursuant to, or in  connection
with,  this  Agreement or any of the other  Loan  Documents,
whether  from the Borrower, any of the Subsidiaries  or  any
other person, and (iii) all monies, investments, property or
other  assets at any time representing or deriving from  any
of  the foregoing, including all interest, income and  other
sums  at any time received or receivable by it or any  agent
thereof  in respect of the same (or any part thereof).   The
Agent  hereby  accepts such appointment but  shall  have  no
obligations  under this Agreement or under any of  the  Loan
Documents  except  those  expressly  set  forth  herein  and
therein.

          (c)  Each Lender hereby agrees, and each holder of
any Obligations by the acceptance thereof will be deemed  to
agree,  that,  except  as otherwise set  forth  herein,  any
action  taken  by  the  Agent or  the  Required  Lenders  in
accordance  with  the provisions of this  Agreement  or  the
other  Loan Documents, and the exercise by the Agent or  the
Required  Lenders of the powers set forth herein or therein,
together with such other powers as are reasonably incidental
thereto,  shall be authorized and binding upon  all  of  the
Lenders.  The Agent is hereby authorized on behalf of all of
the  Lenders,  without the necessity of  any  notice  to  or
further consent from any Lender, from time to time, to  take
any  action with respect to any Collateral or Loan Documents
which may be necessary to perfect and maintain perfected the
Liens on the Collateral granted by the Loan Documents.   The
Lenders irrevocably authorize the Agent at its option and in
its  discretion, to release any Lien granted to or  held  by
the  Agent upon any Collateral (i) upon termination  of  the
Line  of Credit Commitments and the payment in full  of  all
Obligations; (ii) constituting property sold or to  be  sold
or  disposed  of  as  part  of or  in  connection  with  any
disposition  permitted  hereunder  or  by  any  other   Loan
Document;  (iii)  constituting  property  in  which  neither
Borrower  nor any Guarantor owned any interest at  the  time
the  Lien  was  granted  or  at any  time  thereafter;  (iv)
constituting  property leased to Borrower or  any  Guarantor
under  a  lease  which has expired or been terminated  in  a
transaction  permitted under this Agreement or is  about  to
expire  and  which  has not been, and  is  not  intended  by
Borrower  or  any Guarantor to be, renewed or extended;  (v)
consisting of an instrument evidencing Indebtedness  if  the
Indebtedness  evidenced thereby has been paid  in  full;  or
(vi)  if approved, authorized or ratified in writing by  the
Required  Lenders.  Upon request by the Agent at  any  time,
the Lenders will confirm in writing the Agent's authority to
release particular types or items of Collateral pursuant  to
this Section 10.2.

       10.3  General Immunity.  Neither the Agent nor any of
its directors, officers, employees, agents or advisors shall
be  liable to any of the Lenders for any action taken or not
taken  by it (i) with the consent or at the request  of  the
Required  Lenders or (ii) in the absence of  its  own  gross
negligence or willful misconduct.

        10.4   No  Responsibility for Loans, Recitals,  Etc.
Neither  the  Agent  nor  any of  its  directors,  officers,
employees,  agents or advisors shall (i) be responsible  for
or  have  any duty to ascertain, inquire into or verify  any
recitals, reports, statements, representations or warranties
contained  in  this  Agreement or  any  of  the  other  Loan
Documents or furnished pursuant hereto or thereto;  (ii)  be
responsible  for  any Loans or Letters of  Credit  hereunder
(except  in  Agent's  capacity as a  Lender  hereunder  with
respect to its Pro Rata Share thereof pursuant to the  terms
of  this  Agreement), (iii) be bound to ascertain or inquire
as  to the performance or observance of any of the terms  of
this  Agreement or any of the other Loan Documents; (iv)  be
responsible for the satisfaction of any condition  specified
in  Section  6,  except  receipt of  items  required  to  be
delivered  to  the  Agent; or (v)  be  responsible  for  the
validity,  effectiveness, genuineness or  enforceability  of
this  Agreement or any of the other Loan Documents; or  (vi)
be responsible for the creation, attachment or perfection of
any  security interests or liens purported to be granted  to
the  Agent  or any of the Lenders pursuant to this Agreement
or  any  of  the other Loan Documents.  The Agent shall  not
incur  any liability by acting in reliance upon any  notice,
consent, certificate, statement or other writing (which  may
be  a  Lender  wire,  telex, telecopy  or  similar  writing)
believed  by it to be genuine or to be signed by the  proper
party or parties.

        10.5  Right to Indemnity.  Notwithstanding any other
provision  contained in this Agreement to the  contrary,  to
the extent Borrower fails to reimburse the Agent pursuant to
Section  11.3 or Section 11.5, the Lenders shall ratably  in
accordance  with  their respective Pro Rata  Shares  of  the
aggregate  amount  of  Loans  and  Letters  of  Credit  then
outstanding,  or if no Loans or Letters of Credit  are  then
outstanding, their respective Pro Rata Shares of  the  total
Commitments of all of the Lenders, indemnify the  Agent  and
hold  it  harmless from and against any and all liabilities,
losses  (except  losses  occasioned  solely  by  failure  of
Borrower  to make any payments or to perform any obligations
required  by  this Agreement (other than those described  in
Sections  11.3  and 11.5), the Notes, the Letter  of  Credit
Applications  or  any  of the other Loan  Documents),  costs
and/or  expenses, including, without limitation,  reasonable
attorneys'  fees  and expenses, which the Agent  may  incur,
directly  or indirectly, in connection with this  Agreement,
the  Notes or any of the other Loan Documents, or any action
or transaction related hereto or thereto; provided only that
the  Agent shall not be entitled to such indemnification for
any  losses, liabilities, costs and/or expenses directly and
solely  resulting from its own gross negligence  or  willful
misconduct.  This indemnity shall be a continuing indemnity,
contemplates  all  liabilities, losses, costs  and  expenses
related  to the execution, delivery and performance of  this
Agreement, the Notes and the other Loan Documents, and shall
survive  the  satisfaction and payment  of  the  Loans,  the
expiration or other termination of the Letters of Credit and
the termination of this Agreement.

        10.6   Action Upon Instructions of Required Lenders.
The  Agent agrees, upon the written request of the  Required
Lenders,  to take any action of the type specified  in  this
Agreement or any of the other Loan Documents as being within
the   Agent's   rights,   duties,  powers   or   discretion.
Notwithstanding  the  foregoing, the Agent  shall  be  fully
justified  in  failing  or  refusing  to  take  any   action
hereunder,  unless  it  shall first be  indemnified  to  its
satisfaction  by the Lenders pro rata against  any  and  all
liabilities, losses, costs and expenses (including,  without
limitation,  attorneys'  fees and  expenses)  which  may  be
incurred by it by reason of taking or continuing to take any
such action, other than any liability which may arise out of
Agent's  gross negligence or willful misconduct.  The  Agent
shall  in  all  cases be fully protected in  acting,  or  in
refraining from acting, hereunder in accordance with written
instructions  signed  by  the  Required  Lenders,  and  such
instructions and any action taken or failure to act pursuant
thereto  shall be binding on all of the Lenders and  on  all
holders  of the Notes.  In the absence of a request  by  the
Required  Lenders,  the Agent shall have authority,  in  its
sole  discretion, to take or not to take any action,  unless
this   Agreement   or  any  of  the  other  Loan   Documents
specifically requires the consent of the Required Lenders or
of all of the Lenders.

       10.7  Reliance on Documents; Employment of Agents and
Counsel.  The Agent shall be entitled to rely upon any note,
notice,  consent, certificate, affidavit, letter,  telegram,
statement,  paper or document believed by it to  be  genuine
and  correct and to have been signed or sent by  the  proper
person  or persons.  The Agent may execute any of its duties
as  Agent  hereunder  by or through employees,  agents,  and
attorneys-in-fact and shall not be answerable to the Lenders
for  the  default  or  misconduct  of  any  such  agents  or
attorneys-in-fact  selected by it in  good  faith  and  with
reasonable  care, except as to money or securities  received
by it or its authorized agents.  The Agent shall be entitled
to  advice and opinion of legal counsel concerning all legal
matters  and  all matters pertaining to the  duties  of  the
Agent.

        10.8  May Treat Payee as Owner.  The Agent may  deem
and treat the payee of any Note as the owner thereof for all
purposes  hereof unless and until a written  notice  of  the
assignment  or transfer thereof shall have been  filed  with
the Agent pursuant to Section 11.14.  Any request, authority
or  consent  of any person, firm or corporation who  at  the
time  of  making  such request or giving such  authority  or
consent  is  the holder of any such Note shall be conclusive
and binding on any subsequent holder, transferee or assignee
of such Note or of any Note issued in exchange therefor.

        10.9  Agent's Reimbursement.  Each Lender agrees  to
reimburse the Agent pro rata in accordance with its Pro Rata
Share  for  any  out-of-pocket expenses  not  reimbursed  by
Borrower   (a)   for  which  the  Agent   is   entitled   to
reimbursement by Borrower under this Agreement or any of the
other  Loan  Documents and (b) for any  other  out-of-pocket
expenses incurred by the Agent on behalf of the Lenders,  in
connection   with  the  preparation,  execution,   delivery,
amendment,  modification, extension, renewal, administration
and/or enforcement of this Agreement and/or any of the other
Loan Documents.

        10.10   Rights  as a Lender.  With  respect  to  its
commitment, the Loans made by it and the Notes issued to it,
Regions  shall have the same rights and powers hereunder  as
any  Lender and may exercise the same as though it were  not
the  Agent,  and  the  terms "Lender" and  "Lenders"  shall,
unless  the context otherwise indicates, include Regions  in
its  individual capacity. Regions may accept deposits  from,
lend money to and generally engage in any kind of banking or
trust business with Borrower as if it were not the Agent.

        10.11   Independent  Credit Decision.   Each  Lender
acknowledges that it has, independently and without reliance
upon  the  Agent  or any Lender and based on  the  financial
statements  referred  to  in  Section  7.7  and  such  other
documents and information as it has deemed appropriate, made
its  own  credit  analysis and decision to enter  into  this
Agreement  and the other Loan Documents.  Each  Lender  also
acknowledges  that  it  will,  independently   and   without
reliance  upon  the Agent or any Lender and  based  on  such
documents  and  information as it shall deem appropriate  at
the  time,  continue  to make its own  credit  decisions  in
taking  or  not taking action under this Agreement  and  the
other Loan Documents.

         10.12   Resignation  of  Agent.   Subject  to   the
appointment  of a successor Agent, the Agent may  resign  as
Agent  for  the Lenders under this Agreement and  the  other
Loan  Documents  at any time by thirty (30) days  notice  in
writing to the Lenders.  Such resignation shall take  effect
upon  appointment  of  such successor Agent.   The  Required
Lenders  shall  have the right to appoint a successor  Agent
(and   if  no  Default  or  Event  of  Default  then  exists
hereunder,  such appointment shall be with  the  consent  of
Borrower, which consent shall not be unreasonably withheld),
and  the  successor Agent shall be entitled to  all  of  the
rights  of, and vested with the same powers as, the original
Agent  under  this Agreement and the other  Loan  Documents.
Resignation  by  the Agent shall not affect  or  impair  the
rights of the Agent under Sections 10.5 and 10.9 hereof with
respect to all matters preceding such resignation.

       10.13  Duration of Agency.  The agency established by
Section  10.1  hereof  shall  continue,  and  Sections  10.1
through  and  including this Section 10.13 shall  remain  in
full  force and effect, until all of the  Obligations  shall
have  been paid in full and the Lenders' commitments to make
Loans,  issue Letters of Credit and/or extend credit  to  or
for the benefit of Borrower shall have terminated or expired
(and   the   provisions  of  Section  10.5  shall   continue
thereafter as provided therein).

       SECTION 11.  GENERAL.

       11.1  No Waiver.  No failure or delay by the Agent or
any of the Lenders in exercising any right, remedy, power or
privilege  hereunder or under any other Loan Document  shall
operate as a waiver thereof; nor shall any single or partial
exercise  thereof  preclude any other  or  further  exercise
thereof or the exercise of any other right, remedy, power or
privilege.   The remedies provided herein and in  the  other
Loan  Documents  are  cumulative and not  exclusive  of  any
remedies provided by law.  Nothing herein contained shall in
any  way  affect the right of any of the Lenders to exercise
any  statutory  or  common law right  of  Lender's  lien  or
setoff.

        11.2   Right  of  Setoff.  Upon the  occurrence  and
during the continuance of any Event of Default, each of  the
Lenders  is hereby authorized at any time and from  time  to
time,  without  notice to Borrower (any  such  notice  being
expressly  waived  by Borrower) and to  the  fullest  extent
permitted  by law, to setoff and apply any and all  deposits
(general  or special, time or demand, provisional or  final)
at  any  time held by such Lender(s) and any and  all  other
indebtedness at any time owing by such Lender(s) to  or  for
the credit or account of Borrower against any and all of the
Obligations.  Each of the Lenders agrees to promptly  notify
Borrower after any such setoff and application made by  such
Lender(s), provided, however, that the failure to give  such
notice  shall  not affect the validity of  such  setoff  and
application.   The rights of the Lenders under this  Section
11.2  are  in  addition  to any other  rights  and  remedies
(including,  without  limitation, other  rights  of  setoff)
which  the  Lenders  may have.  Nothing  contained  in  this
Agreement or any other Loan Document shall impair the  right
of  any  of  the Lenders to exercise any right of setoff  or
counterclaim it may have against Borrower and to  apply  the
amount   subject  to  such  exercise  to  the   payment   of
indebtedness of Borrower unrelated to this Agreement or  the
other Loan Documents.

       11.3  Cost and Expenses.  Borrower agrees, whether or
not  any  Loan is made hereunder or any Letter of Credit  is
issued hereunder, to pay the Agent upon demand (i) all  out-
of-pocket  costs and expenses and all reasonable  attorneys'
fees  of  the Agent and/or each of the Lenders in connection
with   the   Cases   and  the  preparation,   documentation,
negotiation,  execution, amendment, modification,  extension
and/or  renewal of this Agreement, the Notes, the Letter  of
Credit Application(s) and the other Loan Documents, (ii) all
out-of-pocket   costs  and  expenses  and   all   reasonable
attorneys'  fees of the Agent and/or each of the Lenders  in
connection  with  the preparation of any waiver  or  consent
hereunder  or under any other Loan Documents,  (iii)  if  an
Event  of  Default  occurs,  all  out-of-pocket  costs   and
expenses and all reasonable attorneys' fees incurred by  the
Agent  and/or  each of the Lenders in connection  with  such
Event  of  Default  and  collection  and  other  enforcement
proceedings  resulting  therefrom,  (iv)  all  out-of-pocket
costs  and  expenses  and  all  reasonable  attorneys'  fees
incurred  by  the  Agent  and/or  each  of  the  Lenders  in
connection  with  the  enforcement  of  any  rights   and/or
remedies  of the Agent or any of the Lenders to collect  any
of  the Obligations, and (v) all other reasonable attorneys'
fees  and out-of-pocket costs and expenses incurred  by  the
Agent and/or each of the Lenders relating to or arising  out
of  or in connection with this Agreement or any of the other
Loan Documents.  Borrower further agrees to pay or reimburse
the  Agent  and each of the Lenders for any stamp  or  other
taxes  or  costs  which may be payable with respect  to  the
execution,  delivery,  recording  and/or  filing   of   this
Agreement, the Notes, the Letter of Credit Application(s) or
any of the other Loan Documents.  All of the obligations  of
Borrower   under  this  Section  11.3  shall   survive   the
satisfaction  and  payment  of  the  Obligations   and   the
termination  of this Agreement.  As used herein, "attorneys'
fees" shall include, without limitation, fees on a solicitor
and its own client basis and extra-judicial fees.

       11.4  Environmental Indemnity. Borrower hereby agrees
to  indemnify  the  Agent and each of the  Lenders  and  any
holder(s)   of  the  Notes,  and  the  officers,  directors,
employees, agents and affiliates of the Agent, each  of  the
Lenders and such holder(s) (collectively, the "Indemnitees")
and  hold the Indemnitees harmless from and against any  and
all  losses, liabilities, damages, injuries, costs, expenses
and  claims  of  any  and every kind whatsoever  (including,
without  limitation, reasonable court costs  and  attorneys'
fees  and expenses) which at any time or from time  to  time
may  be paid, incurred or suffered by the Indemnitees,  with
respect  to  or  as  a  direct or  indirect  result  of  the
violation  by Borrower or any Guarantor of any Environmental
Laws;  or with respect to, or as a direct or indirect result
of  the  presence  on  or  under, or  the  escape,  seepage,
leakage,  spillage,  discharge, emission  or  release  from,
properties   owned  or  operated  by  Borrower  and/or   any
Guarantor of any hazardous substances or any other hazardous
or  toxic waste, substance or constituent or other substance
(including,  without  limitation, any  losses,  liabilities,
damages,  injuries,  costs, expenses or claims  asserted  or
arising under the Environmental Laws); and the provisions of
and undertakings and indemnification set out in this Section
11.4  shall  survive  the satisfaction and  payment  of  the
Obligations and the termination of this Agreement;  provided
that  Borrower  shall have no obligation  to  an  Indemnitee
hereunder  with  respect to indemnified liabilities  arising
from  the  gross  negligence or willful misconduct  of  that
Indemnitee.

        11.5   General Indemnity. In addition to the payment
of  expenses pursuant to Section 11.3, whether  or  not  the
transactions   contemplated  hereby  shall  be  consummated,
Borrower hereby agrees to indemnify and pay Indemnitees  and
hold Indemnitees harmless from and against any and all other
liabilities,   obligations,  losses,   damages,   penalties,
actions,  judgments,  suits,  claims,  costs,  expenses  and
disbursements  of any kind or nature whatsoever  (including,
without limitation, the reasonable fees and disbursements of
counsel   for  such  Indemnitees  in  connection  with   any
investigative,   administrative   or   judicial   proceeding
commenced  or  threatened, whether or not  such  Indemnitees
shall  be  designated a party thereto), that may be  imposed
on,  incurred by or asserted against the Indemnitees, in any
manner relating to or arising out of this Agreement, any  of
the other Loan Documents or any other agreement, document or
instrument executed and delivered by Borrower or  any  other
Obligor  in connection herewith or therewith, the statements
contained  in any commitment letters delivered by the  Agent
or  any  of the Lenders, the agreement of any of the Lenders
to  make  the Loans hereunder, the agreement of  Lenders  to
issue the Letters of Credit hereunder or the use or intended
use of the proceeds of any Loan hereunder (collectively, the
"Indemnified  Liabilities"); provided  that  Borrower  shall
have  no  obligation to an Indemnitee hereunder with respect
to Indemnified Liabilities arising from the gross negligence
or willful misconduct of that Indemnitee. To the extent that
the  undertaking  to indemnify, pay and  hold  harmless  set
forth in the preceding sentence may be unenforceable because
it  is violative of any law or public policy, Borrower shall
contribute the maximum portion that it is permitted  to  pay
and   satisfy  under  applicable  law  to  the  payment  and
satisfaction of all Indemnified Liabilities incurred by  the
Indemnitees   or  any  of  them.  The  provisions   of   the
undertakings  and indemnification set out  in  this  Section
11.5   shall  survive  satisfaction  and  payment   of   the
Obligations  and  the  termination of  this  Agreement.   No
provision  contained in this Section 11.5 shall  affect  any
rights  Borrower may have against any Lender which  defaults
under  this Agreement or is intended to indemnify  any  such
Agent  or  Lender which defaults under this  Agreement  (but
only   such  Agent  or  Lender  that  defaults  under   this
Agreement) for any such Indemnified Liabilities arising from
such defaulting Lender's action.

        11.6  Authority to Act.  The Agent shall be entitled
to  act  on  any  notices  and instructions  (telephonic  or
written)  believed by the Agent in good faith to  have  been
sent  or  delivered  by  any person identifying  himself  as
Borrower's Representative, regardless of whether such notice
or  instruction  was in fact delivered by such  person,  and
Borrower  hereby agrees to indemnify the Agent and hold  the
Agent  harmless  from and against any  and  all  losses  and
expenses, if any, ensuing from any such action.

       11.7  Notices.  Any notice, request, demand, consent,
confirmation or other communication hereunder  shall  be  in
writing  and  delivered in person or  sent  by  telecopy  or
registered  or certified mail, return receipt requested  and
postage  prepaid, to the applicable party at its address  or
telecopy number set forth on the signature pages hereof,  or
at such other address or telecopy number as any party hereto
may designate as its address for communications hereunder by
notice so given.  Such notices shall be deemed effective  on
the day on which delivered or sent if delivered in person or
sent  by telecopy, or on the third (3rd) Business Day  after
the  day on which mailed, if sent by registered or certified
mail;  provided,  however, that notices to the  Agent  under
Section 3 shall not be effective until actually received  by
the Agent.

        11.8   Sharing of Payments.  The Lenders agree among
themselves  that  except as otherwise  expressly  set  forth
herein,  in the event that any of the Lenders shall directly
or   indirectly  obtain  any  payment  (whether   voluntary,
involuntary,  through the exercise of any right  of  setoff,
banker's  lien  or  counterclaim, through  the  realization,
collection,  sale  or  liquidation  of  any  collateral   or
otherwise) on account of or in respect of any of  the  Loans
or  other Obligations in excess of its Pro Rata Share of all
such  payments,  such  Lender(s) shall immediately  purchase
from  the  other Lender(s) participations in  the  Loans  or
other  Obligations  owed  to such other  Lender(s)  in  such
amounts, and make such other adjustments from time to  time,
as shall be equitable to the end that the Lenders share such
payment ratably in accordance with their respective Pro Rata
Shares of the outstanding Loans and other Obligations.  (For
purposes  of  clarification, the provisions of this  Section
11.9  shall  not  apply  to  any payments  relating  to  the
Lenders'  Pre-Petition Indebtedness).  The  Lenders  further
agree among themselves that if any such excess payment to  a
Lender shall be rescinded or must otherwise be restored, the
other Lender(s) which shall have shared the benefit of  such
payment  shall,  by repurchase of participation  theretofore
sold, or otherwise, return its share of that benefit to  the
Lender  whose payment shall have been rescinded or otherwise
restored.    Borrower agrees, to the fullest extent  it  may
effectively do so under applicable law, that any holder of a
participation  in  any of the Obligations,  whether  or  not
acquired   pursuant  to  the  foregoing  arrangements,   may
exercise rights of setoff, banker's lien or counterclaim and
other rights with respect to such participation as fully  as
if  such holder of a participation were a direct creditor of
Borrower in the amount of such participation.  If under  any
applicable bankruptcy, insolvency or other similar  law  any
of  the Lenders receives a secured claim in lieu of a setoff
to  which  this  Section  11.9 would apply,  such  Lender(s)
shall,  to the extent practicable, exercise their rights  in
respect  of  such secured claim in a manner consistent  with
the rights of the Lender(s) entitled under this Section 11.9
to  share  in  the benefits of any recovery of such  secured
claim.

        11.9   Governing  Law; Waiver of Jury  Trial.   This
Agreement,  the  Notes, the Letter of Credit  Application(s)
and all of the other Loan Documents shall be governed by and
construed in accordance with the internal laws of the  State
of Louisiana, the Bankruptcy Code, and United States federal
maritime law, as applicable. THE LOAN PARTIES, THE AGENT AND
THE  LENDERS  IRREVOCABLY WAIVE THE RIGHT TO TRIAL  BY  JURY
WITH  RESPECT TO ANY ACTION IN WHICH BORROWER AND THE  AGENT
AND/OR ANY OF THE LENDERS ARE PARTIES RELATING TO OR ARISING
OUT  OF  OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF  THE
OTHER TRANSACTION DOCUMENTS.

       11.10  Amendments and Waivers.  Any provision of this
Agreement, the Notes, the Letter of Credit Application(s) or
any of the other Loan Documents may be amended or waived if,
but  only if, such amendment or waiver is in writing and  is
signed  by  Borrower and the Required Lenders (and,  if  the
rights  or duties of the Agent in its capacity as Agent  are
affected  thereby,  by  the Agent); provided  that  no  such
amendment  or  waiver shall, unless signed  by  all  of  the
Lenders,  (i)  increase the Commitment of any  Lender,  (ii)
reduce  the principal amount of or rate of interest  on  any
Loan  or any fees hereunder or the amount for which Borrower
or  any  Guarantor  is  obligated to  reimburse  Regions  in
respect  of  a  drawing  under a  Letter  of  Credit,  (iii)
postpone the date fixed for any payment of principal  of  or
interest  on  any  Loan or any reimbursement  obligation  in
respect  of a drawing under a Letter of Credit, or any  fees
hereunder, (iv) change the Pro Rata Share of the Commitments
or  of the aggregate principal amount of Loans or Letters of
Credit of any Lender, (v) change the number of Lenders which
shall be required for the Lenders or any of them to take any
action or obligations under this Section or under any  other
provision  of  this Agreement, (vi) release  any  Collateral
(including,  without limitation, release of  any  Continuing
Guarantee)  other  than  pursuant  to  Section  10.2;  (vii)
postpone the scheduled expiration date of the Line of Credit
Period  or  the Letter of Credit Period hereunder or  extend
the  expiry date of a Letter of Credit beyond the Letter  of
Credit Period; or (viii) amend this Section 11.11.

        11.11  References; Headings for Convenience.  Unless
otherwise specified herein, all references herein to Section
numbers  refer  to  Section numbers of this  Agreement,  all
references herein to Exhibits A, B, C and D refer to annexed
Exhibits A, B, C and D which are hereby incorporated  herein
by  reference  and  all references herein to  Schedule  7.13
refer  to annexed Schedule 7.13 which is hereby incorporated
herein by reference.  The Section headings are furnished for
the  convenience of the parties and are not to be considered
in  the  construction or interpretation of  this  Agreement.
The  words "hereof," "herein" and "hereunder" and  words  of
similar  import when used in this Agreement shall  refer  to
this  Agreement  as  a  whole  and  not  to  any  particular
provision of this Agreement.

       11.12  Successors and Assigns, Participations.

           (a)  The  provisions of this Agreement  shall  be
binding upon and inure to the benefit of the parties  hereto
and  their  respective successors and assigns,  except  that
Borrower  may not assign or otherwise transfer  any  of  its
rights  or  delegate  any  of  its  obligations  under  this
Agreement.  Any Lender may sell participations in its  Notes
and  its rights under this Agreement in whole or in part  to
any commercial Lender organized under the laws of the United
States  or Canada or any state or providence thereof without
the  consent  of  Borrower or the  Agent  so  long  as  each
agreement  pursuant  to  which  any  such  participation  is
granted  provides that no such participant  shall  have  any
rights under this Agreement or any other Loan Document  (the
participants'  rights  against  the  Lender   granting   its
participation  to  be those set forth in  the  Participation
Agreement between the participant and such Lender), and such
selling  Lender shall retain the sole right  to  approve  or
disapprove  any  amendment, modification or  waiver  of  any
provision  of  this  Agreement or  any  of  the  other  Loan
Documents.  Each such participant shall be entitled  to  the
benefits  of the yield protection provisions hereof  to  the
extent  such Lender would have been so entitled had no  such
participation been sold.

           (b)  Any Lender which, in accordance with Section
11.13(a), grants a participation in any of its rights  under
this Agreement or its Notes shall give prompt notice thereof
to the Agent and Borrower.

           (c)  Unless  otherwise agreed to by  Borrower  in
writing,  no  Lender  shall, as between  Borrower  and  that
Lender,  be  relieved of any of its obligations  under  this
Agreement  as  a  result  of such  Lender's  granting  of  a
participation in all or any part of such Lender's  Notes  or
all   or  any  part  of  such  Lender's  rights  under  this
Agreement.

        11.13  Assignment Agreements.  Each Lender may, from
time  to time with the consent of Borrower and Agent  (which
will not in any instance be unreasonably withheld), sell  or
assign  a pro rata part of all of the indebtedness evidenced
by  the  Notes  then owed by it together with an  equivalent
proportion of its obligation to make Loans hereunder and the
credit risk incidental to the Letters of Credit pursuant  to
an  Assignment  Agreement, in form and substance  reasonably
acceptable  to Agent and Borrower, executed by the  assignor
and  the  assignee, which agreements shall specify  in  each
instance  the portion of the indebtedness evidenced  by  the
Notes which is to be assigned to each such assignee and  the
portion  of  the Commitments of the assignor and the  credit
risk  incidental  to the Letters of Credit  (which  portions
shall  be  equivalent) to be assumed by it  (an  "Assignment
Agreement");  provided  that (i)  nothing  herein  contained
shall  restrict, or be deemed to require any  consent  as  a
condition  to,  or require payment of any fee in  connection
with, any sale, discount or pledge by any Lender of any Note
or  other obligation hereunder to a Federal reserve bank and
(ii)  the consent of the Borrower shall not be required  for
assignments  or  sales to a Lender or  any  affiliate  of  a
Lender.  Upon the execution of each Assignment Agreement  by
the  assignor  and  the  assignee (i)  such  assignee  shall
thereupon  become  a  "Lender"  for  all  purposes  of  this
Agreement with a Commitment in the amount set forth in  such
Assignment  Agreement and with all the  rights,  powers  and
obligations  afforded a Lender hereunder, (ii) the  assignor
shall  have no further liability for funding the portion  of
its  Commitments assumed by such other Lender and (iii)  the
address for notices to such Lender shall be as specified  in
the  Assignment  Agreement, and Borrower shall  execute  and
deliver  Notes to the assignee Lender in the amount  of  its
Commitments  and  new Notes to the assignor  Lender  in  the
amount  of  its  Commitments  after  giving  effect  to  the
reduction occasioned by such assignment, all such  Notes  to
constitute  "Notes" for all purposes of this Agreement,  and
there  shall  be paid to the Agent, as a condition  to  such
assignment, an administration fee of $2,500 plus any out-of-
pocket  costs and expenses incurred by it in effecting  such
assignment,  such  fee to be paid by  the  assignor  or  the
assignee   as  they  may  mutually  agree,  but   under   no
circumstances shall any portion of such fee be payable by or
charged to Borrower.

       11.14 Withholding Tax. At the time it becomes a party
to  this Agreement, each Lender that is organized under  the
laws  of  a  jurisdiction outside the  United  States  shall
deliver  to  the  Agent  and Borrower  either  a  valid  and
currently  effective Internal Revenue Service Form  1001  or
Form  4224 or, in the case of a bank claiming exemption from
U.S.  Federal withholding tax under Section 871(h) or 881(c)
of   the   Code  with  respect  to  payments  of  "portfolio
interest", a Form W-8, or any subsequent version thereof  or
successors thereto, (and if such bank delivers a Form W-8, a
certificate representing that such bank is not  a  bank  for
purposes  of Section 881(c) of the Code, is not a 10-percent
shareholder  (within the meaning of Section 871(h)(3)(B)  of
the  Code)  of  Borrower  and is not  a  controlled  foreign
corporation  related  to  Borrower (within  the  meaning  of
Section 864(d)(4) of the Code)), properly completed and duly
executed by such Lender, establishing that payments relating
to  this  Agreement  are (i) not subject  to  United  States
Federal withholding tax under the Code because such payments
are effectively connected with the conduct by such Lender of
a  trade  or  business in the United States or (ii)  totally
exempt from United States Federal withholding tax.

        11.15   Binding Agreement.  This Agreement shall  be
binding upon and inure to the benefit of the parties  hereto
and  their  respective  successors  and  assigns;  provided,
however, that Borrower may not assign or delegate any of its
rights or obligations under this Agreement.

        11.16   NO ORAL AGREEMENTS, ENTIRE AGREEMENT.   ORAL
AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO
FORBEAR  FROM  ENFORCING  REPAYMENT  OF  A  DEBT,  INCLUDING
PROMISES  TO EXTEND OR RENEW SUCH DEBT, ARE NOT ENFORCEABLE.
TO   PROTECT  BORROWER,  THE  AGENT  AND  THE  LENDERS  FROM
MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENT REACHED BY
BORROWER,  THE AGENT AND THE LENDERS COVERING  SUCH  MATTERS
ARE   CONTAINED  IN  THIS  AGREEMENT  AND  THE  OTHER   LOAN
DOCUMENTS,  WHICH AGREEMENT AND OTHER LOAN DOCUMENTS  ARE  A
COMPLETE  AND  EXCLUSIVE STATEMENT OF  THE  AGREEMENT  AMONG
BORROWER, THE AGENT AND THE LENDERS, EXCEPT AS BORROWER, THE
AGENT  AND THE LENDERS MAY LATER AGREE IN WRITING TO  MODIFY
THEM.   THIS  AGREEMENT  EMBODIES THE ENTIRE  AGREEMENT  AND
UNDERSTANDING BETWEEN  THE PARTIES HERETO AND SUPERSEDES ALL
PRIOR   AGREEMENTS  AND  UNDERSTANDINGS  (ORAL  OR  WRITTEN)
RELATING TO THE SUBJECT MATTER HEREOF.

       11.17  Severability.  In the event any one or more of
the  provisions  contained  in  this  Agreement  should   be
invalid,  illegal  or  unenforceable  in  any  respect,  the
validity,  legality  and  enforceability  of  the  remaining
provisions contained herein shall not in any way be affected
or impaired thereby.

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

        11.19   Resurrection  of the  Obligations.   To  the
extent  that  any  of the Lenders receives  any  payment  on
account  of  any of the Obligations, and any such payment(s)
or  any  part thereof are subsequently invalidated, declared
to  be  fraudulent or preferential, set aside,  subordinated
and/or  required to be repaid to a trustee, receiver or  any
other  Person under any contract, bankruptcy act,  state  or
federal  law,  common law or equitable cause, then,  to  the
extent of such payment(s) received, the Obligations or  part
thereof intended to be satisfied and any and all Liens  upon
or  pertaining  to any Property or assets  of  Borrower  and
theretofore  created  and/or  existing  in  favor  of   such
Lender(s)  as  security for the payment of such  Obligations
shall  be revived and continue in full force and effect,  as
if  such  payment(s) had not been received by such Lender(s)
and applied on account of the Obligations.

       11.20  No Third Party Beneficiary.  This Agreement is
solely  for  the  benefit  of  the  parties  and  is  not  a
stipulation for the benefit of any other Person  except  for
any  approved assignee of Borrower and any assignee  of  the
Lenders.

         11.21   Independence  of  Covenants.   All  of  the
covenants  contained in this Agreement and  the  other  Loan
Documents  shall be given independent effect so  that  if  a
particular action, event or condition is prohibited  by  any
one  of  such covenants, the fact that it would be permitted
by an exception to, or otherwise be in compliance within the
provisions  of,  another  covenant  shall  not   avoid   the
occurrence  of a Default or Event of Default if such  action
is taken, such event occurs or such condition exists.

        11.22   Confidentiality.  The Agent and each of  the
Lenders  shall keep confidential any information  delivered,
made  available  or otherwise conveyed by  Borrower  or  any
Guarantor  in  connection  with  this  Agreement   and   the
transactions   contemplated  hereby;  provided   that,   the
provisions  of this Section 11.22 shall not be construed  to
prohibit Agent or any Lender from disclosing any information
to  (i)  Agent  or any Lender (or any attorneys,  agents  or
consultants of Agent or any Lender), (ii) any participant or
assignee  or  prospective participant  or  assignee  of  any
Lender   (so  long  as  such  participant  or  assignee   or
prospective  participant or assignee agrees to be  bound  by
the  provisions of this Section 11.22), (iii) any  affiliate
of  Agent  or  any Lender or (iv) any Person as required  by
law, regulation or court order.  Notwithstanding anything to
the   contrary   herein,  the  Borrower  agrees   to   EDC's
disclosure,  following the Effective Date, of the  following
information:  the  name of the Borrower, the  EDC  financial
service  provided  and  the date of related  agreement,  the
amount  of  EDC support in an approximate dollar range,  and
the name of the Exporter.

        11.23  Conflicting Provisions.  In the event any  of
the terms and provisions of this Agreement conflict with any
terms  and  provisions contained in any other Loan Document,
the  terms  and  provisions of this Agreement  shall  govern
provided  that, nothing in this Agreement shall be construed
to limit the Property encumbered by the Loan Documents.


           IN  WITNESS WHEREOF, Borrower, the Guarantors (as
to  those representations, warranties and covenants to which
they  are  obligated in this Agreement), the Agent  and  the
Lenders have executed this Credit Agreement effective as  of
the date first written above.

                           TORCH OFFSHORE, INC.


                         By:  /s/ Robert E. Fulton
                              --------------------
                              Name:
                              Title:
                              401 Whitney Avenue,Suite 400
                              Gretna, Louisiana 70056
                              Telecopy number:(504)367-7075

                           TORCH OFFSHORE, L.L.C.


                         By:  /s/ Robert E. Fulton
                              --------------------
                              Name:
                              Its Manager
                              401 Whitney Avenue,Suite 400
                              Gretna, Louisiana 70056
                              Telecopy number:(504)367-7075


                            TORCH EXPRESS, L.L.C.


                         By:  /s/ Robert E. Fulton
                              --------------------
                              Name:
                              Its Manager
                              401 Whitney Avenue,Suite 400
                              Gretna, Louisiana 70056
                              Telecopy number:(504)367-7075


                            REGIONS BANK
Share of the
Line of Credit Commitment:    $3,450,000.00

                                By: /s/ Mike J. Paternostro
                                    -----------------------
                                   Mike J. Paternostro
                                   Senior Vice President
                                   301 St. Charles Avenue
                                   New Orleans, LA 70130
                                   Telecopier:(504)584-1347


                       EXPORT DEVELOPMENT CANADA
Share of the
Line of Credit Commitment:    $3,450,000.00

                                By: /s/ Sean Mitchell
                                    ------------------
                                   Sean Mitchell
                                   Manager Special Risks

                                By: /s/ Bruce Dunlop
                                    -----------------
                                   Bruce Dunlop
                                   Portfolio Manager

                                   151 O'Connor
                                   Ottawa, Canada K1A1K3
                                   (Telecopier:(613)598-3186

                          EXHIBIT A

                 FORM OF LINE OF CREDIT NOTE

                          EXHIBIT B

                 FORM OF CONTINUING GUARANTEE

                          EXHIBIT C

                    FORM OF INTERIM ORDER

                          EXHIBIT D

                 FORM OF SECURITY AGREEMENT

                        SCHEDULE 1.1A

     [INSERT RESULTS OF MARITIME AND UCC LIEN SEARCHES]
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                   Washington, D.C.  20549
                    ____________________

                          FORM 8-K

                       CURRENT REPORT

 Pursuant to Section 13 or 15(d) of the Securities Exchange
                         Act of 1934

      Date of Report (Date of earliest event reported):
            January 18, 2005 (January 12, 2005)
                     ___________________

                    TORCH OFFSHORE, INC.
   (Exact Name of Registrant as Specified in its Charter)

                         000-32855
                  (Commission File Number)

         Delaware                         74-2982117
(State or Other Jurisdiction            (IRS Employer
    of Incorporation)                 Identification No.)

   401 Whitney Avenue, Suite 400
         Gretna, Louisiana                 70056-2596
(Address of Principal Executive Offices)   (Zip Code)

      Registrant's Telephone Number, Including Area Code:
                       (504) 367-7030
                     ___________________

Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of
the Registrant under any of the following provisions:

     [  ] Written communications pursuant to Rule 425 under
          the Securities Act (17 CFR 230.425)

     [  ] Soliciting material pursuant to Rule 14a-12 under
          the Exchange Act (17 CFR 240.14a-12)

     [  ] Pre-commencement communications pursuant to Rule
          14d-2(b) under the Exchange Act (17 CFR
          240.14d-2(b))

     [  ] Pre-commencement communications pursuant to Rule
          13e-4(c) under the Exchange Act (17 CFR
          240.13e-4(c)

Item 1.01 Entry into a Material Definitive Agreement.

On January 12, 2005, Torch Offshore, Inc. (the "Company"),
and its wholly-owned subsidiaries, Torch Offshore, L.L.C.
and Torch Express, L.L.C., each debtors-in-possession under
Chapter 11 of the U.S. Bankruptcy Code, entered into an
agreement with Regions Bank and Export Development Canada
("EDC") (collectively, the "Lenders") for debtor-in-
possession financing (the "DIP Facility").

The DIP Facility provides a $6.9 million revolving credit
facility and a $2.0 million discretionary letter of credit
facility to fund the Company's working capital requirements
and other corporate purposes during the Company's Chapter 11
proceedings. The credit facilities are equally shared
between Regions Bank and EDC. The interest rate on the DIP
Facility is the prime rate plus 4.00% per annum.

The DIP Facility requires the Company to meet certain
obligations, including the delivery of a weekly written
report with respect to the cash flow forecast compared to
actual results, quarterly and annual financial statements,
and certificates of compliance on a quarterly and annual
basis. The Company is also subject to limitations on paying
indebtedness, creating liens against their property, and the
weekly actual borrowing base test (as defined) cannot vary
by more than 5% (in the negative) from the Company's
forecasted borrowing base test (as defined).

Amounts owed by the Company under the DIP Facility may be
accelerated following certain events of default, including,
but not limited to: failure of the Company to make principal
or interest payments under the DIP Facility; breaches of
certain covenants, representations and warranties set forth
in the DIP Facility; the conversion of the Company's Chapter
11 case to a Chapter 7 case under the U.S. Bankruptcy Code
or the appointment of a trustee pursuant to Chapter 7 or
Chapter 11 of the U.S. Bankruptcy Code; default under any
post-petition indebtedness; failure of the U.S. Bankruptcy
Court to approve a Final Order before January 31, 2005; and
a material adverse effect impacting the business or property
of the Company and its wholly-owned subsidiaries, taken as a
whole.

The DIP Facility has received interim approval (the "Interim
Order") from the U.S. Bankruptcy Court for the Eastern
District of Louisiana. Pursuant to the terms of the DIP
Facility, the Company will have access to the interim
funding through April 1, 2005, subject to a budget and other
restrictions. In addition, the DIP Facility and Interim Order
permit the use of cash collateral (defined as cash plus cash
receipts on receivables) by the Company.

A copy of the Debtor-in-Possession Credit Agreement is filed
as Exhibit 10.1 and is incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or an
          Obligation under an Off-Balance Sheet Arrangement
          of a Registrant.

The information provided in Item 1.01 of this Current Report
regarding the DIP Facility is incorporated into this Item
2.03 by reference.

Item 9.01 Financial Statements and Exhibits.

     (c)  Exhibits.

Exhibit Number                Description
--------------                -----------
    10.1       Debtor-in-Possession Credit Agreement dated
               January 12, 2005 by and among Torch Offshore,
               Inc., Torch Offshore, L.L.C. and Torch
               Express, L.L.C. and the Undersigned Lenders,
               including Regions Bank as Agent for the
               Lenders.

                          SIGNATURE

Pursuant to the requirements of the Securities Exchange  Act
of  1934, the Registrant has duly caused this report  to  be
signed  on  its  behalf  by  the undersigned  hereunto  duly
authorized.

                              TORCH OFFSHORE, INC.

                              By: /s/ ROBERT E. FULTON
Date: January 18, 2005        -------------------------
                              Robert E. Fulton
                              Chief Financial Officer

                        EXHIBIT INDEX

Exhibit Number                Description
--------------                -----------
    10.1       Debtor-in-Possession Credit Agreement dated
               January 12, 2005 by and among Torch Offshore,
               Inc., Torch Offshore, L.L.C. and Torch
               Express, L.L.C. and the Undersigned Lenders,
               including Regions Bank as Agent for the
               Lenders.

                                                Exhibit 10.1

            DEBTOR-IN-POSSESSION CREDIT AGREEMENT

       THIS   DEBTOR-IN-POSSESSION  CREDIT  AGREEMENT  (this
"Agreement") is effective the 12th day of January, 2005 (the
"Effective Date"), and is made and entered into by and among
TORCH  OFFSHORE, INC., a Delaware corporation  ("Borrower"),
TORCH  OFFSHORE,  LLC  ("TOLLC")  and  TORCH  EXPRESS,   LLC
("TELLC"  and, together with TOLLC, the "Guarantors"),  each
debtors-in-possession in cases pending under chapter  11  of
the Bankruptcy Code (defined below), the undersigned Lenders
(as  hereinafter  defined), including Regions  Bank  in  its
capacity as a Lender hereunder and as Agent for the  Lenders
under this Agreement.

                           WITNESSETH:

      WHEREAS, on January 7, 2005 (the "Petition Date"), the
Borrower  and  the other Loan Parties (defined below)  filed
voluntary petitions with the United States Bankruptcy  Court
for  the Eastern District of Louisiana (including any  other
court  having  jurisdiction over the Cases, the  "Bankruptcy
Court")  initiating cases under chapter 11 of the Bankruptcy
Code,  Case  Nos. 05-10137, 05-10138 and 05-10140  (each,  a
"Case" and, collectively, the "Cases"), and the Loan Parties
have continued in the possession of their assets and in  the
management of their businesses pursuant to Sections 1107 and
1108 of the Bankruptcy Code;

      WHEREAS,  the Borrower has requested that the  Lenders
and  the  Agent enter into this Agreement to provide  (i)  a
$6,900,000  committed revolving credit facility and  (ii)  a
$2,000,000 discretionary letter of credit facility,  all  of
the  Borrower's obligations under which are to be guaranteed
by  the  other Loan Parties and secured as provided  in  the
Interim  Order  (defined below) or the Final Order  (defined
below), when applicable, and in the Security Documents,  and
the  proceeds  of  which  may  only  be  used  as  expressly
permitted by the terms of this Agreement;

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

     SECTION l. DEFINITIONS.

      1.1   Definitions.  In addition to the  terms  defined
elsewhere  in this Agreement or in any Exhibit  or  Schedule
hereto,  when  used in this Agreement, the  following  terms
shall  have the following meanings (such meanings  shall  be
equally applicable to the singular and plural forms  of  the
terms used, as the context requires):

      Agent means Regions Bank in its capacity as agent  for
the Lenders hereunder and its successors in such capacity.

      Applicable  Rate means the Base Rate  plus  4.00%  per
annum.

       Assignment  Agreement  means  any  of  those  certain
Assignment Agreements described in Section 11.13 herein.

     Assignment of Earnings has the meaning ascribed thereto
     in Section 5.6(b).

      Bankruptcy  Code means Title 11 of the  United  States
Code,  as heretofore and hereafter amended, and codified  as
11 U.S.C. section 101, et seq.

      Base  Rate means the "prime rate" as published in  the
The  Wall  Street Journal on a daily basis, or, if The  Wall
Street Journal suspends publication of the "prime rate", the
interest rate announced from time to time by Regions at  its
main  office  as  its "commercial base rate"  on  commercial
loans   (which  rate  shall  fluctuate  as  and  when   said
commercial  base  rate shall change). Such  commercial  base
rate  is not the lowest interest rate offered by Regions  to
its customers.

      Borrower's  Representative means any one  of  Lyle  G.
Stockstill   or  Robert  E.  Fulton  or  any  other   person
subsequently  authorized  by  a corporate  resolution,  duly
authorized and adopted by the board of directors of Borrower
in form acceptable to Lenders.

     Budget has the meaning set forth in Section 8.3.

      Business Day means any day except a Saturday,  Sunday,
or legal holiday observed by any Lender.

      Capitalized Lease means any lease of Property, whether
real  and/or  personal,  by  a Person  as  lessee  which  as
determined  in  accordance  with  GAAP  is  required  to  be
capitalized on the balance sheet of such Person.

      Capitalized Lease Obligations of any Person means,  as
of  the  date  of any determination thereof, the  amount  at
which the aggregate rental obligations due and to become due
under  all Capitalized Leases under which such Person  is  a
lessee would be reflected as a liability on a balance  sheet
of such Person as determined in accordance with GAAP.

      Carve Out means, solely effective after receipt by the
Borrower  of  written  notice  from  the  Lenders   of   the
occurrence (and solely during the continuance) of  an  Event
of  Default  hereunder, the aggregate  sum  of:  (i)  unpaid
Bankruptcy  Court costs and U.S. Trustee's  fees,  (ii)  the
fees  and  costs incurred by professionals retained  by  the
Loan   Parties,  retained  by  any  official  committee   of
unsecured creditors or other similar committee appointed  by
the  Bankruptcy  Court, or otherwise paid by the  bankruptcy
estate  of  the  Loan  Parties in the Cases,  in  each  case
incurred  or  paid prior to the receipt by the  Borrower  of
written notice of such Event of Default, and (iii) fees  and
costs incurred by professionals retained by the Loan Parties
from and after the receipt by the Borrower of written notice
of such Event of Default, not to exceed the aggregate sum of
$100,000.   Notwithstanding  anything  contained   in   this
definition    to    the    contrary,    all    such     fees
and costs described in the foregoing sentence, shall not  be
paid in excess of the amounts relating thereto set forth  in
the  Budget  for the periods that correspond to the  periods
during which such fees were earned and costs incurred.

      Change  in  Control means (i) an event  or  series  of
events as a result of which any "person" or "group" (as such
terms  are  used  in  Sections 13(d)(3)  and  14(d)  of  the
Exchange  Act)  (excluding  Borrower  or  any  wholly  owned
Subsidiary  thereof) is or becomes, directly or  indirectly,
the  "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under  the Exchange Act, whether or not applicable) of  more
than   45%  of  the  combined  voting  power  of  the   then
outstanding   securities  entitled  to  vote  generally   in
elections of directors, managers or trustees, as applicable,
of  Borrower or any successor entity ("Voting Stock"),  (ii)
the  completion  of  any consolidation  with  or  merger  of
Borrower into any other Person, or sale (it being understood
that  the  vessel  sales  and related transactions  required
under Section 9.10 of this Agreement shall not be considered
a "sale" for purposes of a "Change of Control"), conveyance,
transfer or lease by Borrower of all or substantially all of
its  assets to any Person, or any merger of any other Person
into  Borrower in a single transaction or series of  related
transactions,  and, in the case of any such  transaction  or
series of related transactions, the outstanding common stock
of  Borrower is changed or exchanged as a result, unless the
stockholders  of  the  Borrower  immediately   before   such
transaction   own,   directly  or  indirectly,   immediately
following  such  transaction, at least 55% of  the  combined
voting  power  of the outstanding voting securities  of  the
Person resulting from such transaction in substantially  the
same  proportion  as  their ownership of  the  Voting  Stock
immediately before such transaction, or (iii) the occurrence
of  any event whereby less than a majority of the members of
the  Board  of  Directors of Borrower shall be  persons  who
either  (a) were serving as directors on the Effective  Date
or  (b) were nominated as directors and approved by the vote
of  the majority of the directors who are directors referred
to in clause (a) or this clause (b).

      Code  means  the  Internal Revenue Code  of  1986,  as
amended,  and  any  successor  statute  of  similar  import,
together with the regulations thereunder, in each case as in
effect  from  time to time.  References to sections  of  the
Code  shall  be  construed to also refer  to  any  successor
sections.

      Collateral means all of the following Property now  or
hereafter owned by any one or more of the Loan Parties:  (i)
all Property in respect of which a Lien has been granted  by
any  one  or more of the Loan Parties in favor of the  Agent
for the benefit of the Secured Parties pursuant to the terms
of  the Orders, (ii) all Property in respect of which a Lien
has  been granted by any one or more of the Loan Parties  in
favor  of  the Agent for the benefit of the Secured  Parties
under  the  terms  of  the  Preferred  Ship  Mortgages   and
Assignments of Earnings, including, without limitation,  the
Vessels,  (iii) all Property in respect of which a Lien  has
been granted by any one or more of the Loan Parties in favor
of  the  Agent for the benefit of the Secured Parties  under
the  terms  of  the Security Agreements, including,  without
limitation,  all  accounts,  inventory,  chattel  paper  and
general  intangibles  (including,  without  limitation,  all
patents)  of any one or more of the Loan Parties,  and  (iv)
all Property in respect of which a Lien has been granted  by
any  one  or more of the Loan Parties in favor of the  Agent
for the benefit of the Secured Parties pursuant to the terms
of the other Security Documents and other Loan Documents.

      Commitment  means, with respect to each  Lender,  such
Lender's Line of Credit Commitment.

      Committee  means any statutory committee or committees
appointed in the Cases.

      Company  Business  means  (i)  the  offshore  pipeline
installation and sub-sea construction for the  oil  and  gas
industry  and  (ii) any other activities  ancillary  to  the
foregoing.

      Consummation  Date means the date of  the  substantial
consummation   (as  defined  in  Section  1101(2)   of   the
Bankruptcy  Code and which, for purposes of this  Agreement,
shall   be   no  later  than  the  effective  date)   of   a
Reorganization  Plan  of any Loan Party  that  is  confirmed
pursuant to an order of the Bankruptcy Court in the Cases.

      Continuing  Guarantee  means  a  Continuing  Guarantee
substantially in the form of Exhibit B executed  now  or  at
any time hereafter by a Guarantor and delivered to Agent, as
the  same may be amended, supplemented or otherwise modified
from time to time.

     EDC means Export Development Canada.

      Default means the occurrence of any event or condition
specified   in  Section  9  hereof,  whether  or   not   any
requirement  for notice or lapse of time or other  condition
precedent has been satisfied.

      Disbursement Date has the meaning ascribed thereto  in
Section 4.3.

      Distribution  in  respect  of  any  Person  means  (a)
dividends  or other distributions of cash, stock, assets  or
other  property  on or in respect of any  shares  of  stock,
membership interest or other equity interest in such Person;
and  (b) the redemption, repurchase or other acquisition  of
any  shares  of stock, membership interest or  other  equity
interest in such Person or of any warrants, rights or  other
options  to purchase any such stock, membership interest  or
other  equity  interest (except when solely in exchange  for
such  stock, membership interest or other equity  interest);
provided  that, the issuance or granting of stock, warrants,
rights or other options to purchase stock of Borrower  shall
not be considered a Distribution.

      Dollars and $ means, unless otherwise provided herein,
dollars of the United States of America.

      Effective Date has the meaning set forth in the  first
paragraph of this Agreement.

      Environmental  Law means any federal, state  or  local
statute,  law,  rule,  regulation,  order,  consent  decree,
judgment,  permit,  license, code, deed restriction,  common
law,  treaty,  convention, ordinance or  other  governmental
requirement, domestic or foreign, relating to public health,
safety  or  the environment, including, without  limitation,
those relating to releases, discharges or emissions to  air,
water,  land  or groundwater, to the use of groundwater,  to
the  use  and  handling  of  polychlorinated  biphenyls   or
asbestos,  to the disposal, treatment, storage or management
of  hazardous or solid waste, hazardous substances or  crude
oil,  or  any  fraction  thereof, to exposure  to  toxic  or
hazardous   materials,  to  the  handling,   transportation,
discharge   or  release  of  gaseous  or  liquid   hazardous
substances,  in each case applicable to any of the  Property
owned,  leased or operated by Borrower or any Subsidiary  or
the  operation,  construction or modification  of  any  such
Property, including, without limitation, the following:  the
Comprehensive   Environmental  Response,  Compensation   and
Liability   Act  of  1980,  as  amended  by  the   Superfund
Amendments  and  Reauthorization  Act  of  1986,  42  U.S.C.
9601  et  seq., the Solid Waste Disposal Act, as amended  by
the  Resource  Conservation and Recovery  Act  of  1976  and
Hazardous  and  Solid Waste Amendments of  1984,  42  U.S.C.
556901 et seq., the Hazardous Materials Transportation  Act,
the  Federal Water Pollution Control Act, as amended by  the
Clean  Water  Act of 1976, the Safe Drinking  Water  Control
Act, the Clean Air Act of 1966, the Toxic Substances Control
Act of 1976, the Occupational Safety and Health Act of 1977,
the  Emergency Planning and Community Right-to-Know  Act  of
1986, the National Environmental Policy Act of 1975, the Oil
Pollution  Act of 1990, the Louisiana Environmental  Quality
Act  (La. R.S. 30:2001 et seq.), and the Louisiana Abandoned
Oil  field  Waste Site Law, La. R.S. 30:71 et seq.  and  any
amendments  to  these  laws and any  rules  and  regulations
promulgated thereunder.

     ERISA means the Employee Retirement Income Security Act
of  1974,  as amended, and any successor statute of  similar
import,  together with the regulations thereunder,  in  each
case as in effect from time to time.

      Event  of Default has the meaning ascribed thereto  in
Section 9.

     Exchange Act means the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated by the
Securities Exchange Commission.

      Fees  means all fees payable by Borrower under Section
5.2.

      Fed  Funds Rate means, for any day, the rate per annum
(rounded upwards, if necessary to the nearest 1/100th of 1%)
equal  to  the  weighted average of the rates  on  overnight
Federal  funds  transactions with  members  of  the  Federal
Reserve  System  arranged by Federal funds brokers  on  such
day, as published by the Federal Reserve Bank of New York on
the Business Day next succeeding such day, provided that (a)
if  such  day is not a Business Day, the Federal Funds  Rate
for  such day shall be such rate on such transactions on the
next  preceding  Business Day as so published  on  the  next
succeeding  Business Day, and (b) if  no  such  rate  is  so
published on such next succeeding Business Day, the  Federal
Funds Rate for such day shall be the average rate charged to
the Agent on such day on such transactions.

      Final  DIP  Payment Date means the date when  (i)  all
Commitments shall have expired or been terminated, (ii)  the
principal  of and interest on each Loan and Fees shall  have
been  paid  in full, (iii) all Letters of Credit shall  have
expired, been cancelled or been cash collateralized or other
arrangements satisfactory to the Agent and the Lenders shall
have  been  made,  and all amounts drawn  under  Letters  of
Credit shall have been reimbursed (together with any allowed
interest  thereon),  and (iv) all other  Obligations  (other
than  any  unmatured indemnity obligations) shall have  been
satisfied.

      Final  Order  means an order of the Bankruptcy  Court,
satisfactory  to  the Agent and the Lenders  in  their  sole
discretion,  approving the Loan Documents and  granting  the
Superpriority  Claim  status  and  the  Liens  described  in
Section  3.1, which Final Order (i) shall have been  entered
upon  an  application or motion of the Borrower satisfactory
in  form and substance to the Agent and the Lenders  in  all
material  respects, on such prior notice to such parties  as
may in each case be reasonably satisfactory to the Agent and
the  Lenders,  (ii) shall be in full force  and  effect  and
(iii)  shall  not  have been stayed, reversed,  modified  or
amended  in  any  respect; and, if the Final  Order  is  the
subject  of  a  pending appeal in any respect,  neither  the
making  of  any  Loans nor the issuance of  any  Letters  of
Credit  nor the performance by any Loan Party of any of  its
obligations hereunder or under the Loan Documents  or  under
any  other instrument or agreement referred to herein  shall
be the subject of a presently effective stay pending appeal.

      Final  Order Closing Date means the date on which  the
following  conditions  shall have been  satisfied:  (i)  the
Final  Order shall have been entered by the Bankruptcy Court
and  (ii)  the Agent and the Lenders shall have  received  a
favorable  written opinion of counsel to the  Loan  Parties,
dated the Final Order Closing Date and in substantially  the
form  of  the opinion delivered with respect to the  Interim
Order on the Effective Date.

      First  Day  Orders  means all orders  entered  by  the
Bankruptcy  Court  on the Petition Date,  within  five  days
thereafter or based on motions filed thereon or within three
Business Days thereafter.

      GAAP means generally accepted accounting principles at
the time in the United States of America.

      Guarantors  has  the meaning set forth  in  the  first
paragraph of this Agreement.

      Guarantor  Pledge Agreement has the  meaning  ascribed
thereto in the defined term Guarantor Pledge Documents.

     Guarantor Pledge Documents  means, with respect to each
Guarantor, the following documents: (a) a security agreement
(a  "Guarantor  Pledge  Agreement") in  form  and  substance
required  by the Required Lenders granting Lenders a  pledge
of  and  a  security  interest in all of the  common  stock,
membership  interest, partnership interest or  other  equity
interest  in such Guarantor owned directly or indirectly  by
Borrower  and/or  any one or more Guarantors,  (b)  executed
stock  powers  covering  all of the  common  stock  of  such
Guarantor  owned  directly or indirectly by Borrower  and/or
any one or more Guarantors, (c) such opinions of counsel for
Borrower  and/or any Guarantors as the Required Lenders  may
reasonably  require,  and  (d)  such  financing  statements,
resolutions,   certificates,   approvals,   documents    and
instruments as the Required Lenders may reasonably require.

     Indebtedness means, with respect to any Person, without
duplication,  all indebtedness, liabilities and  obligations
of   such  Person,  but  in  any  event  including,  without
limitation, all (i) obligations of such Person for  borrowed
money  or  for  the deferred purchase price of  Property  or
services  (including, without limitation, all notes  payable
and all obligations evidenced by bonds, debentures, notes or
other similar instruments), (ii) obligations secured by  any
Lien  on, or payable out of the proceeds of production from,
any  Property or assets owned by such Person, whether or not
such Person has assumed or become liable for the payment  of
such   obligations,  (iii)  indebtedness,  liabilities   and
obligations  of third parties, including joint ventures  and
partnerships of which such Person is a venturer  or  general
partner,  recourse to which may be had against such  Person,
(iv)  obligations created or arising under  any  conditional
sale  or  other  title retention agreement with  respect  to
Property  acquired by such Person, notwithstanding the  fact
that the rights and remedies of the seller, lender or lessor
under such agreement in the event of default are limited  to
repossession or sale of such Property, (v) Capitalized Lease
Obligations  of such Person, (vi) all accounts  payables  of
such   Person,  (vii)  all  indebtedness,  liabilities   and
obligations of such Person under guarantees or endorsements,
and  (viii)  all obligations of such Person,  contingent  or
otherwise, relative to the face amount of letters of  credit
(as  may be reduced pursuant to their terms), whether or not
drawn.

     Indemnitees has the meaning ascribed thereto in Section
11.4.

      Interim Order means an interim order of the Bankruptcy
Court,  as  filed  and approved by the Bankruptcy  Court  on
January 11, 2005, approving the Loans and Letters of  Credit
made  or  to be made to the Borrower by Lenders on or  after
the Effective Date in accordance with this Agreement, as the
same  may  be  amended, restated, supplemented or  otherwise
modified from time to time with the express written  consent
of   the  Agent  and  Required  Lenders  and  granting   the
Superpriority  Claim  status  and  the  Liens  described  in
Section 3.1, which Interim Order (i) shall be in full  force
and  effect  and (ii) shall not have been stayed,  reversed,
modified  or  amended in any respect; and,  if  the  Interim
Order  is  the  subject of a pending appeal in any  respect,
neither  the  making of any Loans nor the  issuance  of  any
Letters  of Credit nor the performance by any Loan Party  of
any of its obligations hereunder or under the Loan Documents
or  under  any  other  instrument or agreement  referred  to
herein  shall  be the subject of a presently effective  stay
pending appeal.

      Investment  means any investment by  Borrower  or  any
Guarantor in any Person, whether payment therefor is made in
cash  or  capital  stock of Borrower or any  Guarantor,  and
whether  such  investment  is by  acquisition  of  stock  or
Indebtedness, or by loan, advance, transfer of property  out
of  the  ordinary course of business, capital  contribution,
equity  or  profit sharing interest, extension of credit  on
terms  other  than  those normal in the ordinary  course  of
business,    guarantee   or   otherwise   becoming    liable
(contingently  or otherwise) in respect of the  Indebtedness
of any Person, or otherwise.

      Interest Rate Protection Agreement means any  interest
rate  exchange,  collar, cap or similar agreement  providing
interest  rate  protection,  entered  into  by  Borrower  in
respect of the Loans.

      Lenders  shall collectively mean Regions and EDC,  and
their  respective successors and assigns, with each being  a
Lender.

      Lenders'  Pre-Petition Collateral has the meaning  set
forth in Section 3.1.

      Lenders'  Pre-Petition Indebtedness means Indebtedness
of  the  Loan Parties under the following credit facilities:
(i)  a $15,000,000 revolving credit facility pursuant to the
terms of the Regions Loan Agreement, (ii) a $5,000,000  non-
revolving credit facility pursuant to the terms of the Sixth
Amendment  to  the  Regions  Loan  Agreement  and  (iii)   a
$79,000,000  construction credit facility  pursuant  to  the
terms of the Regions/EDC Credit Agreement.

     Lenders' Pre-Petition Loan Documents means the loan and
credit  agreements,  security  agreements,  ship  mortgages,
assignments,  pledge agreements and other loan and  security
documents  relating to, evidencing or securing the  Lenders'
Pre-Petition Indebtedness.

     Letter of Credit and Letters of Credit has the meanings
ascribed thereto in Section 4.1(a).

      Letter of Credit Application means an application  and
agreement  for letters of credit substantially in  the  form
attached  to  the Regions/EDC Credit Agreement, executed  by
Borrower  or by Borrower and a Guarantor (if the  Letter  of
Credit  is  to  be  for  the account  of  a  Guarantor)  and
delivered to Regions pursuant to Section 4.1(a), as the same
may  from  time  to time be amended, modified,  extended  or
renewed.

      Letter  of  Credit Maximum Amount means  an  aggregate
amount not exceeding $2,000,000.00.

      Letter  of Credit Loan and Letter of Credit Loans  has
the meaning ascribed thereto in Section 4.3.

      Letter  of  Credit Period means, with respect  to  any
Letter  of  Credit, the period commencing on  the  Effective
Date  and  ending no later than the fifth day prior  to  the
Termination Date.

      Letter  of  Credit  Request has the  meaning  ascribed
thereto in Section 4.1(a).

      Lien  means  any  interest  in  Property  securing  an
obligation owed to, or a claim by, a Person other  than  the
owner  of  the Property, whether such interest is  based  on
common   law,   statute  or  contract,  including,   without
limitation, any security interest, mortgage, deed of  trust,
hypothec, prior claim, right of retention, maritime lien  or
right  in  rem,  pledge, assignment, judgment  lien,  deemed
trust  or  other lien or encumbrance of any kind  or  nature
whatsoever, any conditional sale or trust receipt,  and  any
consignment  or  bailment for security purposes.   The  term
"Lien"     shall    include    reservations,     exceptions,
encroachments,    easements,   servitudes,    rights-of-way,
covenants, conditions, restrictions, leases and other  title
exceptions and encumbrances affecting Property.

      Line  of  Credit Commitment means for all Lenders  the
aggregate principal amount of $6,900,000.00.

      Line of Credit Loan and Line of Credit Loans have  the
meanings ascribed thereto in Section 2.1.

      Line  of Credit Notes has the meaning ascribed thereto
in Section 2.4.

      Line  of Credit Period means the period commencing  on
the Effective Date and ending on the Termination Date.

      Loans shall collectively mean the Line of Credit Loans
and  the Letter of Credit Loans, with each being a Loan, and
shall  include all principal, interest, attorneys' fees  and
costs owed thereon.

      Loan  Documents means this Agreement, the  Notes,  the
Letter  of Credit Application(s), the Continuing Guarantees,
the  Security Documents and all other agreements,  documents
and  instruments heretofore, now or hereafter  delivered  to
the  Agent  or  any  of the Lenders with respect  to  or  in
connection  with  or pursuant to this Agreement,  any  Loans
made  hereunder  or  thereunder, or any  Letters  of  Credit
issued hereunder or thereunder, and executed by or on behalf
of  Borrower and/or any Guarantor, all as the same may  from
time to time be amended, modified, extended or renewed.

      Loan Parties means, collectively, the Borrower and the
Guarantors.

     Material Adverse Effect means a material adverse effect
on    the   Properties,   assets,   liabilities,   business,
operations, income or condition (financial or otherwise)  of
Borrower and the Guarantors taken as a whole.

      Note  means  each Line of Credit Note, with  all  such
notes being collectively referred to as the Notes.

     Notice of Borrowing has the meaning ascribed thereto in
Section 2.3(a).

      Obligations means, without duplication,  any  and  all
present   and   future   Indebtedness  (including,   without
limitation, principal of the Loans, interest thereon,  Fees,
collection  costs and expenses, attorneys'  fees  and  other
amounts),  liabilities and obligations  (including,  without
limitation,  reimbursement  obligations  with   respect   to
Letters of Credit issued by Regions under this Agreement and
charge  backs  owed by Borrower with respect to  checks  and
other items of payment returned for insufficient funds under
Section 2.6) of Borrower and each Guarantor, and of any  one
or  more  of them, to any one or more of the Secured Parties
evidenced  by  or arising under or in connection  with  this
Agreement,  the  Notes, the Letter of Credit Application(s),
and/or  any of the other Loan Documents, whether  direct  or
contingent,  due  or  to  become  due  or  now  existing  or
hereafter arising.

      Obligor means Borrower, each Guarantor and each  other
Person  who  is  or  shall  at  any  time  hereafter  become
primarily or secondarily liable on any of the Obligations.

     Orders means the Interim Order and the Final Order.

     Overadvance has the meaning ascribed thereto in Section
2.2.

      Permitted Liens means any of the following: (a)  Liens
for  property taxes and assessments or governmental  charges
or  levies, provided that payment thereof is not at the time
required  by Section 8.1(d); (b) (i) deposits to secure  the
performance  of  bids, tenders, trade  contracts  or  leases
(other  than  Capitalized Leases)  or  to  secure  statutory
obligations, surety or appeal bonds or other Liens  of  like
general  nature incurred in the ordinary course of  business
and  not  in connection with the borrowing of money  or  the
acquisition  of inventory or other Property and  (ii)  Liens
(other  than  any  Liens imposed by ERISA)  arising  in  the
ordinary  course of business or incidental to the  ownership
of Properties and assets (including Liens in connection with
worker's compensation, unemployment insurance and other like
laws,  carrier's,  mechanic's,  materialmen's,  repairmen's,
vendor's,  warehousemen's and attorneys' liens and statutory
landlords'  liens);  provided  in  each  case  that  payment
thereof  is  not at the time required by Section  8.1(d)  or
8.1(e);  (c)  Survey exceptions, issues with regard  to  the
merchantability  of  title, easements  or  reservations,  or
rights  of  others for rights-of-way, servitudes,  utilities
and  other similar purposes, or zoning or other restrictions
as to the use of real properties, which could not reasonably
be  expected  to have a Material Adverse Effect;  (d)  Liens
permitted by the Required Lenders in writing; (e)  Liens  on
Properties   in   respect  of  judgments  or   awards,   the
Indebtedness with respect to which is permitted  by  Section
8.2(a)(v);  (f) Liens on Schedule 1.1A attached hereto;  (g)
leases  of  or  purchase  money security  interests  against
specific  equipment  securing Indebtedness  permitted  under
Section  8.2(a)(xiii);  (h) Liens under  the  Lenders'  Pre-
Petition  Loan  Documents; (i) Liens granted  in  connection
with  Pre-Petition  Indebtedness relating  to  the  MIDNIGHT
WRANGLER  and  MIDNIGHT  GATOR in  a  principal  amount  not
exceeding  $15,000,000.00 in the aggregate at any  one  time
outstanding;  (j)  Liens  granted in  connection  with  Pre-
Petition  Indebtedness relating to the MIDNIGHT EAGLE  in  a
principal   amount  not  exceeding  $9,250,000.00   in   the
aggregate  at  any one time outstanding; (k)  Liens  granted
with  respect to Post-Petition Indebtedness relating to  the
MIDNIGHT  WRANGLER, MIDNIGHT GATOR and MIDNIGHT  EAGLE,  and
all   Post-Petition  accounts  receivables  generated   with
respect  thereto;  (l)  Liens  with  respect  to  all  other
property  or assets of the Debtors that does not  constitute
part of the Collateral; and (m) Liens created under the Loan
Documents.

      Person  means  any  individual,  sole  proprietorship,
partnership,    joint    venture,   trust,    unincorporated
organization,  association, corporation,  limited  liability
company,   institution,   entity  or   government   (whether
national,   federal,  state,  county,  city,  municipal   or
otherwise,     including,    without     limitation,     any
instrumentality,  division,  agency,  body   or   department
thereof).
      Post-Petition  means, when used with  respect  to  any
Indebtedness, obligation, liability, claim or  other  matter
with  respect  to  any Loan Party, that  such  Indebtedness,
obligation,  liability, claim or other matter  arose  on  or
after the Petition Date.

      Pre-Petition  means, when used  with  respect  to  any
Indebtedness, obligation, liability, claim or  other  matter
with  respect  to  any Loan Party, that  such  Indebtedness,
obligation, liability, claim or other matter arose prior  to
the Petition Date.

      Pre-Petition  Payment means any  payment  (by  way  of
adequate  protection or otherwise), directly or  indirectly,
of principal or interest or otherwise on account of any Pre-
Petition  Indebtedness  or  trade  payables  or  other  Pre-
Petition  claims  against any Loan Party, including  without
limitation,  the  providing of a letter of credit  or  other
security to provide assurance of any such payment.

      Preferred  Ship  Mortgages has  the  meaning  ascribed
thereto in Section 5.6(b).

      Property means any interest in any kind of property or
asset,  whether  real,  personal or mixed,  or  tangible  or
intangible.  Properties means the plural of Property.

      Pro  Rata Share means with respect to each Lender with
respect  to  Line of Credit Loans or Letters of Credit,  the
percentage amount equal to the quotient of (x) such Lender's
share of the Line of Credit Commitment set forth (i) next to
such Lender's signature to this Agreement or (ii) after  the
Effective Date, in any Assignment Agreement, divided by  (y)
the  aggregate amount of Line of Credit Commitments. On  the
Effective Date, the Pro Rata Share of Regions and EDC is 50%
each.

      Regions means Regions Bank, an Alabama state bank,  in
its  individual  corporate capacity as a Lender   hereunder,
including,  without  limitation, its capacity  as  a  Lender
hereunder with respect to its Pro-Rata Share of the Line  of
Credit Loans and with respect to its issuance of Letters  of
Credit.

      Regions Loan Agreement means that certain Amended  and
Restated  Loan  Agreement dated as  of  December  20,  2002,
between Regions and Borrower, as previously amended.

      Regions/EDC Credit Agreement means that certain Credit
Agreement  dated as of April 23, 2003, among  the  Borrower,
Regions and EDC, as previously amended.

      Required  Lenders  means at any  time  Lenders  having
Fifty-One (51%) Percent of the aggregate amount of the  Line
of  Credit  Loans, the Letter of Credit Loans and  the  face
amount  (or  participation interest in the face  amount)  of
Letters  of Credit then outstanding or, if no such Loans  or
Letters  of  Credit  are then outstanding,  Fifty-One  (51%)
Percent  of  the  total Commitments of all of  the  Lenders;
provided  further  that the Required  Lenders  must  in  all
instances be at least two Lenders.

      Restricted  Investment means any  Investment,  or  any
expenditure or any incurrence of any liability to  make  any
expenditure for an Investment, other than:

        (a)  Guarantees, loans or advances by Borrower to  a
Guarantor or a Guarantor to Borrower;

       (b) Investments made Pre-Petition;

        (c) Investments permitted by the First Day Orders or
any  other  order  of the Bankruptcy Court approved  by  the
Lenders; and

       (d) Investments in the Subsidiaries of Borrower as of
the Effective Date.

      Secured Parties shall collectively mean Agent and  the
Lenders.

     Security Agreements has the meaning ascribed thereto in
Section 5.6(a).

      Security Documents means the Preferred Ship Mortgages,
the  Assignments  of Earnings, the Security Agreements,  the
Guarantor  Pledge Documents and any other Loan Documents  in
respect of which a Lien has been granted by the Loan Parties
in  favor  of  the  Agent  for the benefit  of  the  Secured
Parties.

     Subsidiary means (a) any corporation of which more than
fifty  percent  (50%) of the issued and outstanding  capital
stock  entitled to vote for the election of directors is  at
the time owned directly or indirectly by Borrower and/or any
one  or  more Subsidiaries, or (b) any partnership,  limited
liability  company,  business trust, or  any  other  similar
entity  of which more than fifty percent (50%) of the voting
interests  is  at the time owned directly or  indirectly  by
Borrower   and/or   any  one  or  more   Subsidiaries,   and
specifically  including, but not limited  to,  each  of  the
entities described on Schedule 7.13.

      Superpriority  Claim means a claim  against  any  Loan
Party   in   any  of  the  Cases  that  is  a  superpriority
administrative expense claim having priority  over  any  and
all administrative expenses, diminution claims and all other
claims,  now  existing  or hereafter arising,  of  any  kind
whatsoever  (other  than the Carve Out), including,  without
limitation, any and all administrative expenses of the  kind
specified  in  Sections 503(b) and 507(b) of the  Bankruptcy
Code,  and  any  and  all administrative expenses  or  other
claims  arising  under Sections 105,  326,  328,  330,  331,
503(b),  506(c), 507(a), 507(b), 726, 1113 or  1114  of  the
Bankruptcy Code), whether or not such claims or expenses may
become  secured  by a judgment lien or other  non-consensual
lien, levy or attachment.

      TELLC has the meaning set forth in the first paragraph
of this Agreement

      Termination  Date means the earlier to  occur  of  (i)
April  1,  2005  (which  date  may  be  extended  up  to  90
additional  days  thereafter upon  the  written  consent  of
Lenders  in  the  exercise of their  sole  discretion,  such
consent, if any, to be conditioned, among other things, upon
receipt  of  a  new Budget and the Agent's and the  Lenders'
complete  satisfaction  therewith),  (ii)  the  Consummation
Date,  and  (iii)  the acceleration of  the  Loans  and  the
termination of the Line of Credit Commitments in  accordance
with the terms hereof.

      TOLLC has the meaning set forth in the first paragraph
of this Agreement.

      US Vessels means the following vessels registered with
the  United  States of America and owned by the  Loan  Party
mentioned below: (i) Midnight Brave, Official Number 529263,
owned  by TOLLC, (ii) Midnight Fox, Official Number 1065954,
owned  by  TOLLC,  (iii)  Midnight Dancer,  Official  Number
586595, owned by TOLLC, (iv) Midnight Rider, Official Number
1035377,  owned by TOLLC, together with all masts,  boilers,
cables,   engines,  machinery,  bowsprits,  sails,  rigging,
boats,   anchors,   chains,  tackle,   apparel,   furniture,
fittings,  tools,  pumps, equipment, fuel,  supplies,  spare
parts and all other attachments, appurtenances, accessories,
additions, fixtures, equipment, appliances, improvements and
replacements  now  or hereafter belonging  thereto,  affixed
thereto, or used in connection therewith, whether because of
repairs or otherwise, whether or not removed therefrom.

      Vanuatu Vessels means the following vessels registered
with  the  Republic of Vanuatu and owned by the  Loan  Party
mentioned below: (i) Midnight Express, Official Number 1450,
owned by TELLC, (ii) Midnight Carrier, Official Number 1208,
owned  by  TOLLC,  (iii) and Midnight Star, Official  Number
398,  owned  by  TOLLC, together with  all  masts,  boilers,
cables,   engines,  machinery,  bowsprits,  sails,  rigging,
boats,   anchors,   chains,  tackle,   apparel,   furniture,
fittings,  tools,  pumps, equipment, fuel,  supplies,  spare
parts and all other attachments, appurtenances, accessories,
additions, fixtures, equipment, appliances, improvements and
replacements  now  or hereafter belonging  thereto,  affixed
thereto, or used in connection therewith, whether because of
repairs or otherwise, whether or not removed therefrom.

     Vessels means, collectively, the US Vessels and Vanuatu
Vessels.  References to the name of a Vessel shall refer  to
such vessel described in either the definition of US Vessels
or Vanuatu Vessels.

      1.2   Accounting Terms and Determinations.  Except  as
otherwise specified herein, all accounting terms used herein
shall   be   interpreted,   all  accounting   determinations
hereunder   shall  be  made  and  all  financial  statements
required  to  be  delivered hereunder shall be  prepared  in
accordance with GAAP as in effect from time to time, applied
on  a basis consistent (except for changes accompanied by  a
concurrence  from  Borrower's independent  certified  public
accountants)   with   the  most  recent  audited   financial
statements of Borrower delivered to the Lenders.

     SECTION 2.  LINE OF CREDIT LOANS.

      2.1  Line of Credit Commitments.  Subject to the terms
and conditions set forth in this Agreement and so long as no
Default  or Event of Default has occurred and is continuing,
during the Line of Credit Period, each Lender severally (and
not jointly) agrees to lend to Borrower from time to time on
a revolving basis (individually, a "Line of Credit Loan" and
collectively,  the "Line of Credit Loans")  amounts  not  to
exceed,  in the aggregate at any one time outstanding,  such
Lender's Pro Rata Share of (x) the Line of Credit Commitment
minus  (y) the aggregate principal amount of all outstanding
Line  of  Credit  Loans.  Within the foregoing  limitations,
Borrower  may  borrow under this Section 2.1,  prepay  under
Section  5.3  and reborrow at any time during  the  Line  of
Credit  Period  under  this Section 2.1.  Loans  under  this
Section  2.1 shall be made from the several Lenders  ratably
in  proportion  to  their respective Pro Rata  Shares.   The
failure  of  any  Lender to make any  Line  of  Credit  Loan
required  under this Agreement shall not release  any  other
Lender  from its obligation to make Line of Credit Loans  as
provided  herein.   Each  Line of  Credit  Loan  shall  bear
interest  on  the outstanding principal amount thereof,  for
each  day  from the date such Loan is made until it  becomes
due, at a rate per annum equal to the Applicable Rate.  Such
interest  shall be payable on all such Line of Credit  Loans
monthly  in  arrears on the last day of each month  (or  the
immediate  subsequent Business Day if any such last  day  is
not  a Business Day) and at maturity.  Any overdue principal
of and, to the extent permitted by law, overdue interest on,
any  Line  of  Credit Loan shall bear interest,  payable  on
demand, for each day until paid at a rate per annum equal to
the sum of three percent (3%) plus the Applicable Rate.

      2.2   Total  Line  of Credit Loans  Shall  Not  Exceed
Commitments.  If the Line of Credit Loans outstanding should
at any time exceed $6,900,000.00 (such excess Loans being an
"Overadvance"),   such   Overadvance   shall    nevertheless
constitute  Indebtedness that is secured by  the  Collateral
and  entitled  to all of the benefits of this Agreement  and
the  other  Loan Documents.  Any such Overadvance  shall  be
payable  by  the Borrower on demand by the Agent  and  shall
bear  interest at the Applicable Rate.  The Agent shall  not
be  responsible or liable for failure to make any demand for
payment under this Section 2.2.

     2.3  Method of Borrowing.

        (a)  With  respect  to  each Line  of  Credit  Loan,
Borrower's  Representative shall give notice (a  "Notice  of
Borrowing") to each Lender by 10:30 a.m. (New Orleans  time)
at  least  one (1) Business Day before each Line  of  Credit
Loan, specifying:

       (i) the date of such Line of Credit Loan, which shall
be a Business Day,

        (ii) the aggregate principal amount of such Line  of
Credit Loan,

        (iii)  that on the date of, and after giving  effect
to, such Line of Credit Loan, no Default or Event of Default
has occurred and is continuing, and

       (iv) that on the date of, and after giving effect to,
such  Line  of  Credit Loan, all of the representations  and
warranties  of  Borrower contained  in  Section  7  of  this
Agreement  and of Borrower and the Guarantors  contained  in
the  other  Loan  Documents are  true  and  correct  in  all
material respects as if made on and as of the date  of  such
Line  of  Credit  Loan  (except  to  the  extent  that  such
representations and warranties expressly relate solely to an
earlier  date  (in  which  case  such  representations   and
warranties  shall have been true and correct on  and  as  of
such earlier date)).

        (b) A Notice of Borrowing shall not be revocable  by
Borrower.

        (c)  Not later than 3:00 p.m. (New Orleans time)  on
the date of each Line of Credit Loan, each Lender shall make
available its Pro Rata Share of such Line of Credit Loan, in
federal or other funds immediately available in New Orleans,
Louisiana,  to  the  Borrower at  the  Borrower's  operating
account  at  Regions (or such other account mutually  agreed
upon  in  writing  between each Lender  and  Borrower).  The
parties hereto agree that no Lender is obligated to send any
proceeds  via  wire  transfer after 2:00 p.m.  (New  Orleans
time).  In  any event, each Lender shall remain  responsible
with  respect to making its Pro Rata Share of each  Line  of
Credit  Loan  available  to Borrower.  Agent  shall  not  be
required  to make any amount available to Borrower hereunder
except  to the extent that Agent and such Lender shall  have
made  alternative arrangements to fund Line of Credit  Loans
as  mutually  agreed between them, provided,  however,  that
under  such alternative arrangement, unless the Agent  shall
have  been notified in writing by a Lender prior to the date
a  Line  of  Credit Loan is to be made hereunder  that  such
Lender  does not intend to make its Pro Rata Share  of  such
Line  of Credit Loan available to the Agent, the Agent  may,
after  notice to such Lender, assume that such  Lender  will
make  such  Pro  Rata Share available to the Agent  on  such
date, and the Agent may, but has no obligation to do so,  in
reliance  upon such assumption, make available  to  Borrower
the  corresponding amount.  If such corresponding amount  is
not  in fact made available to the Agent by such Lender  and
the  Agent  has made such amount available to Borrower,  the
Agent  shall  be entitled to receive such amount  from  such
Lender  or the Borrower forthwith upon its demand,  together
with  interest  thereon in respect of each  day  during  the
period  commencing on the date such amount was  advanced  to
Borrower  and  ending on but excluding the  date  the  Agent
recovers such amount from (i) the Lender at a rate per annum
equal to the Fed Funds Rate or (ii) from the Borrower at the
Applicable Rate.

     2.4  Line of Credit Notes.

        (a)  The  Line  of Credit Loans of  each  Lender  to
Borrower shall be evidenced by a promissory note of Borrower
dated  the Effective Date and payable to the order  of  such
Lender  in  a principal amount equal to its Line  of  Credit
Commitment  in  substantially the form of  Exhibit  A  (with
appropriate insertions) (as such promissory notes  may  from
time  to time be amended, modified extended or renewed,  the
"Line of Credit Notes").

        (b)   Each  Lender  may record,  and  prior  to  any
transfer  of  its  Line of Credit Note may  endorse  on  the
schedules  forming a part thereof, appropriate notations  to
evidence  the  date and amount of each Line of  Credit  Loan
made  by  it  and  the date and amount of  each  payment  of
principal  made  by  Borrower with  respect  thereto.   Each
Lender  is hereby irrevocably authorized by Borrower  so  to
endorse its Line of Credit Note and to attach to and make  a
part  of any such Line of Credit Note a continuation of  any
such  schedule as and when required; provided, however  that
the obligation of Borrower to repay each Line of Credit Loan
actually made hereunder shall be absolute and unconditional,
notwithstanding any failure of any Lender to endorse or  any
mistake by any Lender in connection with endorsement on  the
schedules  attached to its respective Line of  Credit  Note.
The internal records of each Lender shall constitute for all
purposes prima facie evidence of (i) the amount of principal
and  interest  owing to such Lender on its  Line  of  Credit
Loans  from  time to time, (ii) the amount of each  Line  of
Credit  Loan made by such Lender to Borrower and  (iii)  the
amount of each principal and/or interest payment received by
such Lender on its Line of Credit Loans.

     2.5  Maturity.  All Line of Credit Loans not paid prior
to  the last day of the Line of Credit Period, together with
all  accrued  and unpaid interest thereon and all  fees  and
other  amounts owing by Borrower to the Lenders with respect
thereto,  shall be due and payable by Borrower on  the  last
day of the Line of Credit Period.

      2.6   Collections Account.   (a) All payments  on  all
accounts  receivable of the Loan Parties shall be  deposited
by  the Loan Parties on each Business Day such payments  are
received   to  a  collections  account  with  Regions   (the
"Collections Account").  Borrower shall pay all of  Regions'
standard  fees and charges in connection with the Collection
Account  as  such fees and charges may change from  time  to
time.   Borrower hereby grants to Agent, for the benefit  of
the  Lenders,  a  security interest in  and  lien  upon  the
Collections Account and all checks, items of payment and all
funds  deposited  and  collected in the Collections  Account
from  time  to  time  as  collateral  for  the  Obligations.
Borrower acknowledges and agrees that (i) neither the  Agent
nor  any Lender has any obligation to monitor or apply funds
in   the   Collections  Account  to  the  payment   of   the
Obligations,  (ii) Borrower retains the full  responsibility
(except  during  the existence of an Event  of  Default)  to
direct Regions from time to time in writing (or as otherwise
agreed)  as  to the disbursement of funds in the Collections
Account (including, without limitation, disbursements to pay
down the Line of Credit Loans, interest thereon or Fees)  in
accordance with the terms of this Agreement, the Budget  and
the  Orders,  (iii)  neither Agent nor any  Lender  has  any
obligation  to fund any overdrafts drawn on the  Collections
Account or any other account of a Loan Party with the  Agent
or  any  of the Lenders, (iv) notwithstanding the foregoing,
during  the  existence of an Event of Default,  and  without
limiting the Agent's other rights and remedies, Agent  shall
have  sole  authority to disburse funds in  the  Collections
Account and Borrower may not direct disbursements as to,  or
withdraw funds from, the Collections Account and (v) Regions
shall  have  the  right to charge back  to  the  Collections
Account any item which is returned for inability to collect,
plus  accrued interest (at the Applicable Rate)  during  the
period of Regions' provisional credit for such item prior to
receiving  notice of dishonor, or, in the  exercise  of  the
Lenders' sole discretion, make a Line of Credit Loan  to  be
applied to such charge back amount.

      (b)  Upon the deposit of any items of payment into the
Collections Account, Borrower shall provide Lenders  with  a
detailed   written  backup  report  in  form   and   content
satisfactory to the Lenders.

      2.7  Midnight Express Application of Proceeds of Sale.
(a)   Proceeds  from  the sale of the Midnight  Express  (as
described  in  Section 9.9) shall be applied  first  to  the
payment of reasonable transaction costs directly incurred in
connection  with  such sale as approved by  the  Lenders  in
writing (including, without limitation, attorneys' fees  and
expenses,  and broker and other professional fees),  second,
to  the  payment of the Obligations, and, third, subject  to
(b)  of  this  Section  2.7,  to pay  Lenders'  Pre-Petition
Indebtedness  described  in clause (ii)  of  the  definition
thereof, and the balance, if any, to such of the Obligations
and  Lenders'  Pre-Petition Indebtedness  as  Lenders  shall
direct, the extent, manner and amount of such application to
be  at  Lenders' sole discretion (proceeds from the sale  of
any other Vessels  shall be applied first to the payment  of
reasonable transaction costs directly incurred in connection
with  such  sale (including, without limitation,  attorneys'
fees  and expenses, and broker and other professional fees),
second,  to  the  payment  of such of  the  Obligations  and
Lenders' Pre-Petition Indebtedness as Lenders shall  direct,
the  extent, manner and amount of such application to be  at
Lenders'  sole discretion); provided, however, in the  event
and  to  the extent any maritime Lien or claim is determined
by a final order of the Bankruptcy Court (or any other court
of  competent jurisdiction) to prime or otherwise be  senior
in  priority to the Liens securing the Lenders' Pre-Petition
Indebtedness,  then, in such event and to such  extent,  the
proceeds from the sale of the Midnight Express or any  other
Vessel  shall  be  applied to the payment of  such  maritime
Liens  before  being  applied to the  Lenders'  Pre-Petition
Indebtedness.

        (b)    After payment of transactions costs  and  the
Obligations  pursuant  to clause (a) of  this  Section  2.7,
following  receipt by Debtors or Lenders, as applicable,  of
sale  proceeds  pursuant to subsection (a) of  this  Section
2.7,  Debtors or Lenders, as applicable, shall  establish  a
reserve account at Regions and deposit such amounts received
from  the sale proceeds before being applied to the Lenders'
Per-Petition Indebtedness as necessary to pay any bona  fide
maritime  Liens  or  claims determined by  the  Debtors  and
Lenders to prime or otherwise be senior in priority  to  the
Liens securing the Lenders' Pre-Petition Indebtedness, which
funds  shall be disbursed at the earlier of (i) entry  of  a
final  order  determining that such maritime Lien  or  claim
primes  or  is otherwise senior in priority to the  Lenders'
Pre-Petition  Indebtedness  to  such  claimant  and  (ii)  a
further order of the Bankruptcy Court with respect thereto.

      SECTION 3. SUPERPRIORITY STATUS OF OBLIGATIONS AND  OF
LIENS

      3.1  Priority  and  Liens.   Each  Loan  Party  hereby
covenants, represents and warrants that, upon entry  of  the
Interim  Order,  the Obligations and the Liens  against  the
Collateral  securing  the Obligations shall,  in  each  case
subject to the Carve Out: (i) be Superpriority Claims,  (ii)
pursuant  to  section  364(c)(2)  of  the  Bankruptcy  Code,
constitute  perfected first priority (except that  the  Lien
against  the  Midnight  Rider shall not  have  Superpriority
Claim  status  solely with respect to the Lien  against  the
Midnight    Rider   securing   the   Lenders'   Pre-Petition
Indebtedness under the Regions Loan Agreement) liens on  (1)
all  of the Loan Parties' assets that were pledged to secure
the   Lenders'  Pre-Petition  Indebtedness  (the   "Lenders'
Prepetition   Collateral"),  (2)  all  accounts   receivable
generated  by the Debtors postpetition from the  Prepetition
Collateral and (3) avoided liens or security interests under
section  551  of the Bankruptcy Code, and (iii) pursuant  to
Section   364(d)(1)  of  the  Bankruptcy  Code,   constitute
perfected  first  priority priming liens on the  Prepetition
Collateral, which shall prime any maritime liens that may be
senior   to  liens  of  the  Lenders  against  the  Lenders'
Prepetition  Collateral with respect to  the  Lenders'  Pre-
Petition Indebtedness.

       3.2   Payment  of  Obligations.   Upon  the  maturity
(whether  by  acceleration  or  otherwise)  of  any  of  the
Obligations,  the  Lenders shall be  entitled  to  immediate
payment  of such Obligations without further application  to
or order of the Bankruptcy Court.

     3.3  No Discharge: Survival of Claims.  Each Loan Party
agrees  that  (i) its obligations hereunder  and  under  the
other Loan Documents shall not be discharged by the entry of
an  order confirming any Reorganization Plan, dismissing any
Case or converting any Case to a case under Chapter 7 of the
Bankruptcy  Code (and each Loan Party, pursuant  to  Section
1141(d)(4)  of the Bankruptcy Code, hereby waives  any  such
discharge  with respect to such obligations)  and  (ii)  the
Superpriority  Claims granted to the Agent and  the  Lenders
pursuant to the Orders and described in Section 3.1 and  the
Liens  granted  to  the Agent pursuant  to  the  Orders  and
described  in Sections 3.1 and 5.7 shall not be affected  in
any   manner  by  the  entry  of  an  order  confirming  any
Reorganization  Plan, dismissing any Case or converting  any
Case to a case under Chapter 7 of the Bankruptcy Code.

      3.4  Use of Cash Collateral.  Notwithstanding anything
to the contrary contained herein, (x) the Borrower shall not
be  permitted to request a Line of Credit Loan under Section
2.1,  or  request the issuance of a Letter of  Credit  under
Section  4.1  unless  (i) the Bankruptcy  Court  shall  have
entered the Interim Order and (ii) the Loan Parties shall at
that  time  have the use of all Cash Collateral (defined  in
the   Orders)  subject  to  any  limitations  or  conditions
contained  in the Orders for the purposes described  in  the
Interim  Order  and (y) upon the occurrence and  during  the
continuation  of an Event of Default, the Loan  Parties  may
not use any Cash Collateral.

     SECTION 4.  LETTERS OF CREDIT.

     4.1  Letter of Credit Discretionary Facility.

        (a)  Subject  to  the terms and conditions  of  this
Agreement, during the Letter of Credit Period, and  so  long
as  no  Default  or  Event of Default has  occurred  and  is
continuing  (provided, however, that Regions shall  have  no
liability to any of the other Lenders for issuing  a  Letter
of  Credit after the occurrence of any Default or  Event  of
Default  unless  Regions has previously received  notice  in
writing  by Borrower, the Agent (if not Regions) or  any  of
the other Lenders of the occurrence of such Default or Event
of  Default), Regions hereby agrees to consider requests  in
the  exercise of its sole discretion from Borrower to  issue
commercial letters of credit and irrevocable standby letters
of  credit for the account of Borrower or for the account of
Borrower  and any other Loan Party (individually, a  "Letter
of  Credit" and collectively, the "Letters of Credit") in an
amount not exceeding the Letter of Credit Maximum Amount and
for the term specifically requested by Borrower by notice in
writing to Regions substantially in the form attached to the
Regions/EDC Credit Agreement (a "Letter of Credit  Request")
at  least  three  (3) Business Days prior to  the  requested
issuance thereof; provided, however, that:

           (i)  Regions shall have no commitment under  this
Agreement to issue any Letter of Credit and may reject,  for
any  reason, any request for the issuance of any  Letter  of
Credit in the exercise of its sole discretion;

           (ii)  Borrower, and if the Letter of Credit is to
be  issued for the account of Borrower and a Guarantor, such
Guarantor,  shall have executed and delivered to  Regions  a
Letter of Credit Application with respect to such Letter  of
Credit,  with Borrower and such Guarantor (if the Letter  of
Credit  will  be  issued for the account of Borrower  and  a
Guarantor)  to  be jointly, severally and solidarily  liable
thereunder;

           (iii) the term of any such Letter of Credit shall
not  extend  beyond  the last day of the  Letter  of  Credit
Period;

           (iv) any Letter of Credit may only be utilized in
the  ordinary course of business for the requirements of the
Company Business;

           (v)  the  sum  of (A) the aggregate undrawn  face
amount  of all outstanding Letter(s) of Credit plus (B)  the
aggregate  principal  amount of all  outstanding  Letter  of
Credit Loans shall not at any one time exceed the Letter  of
Credit Maximum Amount; and

           (vi)  the  text of any such Letter of  Credit  is
provided  to  Regions no less than three (3)  Business  Days
prior  to  the  requested  issuance  date,  the  terms   and
conditions of which must be acceptable to Regions.

        (b) Regions will make available the original of each
Letter  of  Credit  to  the beneficiary  thereof  (and  will
promptly  provide each of the other Lenders  and  the  Agent
with a copy of such Letter of Credit).

       (c) Borrower hereby further agrees to pay (or arrange
for  a  Guarantor,  if  it executed  the  Letter  of  Credit
Application, to pay) to Regions, solely for the  account  of
the Regions, a facing fee in the amount of 0.12% of the face
amount  of each Letter of Credit upon the issuance  thereof.
Borrower  further agrees to pay Regions standard negotiation
charges upon demand from time to time.  No Lender other than
Regions shall have any right to share in any facing fees  or
negotiation  fees  paid  by Borrower  (or  a  Guarantor)  to
Regions in connection with any of the Letters of Credit.

     4.2  Participation by Other Lenders.

        (a)  Upon  the issuance of a Letter of Credit,  each
Lender  shall share the obligation represented by each  such
Letter  of  Credit  so issued, in an amount  equal  to  such
Lender's  Pro Rata Share.  The participation of each  Lender
in  each  Letter of Credit shall be automatic.   Each  other
Lender  shall  make  available  to  Regions,  regardless  of
whether  any Default or Event of Default shall have occurred
and  is  continuing, an amount equal to its  respective  Pro
Rata  Share of each drawing on each Letter of Credit in same
day or immediately available funds not later than 11:00 a.m.
New  Orleans  time on each Disbursement Date (as hereinafter
defined)  for  each  such drawing.  In the  event  that  any
Lender fails to make available to Regions the amount of such
Lender's Pro Rata Share of any drawing on a Letter of Credit
as  provided  herein, Regions shall be entitled  to  recover
such  amount  on  demand  from  such  Lender  together  with
interest  at  the daily average Federal Funds Rate  for  the
first  two  Business  Days after the Disbursement  Date  and
thereafter at the Applicable Rate.

        (b) Regions shall distribute to each Lender that has
paid  all amounts payable by it under this Section 4.2  with
respect  to  any  Letter of Credit issued  by  Regions  such
Lender's Pro Rata Share of all payments received by  Regions
from  Borrower  in  reimbursement  of  drawings  honored  by
Regions  under such Letter of Credit when such payments  are
received  (to  the extent that such Lender has  not  already
received such amounts).

      4.3   Disbursements.   Regions shall  notify  Borrower
promptly  of  the presentment for payment of any  Letter  of
Credit  (on  the  date  of  presentment,  if  possible,  and
otherwise  on  the next Business Day, it being  agreed  that
such  notice may be made by phone), together with notice  of
the  date  (the "Disbursement Date") such payment  shall  be
made, and Regions will promptly notify the other Lenders  of
such  matters.  Subject to the terms and provisions of  such
Letter  of  Credit, Regions shall make such payment  to  the
beneficiary (or its designee) of such Letter of Credit.   On
the   Disbursement  Date,  Borrower  shall,  prior   to   or
contemporaneous  with a payment on such  Letter  of  Credit,
reimburse  (or cause any Guarantor for which the  Letter  of
Credit  was  issued  to  reimburse) Regions  and  the  other
Lenders  (to  the extent each Lender has paid its  Pro  Rata
Share of such drawing) for all amounts which will be or have
been disbursed under such Letter of Credit.  In the event  a
payment   under   a  Letter  of  Credit  is   made   without
contemporaneous   receipt  of  payment  from   Borrower   in
accordance  with  this  Section  4.3,  such  payment   shall
constitute  a  loan (individually a "Letter of Credit  Loan"
and  collectively, the "Letter of Credit Loans") by  Regions
and/or the other Lenders (to the extent each Lender has paid
its Pro Rata Share of such drawing) to Borrower.  All Letter
of Credit Loans shall accrue interest at the Applicable Rate
and shall be payable on demand.  Regions shall distribute to
each  Lender that has paid all amounts payable by  it  under
Section 4.2 with respect to a Letter of Credit such Lender's
Pro Rata share of all interest and other amounts received by
Regions from Borrower (or any Guarantor) under the Letter of
Credit Loan relating to such Letter of Credit (to the extent
that such Lender has not already received such amounts).

       4.4    Reimbursement.   Borrower's  obligation  under
Section 4.3 to reimburse Regions and the other Lenders  with
respect  to  each  drawing  under  each  Letter  of   Credit
(including interest thereon) (to the extent each Lender  has
paid  its Pro Rata Share of such drawing), and each Lender's
obligation  to  fund each drawing shall,  absent  the  gross
negligence or willful misconduct of Regions, be absolute and
unconditional   under   any  and   all   circumstances   and
irrespective  of  any setoff, counterclaim,  or  defense  to
payment  which Borrower or any Lender may have or  have  had
against any Lender, Borrower or any beneficiary of a  Letter
of  Credit, including, without limitation, any defense based
upon the occurrence of any Default or Event of Default,  any
draft,  demand  or  certificate or other document  presented
under  a  Letter of Credit proving to be forged, fraudulent,
invalid  or  insufficient,  or  any  failure  to  apply   or
misapplication  by the beneficiary of the  proceeds  of  any
disbursement,  or the legality, validity, form,  regularity,
or enforceability of such Letter of Credit.

      4.5   Replacement or Collateralization of  Letters  of
Credit.   Notwithstanding any provision  contained  in  this
Agreement or any of the Letter of Credit Applications to the
contrary,  upon the occurrence of any Event of  Default,  at
Agent's option, Borrower shall, upon Agent's demand, deliver
to Agent cash or other collateral acceptable to Agent having
a  value,  as  determined by Agent, at least  equal  to  the
aggregate undrawn face amount of all outstanding Letters  of
Credit  issued by Regions.  Any such collateral  and/or  any
amounts received by Agent pursuant to this Section 4.5 shall
be   held   by  Agent  in  a  separate  account   at   Agent
appropriately  designated as a cash  collateral  account  in
relation  to  this Agreement and the Letters of  Credit  and
retained by Agent as collateral security for the payment  of
the  Obligations.  Cash amounts delivered to Agent  pursuant
to  the foregoing requirements of this Section 4.5 shall  be
invested, at the request and for the account of Borrower, in
investments of a type and nature and with a term  acceptable
to  Agent.   Such  amounts, including in the  case  of  cash
amounts  invested  in  the  manner  set  forth  above,   any
investment realized thereon, shall not be used by  Agent  to
pay  any  amounts  drawn or paid under or  pursuant  to  any
Letter  of  Credit, but may be applied to reimburse  Regions
for drawings or payments under or pursuant to the Letters of
Credit  which  Regions has paid, or if no such reimbursement
is  required shall be used by Agent for application to  such
other  of  the  Obligations as Agent shall  determine.   Any
amounts remaining in any cash collateral account established
pursuant  to this Section 4.5 after the payment in  full  of
all of the Obligations and the expiration or cancellation of
all of the Letters of Credit shall be returned to Borrower.

     SECTION 5.  GENERAL PROVISIONS FOR ALL LOANS.

      5.1  Determination of Interest Rates.  The Agent shall
(in  accordance with this Agreement) determine each interest
rate  applicable to the Loans hereunder. Upon  request,  the
Agent  shall give prompt notice to Borrower and the  Lenders
of   each   rate   of  interest  so  determined,   and   its
determination thereof shall be conclusive in the absence  of
manifest error.

     5.2  Fees.

        (a)  Borrower  shall pay to Agent  for  the  ratable
account  of  the  Lenders, a commitment fee which  is  fully
earned  and non-refundable on the Effective Date  but  which
shall become payable on the Termination Date, of 1.5% of the
Line of Credit Commitment, equal to $103,500.00.

        (b)  Borrower  shall pay to Agent  for  the  ratable
account  of  the  Lenders, a letter of credit  issuance  fee
which  is  fully earned and non-refundable on  the  date  of
issuance  of  any  Letter of Credit but which  shall  become
payable  on the Termination Date, of 1.5% of the  full  face
amount of each Letter of Credit when issued.

     5.3  Early Payments.

        (a)  Borrower may, upon notice to the  Agent,  which
notice  shall be irrevocable, specifying that it  is  paying
its  Line  of Credit Loans, pay without penalty  or  premium
such  Line of Credit Loans in whole or in part at any  time,
or  from time to time.  Each such optional payment shall  be
applied  to  pay  the Line of Credit Loans  of  the  several
Lenders in proportion to their respective Pro Rata Shares.

        (b) Upon receipt of a notice of payment pursuant  to
Section 5.3(a), the Agent shall promptly notify each  Lender
of  the contents thereof and of such Lender's ratable  share
of such payment.

     5.4  General Provisions as to Payments.  Borrower shall
make  each  payment of principal of, and  interest  on,  the
Loans  and  of fees and all other amounts payable hereunder,
not  later  than 12:00 noon (New Orleans time) on  the  date
when due, in federal or other funds immediately available in
New Orleans, Louisiana, to the Agent at its address referred
to  in Section 11.7.  The Agent will promptly distribute  to
each Lender in immediately available funds its ratable share
of  each  such payment received by the Agent for the account
of  the  Lenders.  Whenever any payment of principal of,  or
interest  on,  the Loans or of fees shall be due  on  a  day
which  is  not a Business Day, the date for payment  thereof
shall  be extended to the next succeeding Business Day.   If
the  date  for  any  payment  of principal  is  extended  by
operation of law or otherwise, interest thereon, at the then
applicable rate, shall be payable for such extended time.

      5.5   Computation  of  Interest.   Interest  on  Loans
hereunder  shall be computed on the basis of a year  of  360
days  and  paid  for  the  actual  number  of  days  elapsed
(including the first day but excluding the last day).

      5.6  Security.  In order to secure payment when due of
the Obligations:

        (a)  Security Documents.  Borrower shall cause  each
Guarantor  to execute a Security Agreement substantially  in
the  form  of  Exhibit D (with appropriate insertions)  (the
"Security Agreement") in favor of the Agent for the  benefit
of the Secured Parties.  Borrower shall cause each Guarantor
to  execute  any and all financing statements,  continuation
statements and such other documents as may from time to time
be  requested by Agent or the Required Lenders in  order  to
create,  perfect and maintain the security interest  created
by the Security Agreement.

         (b)   Preferred  Ship  Mortgages;  Assignments   of
Earnings.  Borrower  shall cause each Guarantor  to  execute
preferred  fleet mortgage(s) and preferred ship  mortgage(s)
(the  "Preferred Ship Mortgages") granting  Agent,  for  the
benefit  of  the  Lenders,  preferred  mortgages  on   their
respective Vessels together with all proceeds thereof and to
execute  Assignments of Earnings with respect to the Vessels
(the  "Assignments  of  Earnings"), together  with  a  UCC-1
Financing  Statement filed in connection therewith,  all  of
the   foregoing  to  be  substantially  in  the  same   form
previously  executed in order to secure  the  Lenders'  Pre-
Petition Indebtedness.

        (c)   Continuing Guarantees.  Borrower  shall  cause
each  Guarantor to execute and deliver to Agent a Continuing
Guarantee  substantially  in the form  of  Exhibit  B  (with
appropriate insertions).

        (c)  Guarantor  Pledge  Documents.   Borrower  shall
execute and deliver, and cause each Guarantor to execute and
deliver,  to Agent Guarantor Pledge Documents pertaining  to
the  outstanding  stock  or other equity  interest  of  each
Guarantor.

        (d)   Patent and Trademark Office Filing.   Borrower
shall  execute  and  deliver, and cause  each  Guarantor  to
execute and deliver, to Agent on or before the date which is
20   days   after   the  Effective  Date,  patent   security
agreements,  in  form  and  substance  satisfactory  to  the
Lenders, to be recorded at Borrower's expense (not to exceed
$1,000) with the U.S. Patent and Trademark Office.

        (e)  Further Documents.  Borrower shall execute, and
shall cause each Guarantor to execute, any and all documents
as may from time to time be reasonably requested by Agent or
the  Required  Lenders  in  order  to  create,  perfect  and
maintain  the  Liens created by the Loan  Documents  subject
only to Permitted Liens.  Upon demand, Borrower shall pay to
Agent  or to any other party designated by Agent all  filing
fees  incurred  by  Agent  in the perfection  of  the  Liens
contemplated by the Loan Documents.

      5.7   Guaranty of Obligations of Guarantors.  Borrower
hereby unconditionally, irrevocably, jointly, severally  and
solidarily  guarantees the due and punctual payment  to  the
Agent for the benefit of the Secured Parties when stated  to
be due of all present and future obligations and liabilities
of  each  Guarantor  evidenced by or  arising  under  or  in
connection  with  the  Security  Agreement,  Preferred  Ship
Mortgages  and/or any other security documents  executed  by
such  Guarantor  in favor of Agent for the  benefit  of  the
Secured  Parties, whether direct or contingent,  due  or  to
become due or now existing or hereafter arising.

      5.8   Form  of  Loan  Documents.   Borrower  and  each
Guarantor  will agree to such modifications to the  form  of
the  Continuing  Guarantees, Security  Agreement,  Preferred
Ship  Mortgages, Guarantor Pledge Agreements and  the  other
Loan  Documents that are reasonably necessary to comply with
applicable  law  or  that  Agent  may  otherwise  reasonably
require.

       5.9    Deposit   Accounts.   As  security   for   the
Obligations, Borrower shall, and Borrower shall  cause  each
Guarantor, to maintain all of its primary operating accounts
with Agent.

     5.10 Insurance Proceeds.

        (a)   All  policies of insurance on  the  Collateral
shall  designate  Agent,  for the  benefit  of  the  Secured
Parties, as lender loss payee pursuant to a mortgagee's loss
payable  endorsement acceptable to Lenders.  Such  insurance
policies  shall contain an agreement by the insurer  not  to
cancel  or reduce coverage under the policies without giving
Agent at least thirty (30) days prior written notice of  its
intention  to  do  so.   Agent  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 Agent instead  of  to
Borrower or any Guarantor and Lenders jointly to be  applied
first  to the payment of the Obligations and second  to  the
Lenders' Pre-Petition Indebtedness; provided, that, so  long
as no default or Event of Default shall have occurred and be
continuing,  payments in respect of any hull  losses  for  a
Vessel  under $100,000 may be paid directly to  Borrower  or
Guarantors  as appropriate to be applied either  toward  the
repair  costs  to  such  Vessel or  toward  payment  of  the
Obligations.

      SECTION  6.   PRECONDITIONS TO LOANS  AND  LETTERS  OF
CREDIT.

      6.1  Initial Line of Credit Loan or Initial Letter  of
Credit.   Notwithstanding any provision contained herein  to
the  contrary, none of the Lenders shall have any obligation
to  make  the  initial  Line of Credit  Loan  hereunder  and
Regions shall have no obligation to issue a Letter of Credit
hereunder  unless  each  of  the following  requirements  is
satisfied  and  Lender has received each  of  the  following
documents:

          (a)  This Agreement, the Line of Credit Notes, the
Security Documents, the Continuing Guarantees and the  other
Loan Documents required by Section 5.6, each duly authorized
and executed;

           (b)   A  copy  of  resolutions of  the  Board  of
Directors  of  Borrower, duly adopted, which  authorize  the
execution,  delivery and performance of the  Loan  Documents
executed  by Borrower and each Guarantor, certified  by  the
Secretary or an Assistant Secretary of Borrower;

           (c)   A copy of the unanimous consent of the sole
member  of  each Guarantor, which authorizes the  execution,
delivery  and performance of the Loan Documents executed  by
such Guarantor;

           (d)  An incumbency certificate, executed  by  the
Secretary or an Assistant Secretary of Borrower, which shall
identify by name and title and bear the signatures of all of
the officers of Borrower executing any of the Loan Documents
delivered at or prior to the closing;

           (e)  Opinions  of  counsel for Borrower  and  the
Guarantors satisfactory to Agent relating to the  Cases  and
the Loan Documents and such other matters as the Lenders may
reasonably require;

           (f)  Payment  of  Agent's  reasonable  costs  and
expenses  as  provided for in Section 11.3  and  payment  to
Agent  for  the ratable benefit of the Lenders of  the  fees
required under Section 5.2(b);

           (g)  The Agent and Lenders shall have received  a
copy of the signed and entered Interim Order;

           (h)    All  of  the  First Day  Orders  shall  be
satisfactory  in  form and substance to the  Agent  and  the
Lenders in their sole discretion in all material respects;

           (i)  Evidence that appropriate insurance for  the
Vessels is in force;

           (j)   All  information, approvals,  documents  or
other  instruments  as the Required Lenders  may  reasonably
request;

           (k)   On the date of and immediately after giving
effect  to such Line of Credit Loan or Letter of Credit,  no
Default  or  Event  of Default shall have  occurred  and  be
continuing;

           (l) No material adverse change in the Properties,
assets,   liabilities,  business,  operations,   income   or
condition  (financial  or otherwise)  of  Borrower  and  the
Guarantors  taken as a whole shall have occurred  since  the
Effective Date and be continuing;

           (m) Except for subsequent changes consented to in
writing by the Required Lenders after the Effective Date, or
as  permitted pursuant to this Agreement or the  other  Loan
Documents,   all  of  the  representations  and   warranties
contained in Section 7 of this Agreement and of Borrower and
the Guarantors contained in the Loan Documents shall be true
and  correct in all material respects on and as of the  date
of such Line of Credit Loan or Letter of Credit, as the case
may  be,  as if made on and as of the date of such  Line  of
Credit  Loan or Letter of Credit (except to the extent  that
such  representations and warranties expressly relate solely
to  an earlier date (in which case such representations  and
warranties  shall have been true and correct on  and  as  of
such earlier date)); and

          (n)  The Agent and the Lenders shall have received
the  Budget which shall be satisfactory to the Agent and the
Lenders in their sole discretion.

        A  request  for  a Line of Credit Loan  or  for  the
issuance  of a Letter of Credit by Borrower hereunder  shall
be deemed to be a representation and warranty by Borrower on
the date of such Line of Credit Loan or Letter of Credit, as
the  case may be, as to the facts specified in clauses  (k),
(l) and (m) of this Section 6.1.

         Unless  otherwise  expressly  provided  above,  all
documents described above must be in form and substance  and
upon  terms  and  conditions satisfactory  to  the  Required
Lenders in their reasonable discretion.

        6.2      All  Line of Credit Loans.  Notwithstanding
any  provision contained herein to the contrary, none of the
Lenders  shall have any obligation to make any further  Line
of  Credit  Loan  hereunder, unless each  of  the  following
requirements is satisfied:

           (a)  With respect to any new Line of Credit Loan,
the  Agent shall have received a Borrowing Notice  for  such
Line of Credit Loan as required by Section 2.3;

           (b)   On the date of and immediately after giving
effect  to such Line of Credit Loan, no Default or Event  of
Default shall have occurred and be continuing;

           (c) No material adverse change in the Properties,
assets,   liabilities,  business,  operations,   income   or
condition  (financial  or otherwise)  of  Borrower  and  the
Guarantors  taken as a whole shall have occurred  since  the
Effective Date and be continuing; and

           (d) Except for subsequent changes consented to in
writing by the Required Lenders after the Effective Date, or
as  permitted pursuant to this Agreement or the  other  Loan
Documents,   all  of  the  representations  and   warranties
contained in Section 7 of this Agreement and of Borrower and
the Guarantors contained in the Loan Documents shall be true
and  correct in all material respects on and as of the  date
of such Line of Credit Loan as if made on and as of the date
of  such Line of Credit Loan (except to the extent that such
representations and warranties expressly relate solely to an
earlier  date  (in  which  case  such  representations   and
warranties  shall have been true and correct on  and  as  of
such earlier date)).

          (e)  On any date on which a Line of Credit Loan is
made, the Interim Order or the Final Order, as the case  may
be,  shall have been entered and shall not have been stayed,
amended,  vacated, reversed or rescinded without  the  prior
written consent of the Lenders.

        Each  request for a Line of Credit Loan by  Borrower
hereunder  shall  be  deemed  to  be  a  representation  and
warranty by Borrower on the date of such Line of Credit Loan
as  to the facts specified in clauses (b). (c), (d) and  (e)
of this Section 6.2.

        6.3      Letters  of  Credit.   Notwithstanding  any
provision  contained herein to the contrary,  Regions  shall
have  no obligation to consider a request from Borrower that
Regions issue any Letter of Credit hereunder unless each  of
the following requirements is satisfied:

          (a) Regions shall have received a Letter of Credit
Request  for  such Letter of Credit as required  by  Section
4.1(a);

          (b) Regions shall have received a Letter of Credit
Application for such Letter of Credit as required by Section
4.1(a),  duly executed by an authorized officer of  Borrower
and  of  a  Guarantor (if such Letter of Credit is  for  the
account of Borrower and a Guarantor) as account party;

           (c) Borrower shall have complied with all of  the
procedures and requirements set forth in Section 4.1;

           (d)  On  the  date of and immediately  after  the
issuance  of such Letter of Credit, no Default or  Event  of
Default shall have occurred and be continuing;

           (e) No material adverse change in the Properties,
assets,   liabilities,  business,  operations,   income   or
condition  (financial  or otherwise)  of  Borrower  and  the
Guarantors  taken as a whole shall have occurred  since  the
Effective Date and be continuing;

           (f) Except for subsequent changes consented to in
writing by the Required Lenders after the Effective Date, or
as  permitted pursuant to this Agreement or the  other  Loan
Documents,  all  of  the representations and  warranties  of
Borrower  contained in Section 7 of this  Agreement  and  of
Borrower  and  the Guarantors contained in  the  other  Loan
Documents shall be true and correct in all material respects
on  and  as  of the date of the issuance of such  Letter  of
Credit  as if made on and as of the date of the issuance  of
such  Letter  of  Credit (except to  the  extent  that  such
representations and warranties expressly relate solely to an
earlier  date  (in  which  case  such  representations   and
warranties  shall have been true and correct on  and  as  of
such earlier date));

            (g)  Regions  shall  have  received  such  other
documents,  certificates and agreements as it may reasonably
request; and

           (h)   On any date on which a Letter of Credit  is
issued,  the Interim Order or the Final Order, as  the  case
may  be,  shall  have been entered and shall not  have  been
stayed, amended, vacated, reversed or rescinded without  the
prior written consent of the Lenders.

        Each  request for the issuance of a Letter of Credit
by Borrower hereunder shall be deemed to be a representation
and warranty by Borrower on the date of the issuance of such
Letter  of Credit as to the facts specified in clauses  (d),
(e), (f) and (h) of this Section 6.3.

       SECTION 7.  REPRESENTATIONS AND WARRANTIES.

        Borrower hereby represents and warrants to  each  of
the Lenders that:

        7.1      Existence  and Power.   Borrower  and  each
Guarantor:  (i) is duly organized, validly existing  and  in
good  standing  under  the laws of the jurisdiction  of  its
organization;  (ii)  has  all  requisite  powers   and   all
governmental   and   regulatory  licenses,   authorizations,
consents and approvals required to carry on its business  as
now  conducted; and (iii) is qualified to transact  business
as  a  foreign entity in, and is in good standing under  the
laws  of,  all states in which it is required by  applicable
law  to maintain such qualification and good standing except
for those states in which the failure to qualify or maintain
good  standing could not reasonably be expected  to  have  a
Material Adverse Effect.

        7.2     Authorization.  The execution, delivery  and
performance by Borrower of this Agreement and the other Loan
Documents  and the commencement of the Cases are within  the
powers  of  Borrower and have been duly  authorized  by  all
necessary  action.  The execution, delivery and  performance
by  each Guarantor of any Continuing Guarantee and any other
Loan   Documents   executed  by  such  Guarantor   and   the
commencement  of  the Cases are within the  powers  of  such
Guarantor  and  have been duly authorized by  all  necessary
action.

       7.3     Governmental Approvals.  Except for the entry
of  the  Interim  Order  (and, where applicable,  the  Final
Order), no consent or approval of any governmental agency or
authority  is   required in connection with  the  execution,
delivery  and performance by Borrower and the Guarantors  of
the Loan Documents.

       7.4      Binding Effect.  Subject in each case to the
entry  of the Interim Order (or, where applicable, the Final
Order),  all  Loan  Documents are legal, valid  and  binding
obligations  of Borrower and each Guarantor, as  applicable,
enforceable according to their terms and conditions, and all
statements made in this Agreement are true and correct as of
the date hereof in all material respects, and the Letter  of
Credit  Application(s)  and any future  Loan  Documents  not
executed  contemporaneously  with  the  execution  of   this
Agreement,  when  executed and delivered in accordance  with
this Agreement, will constitute the legal, valid and binding
obligations  of Borrower and each Guarantor, as  applicable,
enforceable in accordance with their respective terms.

        7.5  ERISA.  To the extent applicable, Borrower  and
each  Guarantor  has  fulfilled its  obligations  under  the
minimum funding standards of ERISA and the Code with respect
to  each  plan and is in compliance in all material respects
with  the presently applicable provisions of ERISA  and  the
Code,  and  has  not incurred any liability to  the  Pension
Benefit Guaranty Corporation or to a plan under Title IV  of
ERISA which the failure to comply with could have a Material
Adverse Effect.

        7.6       No  Defaults.  Neither  Borrower  nor  any
Guarantor  is  in default in the performance, observance  or
fulfillment of any Post-Petition (i) obligations,  covenants
or conditions contained in any indenture, agreement or other
instrument  to which it is a party, and which could  have  a
Material  Adverse  Effect  or (ii)  judgment,  order,  writ,
injunction, decree or decision of any government  agency  or
authority.

        7.7      Liabilities, Litigation.  Neither  Borrower
nor  any Guarantor has any material (individually or in  the
aggregate)  liabilities,  direct or  contingent,  except  as
disclosed or referred to in the most recent balance sheet of
Borrower  delivered to the Lenders and, except as  described
in  the  most recent balance sheet of Borrower delivered  to
the  Lenders or in the most recent quarterly 10Q  or  annual
10K  filing  of  Borrower with the Securities  and  Exchange
Commission,  there is no material (individually  or  in  the
aggregate)  litigation, legal or administrative  proceeding,
investigation or other action of any nature pending  or,  to
the  knowledge of Borrower, threatened against or  affecting
Borrower or any Guarantor.

       7.8     Tax Payment.  Borrower and each Guarantor has
filed  all  tax returns and reports required  to  be  filed,
which  the  failure  to file could have a  Material  Adverse
Effect, and has paid all taxes, assessments, fees and  other
governmental  charges levied upon Borrower or any  Guarantor
or  upon any property owned by Borrower or any Guarantor  or
upon any income of Borrower or any Guarantor, which are  due
and  payable,  including interest and penalties,  which  the
failure to pay could have a Material Adverse Effect, or  has
provided adequate reserves for the payment thereof.

         7.9      Title  to  Property.   Borrower  and  each
Guarantor  is  the sole and absolute owner of,  or  has  the
legal right to use and occupy, all Property it claims to own
or  which  is  necessary for Borrower or such  Guarantor  to
conduct its material businesses free and clear of all  Liens
other  than Permitted Liens and subject to the turnover  and
release from arrest of the Midnight Express, Midnight  Eagle
and  Midnight Wrangler.  Borrower and each Guarantor  enjoys
peaceful and undisturbed possession in all material respects
under  all  leases  under which its is operating  as  lessee
which is necessary for Borrower or such Guarantor to conduct
its  material businesses free and clear of all  Liens  other
than Permitted Liens.

        7.10   Compliance  With  Laws.   Borrower  and  each
Guarantor  has  complied in all material respects  with  all
valid  laws,  statutes,  codes,  acts,  ordinances,  orders,
judgments,   decrees,   injunctions,   rules,   regulations,
certificates, franchises, permits, licenses, authorizations,
directions  and requirements of all federal, state,  county,
municipal  and  other  governments,  agencies,  departments,
divisions,   commissions,   boards,   courts,   authorities,
officials  and  officers, domestic  or  foreign,  including,
without  limitation, (i) all laws regarding the  collection,
payment,  and  deposit  of employees' income,  unemployment,
social  security, sales, and excise taxes  (subject  to  any
Bankruptcy  Court  orders  limiting  or  conditioning   such
compliance),  (ii)  all requirements  of  ERISA,  (iii)  all
Environmental   Laws  and  (iv)  all  laws   pertaining   to
occupational safety and health.

        7.11   Other Instruments; None Burdensome.   Neither
Borrower  nor  any  Guarantor is a party to  any  indenture,
agreement   or  other  instrument  affecting  its  business,
properties  or  assets,  operation  or  condition,   whether
financial or otherwise, which could have a Material  Adverse
Effect  except as disclosed in the balance sheet of Borrower
delivered  to  the Lenders and, except as described  in  the
most  recent  balance  sheet of Borrower  delivered  to  the
Lenders  or  in the most recent quarterly 10Q or annual  10K
filing   of  Borrower  with  the  Securities  and   Exchange
Commission.

        7.12   Investments.  Except as may be  permitted  by
Section  8.2(g) neither Borrower nor any Guarantor  has  any
Restricted Investments.

        7.13  Subsidiaries.  There are no Subsidiaries other
than as specifically set forth in Schedule 7.13.  As of  the
Effective Date, the stock or other equity interest  of  each
Guarantor is owned solely by Borrower.  Borrower may at  any
time  amend, modify or supplement Schedule 7.13 by notifying
Agent in writing of any changes with respect to a Subsidiary
that   is   not   a  Guarantor,  including  any   formation,
acquisition, merger or liquidation of any Subsidiary that is
not  a Guarantor or any change in the capitalization of  any
Subsidiary  that  is  not  a Guarantor,  in  each  case,  in
accordance  with  the terms of this Agreement  and  provided
that any such new Subsidiary shall, within fifteen (15) days
of  the  creation or acquisition of such Subsidiary, execute
and deliver to Agent all documents required by Section 5.6

       SECTION 8.  COVENANTS.

        8.1     Affirmative Covenants of Borrower.  Borrower
covenants and agrees that until the Final DIP Payment Date:

          (a) Information.  Borrower will deliver to Agent:

                    (i)   within 45 days after the close  of
                    each  quarter of Borrower's fiscal year,
                    consolidated  financial  statements   of
                    Borrower and its Subsidiaries consisting
                    of a balance sheet as of the end of such
                    fiscal  quarter, a statement of earnings
                    and surplus for such fiscal quarter, and
                    a statement of cash flow for such fiscal
                    quarter   certified  by  the  Borrower's
                    Chief Financial Officer;

                              (ii) within 120 days after the
                    close of Borrower's fiscal year, a  copy
                    of    annual    consolidated   financial
                    statements   of   Borrower    and    its
                    Subsidiaries, including a balance  sheet
                    as  of the end of each such fiscal year,
                    a  statement of earnings and surplus for
                    such  fiscal  year, and a  statement  of
                    cash  flow  for such fiscal year,  which
                    statements  shall  be  audited   by   an
                    independent certified public  accounting
                    firm acceptable to the Required Lenders;

                    (iii)       simultaneously   with    the
                    delivery   of  each  set  of   financial
                    statements   of  Borrower  referred   to
                    above,  a  certificate of the Borrower's
                    Chief Financial Officer substantially in
                    the  form  attached to  the  Regions/EDC
                    Credit   Agreement   (with   appropriate
                    insertions),  accompanied by  supporting
                    financial work sheets where appropriate,
                    stating whether there exists on the date
                    of  such certificate any Default, and if
                    a Default then exists, setting forth the
                    details  thereof  and the  action  which
                    Borrower is taking or proposes  to  take
                    with respect thereto;

               (iv) within   thirty  (30)  days  of  filing,
                    furnish Lenders with copies of the state
                    and   federal  tax  returns   filed   by
                    Borrower,   with   all   schedules   and
                    supporting documentation;

               (v)  promptly  upon, and in any event  within
                    three  business days of, becoming  aware
                    of  the  occurrence of any  event  which
                    constitutes  a Default, notice  of  such
                    occurrence  together  with  a   detailed
                    statement  by a responsible  officer  of
                    Borrower  of  the steps being  taken  by
                    Borrower  to  cure the  effect  of  such
                    event;

               (vi) on  or before 3:00 p.m. eastern time  on
                    each Tuesday, Borrower shall provide the
                    Agent  and  the  Lenders with  a  weekly
                    written  report  with  respect  to   the
                    Budget    setting   forth   the   actual
                    performance of the Borrower against  the
                    forecasts in the Budget and an  analysis
                    of  any material variance of such actual
                    performance   against  such   forecasted
                    performance in the Budget; and

                    (vii)      with  reasonable  promptness,
                    such  further information regarding  the
                    business,    affairs    and    financial
                    condition  of Borrower or any  Guarantor
                    as the Required Lenders may from time to
                    time reasonably request.

           (b)  Compliance with Laws.  Borrower will observe
and  comply, and cause each Guarantor to observe and comply,
with  all  valid  laws, statutes, codes,  acts,  ordinances,
orders, judgments, decrees, injunctions, rules, regulations,
certificates, franchises, permits, licenses, authorizations,
directions  and requirements of all federal, state,  county,
municipal  and  other  governments,  agencies,  departments,
divisions,   commissions,   boards,   courts,   authorities,
officials  and  officers, domestic  or  foreign,  including,
without  limitation, (i) all laws regarding the  collection,
payment,  and  deposit  of employees' income,  unemployment,
social  security, sales, and excise taxes  (subject  to  any
Bankruptcy  Court  orders  limiting  or  conditioning   such
compliance),  (ii)  all  applicable requirements  of  ERISA,
(iii)  all applicable Environmental Laws and (iv)  all  laws
pertaining  to  occupational safety and  health,  which  the
failure to comply with could have Material Adverse Effect.

           (c)  Payment of Indebtedness.  In addition to the
Borrower's obligations to pay the Obligations from  time  to
time,  the  Borrower will, and it will cause each  Guarantor
to,  pay  and  discharge  any and  all  other  Post-Petition
Indebtedness  (unless  prohibited by  any  Bankruptcy  Court
orders    with   respect   to   such   other   Post-Petition
Indebtedness)  payable by Borrower or a  Guarantor,  as  the
case  may be, and any interest or premium thereon, when  due
in  accordance  with the agreement, document  or  instrument
relating  to  such  Indebtedness,  provided,  however,  that
neither Borrower nor any Guarantor shall be required to  pay
any  such Indebtedness (excluding the Obligations) which  is
being contested in good faith and by appropriate proceedings
being  diligently conducted and for which adequate provision
in  accordance with GAAP has been made, except that Borrower
or such Guarantor, as the case may be, shall pay or cause to
be   paid   any   such  Indebtedness  forthwith   upon   the
commencement of proceedings to foreclose any Lien  which  is
attached  as  security therefor, unless such foreclosure  is
stayed by the filing of an appropriate bond.

           (d)   Payment of Taxes.  Borrower will, and  will
cause each Guarantor to, pay and discharge all Post-Petition
taxes,   assessments  and  governmental  charges  or  levies
imposed  upon it, or upon its income and profits,  prior  to
the  date  on which penalties might attach thereto  and  all
lawful claims which, if unpaid, might become a Lien upon the
assets of Borrower or any Guarantor; provided, however, that
neither Borrower nor any Guarantor shall be required to  pay
and  discharge  any such tax, assessment,  charge,  levy  or
claim so long as the legality thereof shall be contested  in
good  faith  and by appropriate proceedings  and  for  which
adequate  provision in accordance with GAAP has  been  made,
except that Borrower or such Guarantor, as the case may  be,
shall  pay  or cause to be paid all such taxes,  assessments
and governmental charges forthwith upon the commencement  of
proceedings to sell, seize or collect any Property  attached
as   security  therefor,  unless  such  sale,   seizure   or
collection is stayed by the filing of an appropriate bond.

           (e)   Payment of Claims.  Borrower will,  and  it
will  cause each of Guarantor to, promptly pay and discharge
all  Post-Petition (i) trade accounts payable in  accordance
with  usual and customary business practices and (ii) claims
for work, labor or materials which if unpaid might become  a
Lien  upon any of its Property or assets; provided, however,
that neither Borrower nor any Guarantor shall be required to
pay  any such account payable or claim the payment of  which
is   being  contested  in  good  faith  and  by  appropriate
proceedings  and for which adequate provision as  determined
in  accordance with GAAP has been made, except that Borrower
or such Guarantor, as the case may be, shall pay or cause to
be  paid all such accounts payable and claims forthwith upon
the  commencement of proceedings to foreclose any Lien which
is attached as security therefor, unless such foreclosure is
stayed by the filing of an appropriate bond.

           (f)   Insurance.   Borrower shall  maintain,  and
shall  cause  each  of its Subsidiaries  to  maintain,  with
financially   sound   and  reputable  insurance   companies,
insurance  on all its Property in at least such amounts  and
against  at least such risks as are usually insured  against
in the same general area by companies engaged in the same or
a  similar  business.  All such insurance may be subject  to
reasonable  deductible amounts.  Borrower shall  deliver  to
Agent  certificate(s) of insurance on the  date  hereof  and
upon the annual (or other shorter period of time) renewal of
such  policies specifying the details of all insurance  then
in  effect;  together with a certificate of  an  officer  of
Borrower  that  all  premiums  then  due  have  been   paid.
Borrower  shall notify Agent immediately in writing  of  any
material fire or other casualty to or accident involving any
of  the  Collateral,  whether or not such fire, casualty  or
accident  is  covered by insurance.  Borrower shall  notify,
and  shall  cause  each  Guarantor to notify,  promptly  the
insurance  company  and to submit an appropriate  claim  and
proof of claim to the insurance company if any Collateral is
damaged  or  destroyed by fire or other casualty.   Borrower
shall not, and shall not allow any Guarantor to, declare  or
agree   with   underwriters  that  any   Collateral   is   a
constructive or compromised, agreed or arranged constructive
total loss without the prior written consent of the Required
Lenders.

           (g)  Maintenance of Property.  Borrower will, and
will  cause  each  of its Subsidiaries  to,  at  all  times,
maintain, protect and keep in good repair, working order and
condition  (ordinary wear and tear excepted),  all  Property
necessary to the operation of Borrower and its Subsidiaries'
material businesses.

            (h)    Maintenance  of  Intellectual   Property.
Borrower  will, and will cause each of its Subsidiaries  to,
obtain  or  maintain in full force and effect, all licenses,
franchises,  intellectual property, permits,  authorizations
and  other  rights as are necessary for the conduct  of  its
business.

           (i)  Corporate Existence.  Borrower will, and  it
will  cause  each  of its Subsidiaries  to,  do  all  things
necessary to (i) preserve and keep in full force and  effect
at  all  times its corporate or other existence and (ii)  be
duly qualified to do business in all jurisdictions where the
nature of its business or its ownership of Property requires
such  qualification except for those jurisdictions in  which
the  failure to qualify could not reasonably be expected  to
have a Material Adverse Effect.

           (j)   Notice of Claim.  Borrower will,  and  will
cause  each  of its Subsidiaries to, promptly,  and  in  any
event within three business days, notify Lenders of (i)  the
arising   of   any  Post-Petition  litigation  or   dispute,
threatened  against or affecting assets of Borrower  or  any
Guarantor,  which,  if adversely determined,  could  have  a
Material Adverse Effect or (ii) any default under any  Post-
Petition  contract to which Borrower or any Guarantor  is  a
party.  Receipt of notice by Agent of any such litigation in
the  Cases  shall  constitute notice for  purposes  of  this
Section 8.1(j).

            (k)    Maintenance   of   Books   and   Records,
Consultations and Inspections.  Borrower will, and  it  will
cause  each  of  its  Subsidiaries to,  maintain  books  and
records in accordance with GAAP and in which full, true  and
correct   entries  shall  be  made  of  all   dealings   and
transactions  in  relation to its business  and  activities.
Borrower  will,  and it will cause each of its  Subsidiaries
to, permit Lenders (and any Person appointed by the Required
Lenders  to  whom  Borrower does not reasonably  object)  to
discuss  the affairs, finances and accounts of Borrower  and
each  Guarantor  with  the officers  of  Borrower  and  each
Guarantor and their independent public accountants,  all  at
such  reasonable times and as often as the Required  Lenders
may  from  time  to time reasonably request.  Borrower  will
also  permit,  and  will  cause each  Guarantor  to  permit,
inspection  of  its Property, books and records  by  Lenders
(and  any Person appointed by the Required Lenders  to  whom
Borrower  does not reasonably object) during normal business
hours and at other reasonable times.

           (l)   Further Assurances.  Borrower will, and  it
will  cause  each  Guarantor  to,  execute  and  deliver  to
Lenders,  at  any time and from time to time,  any  and  all
further agreements, documents and instruments, and take  any
and   all  further  actions  which  may  be  required  under
applicable  law,  or which Lenders may  from  time  to  time
reasonably  request, in order to effectuate the transactions
contemplated by this Agreement and the other Loan Documents.

            (m)   Agreements.   Neither  Borrower  nor   any
Guarantor  will  default under any Post-Petition  indenture,
contract,  agreement,  lease or other  instrument  to  which
Borrower  or any Guarantor is a party or by which  Borrower,
any  Guarantor or any Property of Borrower or any  Guarantor
is bound or affected.

           (n)   State  of Organization; Location  of  Chief
Executive Office and Collateral.  Neither Borrower  nor  any
Guarantor  will change its state of incorporation  or  other
organization, principal place of business or chief executive
office,  unless  Borrower or such Guarantor, as  applicable,
has  obtained  Agent's prior written consent and  has  taken
such  action as is necessary to cause the security  interest
of  Secured Parties in the Collateral to continue  to  be  a
first  priority perfected security interest subject only  to
Permitted  Liens,  which consent shall not  be  unreasonably
conditioned, delayed or withheld.

           (o)  Accountant.  Borrower shall give each of the
Lenders   prompt   notice  of  any  change   of   Borrower's
independent certified public accountants.  Borrower shall at
all  times  utilize independent certified public accountants
of  nationally recognized standing reasonably acceptable  to
the Required Lenders.

           (p)   Midnight  Hunter.  In the  event  that  the
Borrower  or  the other Loan Parties have not contracted  or
otherwise  arranged for a profitable job that  utilizes  the
Midnight  Hunter  with the result that the  Midnight  Hunter
remains  idle  for  a consecutive two (2) week  period,  the
Borrower  shall  notify the Agent in  writing  and,  upon  a
request  from the Agent with respect thereto, shall  file  a
motion  seeking, and take all necessary step to obtain,  the
rejection of the lease for the Midnight Hunter in the Case.

           (q)   Pursuit  of Accounts Receivable.   Borrower
shall, and shall cause each Guarantor to, pursue payment  on
all  accounts  receivable,  and,  in  connection  therewith,
Borrower  may  not,  and will not allow  any  Guarantor  to,
settle or compromise any account receivable by an amount  in
excess  of $100,000 per account debtor without the  Lenders'
prior written consent.

        8.2      Negative  Covenants of Borrower.   Borrower
covenants and agrees that until the Final DIP Payment Date:

           (a)   Limitation on Indebtedness.  Borrower  will
not, and it will not cause or permit any Guarantor to, incur
or  be  obligated on any Indebtedness other  than:  (i)  the
Obligations  to the Agent and the Lenders; (ii) Indebtedness
relating  to  employee  benefit  plans;  (iii)  Indebtedness
described  in  clause  (a)  or  (b)  of  the  defined   term
Restricted  Investment;  (iv)  Indebtedness  in  respect  of
taxes,  assessments,  governmental  charges  or  levies  and
claims for labor, materials and supplies to the extent  that
payment  therefor shall not at the time be  required  to  be
made in accordance with the provisions of Section 8.1(d)  or
Section 8.1(e); (v) Indebtedness in respect of judgments  or
awards  (which  do not constitute an Event of Default  under
Section  9.8)  that  have been in force for  less  than  the
applicable  period  for  taking  an  appeal  and  for  which
adequate provision as determined in accordance with GAAP has
been made so long as execution is not levied thereunder  and
in  respect of which Borrower or any Guarantor shall at  the
time  in  good faith be prosecuting an appeal or proceedings
for  review and a suspensive appeal bond in the full  amount
of  such  judgment  or  award shall have  been  obtained  by
Borrower  or  such  Guarantor  with  respect  thereto;  (vi)
current liabilities of Borrower or any Guarantor incurred in
the ordinary course of business not incurred through (A) the
borrowing  of  money, or (B) the obtaining of credit  except
for credit on an open account basis customarily extended and
in  fact  extended  in connection with normal  purchases  of
goods  and  services;  (vii)  endorsements  for  collection,
deposits  or  negotiation  and  warranties  of  products  or
services,  in each case incurred in the ordinary  course  of
business;  (viii)  Indebtedness in respect  of  performance,
surety  or  appeal bonds obtained in the ordinary course  of
Borrower's  or  any Guarantor's business; (xi)  Indebtedness
existing   as   of  the  Petition  Date;  (x)   Pre-Petition
Indebtedness relating to the MIDNIGHT WRANGLER and  MIDNIGHT
GATOR in a principal amount not exceeding $15,000,000.00  in
the  aggregate  at  any  one time  outstanding;  (xii)  Pre-
Petition  Indebtedness relating to the MIDNIGHT EAGLE  in  a
principal   amount  not  exceeding  $9,250,000.00   in   the
aggregate  at any one time outstanding; (xiii) Post-Petition
Indebtedness  relating  to the MIDNIGHT  WRANGLER,  MIDNIGHT
GATOR  and  MIDNIGHT  EAGLE, and all Post-Petition  accounts
receivables  generated  with respect  thereto;  (xiv)  Post-
Petition Indebtedness with respect to all other property  or
assets  of the Debtors that does not constitute part of  the
Collateral;   and  (xv)  guarantees  by  Borrower   of   the
performance of contracts by Guarantors entered into  in  the
ordinary course of business.

            (b)   Consolidation,  Merger,  Sale  of  Assets,
Dissolution, Etc.  Borrower will not, and will not cause  or
permit  any Guarantor to, (i) directly or indirectly,  merge
into  or with or consolidate with any other Person or permit
any  other Person to merge into or with or consolidate  with
it  provided that Borrower may cause a Guarantor to merge or
consolidate into Borrower or any other Guarantor, (ii) sell,
assign, lease, transfer, abandon or otherwise dispose of any
of  its  Property (including, without limitation, any shares
of  capital  stock or other equity interest of  a  Guarantor
owned  by  Borrower or another Guarantor),  except  for  (A)
sales  in  the  ordinary course of business of  those  items
excluded from the definition of Restricted Investments,  (B)
sales  of inventory in the ordinary course of business,  (C)
sales   of   the  Midnight  Express  or  other  Vessels   as
contemplated in Section 9.10 of this Agreement or (C)  sales
of  vessels that are not Collateral so long as the  proceeds
thereof are used to pay Indebtedness or purchase replacement
vessels or equipment or (iii) undertake any major expansion.

          (c)  Changes in Nature of Business.  Borrower will
not,  and  it will not cause or permit any of Guarantor  to,
engage  in any business if, as a result, the general  nature
of  the  business which would then be engaged in by Borrower
and  the  Guarantors,  considered  as  a  whole,  would   be
substantially changed from the Company Business.

           (d)  Change in Control.  Borrower shall not allow
any Change in Control to occur.

          (e)  Ownership of Subsidiaries.  Borrower will not
cause or permit any of its Subsidiaries to (i) authorize  or
issue  any new types, varieties or classes of capital stock,
membership  interest  or any other equity  interest  or  any
bonds  or  debentures,  subordinated or  otherwise,  or  any
warrants  or  options  to  purchase  any  stock,  membership
interest  or  any other equity interest, (ii)  authorize  or
issue  any  additional shares of capital  stock,  membership
interest  or  any other equity interest, (iii)  declare  any
stock,   membership  interest  or  other   equity   interest
Distributions or stock, membership interest or other  equity
interest  splits or (iv) take any other action which  could,
directly   or  indirectly,  decrease  Borrower's   ownership
interest in any of its Subsidiaries.

          (f)  Liens.  Borrower will not, and will not cause
or  permit any Guarantor to, mortgage or encumber any of its
Property or suffer any Liens to exist on any of its Property
without  the  prior written consent of the Required  Lenders
other than Permitted Liens.

           (g)   Restricted Investments.  Borrower will not,
and  it  will not cause or permit any Guarantor to, directly
or  indirectly,  make  or hold any Post-Petition  Restricted
Investments.

          (h)  Change in Management.  Borrower will not, and
will  not  cause  or  permit any  of  its  Subsidiaries  to,
terminate  or make any substantial change in the duties,  as
of the Effective Date, of Lyle G. Stockstill.

          (i)  Critical Vendors.  Borrower may not, and will
not  allow  any Loan Party to, pay any critical vendors  for
Pre-Petition  Date claims without the prior written  consent
of the Agent and the Lenders.

           (j)   Accounts Receivable Ending Balance.  Tested
as  of  the  end of each week, Borrower's (x) weekly  actual
"borrowing base test" shall not vary by more than 5% (in the
negative)   from   the  Borrower's  (y)  weekly   forecasted
"borrowing  base test" (the term "borrowing  base  test"  to
mean the line item in the Budget similarly named).

        8.3  Use of Proceeds.  Borrower covenants and agrees
that  the proceeds of the Line of Credit Loans will be  used
solely  as  set forth in the 13 week cash flow  forecast  as
agreed from time to time between the Borrower, the Agent and
the  Lenders (the "Budget"), but shall not be used in direct
connection with or to directly support the operation of  the
Midnight  Gator, Midnight Wrangler or Midnight  Eagle,  but,
for  the  absence  of  doubt, may be used  for  general  and
administrative expenses of the Borrower and the  other  Loan
Parties.   Immediately  upon the sale  of  any  Vessel,  the
Budget  then in effect shall be amended as agreed among  the
Borrower,   the  Agent  and  the  Lenders  to  reflect   the
elimination  of expenses associated with such  sold  Vessel.
The   Letters  of  Credit  will  be  used  solely  for   the
requirements of the Company Business in the ordinary  course
of  business. In no event may the proceeds of  any  Loan  or
Letter of Credit be used in violation of any applicable  law
or regulation.

       SECTION 9.  EVENTS OF DEFAULT.

       If any of the following (each of the following herein
sometimes called an "Event of Default") shall occur  and  be
continuing:

         9.1   Borrower  shall  fail  to  pay  any  of   the
Obligations   (or  interest  on  the  Lenders'  Pre-Petition
Indebtedness)  when  due  and such  failure  shall  continue
unremedied  for  five (5) days after written or  telegraphic
notice thereof shall have been given to Borrower by Agent;

        9.2   Any representation or warranty of Borrower  or
any  Guarantor  made in this Agreement, in  any  other  Loan
Document to which Borrower or any Guarantor is a party or in
any   certificate,   agreement,  instrument   or   statement
furnished or made or delivered pursuant hereto or thereto by
Borrower  or  any  Guarantor or in  connection  herewith  or
therewith,  shall prove to have been untrue or incorrect  in
any material respect when made or effected;

        9.3  Borrower or any Guarantor shall fail to perform
or  observe  any  term, covenant, or agreement  (other  than
failure to pay when due any of the Obligations) contained in
this  Agreement  or  in any other Loan  Document,  and  such
failure shall continue unremedied for twenty (20) days after
the earlier to occur of (x) actual knowledge by Borrower  or
Guarantor or (y) written or telegraphic notice thereof shall
have been given to Borrower by Agent, or if Borrower or  any
Loan  Party  shall  fail to perform, or otherwise  cause  or
permit  a  default under, any term, condition, provision  or
requirement contained in any Order;

        9.4   This  Agreement  or  any  of  the  other  Loan
Documents  shall  at  any time for any  reason  (other  than
cancellation by Agent) cease to be in full force and  effect
or  shall  be  declared to be null and void by  a  court  of
competent jurisdiction, or if the validity or enforceability
thereof  shall  be contested or denied by  Borrower  or  any
Guarantor,  or  if the transactions completed  hereunder  or
thereunder  shall be contested by Borrower or any  Guarantor
or  if Borrower or any Guarantor shall deny that it has  any
or further liability or obligation hereunder or thereunder;

        9.5 Any of the Cases shall be dismissed or converted
to a case under chapter 7 of the Bankruptcy Code or any Loan
Party  shall  file  a motion or other pleading  seeking  the
dismissal  of  any of the Cases under Section  1112  of  the
Bankruptcy Code or otherwise; a trustee under chapter  7  or
chapter 11 of the Bankruptcy Code, a responsible officer  or
an  examiner with enlarged powers relating to the  operation
of  the  business (powers beyond those set forth in  Section
1106(a)(3)  and  (4) of the Bankruptcy Code)  under  Section
1106(b) of the Bankruptcy Code shall be appointed in any  of
the Cases and the order appointing such trustee, responsible
officer or examiner shall not be reversed or vacated  within
30  days after the entry thereof; or an application shall be
filed  by  any  Loan  Party for the approval  of  any  other
Superpriority Claim (other than the Carve Out) in any of the
Cases  which is pari passu with or senior to the  claims  of
the  Agents  and the Lenders with respect to the  Collateral
against any Loan Party hereunder, or there shall arise or be
granted  any  such pari passu or senior Superpriority  Claim
with respect to the Collateral;

        9.6  The  Bankruptcy Court shall enter an  order  or
orders  granting  relief from the automatic stay  applicable
under  Section 362 of the Bankruptcy Code to the  holder  or
holders  of any security interest to permit foreclosure  (or
the  granting of a deed in lieu of foreclosure or the  like)
on  any  of  the  Collateral, or an order of the  Bankruptcy
Court  shall  be entered reversing, amending, supplementing,
staying,  vacating or otherwise modifying the Interim  Order
or the Final Order, as applicable;

        9.7   Borrower, any Guarantor or any  other  Obligor
shall be in default under any Post-Petition Indebtedness;

        9.8  One  or  more  judgments, decrees,  arbitration
awards  or rulings shall be entered against Borrower or  any
Guarantor  involving in the aggregate a liability (not  paid
or  covered by insurance) of $10,000.00 or more arising from
a  Post-Petition  event  and all  such  judgments,  decrees,
awards,  and  rulings  shall not have  been  vacated,  paid,
discharged,  stayed or suspensively appealed  within  thirty
(30) days from the entry thereof;

        9.9  The  Final  Order has not been entered  by  the
Bankruptcy Court on or before January 31, 2005 or such other
date  as  agreed to in writing by the Agent and  Lenders  in
their sole discretion;

       9.10 If the Loan Parties have failed to (i) execute a
binding  agreement for the sale of the Midnight Express  and
file a motion with the Bankruptcy Court seeking to establish
bid  procedures for such sale on or prior to a  date  to  be
agreed upon among the Borrower, the Agent and the Lenders or
(ii) file a motion on or before February 10, 2005 to approve
the  employment  of  a broker designated  by  Borrower  (and
approved by the Agent and the Lenders, such approval not  to
be   unreasonably  withheld)  to  sell  all  other   Vessels
comprising part of the Collateral, such Vessels to be listed
for  an  aggregate sale amount, together with the reasonably
anticipated proceeds from the sale of the Midnight  Express,
of  not  less than an amount sufficient to pay in  full  the
Obligations and the Lenders' Pre-Petition Indebtedness;

        9.11  Except as permitted by the Orders or the First
Day  Orders,  any  Loan  Party shall make  any  Pre-Petition
Payment other than Pre-Petition Payments authorized  by  the
Bankruptcy Court;

       9.12   Borrowers' chief restructuring advisor, Bridge
Associates  LLC, shall no longer provide such  services  for
any  reason  (whether such services are  terminated  by  any
Borrower, Bridge Associates LLC or otherwise);

        9.13   The  Loan Parties shall (or any successor  in
interest  to  any Loan Party, including, without limitation,
any  trustee  in  the  Cases or any other  cases  under  the
Bankruptcy Code in which any of the Loan Parties is a debtor
therein)   assert  any  claim  for  costs  or  expenses   of
administration  of the Cases against any of the  Collateral,
pursuant  to  Section  506(c)  of  the  Bankruptcy  Code  or
otherwise; or

        9.14  A material adverse change with respect to  the
Properties,   assets,  liabilities,  business,   operations,
income or condition (financial or otherwise) of Borrower and
the  Guarantors  taken as a whole shall have occurred  since
the Effective Date.

        THEN,  and  in each such event, and without  further
order  of or application to the Bankruptcy Court, the  Agent
shall, if requested in writing by the Required Lenders,  and
may,  in  its  sole and absolute discretion, upon  the  oral
request   of   the  Required  Lenders,  declare   that   the
obligations  of  the  Lenders  to  make  Loans  under   this
Agreement  and  to  issue  Letters  of  Credit  under   this
Agreement have terminated, whereupon such obligations of the
Lenders  shall be immediately and forthwith terminated,  and
the  Agent  shall, if requested in writing by  the  Required
Lenders, and may, in its sole and absolute discretion,  upon
the oral request of the Required Lenders, declare the entire
outstanding principal balance of and all accrued and  unpaid
interest on the Notes and all of the other Loans under  this
Agreement  and all of the other Obligations to be  forthwith
due  and  payable,  whereupon all of  the  unpaid  principal
balance of and all accrued and unpaid interest on the  Notes
and all of the other Loans under this Agreement and all such
other  Obligations shall become and be immediately  due  and
payable,  without  presentment, demand, protest  or  further
notice of any kind, all of which are hereby expressly waived
by  Borrower,  and  the Agent and each of  the  Lenders  may
terminate the Borrower's use of Cash Collateral and exercise
any  and  all other rights and remedies which they may  have
under  any  of  the Loan Documents or under applicable  law;
provided,  however, that upon the occurrence  of  any  event
described in Sections 9.5, the obligations of the Lenders to
make  Loans  under  this Agreement and to issue  Letters  of
Credit  under  this Agreement shall automatically  terminate
and  the  entire outstanding principal balance  of  and  all
accrued  and  unpaid interest on the Notes and  all  of  the
other  Loans  under  this Agreement and  all  of  the  other
Obligations shall automatically become immediately  due  and
payable,  without  presentment, demand, protest  or  further
notice of any kind, all of which are hereby expressly waived
by  Borrower,  and  the Agent and each of  the  Lenders  may
exercise  any and all other rights and remedies  which  they
may have under any of the Loan Documents or under applicable
law.

       SECTION 10.  AGENT.

        10.1   Appointment.  Regions is hereby appointed  by
the  Lenders  as  Agent  under  and  for  purposes  of  this
Agreement,  the  Notes and the other  Loan  Documents.   The
Agent  agrees  to  act as such upon the  express  conditions
contained  in  this Agreement and the other Loan  Documents.
The Agent shall hold all Collateral as the agent for all  of
the Lenders and all net proceeds of the Collateral shall  be
shared  by  the  Lenders  ratably in accordance  with  their
respective Pro Rata Shares.

       10.2  Powers.

           (a)   The Agent shall have and may exercise  such
powers hereunder as are specifically delegated to the  Agent
by the terms of this Agreement and the other Loan Documents,
together  with  such  powers  as are  reasonably  incidental
thereto.   Each  Lender and the Agent hereby authorizes  the
Agent to enter into the Loan Documents to which Agent  is  a
party  and  to  take  all actions contemplated  thereby  and
confirms its appointment of Regions Bank as Agent under  the
terms  and  conditions of the Loan Documents.   Each  Lender
hereby  confirms its agreement to be bound by the terms  and
conditions  of  the security documents included  within  the
Loan  Documents.  The Agent shall have no implied duties  to
the  Lenders, nor any obligation to the Lenders to take  any
action  under  this  Agreement or  any  of  the  other  Loan
Documents, except any action specifically provided  by  this
Agreement or any of the other Loan Documents to be taken  by
the   Agent.   Without  limiting  the  generality   of   the
foregoing,  the  Agent  shall not be required  to  take  any
action  with  respect to any Default or  Event  of  Default,
except as expressly provided in Section 9.  Each Lender  and
the  Agent  agree  that  no  Lender  shall  have  any  right
individually to seek to realize upon the Collateral  granted
for the benefit of the Agent and the Lenders pursuant to any
of  the Loan Documents, it being understood and agreed  that
such  rights and remedies may be exercised by the  Agent  as
Agent  for the benefit of the Secured Parties upon the terms
of the Loan Documents.

           (b)  Each  of the Lenders also hereby irrevocably
appoints and authorizes the Agent to act as security trustee
on  its  behalf  with  regard to (i) the  security,  powers,
rights,  titles,  benefits and interests (both  present  and
future)  constituted  by and conferred  on  it  or  for  its
benefit  under or pursuant to this Agreement or any  of  the
Loan  Documents (including, without limitation, the  benefit
of  all covenants, undertakings, representations, warranties
and  obligations given, made or undertaken  to  it  in  this
Agreement or in any of the other Loan Documents),  (ii)  all
monies, property and other assets paid or transferred to  or
vested  in  it or any agent thereof or received or recovered
by  it  or  any agent thereof pursuant to, or in  connection
with,  this  Agreement or any of the other  Loan  Documents,
whether  from the Borrower, any of the Subsidiaries  or  any
other person, and (iii) all monies, investments, property or
other  assets at any time representing or deriving from  any
of  the foregoing, including all interest, income and  other
sums  at any time received or receivable by it or any  agent
thereof  in respect of the same (or any part thereof).   The
Agent  hereby  accepts such appointment but  shall  have  no
obligations  under this Agreement or under any of  the  Loan
Documents  except  those  expressly  set  forth  herein  and
therein.

          (c)  Each Lender hereby agrees, and each holder of
any Obligations by the acceptance thereof will be deemed  to
agree,  that,  except  as otherwise set  forth  herein,  any
action  taken  by  the  Agent or  the  Required  Lenders  in
accordance  with  the provisions of this  Agreement  or  the
other  Loan Documents, and the exercise by the Agent or  the
Required  Lenders of the powers set forth herein or therein,
together with such other powers as are reasonably incidental
thereto,  shall be authorized and binding upon  all  of  the
Lenders.  The Agent is hereby authorized on behalf of all of
the  Lenders,  without the necessity of  any  notice  to  or
further consent from any Lender, from time to time, to  take
any  action with respect to any Collateral or Loan Documents
which may be necessary to perfect and maintain perfected the
Liens on the Collateral granted by the Loan Documents.   The
Lenders irrevocably authorize the Agent at its option and in
its  discretion, to release any Lien granted to or  held  by
the  Agent upon any Collateral (i) upon termination  of  the
Line  of Credit Commitments and the payment in full  of  all
Obligations; (ii) constituting property sold or to  be  sold
or  disposed  of  as  part  of or  in  connection  with  any
disposition  permitted  hereunder  or  by  any  other   Loan
Document;  (iii)  constituting  property  in  which  neither
Borrower  nor any Guarantor owned any interest at  the  time
the  Lien  was  granted  or  at any  time  thereafter;  (iv)
constituting  property leased to Borrower or  any  Guarantor
under  a  lease  which has expired or been terminated  in  a
transaction  permitted under this Agreement or is  about  to
expire  and  which  has not been, and  is  not  intended  by
Borrower  or  any Guarantor to be, renewed or extended;  (v)
consisting of an instrument evidencing Indebtedness  if  the
Indebtedness  evidenced thereby has been paid  in  full;  or
(vi)  if approved, authorized or ratified in writing by  the
Required  Lenders.  Upon request by the Agent at  any  time,
the Lenders will confirm in writing the Agent's authority to
release particular types or items of Collateral pursuant  to
this Section 10.2.

       10.3  General Immunity.  Neither the Agent nor any of
its directors, officers, employees, agents or advisors shall
be  liable to any of the Lenders for any action taken or not
taken  by it (i) with the consent or at the request  of  the
Required  Lenders or (ii) in the absence of  its  own  gross
negligence or willful misconduct.

        10.4   No  Responsibility for Loans, Recitals,  Etc.
Neither  the  Agent  nor  any of  its  directors,  officers,
employees,  agents or advisors shall (i) be responsible  for
or  have  any duty to ascertain, inquire into or verify  any
recitals, reports, statements, representations or warranties
contained  in  this  Agreement or  any  of  the  other  Loan
Documents or furnished pursuant hereto or thereto;  (ii)  be
responsible  for  any Loans or Letters of  Credit  hereunder
(except  in  Agent's  capacity as a  Lender  hereunder  with
respect to its Pro Rata Share thereof pursuant to the  terms
of  this  Agreement), (iii) be bound to ascertain or inquire
as  to the performance or observance of any of the terms  of
this  Agreement or any of the other Loan Documents; (iv)  be
responsible for the satisfaction of any condition  specified
in  Section  6,  except  receipt of  items  required  to  be
delivered  to  the  Agent; or (v)  be  responsible  for  the
validity,  effectiveness, genuineness or  enforceability  of
this  Agreement or any of the other Loan Documents; or  (vi)
be responsible for the creation, attachment or perfection of
any  security interests or liens purported to be granted  to
the  Agent  or any of the Lenders pursuant to this Agreement
or  any  of  the other Loan Documents.  The Agent shall  not
incur  any liability by acting in reliance upon any  notice,
consent, certificate, statement or other writing (which  may
be  a  Lender  wire,  telex, telecopy  or  similar  writing)
believed  by it to be genuine or to be signed by the  proper
party or parties.

        10.5  Right to Indemnity.  Notwithstanding any other
provision  contained in this Agreement to the  contrary,  to
the extent Borrower fails to reimburse the Agent pursuant to
Section  11.3 or Section 11.5, the Lenders shall ratably  in
accordance  with  their respective Pro Rata  Shares  of  the
aggregate  amount  of  Loans  and  Letters  of  Credit  then
outstanding,  or if no Loans or Letters of Credit  are  then
outstanding, their respective Pro Rata Shares of  the  total
Commitments of all of the Lenders, indemnify the  Agent  and
hold  it  harmless from and against any and all liabilities,
losses  (except  losses  occasioned  solely  by  failure  of
Borrower  to make any payments or to perform any obligations
required  by  this Agreement (other than those described  in
Sections  11.3  and 11.5), the Notes, the Letter  of  Credit
Applications  or  any  of the other Loan  Documents),  costs
and/or  expenses, including, without limitation,  reasonable
attorneys'  fees  and expenses, which the Agent  may  incur,
directly  or indirectly, in connection with this  Agreement,
the  Notes or any of the other Loan Documents, or any action
or transaction related hereto or thereto; provided only that
the  Agent shall not be entitled to such indemnification for
any  losses, liabilities, costs and/or expenses directly and
solely  resulting from its own gross negligence  or  willful
misconduct.  This indemnity shall be a continuing indemnity,
contemplates  all  liabilities, losses, costs  and  expenses
related  to the execution, delivery and performance of  this
Agreement, the Notes and the other Loan Documents, and shall
survive  the  satisfaction and payment  of  the  Loans,  the
expiration or other termination of the Letters of Credit and
the termination of this Agreement.

        10.6   Action Upon Instructions of Required Lenders.
The  Agent agrees, upon the written request of the  Required
Lenders,  to take any action of the type specified  in  this
Agreement or any of the other Loan Documents as being within
the   Agent's   rights,   duties,  powers   or   discretion.
Notwithstanding  the  foregoing, the Agent  shall  be  fully
justified  in  failing  or  refusing  to  take  any   action
hereunder,  unless  it  shall first be  indemnified  to  its
satisfaction  by the Lenders pro rata against  any  and  all
liabilities, losses, costs and expenses (including,  without
limitation,  attorneys'  fees and  expenses)  which  may  be
incurred by it by reason of taking or continuing to take any
such action, other than any liability which may arise out of
Agent's  gross negligence or willful misconduct.  The  Agent
shall  in  all  cases be fully protected in  acting,  or  in
refraining from acting, hereunder in accordance with written
instructions  signed  by  the  Required  Lenders,  and  such
instructions and any action taken or failure to act pursuant
thereto  shall be binding on all of the Lenders and  on  all
holders  of the Notes.  In the absence of a request  by  the
Required  Lenders,  the Agent shall have authority,  in  its
sole  discretion, to take or not to take any action,  unless
this   Agreement   or  any  of  the  other  Loan   Documents
specifically requires the consent of the Required Lenders or
of all of the Lenders.

       10.7  Reliance on Documents; Employment of Agents and
Counsel.  The Agent shall be entitled to rely upon any note,
notice,  consent, certificate, affidavit, letter,  telegram,
statement,  paper or document believed by it to  be  genuine
and  correct and to have been signed or sent by  the  proper
person  or persons.  The Agent may execute any of its duties
as  Agent  hereunder  by or through employees,  agents,  and
attorneys-in-fact and shall not be answerable to the Lenders
for  the  default  or  misconduct  of  any  such  agents  or
attorneys-in-fact  selected by it in  good  faith  and  with
reasonable  care, except as to money or securities  received
by it or its authorized agents.  The Agent shall be entitled
to  advice and opinion of legal counsel concerning all legal
matters  and  all matters pertaining to the  duties  of  the
Agent.

        10.8  May Treat Payee as Owner.  The Agent may  deem
and treat the payee of any Note as the owner thereof for all
purposes  hereof unless and until a written  notice  of  the
assignment  or transfer thereof shall have been  filed  with
the Agent pursuant to Section 11.14.  Any request, authority
or  consent  of any person, firm or corporation who  at  the
time  of  making  such request or giving such  authority  or
consent  is  the holder of any such Note shall be conclusive
and binding on any subsequent holder, transferee or assignee
of such Note or of any Note issued in exchange therefor.

        10.9  Agent's Reimbursement.  Each Lender agrees  to
reimburse the Agent pro rata in accordance with its Pro Rata
Share  for  any  out-of-pocket expenses  not  reimbursed  by
Borrower   (a)   for  which  the  Agent   is   entitled   to
reimbursement by Borrower under this Agreement or any of the
other  Loan  Documents and (b) for any  other  out-of-pocket
expenses incurred by the Agent on behalf of the Lenders,  in
connection   with  the  preparation,  execution,   delivery,
amendment,  modification, extension, renewal, administration
and/or enforcement of this Agreement and/or any of the other
Loan Documents.

        10.10   Rights  as a Lender.  With  respect  to  its
commitment, the Loans made by it and the Notes issued to it,
Regions  shall have the same rights and powers hereunder  as
any  Lender and may exercise the same as though it were  not
the  Agent,  and  the  terms "Lender" and  "Lenders"  shall,
unless  the context otherwise indicates, include Regions  in
its  individual capacity. Regions may accept deposits  from,
lend money to and generally engage in any kind of banking or
trust business with Borrower as if it were not the Agent.

        10.11   Independent  Credit Decision.   Each  Lender
acknowledges that it has, independently and without reliance
upon  the  Agent  or any Lender and based on  the  financial
statements  referred  to  in  Section  7.7  and  such  other
documents and information as it has deemed appropriate, made
its  own  credit  analysis and decision to enter  into  this
Agreement  and the other Loan Documents.  Each  Lender  also
acknowledges  that  it  will,  independently   and   without
reliance  upon  the Agent or any Lender and  based  on  such
documents  and  information as it shall deem appropriate  at
the  time,  continue  to make its own  credit  decisions  in
taking  or  not taking action under this Agreement  and  the
other Loan Documents.

         10.12   Resignation  of  Agent.   Subject  to   the
appointment  of a successor Agent, the Agent may  resign  as
Agent  for  the Lenders under this Agreement and  the  other
Loan  Documents  at any time by thirty (30) days  notice  in
writing to the Lenders.  Such resignation shall take  effect
upon  appointment  of  such successor Agent.   The  Required
Lenders  shall  have the right to appoint a successor  Agent
(and   if  no  Default  or  Event  of  Default  then  exists
hereunder,  such appointment shall be with  the  consent  of
Borrower, which consent shall not be unreasonably withheld),
and  the  successor Agent shall be entitled to  all  of  the
rights  of, and vested with the same powers as, the original
Agent  under  this Agreement and the other  Loan  Documents.
Resignation  by  the Agent shall not affect  or  impair  the
rights of the Agent under Sections 10.5 and 10.9 hereof with
respect to all matters preceding such resignation.

       10.13  Duration of Agency.  The agency established by
Section  10.1  hereof  shall  continue,  and  Sections  10.1
through  and  including this Section 10.13 shall  remain  in
full  force and effect, until all of the  Obligations  shall
have  been paid in full and the Lenders' commitments to make
Loans,  issue Letters of Credit and/or extend credit  to  or
for the benefit of Borrower shall have terminated or expired
(and   the   provisions  of  Section  10.5  shall   continue
thereafter as provided therein).

       SECTION 11.  GENERAL.

       11.1  No Waiver.  No failure or delay by the Agent or
any of the Lenders in exercising any right, remedy, power or
privilege  hereunder or under any other Loan Document  shall
operate as a waiver thereof; nor shall any single or partial
exercise  thereof  preclude any other  or  further  exercise
thereof or the exercise of any other right, remedy, power or
privilege.   The remedies provided herein and in  the  other
Loan  Documents  are  cumulative and not  exclusive  of  any
remedies provided by law.  Nothing herein contained shall in
any  way  affect the right of any of the Lenders to exercise
any  statutory  or  common law right  of  Lender's  lien  or
setoff.

        11.2   Right  of  Setoff.  Upon the  occurrence  and
during the continuance of any Event of Default, each of  the
Lenders  is hereby authorized at any time and from  time  to
time,  without  notice to Borrower (any  such  notice  being
expressly  waived  by Borrower) and to  the  fullest  extent
permitted  by law, to setoff and apply any and all  deposits
(general  or special, time or demand, provisional or  final)
at  any  time held by such Lender(s) and any and  all  other
indebtedness at any time owing by such Lender(s) to  or  for
the credit or account of Borrower against any and all of the
Obligations.  Each of the Lenders agrees to promptly  notify
Borrower after any such setoff and application made by  such
Lender(s), provided, however, that the failure to give  such
notice  shall  not affect the validity of  such  setoff  and
application.   The rights of the Lenders under this  Section
11.2  are  in  addition  to any other  rights  and  remedies
(including,  without  limitation, other  rights  of  setoff)
which  the  Lenders  may have.  Nothing  contained  in  this
Agreement or any other Loan Document shall impair the  right
of  any  of  the Lenders to exercise any right of setoff  or
counterclaim it may have against Borrower and to  apply  the
amount   subject  to  such  exercise  to  the   payment   of
indebtedness of Borrower unrelated to this Agreement or  the
other Loan Documents.

       11.3  Cost and Expenses.  Borrower agrees, whether or
not  any  Loan is made hereunder or any Letter of Credit  is
issued hereunder, to pay the Agent upon demand (i) all  out-
of-pocket  costs and expenses and all reasonable  attorneys'
fees  of  the Agent and/or each of the Lenders in connection
with   the   Cases   and  the  preparation,   documentation,
negotiation,  execution, amendment, modification,  extension
and/or  renewal of this Agreement, the Notes, the Letter  of
Credit Application(s) and the other Loan Documents, (ii) all
out-of-pocket   costs  and  expenses  and   all   reasonable
attorneys'  fees of the Agent and/or each of the Lenders  in
connection  with  the preparation of any waiver  or  consent
hereunder  or under any other Loan Documents,  (iii)  if  an
Event  of  Default  occurs,  all  out-of-pocket  costs   and
expenses and all reasonable attorneys' fees incurred by  the
Agent  and/or  each of the Lenders in connection  with  such
Event  of  Default  and  collection  and  other  enforcement
proceedings  resulting  therefrom,  (iv)  all  out-of-pocket
costs  and  expenses  and  all  reasonable  attorneys'  fees
incurred  by  the  Agent  and/or  each  of  the  Lenders  in
connection  with  the  enforcement  of  any  rights   and/or
remedies  of the Agent or any of the Lenders to collect  any
of  the Obligations, and (v) all other reasonable attorneys'
fees  and out-of-pocket costs and expenses incurred  by  the
Agent and/or each of the Lenders relating to or arising  out
of  or in connection with this Agreement or any of the other
Loan Documents.  Borrower further agrees to pay or reimburse
the  Agent  and each of the Lenders for any stamp  or  other
taxes  or  costs  which may be payable with respect  to  the
execution,  delivery,  recording  and/or  filing   of   this
Agreement, the Notes, the Letter of Credit Application(s) or
any of the other Loan Documents.  All of the obligations  of
Borrower   under  this  Section  11.3  shall   survive   the
satisfaction  and  payment  of  the  Obligations   and   the
termination  of this Agreement.  As used herein, "attorneys'
fees" shall include, without limitation, fees on a solicitor
and its own client basis and extra-judicial fees.

       11.4  Environmental Indemnity. Borrower hereby agrees
to  indemnify  the  Agent and each of the  Lenders  and  any
holder(s)   of  the  Notes,  and  the  officers,  directors,
employees, agents and affiliates of the Agent, each  of  the
Lenders and such holder(s) (collectively, the "Indemnitees")
and  hold the Indemnitees harmless from and against any  and
all  losses, liabilities, damages, injuries, costs, expenses
and  claims  of  any  and every kind whatsoever  (including,
without  limitation, reasonable court costs  and  attorneys'
fees  and expenses) which at any time or from time  to  time
may  be paid, incurred or suffered by the Indemnitees,  with
respect  to  or  as  a  direct or  indirect  result  of  the
violation  by Borrower or any Guarantor of any Environmental
Laws;  or with respect to, or as a direct or indirect result
of  the  presence  on  or  under, or  the  escape,  seepage,
leakage,  spillage,  discharge, emission  or  release  from,
properties   owned  or  operated  by  Borrower  and/or   any
Guarantor of any hazardous substances or any other hazardous
or  toxic waste, substance or constituent or other substance
(including,  without  limitation, any  losses,  liabilities,
damages,  injuries,  costs, expenses or claims  asserted  or
arising under the Environmental Laws); and the provisions of
and undertakings and indemnification set out in this Section
11.4  shall  survive  the satisfaction and  payment  of  the
Obligations and the termination of this Agreement;  provided
that  Borrower  shall have no obligation  to  an  Indemnitee
hereunder  with  respect to indemnified liabilities  arising
from  the  gross  negligence or willful misconduct  of  that
Indemnitee.

        11.5   General Indemnity. In addition to the payment
of  expenses pursuant to Section 11.3, whether  or  not  the
transactions   contemplated  hereby  shall  be  consummated,
Borrower hereby agrees to indemnify and pay Indemnitees  and
hold Indemnitees harmless from and against any and all other
liabilities,   obligations,  losses,   damages,   penalties,
actions,  judgments,  suits,  claims,  costs,  expenses  and
disbursements  of any kind or nature whatsoever  (including,
without limitation, the reasonable fees and disbursements of
counsel   for  such  Indemnitees  in  connection  with   any
investigative,   administrative   or   judicial   proceeding
commenced  or  threatened, whether or not  such  Indemnitees
shall  be  designated a party thereto), that may be  imposed
on,  incurred by or asserted against the Indemnitees, in any
manner relating to or arising out of this Agreement, any  of
the other Loan Documents or any other agreement, document or
instrument executed and delivered by Borrower or  any  other
Obligor  in connection herewith or therewith, the statements
contained  in any commitment letters delivered by the  Agent
or  any  of the Lenders, the agreement of any of the Lenders
to  make  the Loans hereunder, the agreement of  Lenders  to
issue the Letters of Credit hereunder or the use or intended
use of the proceeds of any Loan hereunder (collectively, the
"Indemnified  Liabilities"); provided  that  Borrower  shall
have  no  obligation to an Indemnitee hereunder with respect
to Indemnified Liabilities arising from the gross negligence
or willful misconduct of that Indemnitee. To the extent that
the  undertaking  to indemnify, pay and  hold  harmless  set
forth in the preceding sentence may be unenforceable because
it  is violative of any law or public policy, Borrower shall
contribute the maximum portion that it is permitted  to  pay
and   satisfy  under  applicable  law  to  the  payment  and
satisfaction of all Indemnified Liabilities incurred by  the
Indemnitees   or  any  of  them.  The  provisions   of   the
undertakings  and indemnification set out  in  this  Section
11.5   shall  survive  satisfaction  and  payment   of   the
Obligations  and  the  termination of  this  Agreement.   No
provision  contained in this Section 11.5 shall  affect  any
rights  Borrower may have against any Lender which  defaults
under  this Agreement or is intended to indemnify  any  such
Agent  or  Lender which defaults under this  Agreement  (but
only   such  Agent  or  Lender  that  defaults  under   this
Agreement) for any such Indemnified Liabilities arising from
such defaulting Lender's action.

        11.6  Authority to Act.  The Agent shall be entitled
to  act  on  any  notices  and instructions  (telephonic  or
written)  believed by the Agent in good faith to  have  been
sent  or  delivered  by  any person identifying  himself  as
Borrower's Representative, regardless of whether such notice
or  instruction  was in fact delivered by such  person,  and
Borrower  hereby agrees to indemnify the Agent and hold  the
Agent  harmless  from and against any  and  all  losses  and
expenses, if any, ensuing from any such action.

       11.7  Notices.  Any notice, request, demand, consent,
confirmation or other communication hereunder  shall  be  in
writing  and  delivered in person or  sent  by  telecopy  or
registered  or certified mail, return receipt requested  and
postage  prepaid, to the applicable party at its address  or
telecopy number set forth on the signature pages hereof,  or
at such other address or telecopy number as any party hereto
may designate as its address for communications hereunder by
notice so given.  Such notices shall be deemed effective  on
the day on which delivered or sent if delivered in person or
sent  by telecopy, or on the third (3rd) Business Day  after
the  day on which mailed, if sent by registered or certified
mail;  provided,  however, that notices to the  Agent  under
Section 3 shall not be effective until actually received  by
the Agent.

        11.8   Sharing of Payments.  The Lenders agree among
themselves  that  except as otherwise  expressly  set  forth
herein,  in the event that any of the Lenders shall directly
or   indirectly  obtain  any  payment  (whether   voluntary,
involuntary,  through the exercise of any right  of  setoff,
banker's  lien  or  counterclaim, through  the  realization,
collection,  sale  or  liquidation  of  any  collateral   or
otherwise) on account of or in respect of any of  the  Loans
or  other Obligations in excess of its Pro Rata Share of all
such  payments,  such  Lender(s) shall immediately  purchase
from  the  other Lender(s) participations in  the  Loans  or
other  Obligations  owed  to such other  Lender(s)  in  such
amounts, and make such other adjustments from time to  time,
as shall be equitable to the end that the Lenders share such
payment ratably in accordance with their respective Pro Rata
Shares of the outstanding Loans and other Obligations.  (For
purposes  of  clarification, the provisions of this  Section
11.9  shall  not  apply  to  any payments  relating  to  the
Lenders'  Pre-Petition Indebtedness).  The  Lenders  further
agree among themselves that if any such excess payment to  a
Lender shall be rescinded or must otherwise be restored, the
other Lender(s) which shall have shared the benefit of  such
payment  shall,  by repurchase of participation  theretofore
sold, or otherwise, return its share of that benefit to  the
Lender  whose payment shall have been rescinded or otherwise
restored.    Borrower agrees, to the fullest extent  it  may
effectively do so under applicable law, that any holder of a
participation  in  any of the Obligations,  whether  or  not
acquired   pursuant  to  the  foregoing  arrangements,   may
exercise rights of setoff, banker's lien or counterclaim and
other rights with respect to such participation as fully  as
if  such holder of a participation were a direct creditor of
Borrower in the amount of such participation.  If under  any
applicable bankruptcy, insolvency or other similar  law  any
of  the Lenders receives a secured claim in lieu of a setoff
to  which  this  Section  11.9 would apply,  such  Lender(s)
shall,  to the extent practicable, exercise their rights  in
respect  of  such secured claim in a manner consistent  with
the rights of the Lender(s) entitled under this Section 11.9
to  share  in  the benefits of any recovery of such  secured
claim.

        11.9   Governing  Law; Waiver of Jury  Trial.   This
Agreement,  the  Notes, the Letter of Credit  Application(s)
and all of the other Loan Documents shall be governed by and
construed in accordance with the internal laws of the  State
of Louisiana, the Bankruptcy Code, and United States federal
maritime law, as applicable. THE LOAN PARTIES, THE AGENT AND
THE  LENDERS  IRREVOCABLY WAIVE THE RIGHT TO TRIAL  BY  JURY
WITH  RESPECT TO ANY ACTION IN WHICH BORROWER AND THE  AGENT
AND/OR ANY OF THE LENDERS ARE PARTIES RELATING TO OR ARISING
OUT  OF  OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF  THE
OTHER TRANSACTION DOCUMENTS.

       11.10  Amendments and Waivers.  Any provision of this
Agreement, the Notes, the Letter of Credit Application(s) or
any of the other Loan Documents may be amended or waived if,
but  only if, such amendment or waiver is in writing and  is
signed  by  Borrower and the Required Lenders (and,  if  the
rights  or duties of the Agent in its capacity as Agent  are
affected  thereby,  by  the Agent); provided  that  no  such
amendment  or  waiver shall, unless signed  by  all  of  the
Lenders,  (i)  increase the Commitment of any  Lender,  (ii)
reduce  the principal amount of or rate of interest  on  any
Loan  or any fees hereunder or the amount for which Borrower
or  any  Guarantor  is  obligated to  reimburse  Regions  in
respect  of  a  drawing  under a  Letter  of  Credit,  (iii)
postpone the date fixed for any payment of principal  of  or
interest  on  any  Loan or any reimbursement  obligation  in
respect  of a drawing under a Letter of Credit, or any  fees
hereunder, (iv) change the Pro Rata Share of the Commitments
or  of the aggregate principal amount of Loans or Letters of
Credit of any Lender, (v) change the number of Lenders which
shall be required for the Lenders or any of them to take any
action or obligations under this Section or under any  other
provision  of  this Agreement, (vi) release  any  Collateral
(including,  without limitation, release of  any  Continuing
Guarantee)  other  than  pursuant  to  Section  10.2;  (vii)
postpone the scheduled expiration date of the Line of Credit
Period  or  the Letter of Credit Period hereunder or  extend
the  expiry date of a Letter of Credit beyond the Letter  of
Credit Period; or (viii) amend this Section 11.11.

        11.11  References; Headings for Convenience.  Unless
otherwise specified herein, all references herein to Section
numbers  refer  to  Section numbers of this  Agreement,  all
references herein to Exhibits A, B, C and D refer to annexed
Exhibits A, B, C and D which are hereby incorporated  herein
by  reference  and  all references herein to  Schedule  7.13
refer  to annexed Schedule 7.13 which is hereby incorporated
herein by reference.  The Section headings are furnished for
the  convenience of the parties and are not to be considered
in  the  construction or interpretation of  this  Agreement.
The  words "hereof," "herein" and "hereunder" and  words  of
similar  import when used in this Agreement shall  refer  to
this  Agreement  as  a  whole  and  not  to  any  particular
provision of this Agreement.

       11.12  Successors and Assigns, Participations.

           (a)  The  provisions of this Agreement  shall  be
binding upon and inure to the benefit of the parties  hereto
and  their  respective successors and assigns,  except  that
Borrower  may not assign or otherwise transfer  any  of  its
rights  or  delegate  any  of  its  obligations  under  this
Agreement.  Any Lender may sell participations in its  Notes
and  its rights under this Agreement in whole or in part  to
any commercial Lender organized under the laws of the United
States  or Canada or any state or providence thereof without
the  consent  of  Borrower or the  Agent  so  long  as  each
agreement  pursuant  to  which  any  such  participation  is
granted  provides that no such participant  shall  have  any
rights under this Agreement or any other Loan Document  (the
participants'  rights  against  the  Lender   granting   its
participation  to  be those set forth in  the  Participation
Agreement between the participant and such Lender), and such
selling  Lender shall retain the sole right  to  approve  or
disapprove  any  amendment, modification or  waiver  of  any
provision  of  this  Agreement or  any  of  the  other  Loan
Documents.  Each such participant shall be entitled  to  the
benefits  of the yield protection provisions hereof  to  the
extent  such Lender would have been so entitled had no  such
participation been sold.

           (b)  Any Lender which, in accordance with Section
11.13(a), grants a participation in any of its rights  under
this Agreement or its Notes shall give prompt notice thereof
to the Agent and Borrower.

           (c)  Unless  otherwise agreed to by  Borrower  in
writing,  no  Lender  shall, as between  Borrower  and  that
Lender,  be  relieved of any of its obligations  under  this
Agreement  as  a  result  of such  Lender's  granting  of  a
participation in all or any part of such Lender's  Notes  or
all   or  any  part  of  such  Lender's  rights  under  this
Agreement.

        11.13  Assignment Agreements.  Each Lender may, from
time  to time with the consent of Borrower and Agent  (which
will not in any instance be unreasonably withheld), sell  or
assign  a pro rata part of all of the indebtedness evidenced
by  the  Notes  then owed by it together with an  equivalent
proportion of its obligation to make Loans hereunder and the
credit risk incidental to the Letters of Credit pursuant  to
an  Assignment  Agreement, in form and substance  reasonably
acceptable  to Agent and Borrower, executed by the  assignor
and  the  assignee, which agreements shall specify  in  each
instance  the portion of the indebtedness evidenced  by  the
Notes which is to be assigned to each such assignee and  the
portion  of  the Commitments of the assignor and the  credit
risk  incidental  to the Letters of Credit  (which  portions
shall  be  equivalent) to be assumed by it  (an  "Assignment
Agreement");  provided  that (i)  nothing  herein  contained
shall  restrict, or be deemed to require any  consent  as  a
condition  to,  or require payment of any fee in  connection
with, any sale, discount or pledge by any Lender of any Note
or  other obligation hereunder to a Federal reserve bank and
(ii)  the consent of the Borrower shall not be required  for
assignments  or  sales to a Lender or  any  affiliate  of  a
Lender.  Upon the execution of each Assignment Agreement  by
the  assignor  and  the  assignee (i)  such  assignee  shall
thereupon  become  a  "Lender"  for  all  purposes  of  this
Agreement with a Commitment in the amount set forth in  such
Assignment  Agreement and with all the  rights,  powers  and
obligations  afforded a Lender hereunder, (ii) the  assignor
shall  have no further liability for funding the portion  of
its  Commitments assumed by such other Lender and (iii)  the
address for notices to such Lender shall be as specified  in
the  Assignment  Agreement, and Borrower shall  execute  and
deliver  Notes to the assignee Lender in the amount  of  its
Commitments  and  new Notes to the assignor  Lender  in  the
amount  of  its  Commitments  after  giving  effect  to  the
reduction occasioned by such assignment, all such  Notes  to
constitute  "Notes" for all purposes of this Agreement,  and
there  shall  be paid to the Agent, as a condition  to  such
assignment, an administration fee of $2,500 plus any out-of-
pocket  costs and expenses incurred by it in effecting  such
assignment,  such  fee to be paid by  the  assignor  or  the
assignee   as  they  may  mutually  agree,  but   under   no
circumstances shall any portion of such fee be payable by or
charged to Borrower.

       11.14 Withholding Tax. At the time it becomes a party
to  this Agreement, each Lender that is organized under  the
laws  of  a  jurisdiction outside the  United  States  shall
deliver  to  the  Agent  and Borrower  either  a  valid  and
currently  effective Internal Revenue Service Form  1001  or
Form  4224 or, in the case of a bank claiming exemption from
U.S.  Federal withholding tax under Section 871(h) or 881(c)
of   the   Code  with  respect  to  payments  of  "portfolio
interest", a Form W-8, or any subsequent version thereof  or
successors thereto, (and if such bank delivers a Form W-8, a
certificate representing that such bank is not  a  bank  for
purposes  of Section 881(c) of the Code, is not a 10-percent
shareholder  (within the meaning of Section 871(h)(3)(B)  of
the  Code)  of  Borrower  and is not  a  controlled  foreign
corporation  related  to  Borrower (within  the  meaning  of
Section 864(d)(4) of the Code)), properly completed and duly
executed by such Lender, establishing that payments relating
to  this  Agreement  are (i) not subject  to  United  States
Federal withholding tax under the Code because such payments
are effectively connected with the conduct by such Lender of
a  trade  or  business in the United States or (ii)  totally
exempt from United States Federal withholding tax.

        11.15   Binding Agreement.  This Agreement shall  be
binding upon and inure to the benefit of the parties  hereto
and  their  respective  successors  and  assigns;  provided,
however, that Borrower may not assign or delegate any of its
rights or obligations under this Agreement.

        11.16   NO ORAL AGREEMENTS, ENTIRE AGREEMENT.   ORAL
AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO
FORBEAR  FROM  ENFORCING  REPAYMENT  OF  A  DEBT,  INCLUDING
PROMISES  TO EXTEND OR RENEW SUCH DEBT, ARE NOT ENFORCEABLE.
TO   PROTECT  BORROWER,  THE  AGENT  AND  THE  LENDERS  FROM
MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENT REACHED BY
BORROWER,  THE AGENT AND THE LENDERS COVERING  SUCH  MATTERS
ARE   CONTAINED  IN  THIS  AGREEMENT  AND  THE  OTHER   LOAN
DOCUMENTS,  WHICH AGREEMENT AND OTHER LOAN DOCUMENTS  ARE  A
COMPLETE  AND  EXCLUSIVE STATEMENT OF  THE  AGREEMENT  AMONG
BORROWER, THE AGENT AND THE LENDERS, EXCEPT AS BORROWER, THE
AGENT  AND THE LENDERS MAY LATER AGREE IN WRITING TO  MODIFY
THEM.   THIS  AGREEMENT  EMBODIES THE ENTIRE  AGREEMENT  AND
UNDERSTANDING BETWEEN  THE PARTIES HERETO AND SUPERSEDES ALL
PRIOR   AGREEMENTS  AND  UNDERSTANDINGS  (ORAL  OR  WRITTEN)
RELATING TO THE SUBJECT MATTER HEREOF.

       11.17  Severability.  In the event any one or more of
the  provisions  contained  in  this  Agreement  should   be
invalid,  illegal  or  unenforceable  in  any  respect,  the
validity,  legality  and  enforceability  of  the  remaining
provisions contained herein shall not in any way be affected
or impaired thereby.

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

        11.19   Resurrection  of the  Obligations.   To  the
extent  that  any  of the Lenders receives  any  payment  on
account  of  any of the Obligations, and any such payment(s)
or  any  part thereof are subsequently invalidated, declared
to  be  fraudulent or preferential, set aside,  subordinated
and/or  required to be repaid to a trustee, receiver or  any
other  Person under any contract, bankruptcy act,  state  or
federal  law,  common law or equitable cause, then,  to  the
extent of such payment(s) received, the Obligations or  part
thereof intended to be satisfied and any and all Liens  upon
or  pertaining  to any Property or assets  of  Borrower  and
theretofore  created  and/or  existing  in  favor  of   such
Lender(s)  as  security for the payment of such  Obligations
shall  be revived and continue in full force and effect,  as
if  such  payment(s) had not been received by such Lender(s)
and applied on account of the Obligations.

       11.20  No Third Party Beneficiary.  This Agreement is
solely  for  the  benefit  of  the  parties  and  is  not  a
stipulation for the benefit of any other Person  except  for
any  approved assignee of Borrower and any assignee  of  the
Lenders.

         11.21   Independence  of  Covenants.   All  of  the
covenants  contained in this Agreement and  the  other  Loan
Documents  shall be given independent effect so  that  if  a
particular action, event or condition is prohibited  by  any
one  of  such covenants, the fact that it would be permitted
by an exception to, or otherwise be in compliance within the
provisions  of,  another  covenant  shall  not   avoid   the
occurrence  of a Default or Event of Default if such  action
is taken, such event occurs or such condition exists.

        11.22   Confidentiality.  The Agent and each of  the
Lenders  shall keep confidential any information  delivered,
made  available  or otherwise conveyed by  Borrower  or  any
Guarantor  in  connection  with  this  Agreement   and   the
transactions   contemplated  hereby;  provided   that,   the
provisions  of this Section 11.22 shall not be construed  to
prohibit Agent or any Lender from disclosing any information
to  (i)  Agent  or any Lender (or any attorneys,  agents  or
consultants of Agent or any Lender), (ii) any participant or
assignee  or  prospective participant  or  assignee  of  any
Lender   (so  long  as  such  participant  or  assignee   or
prospective  participant or assignee agrees to be  bound  by
the  provisions of this Section 11.22), (iii) any  affiliate
of  Agent  or  any Lender or (iv) any Person as required  by
law, regulation or court order.  Notwithstanding anything to
the   contrary   herein,  the  Borrower  agrees   to   EDC's
disclosure,  following the Effective Date, of the  following
information:  the  name of the Borrower, the  EDC  financial
service  provided  and  the date of related  agreement,  the
amount  of  EDC support in an approximate dollar range,  and
the name of the Exporter.

        11.23  Conflicting Provisions.  In the event any  of
the terms and provisions of this Agreement conflict with any
terms  and  provisions contained in any other Loan Document,
the  terms  and  provisions of this Agreement  shall  govern
provided  that, nothing in this Agreement shall be construed
to limit the Property encumbered by the Loan Documents.

           IN  WITNESS WHEREOF, Borrower, the Guarantors (as
to  those representations, warranties and covenants to which
they  are  obligated in this Agreement), the Agent  and  the
Lenders have executed this Credit Agreement effective as  of
the date first written above.

                           TORCH OFFSHORE, INC.

                         By:  /s/ Robert E. Fulton
                              --------------------
                              Name:
                              Title:
                              401 Whitney Avenue,Suite 400
                              Gretna, Louisiana 70056
                              Telecopy number:(504)367-7075

                           TORCH OFFSHORE, L.L.C.

                         By:  /s/ Robert E. Fulton
                              --------------------
                              Name:
                              Its Manager
                              401 Whitney Avenue,Suite 400
                              Gretna, Louisiana 70056
                              Telecopy number:(504)367-7075

                            TORCH EXPRESS, L.L.C.

                         By:  /s/ Robert E. Fulton
                              --------------------
                              Name:
                              Its Manager
                              401 Whitney Avenue,Suite 400
                              Gretna, Louisiana 70056
                              Telecopy number:(504)367-7075

                            REGIONS BANK
Share of the
Line of Credit Commitment:    $3,450,000.00

                                By: /s/ Mike J. Paternostro
                                    -----------------------
                                   Mike J. Paternostro
                                   Senior Vice President
                                   301 St. Charles Avenue
                                   New Orleans, LA 70130
                                   Telecopier:(504)584-1347

                       EXPORT DEVELOPMENT CANADA
Share of the
Line of Credit Commitment:    $3,450,000.00

                                By: /s/ Sean Mitchell
                                    ------------------
                                   Sean Mitchell
                                   Manager Special Risks

                                By: /s/ Bruce Dunlop
                                    -----------------
                                   Bruce Dunlop
                                   Portfolio Manager

                                   151 O'Connor
                                   Ottawa, Canada K1A1K3
                                   (Telecopier:(613)598-3186

                          EXHIBIT A

                 FORM OF LINE OF CREDIT NOTE

                          EXHIBIT B

                 FORM OF CONTINUING GUARANTEE

                          EXHIBIT C

                    FORM OF INTERIM ORDER

                          EXHIBIT D

                 FORM OF SECURITY AGREEMENT

                        SCHEDULE 1.1A

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