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): October 12, 1999
                                      
                                      
                              KIRBY CORPORATION
---------------------------------------------------------------------------
                                      
           (Exact name of registrant as specified in its charter)
                                      

           Nevada                       1-7615               74-1884980
---------------------------------------------------------------------------
(State or other jurisdiction   (Commission File Number)    (IRS Employer
      of incorporation)                                 Identification No.)


1775 St. James Place, Suite 200, Houston, Texas              77056-3453
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   (Address of principal executive offices)                  (Zip Code)



     Registrant's telephone number, including area code: (713) 435-1000

<PAGE>    2


ITEM 2.   ACQUISITION OR DISPOSITION OF ASSETS.

       On  October  12,  1999,  Kirby  Corporation  ("Kirby")  completed  the
acquisition of Hollywood Marine, Inc. ("Hollywood"), by means of a merger  of
Hollywood  into Kirby Inland Marine, Inc. ("KIM"), a wholly owned  subsidiary
of  Kirby.   Pursuant  to  the Agreement and Plan of Merger,  Kirby  acquired
Hollywood  for  an  aggregate  consideration of  $322,200,000  consisting  of
$89,600,000  in  common  stock  (4,384,000  shares  at  $20.44  per   share),
$128,700,000  in  cash,  and  the assumption of $103,900,000  of  Hollywood's
existing debt and certain other liabilities. The aggregate purchase price  is
subject  to  post-closing  adjustments.   Hollywood was  owned  by C.  Berdon 
Lawrence and certain trusts for members of his family.

      Financing for the cash portion of the transaction and the repayment  of
Hollywood's  existing  debt was through the Company's  existing  $100,000,000
undrawn  bank  revolving credit agreement with Chase Bank of Texas,  N.A.  as
agent  bank  and  through  a new  $200,000,000  credit  facility  with  Chase
Bank  of  Texas,  N.A.  as  administrative  agent;   Bank  of  America,  N.A. 
as syndication agent bank; and Bank One, Texas N.A. as documentation agent.

      Hollywood,  located in Houston, Texas, is engaged in  the  inland  tank
barge  transportation  of  chemicals  and petrochemicals,  refined  petroleum
products,  black  oil  and  pressurized products  primarily  along  the  Gulf
Intracoastal  Waterway, the Houston Ship Channel and  the  lower  Mississippi
River.   Hollywood  operates  a fleet of 256 inland  tank  barges,  with  4.6
million  barrels  of  capacity, and 104 inland towboats.   Kirby  intends  to
continue  to use the assets of Hollywood in the same business that  Hollywood
conducted prior to the merger.

      The  purchase  price was  determined through arm's-length  negotiations
between representatives of Kirby and Hollywood and was based on an evaluation
of  the  fair  market  value of the inland transportation  equipment  in  the
current  industry environment.  Prior to the negotiations, there  existed  no
material  relationships  between  Hollywood  and  Kirby  or  any  of  Kirby's
subsidiaries, or any of its affiliates, any officer, or director of Kirby, or
any associate of any officer or director of Kirby.

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

                              Kirby Corporation
                              (Registrant)
                                   
                              By:  /s/ G. Stephen Holcomb
                                   -----------------------------------
                                   G. Stephen Holcomb
                                   Vice President and Controller

Dated October 14, 1999

<PAGE>    3


ITEM 7.   FINANCIAL STATEMENTS AND EXHIBITS.

     (a)  Financial Statements of Business Acquired:

          1.   Independent Auditors' Report.
          2.   Consolidated Balance Sheets as of December 31, 1997  and  1998
               and June 30, 1999 (Unaudited).
          3.   Consolidated  Statements of Operations  for  the  years  ended
               December 31, 1996, 1997 and 1998 and the six months ended June
               30, 1998 and 1999 (Unaudited).
          4.   Consolidated Statements of Stockholder's Equity for the  years
               ended  December  31, 1996, 1997 and 1998 and  the  six  months
               ended June 30, 1999 (Unaudited).
          5.   Consolidated  Statements of Cash Flows  for  the  years  ended
               December 31, 1996, 1997 and 1998 and the six months ended June
               30, 1998 and 1999 (Unaudited).
          6.   Notes to Consolidated Financial Statements for the years ended
               December 31, 1996, 1997 and 1998 and the six months ended June
               30, 1998 and 1999 (Unaudited).
          
     (b)  Pro Forma Financial Information:
     
          1.   Unaudited  Pro Forma Condensed Combined Balance  Sheet  as  of
               June 30, 1999.
          2.   Unaudited  Pro Forma Condensed Combined Statement of  Earnings
               for the year ended December 31, 1998.
          3.   Unaudited  Pro Forma Condensed Combined Statement of  Earnings
               for the six months ended June 30, 1999.
          4.   Notes  to  Unaudited  Pro Forma Condensed  Combined  Financial
               Statements.

     (c)  Exhibits:

          2.1  Agreement and  Plan of Merger, dated as  of July 28, 1999,  by 
               and  among  Kirby  Corporation,  Kirby  Inland  Marine,  Inc., 
               Hollywood Marine, Inc., C. Berdon Lawrence, and Robert B. Egan
               and  Eddy J. Rogers, Jr.,  as Co-Trustees under certain Berdon
               Lawrence Trusts  (incorporated by reference to Exhibit 2.1  of
               Registrant's Current Report on Form 8-K dated July 30,  1999.)
          10.1 Credit Agreement, dated as of October 12, 1999,  among   Kirby
               Corporation,  the Banks named therein, Chase  Bank  of  Texas,
               National Association as Administrative Agent, Bank of America,
               N.A.  as  Syndication  Agent, and Bank  One,  Texas,  N.A.  as
               Documentation Agent.
          23.1 Consent of KPMG LLP

<PAGE>    4


ITEM 7    FINANCIAL STATEMENTS AND EXHIBITS

   (a)    Financial Statements of Business Acquired


<PAGE>    5
                           HOLLYWOOD MARINE, INC.
                           AND AFFILIATED ENTITIES
                                      
                      Consolidated Financial Statements
                                      
                         December 31, 1997 and 1998
                              and June 30, 1999
                                      
                         (With Independent Auditors'
                               Report Thereon)
                 and six months ended June 30, 1999 and 1998

<PAGE>    6
                             [KPMG LETTERHEAD]



                        Independent Auditors' Report


The Board of Directors
Hollywood Marine, Inc.:


We have audited the accompanying consolidated balance sheets of Hollywood
Marine, Inc. and affiliated entities as of December 31, 1997 and 1998, and
the related consolidated statements of operations, stockholder's equity and
cash flows for each of the years in the three-year period ended
December 31, 1998.  These consolidated financial statements are the
responsibility of the Company's management.  Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Hollywood
Marine, Inc. and affiliated entities as of December 31, 1997 and 1998, and
the results of their operations and their cash flows for each of the years in
the three-year period ended December 31, 1998 in conformity with generally
accepted accounting principles.

As discussed in note 1(j) in the notes to the consolidated financial
statements, the Company changed its method of accounting for internally
developed software costs in 1998.

KPMG LLP

Houston, Texas
March 15, 1999

<PAGE>    7
                           HOLLYWOOD MARINE, INC.
                           AND AFFILIATED ENTITIES
                                      
                         Consolidated Balance Sheets
                                      
                         December 31, 1997, and 1998
                              and June 30, 1999

<TABLE>
<CAPTION>
                                                      December 31,           
                                                -------------------------    June 30,
            Assets                                  1997         1998          1999     
                                                ------------  -----------  ------------
                                                                            (unaudited)  
<S>                                             <C>           <C>          <C>         
Current assets:                                                                       
  Cash and cash equivalents                     $     71,457      136,956       88,811
  Accounts receivable, trade                      18,577,758   19,693,050   19,469,881
  Other receivables                                  942,349      685,329      648,839
  Prepaid expenses and other current assets        1,918,229    2,062,037    2,488,826
                                                 -----------  -----------  -----------
                                                                                      
        Total current assets                      21,509,793   22,577,372   22,696,357
                                                                                      
Property and equipment, at cost:                                                      
  Land                                             5,657,681    5,926,715    5,988,194
  Buildings and improvements                       4,858,401    6,978,171    8,749,528
  Marine equipment                               213,535,178  222,899,570  227,565,307
  Furniture, automobiles and other equipment       9,512,028   11,963,443   12,449,704
                                                 -----------  -----------  -----------
                                                                                      
                                                 233,563,288  247,767,899  254,752,733
  Less accumulated depreciation                  120,803,787  129,034,399  133,358,014
                                                 -----------  -----------  -----------
                                                                                      
        Property and equipment, net              112,759,501  118,733,500  121,394,719
                                                                                      
Other assets, net                                  3,380,847    4,250,401    3,841,319
                                                 -----------  -----------  -----------
                                                                                      
        Total assets                            $137,650,141  145,561,273  147,932,395
                                                 ===========  ===========  ===========
</TABLE>
                                                                       
                                                                    (Continued)

<PAGE>    8
                           HOLLYWOOD MARINE, INC.                        
                           AND AFFILIATED ENTITIES       
                                                                                
                         Consolidated Balance Sheets            
                                                             
                         December 31, 1997, and 1998             
                              and June 30, 1999                   
                                                                    

<TABLE>                                                                                
<CAPTION>                                                                             
                                                           December 31,                
                                                     -------------------------    June 30,
 Liabilities and Stockholder's Equity                     1997         1998         1999     
                                                     ------------  -----------  -----------
                                                                                 (unaudited)
<S>                                                  <C>           <C>          <C>        
Current liabilities:                                                                   
  Current installments of long-term debt             $  5,969,531    5,673,332    5,533,687
  Accounts payable, trade                              14,483,959   14,495,725   10,594,696
  Accrued expenses                                      3,244,639    5,341,396    4,897,868
                                                      -----------  -----------  -----------
                                                                                       
        Total current liabilities                      23,698,129   25,510,453   21,026,251
                                                                                       
Long-term debt, less current installments              78,195,181   86,855,650   91,923,452
                                                                                       
Other long-term liabilities                             8,552,236    7,096,357    5,901,199
                                                                                       
Deferred state income taxes                             1,406,978    1,262,905    1,308,909
                                                                                       
Minority interests in consolidated entities             5,561,716    3,844,289    3,155,144
                                                                                       
Commitments and contingencies                                                          
                                                                                       
Stockholder's equity:                                                                  
  Common stock, $.10 par value; 116,667 shares                                            
    issued and 83,334 outstanding in 1997                                              
    and 1998                                               11,667       11,667       11,667
  Additional paid-in capital                              359,768      359,768      359,768
  Retained earnings                                    43,421,682   44,177,400   47,803,221
                                                      -----------  -----------  -----------
                                                                                       
                                                       43,793,117   44,548,835   48,174,656
  Less 33,333 shares held in treasury, at cost         23,557,216   23,557,216   23,557,216
                                                      -----------  -----------  -----------
                                                                                       
        Total stockholder's equity                     20,235,901   20,991,619   24,617,440
                                                      -----------  -----------  -----------
                                                                                       
        Total liabilities and stockholder's equity   $137,650,141  145,561,273  147,932,395
                                                      ===========  ===========  ===========
</TABLE>


See accompanying notes to consolidated financial statements.

<PAGE>    9
                           HOLLYWOOD MARINE, INC.
                           AND AFFILIATED ENTITIES
                                      
                    Consolidated Statements of Operations
                                      
                Years ended December 31, 1996, 1997 and 1998
                 and six months ended June 30, 1999 and 1998

<TABLE>
<CAPTION>
                                             Year ended December 31,           Six months ended June 30,
                                    -----------------------------------------  -------------------------
                                        1996           1997          1998          1998         1999     
                                    -------------  ------------  ------------  -----------  ------------
                                                                                      (Unaudited)       
<S>                                 <C>            <C>           <C>           <C>          <C>        
Revenues                            $134,988,257   157,461,653   167,952,987   83,074,701    81,667,315
Cost of sales                        104,031,977   122,305,552   133,536,122   64,387,528    64,039,522
                                     -----------   -----------   -----------   ----------    ----------
                                                                                                       
    Gross profit                      30,956,280    35,156,101    34,416,865   18,687,173    17,627,793
                                                                                                       
General and administrative expenses   17,715,262    17,785,852    19,795,462    9,547,755     9,305,513
                                     -----------   -----------   -----------   ----------    ----------
                                                                                                       
    Operating earnings                13,241,018    17,370,249    14,621,403    9,139,418     8,322,280
                                     -----------   -----------   -----------   ----------    ----------
                                                                                                       
Other income (expense)                                                                                 
 Interest expense                     (7,223,870)   (7,951,302)   (7,875,372)  (3,929,989)   (4,101,171)
 Gain on disposal of assets, net          87,446     2,213,731        43,856        7,637        25,888
 Other                                    44,535           789          (549)      28,291        20,646
                                     -----------   -----------   -----------   ----------    ----------
                                                                                                       
                                      (7,091,889)   (5,736,782)   (7,832,065)  (3,894,061)   (4,054,637)
                                     -----------   -----------   -----------   ----------    ----------
                                                                                                       
    Earnings before minority                                                                           
     interests and income taxes        6,149,129    11,633,467     6,789,338    5,245,357     4,267,643
                                                                                                       
Minority interests in earnings of                                                                      
 consolidated entities                   623,507     1,502,547     1,275,737      705,342        21,730
                                     -----------   -----------   -----------   ----------    ----------
                                                                                                       
      Earnings before income taxes     5,525,622    10,130,920     5,513,601    4,540,015     4,245,913
                                     -----------   -----------   -----------   ----------    ----------
                                                                                                       
Income tax expense (benefit):                                                                          
 Federal                                  19,148             -             -            -         2,333 
 Current state                           114,250       138,815        55,681       62,726       127,910
 Deferred state                          (26,107)      288,060      (144,073)     (39,325)       46,004 
                                     -----------   -----------   -----------   ----------    ----------
                                                                                                        
                                         107,291       426,875       (88,392)      23,401       176,247
                                     -----------   -----------   -----------   ----------    ----------
                                                                                                       
      Net earnings                  $  5,418,331     9,704,045     5,601,993    4,516,614     4,069,666
                                     ===========   ===========   ===========   ==========    ==========
</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE>    10
                           HOLLYWOOD MARINE, INC.
                           AND AFFILIATED ENTITIES

               Consolidated Statements of Stockholder's Equity

                Years ended December 31, 1996, 1997 and 1998
                 and six months ended June 30, 1999 and 1998

<TABLE>
<CAPTION>
                                Common stock      Additional                                Total
                              ------------------   paid-in     Retained     Treasury    stockholder's
                               Shares    Amount    capital     earnings       stock        equity    
                              --------  --------  ----------  -----------  -----------  -------------
<S>                           <C>       <C>       <C>         <C>          <C>          <C>        
                                                                                                     
Balance, December 31, 1995    100,343   $11,667   359,768     40,051,685   10,412,941    30,010,179

Net earnings                        -         -         -      5,418,331            -     5,418,331

Dividends                           -         -         -     (9,165,854)           -    (9,165,854)

Advance to stockholder, net         -         -         -              -     (866,522)      866,522

Treasury stock acquired due                                                                        
 to exercise of put           (17,009)        -         -              -   14,010,797   (14,010,797)
                             --------    ------   -------     ----------   ----------   -----------
                                               
Balance, December 31, 1996     83,334    11,667   359,768     36,304,162   23,557,216    13,118,381

Net earnings                        -         -         -      9,704,045            -     9,704,045

Dividends                           -         -         -     (2,586,525)           -    (2,586,525)
                              -------    ------   -------     ----------   ----------   -----------

Balance, December 31, 1997     83,334    11,667   359,768     43,421,682   23,557,216    20,235,901

Net earnings                        -         -         -      5,601,993            -     5,601,993

Dividends                           -         -         -     (4,846,275)           -    (4,846,275)
                              -------    ------   -------     ----------   ----------   -----------

Balance, December 31, 1998     83,334    11,667   359,768     44,177,400   23,557,216    20,991,619

Net earnings (unaudited)            -         -         -      4,069,666            -     4,069,666

Dividends (unaudited)               -         -         -       (443,845)           -      (443,845)
                              -------    ------   -------     ----------   ----------   -----------

Balance, June 30, 1999                                                                             
 (unaudited)                   83,334   $11,667   359,768     47,803,221   23,557,216    24,617,440
                              =======    ======   =======     ==========   ==========   ===========
</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE>    11
                           HOLLYWOOD MARINE, INC.
                           AND AFFILIATED ENTITIES
                                      
                    Consolidated Statements of Cash Flows
                                      
                Years ended December 31, 1996, 1997 and 1998
                 and six months ended June 30, 1999 and 1998

<TABLE>
<CAPTION>
                                                       Year ended December 31,               Six months ended June 30,
                                                  -----------------------------------------  -------------------------
                                                     1996           1997          1998          1998         1999     
                                                  -------------  ------------  ------------  -----------  ------------
                                                                                                    (unaudited)  
<S>                                               <C>            <C>           <C>           <C>           <C>         
Net earnings                                      $  5,418,331     9,704,045     5,601,993    4,516,614     4,069,666 
Adjustments to reconcile net earnings to net                                                                              
 cash provided by operating activities:                                                                                
  Depreciation and amortization                     12,229,311    12,683,202    13,117,190    6,427,976     6,651,276
  Minority interests in earnings                       623,507     1,502,547     1,275,737      671,342        21,730
  Deferred income taxes                                (26,107)      288,060      (144,073)     (39,325)       46,004
  Gain on disposal of assets, net                      (87,446)   (2,213,731)      (43,856)      (7,639)      (25,888)
  Decrease (increase) in assets:                                                                          
    Accounts receivable, trade                         402,997    (2,713,437)   (1,115,292)  (3,150,759)      223,169
    Other receivables                                   45,628      (296,521)      257,020      441,727        36,490
    Equipment inventory                                (99,606)     (125,188)     (361,955)    (155,249)     (109,700)
    Prepaid expenses and other current assets           86,665       (73,423)      218,147     (107,855)     (317,089)
  Increase (decrease) in liabilities:                                                                     
    Accounts payable, trade                         (1,646,192)    5,013,161        11,766   (1,923,984)   (4,261,729)
    Accrued expenses                                   (66,210)   (1,267,576)    2,096,757    1,864,118       (81,328)
    Other deferred credits                           1,455,286      (366,404)   (1,974,879)    (479,626)   (1,195,158)
                                                   -----------    ----------   -----------   ----------    ----------
                                                                                                          
      Net cash provided by operating activities     18,336,164    22,134,735    18,938,555    8,057,340     5,057,443
                                                   -----------    ----------   -----------   ----------    ---------- 
</TABLE>
                                                        
                                                                     (Continued)

<PAGE>    12
                           HOLLYWOOD MARINE, INC.                            
                           AND AFFILIATED ENTITIES                      
                                                                          
                    Consolidated Statements of Cash Flows                     
                                                                              
                Years ended December 31, 1996, 1997 and 1998                   
                 and six months ended June 30, 1999 and 1998                    

<TABLE>                                                                    
<CAPTION>                                                                                                  
                                                              Year ended December 31,         Six months ended June 30,
                                                  -----------------------------------------  -------------------------
                                                      1996           1997          1998          1998          1999   
                                                  ------------   ------------  ------------  -----------   -----------
<S>                                               <C>            <C>           <C>           <C>           <C>         
Cash flows from (used in) investing activities:                                                                       
  Purchases of property and equipment               (8,246,487)  (17,566,843)  (19,071,579)  (9,718,388)   (9,540,760)
  Proceeds from sales of property and equipment        173,327       459,570       105,280       24,767       299,295
  Proceeds from sales of investments                         -     2,240,979             -            -             -
  Net decrease (increase) in other assets             (816,084)      405,395      (431,588)     644,380       362,440
                                                   -----------   -----------   -----------   ----------    ----------
                                                                                                       
      Net cash used in investing activities         (8,889,244)  (14,460,899)  (19,397,887)  (9,049,241)   (8,879,025)
                                                   -----------   -----------   -----------   ----------    ----------
Cash flows from (used in) financing activities:                                                                      
  Net increase in revolving lines of credit          1,250,000     2,475,000     4,300,000   10,250,000     3,850,000
  Proceeds from long-term debt                      30,000,000             -    10,000,000            -     3,900,000
  Repayments of long-term debt                     (16,168,546)   (6,124,527)   (5,935,730)  (3,510,805)   (2,821,843)
  Return of investment to minority interests        (2,258,209)   (1,437,237)   (2,993,164)  (1,865,635)     (710,875)
  Dividends paid                                    (9,165,854)   (2,586,525)   (4,846,275)  (3,881,665)     (443,845)
  Repurchase of stock subject to put               (14,010,797)            -             -            -             -
  Advance to stockholder, net                          866,522             -             -            -             -
                                                   -----------    ----------    ----------   ----------    ----------
                                                                                                                     
      Net cash provided by (used in)                                                                                  
        financing activities                        (9,486,884)   (7,673,289)      524,831      991,895     3,773,437
                                                   -----------    ----------    ----------   ----------    ----------
                                                                                                                     
Net increase in cash and cash equivalents              (39,964)          547        65,499           (6)      (48,145)
                                                                                                                     
Cash and cash equivalents, beginning of year           110,874        70,910        71,457       71,457       136,956
                                                   -----------    ----------     ---------   ----------    ----------
                                                                                                                     
Cash and cash equivalents, end of year            $     70,910        71,457       136,956       71,451        88,811
                                                   ===========    ==========      ========   ==========    ==========
</TABLE>
    
See supplemental cash flow information in note 12.

See accompanying notes to consolidated financial statements.
                                                                              

<PAGE>    13                                                           
                           HOLLYWOOD MARINE, INC.          
                           AND AFFILIATED ENTITIES


                 Notes to Consolidated Financial Statements

                         December 31, 1997 and 1998
                              and June 30, 1999


(1)  Summary of Significant Accounting Policies and Business Activity

     (a)  PRINCIPLES OF CONSOLIDATION

          The  consolidated  financial statements  include  the  accounts  of
          Hollywood  Marine,  Inc., Hollywood Acquisition Company,  a  wholly
          owned   subsidiary,   and  affiliated  limited  partnerships   (the
          Company),  all of which provide marine transportation  services  in
          the  Gulf  Coast  area to customers in the refining,  chemical  and
          petrochemical industries.  The affiliated limited partnerships (the
          affiliated  entities) over which the Company has effective  control
          and  whose activities are an integral part of the operations of the
          Company  have  been  consolidated.   All  significant  intercompany
          balances and transactions have been eliminated in consolidation.

     (b)  MINORITY INTERESTS

          Hollywood  Marine,  Inc.  has a majority interest  in  and  is  the
          general  partner for the affiliated entities.  In situations  where
          losses  applicable  to  the  minority interest  in  the  affiliated
          entities  exceed the limited partners' equity capital, such  excess
          and  any  further  loss  attributable to the minority  interest  is
          charged  against the Company's interest in the affiliated entities.
          If   future  earnings  materialize  in  the  respective  affiliated
          entities, the Company's interest would be credited to the extent of
          such losses previously absorbed.

     (c)  VALUATION OF INVESTMENTS

          Investments  in  debt and equity securities are  stated  at  quoted
          market  value. Unrealized gains and losses on investments that  are
          available  for sale are recorded as a separate component of  equity
          and  reported  as  an element of other comprehensive  income.   The
          Company adopted Statement of Financial Accounting Standards No. 130
          in  1998  which establishes standards for reporting and display  of
          other  comprehensive income and its components in  a  full  set  of
          financial  statements.  The adoption had no effect on the financial
          statements.  Realized gains and losses are recognized as  incurred.
          Certificates  of  deposit  are valued  based  on  yields  currently
          available  on  comparable  interests.   Purchases  and   sales   of
          securities are recorded on a trade date basis.

                                                                  (Continued)

<PAGE>    14
                           HOLLYWOOD MARINE, INC.
                           AND AFFILIATED ENTITIES

                 Notes to Consolidated Financial Statements

                         December 31, 1997 and 1998
                              and June 30, 1999


     (d)  CASH EQUIVALENTS

          Cash  equivalents consist of short-term, highly liquid investments,
          primarily Treasury bills, with an original maturity of three months
          or less.
     
     (e)  CONCENTRATIONS OF CREDIT RISK

          Financial  instruments  which potentially subject  the  Company  to
          concentrations   of  credit  risk  are  primarily  trade   accounts
          receivables.  The Company's marine transportation customers include
          the  major  oil refiners and petrochemical companies.  Credit  risk
          with  respect  to  these trade receivables is generally  considered
          minimal because of the credit history of such companies as well  as
          the  Company  having  procedures in effect to  monitor  the  credit
          worthiness of customers.

     (f)  FAIR VALUE OF FINANCIAL INSTRUMENTS

          Cash, accounts receivable, accounts payable and accrued liabilities
          approximate  fair  value due to the short-term  maturity  of  these
          financial  instruments.   The  fair value  of  the  Company's  debt
          instruments  and  interest rate swaps are more fully  described  in
          note 3, long-term debt.

     (g)  PROPERTY AND EQUIPMENT

          The  Company computes depreciation of property and equipment  using
          the  straight-line method over the following estimated useful lives
          or periods:

               Buildings and improvements              7-32 years
               Marine equipment                        5-25 years
               Furniture                                3-5 years
               Automobiles and other equipment         3-10 years

                                                                  (Continued)

<PAGE>    15
                           HOLLYWOOD MARINE, INC.
                           AND AFFILIATED ENTITIES

                 Notes to Consolidated Financial Statements

                         December 31, 1997 and 1998
                              and June 30, 1999


          The  Company capitalizes expenditures which extend the useful life,
          increase  the  capacity  or improve the capability  of  the  marine
          equipment.   All other maintenance and repair costs  are  expensed.
          During  1996,  1997 and 1998, the Company capitalized approximately
          $3,316,000,  $2,295,000  and $6,632,000,  respectively,  for  these
          expenditures.   Marine equipment is evaluated for  impairment  when
          economic  circumstances  indicate that  the  carrying  value  of  a
          certain  type  of vessel may not be recoverable.  Marine  equipment
          included  approximately $526,000 and $1,858,000 related  to  barges
          and  boats  under  construction at  December  31,  1997  and  1998,
          respectively.

     (h)  INCOME TAXES

          In   1991,  the  Company's  corporate  tax  status  changed  to   S
          Corporation.   As a result, the Company's earnings and  losses  are
          taxable  or  deductible,  under federal  income  tax  law,  to  the
          individual  stockholders of the Company.  For state  tax  purposes,
          however, certain states do not recognize the tax status granted  to
          the  S Corporation under the federal tax law.  Accordingly, to  the
          extent  that  the  basis  of  assets and  liabilities  differs  for
          financial  and  tax purposes, the Company records a  provision  for
          deferred state income taxes.  The Company calculates deferred state
          income  taxes  using  the asset and liability method.   Under  this
          method, deferred tax assets and liabilities are recognized for  the
          future  tax  consequences attributable to differences  between  the
          financial  statement  carrying  amounts  of  existing  assets   and
          liabilities and their respective tax bases.  The impact of a change
          in state income tax rates is recognized in the year of enactment.

     (i)  REVENUE

          The  Company uses a voyage accounting method of revenue recognition
          which allocates voyage revenue and expense between periods based on
          the percent of the voyage completed during the period.

     (j)  INTERNALLY DEVELOPED COMPUTER SOFTWARE

          Effective  January 1, 1998, the Company adopted AICPA Statement  of
          Position  98-1 "Accounting  for  the  Costs  of  Computer  Software
          Developed  or   Obtained  for  Internal   Use",   which   specifies
          capitalization  requirements  for internal  use  software.   During
          1998,   approximately  $990,000  of  internal  use   software   was
          capitalized.   Such amounts prior to 1998 were previously  expensed
          as incurred.

                                                                  (Continued)

<PAGE>    16
                           HOLLYWOOD MARINE, INC.
                           AND AFFILIATED ENTITIES

                 Notes to Consolidated Financial Statements

                         December 31, 1997 and 1998
                              and June 30, 1999


     (k)  USE OF ESTIMATES

          Preparation  of  financial statements in conformity with  generally
          accepted  accounting principles requires the use  of  a  number  of
          assumptions  and  estimates by management.   Actual  results  could
          differ from these estimates.

     (l)  INTERIM FINANCIAL STATEMENTS

          The   accompanying  unaudited  financial  statements  reflect   all
          adjustments, which are, in the opinion of management, of  a  normal
          and  recurring nature and necessary for a fair presentation of  the
          interim  financial position, results of operations and cash  flows,
          as  of  and  for the six months ended June 30, 1999 and 1998.   The
          results  of  operations for the six-month interim periods  are  not
          necessarily  indicative  of results of operations  for  the  entire
          year.

     (m)  EARNINGS PER SHARE

          Earnings per share information is not provided because it is not  a
          meaningful presentation for the intended purpose of these financial
          statements.

     (n)  ADOPTION OF NEW ACCOUNTING STANDARDS

          The FASB  issued SFAS  No. 130,  "Reporting  Comprehensive  Income" 
          (SFAS  No.  130)  in  June 1997,  which  establishes  standards for  
          reporting and display of comprehensive income and its components in  
          a full set of financial statements.  Comprehensive income  includes
          all changes in a company's equity,  except  those  resulting   from
          investments by owners and distributions to owners, including  among
          other   things,   foreign  currency  translation  adjustments   and
          unrealized  gains  and  losses  on  available-for-sale  securities.
          Effective  January 1, 1998, the Company adopted SFAS No. 130  which
          had no impact on the 1998 financial statement.

                                                                  (Continued)

<PAGE>    17
                           HOLLYWOOD MARINE, INC.
                           AND AFFILIATED ENTITIES

                 Notes to Consolidated Financial Statements

                         December 31, 1997 and 1998
                              and June 30, 1999


          The FASB issued  SFAS No. 131, "Disclosures about  Segments  of  an
          Enterprise and Related Information" (SFAS No. 131), in  June  1997,
          which   establishes  standards  for  reporting  information   about
          operating segments in annual financial statements and requires that
          enterprises report selected information about operating segments in
          interim  reports  issued to shareholders.  Effective  December  31,
          1998,  the  Company adopted SFAS No. 131.  The Company operates  in
          only one segment - the marine transportation business.

          The FASB issued SFAS No. 132, "Employees' Disclosures about Pension
          and  Other Postretirement Benefits" (SFAS No. 132) in February 1998,
          which  revised  employer's  disclosures  about  pension  and  other
          postretirement  benefit plans.  SFAS No. 132  did  not  change  the
          measurement   or  recognition  of  those  plans.    The   statement
          standardized  the  disclosure requirements for  pension  and  other
          postretirement  benefits  to  the  extent  practicable,   requiring
          additional  information on changes in the benefit  obligations  and
          fair  value of plan assets that will facilitate financial  analysis
          and  eliminate certain disclosures.  Effective December  31,  1998,
          the Company adopted SFAS No. 132, restating all previously reported
          benefit  plan  disclosures  to  conform  with  the  new  disclosure
          requirements.

(2)  INVESTMENTS

     Included in gain on disposal of assets are realized gains on investments
     totaling $1,989,000 in 1997.  All marketable securities were sold during
     1997.

                                                                  (Continued)

<PAGE>    18
                           HOLLYWOOD MARINE, INC.
                           AND AFFILIATED ENTITIES

                 Notes to Consolidated Financial Statements

                         December 31, 1997 and 1998
                              and June 30, 1999


(3)  LONG-TERM DEBT

     A summary of long-term debt at December 31, 1997 and 1998 follows:


<TABLE>
<CAPTION>
                                                                  1997        1998
                                                              -----------  ----------
<S>                                                           <C>          <C>
     Notes payable collateralized by certain marine 
       equipment:                                                
         Installment note payable to bank, due 2001,
           with interest at LIBOR + 1.125%                    $ 8,833,331   8,166,663
         Installment notes payable to banks, due                 
           through 2003, with interest at rates of                
           LIBOR + 1.50% to LIBOR + 1.75%                      25,647,688  32,246,096
         Various notes payable to financial                      
           institutions, due through 2005, with                   
           interest at varying rates of 10.05% to                 
           10.50%                                               5,233,693   3,366,223
         Revolving lines of credit with banks,                   
           limitation of $22,500,000, interest                    
           payable quarterly at LIBOR + 1.50%,                    
           payment due in 1999 and 2000                         8,000,000  18,500,000
         Revolving line of credit with a bank,              
           limitation of $11,000,000, interest 
           payable quarterly at prime or 
           LIBOR + 1.50%, due April 2000;                   
           collateralized by certain accounts receivable        6,450,000     250,000
                                                               ----------  ----------
                                                               54,164,712  62,528,982
         Subordinated notes payable to financial 
           institutions, due 1/3 in 2001 with the 
           balance due in 2003, with interest at 10.77%        30,000,000  30,000,000
                                                               ----------  ----------
                                                                           
                      Total long-term debt                     84,164,712  92,528,982
         
         Less current installments of long-term debt            5,969,531   5,673,332
                                                               ----------  ----------
                                                                           
                      Long-term debt, excluding current                    
                       installments                           $78,195,181  86,855,650
                                                               ==========  ==========
</TABLE>

                                                                    (Continued)
  

<PAGE>    19
                           HOLLYWOOD MARINE, INC.
                           AND AFFILIATED ENTITIES

                 Notes to Consolidated Financial Statements

                         December 31, 1997 and 1998
                              and June 30, 1999


     Substantially all of the Company's marine equipment and receivables were
     pledged as collateral as of December 31, 1998.  The prime rate was 7.75%
     and  LIBOR  was  4.94% at December 31, 1998.  The Company  believes  the
     carrying   amount  of  long-term  debt  approximates   fair   value   at
     December  31,  1998.   The  Company's debt  agreements  contain  certain
     restrictive covenants.  At December 31, 1998, the Company's subordinated
     notes  payable restrict the Company's ability to incur new  indebtedness
     until certain financial thresholds are met.

     During  1995, the Company entered into an interest rate swap to fix  the
     interest rate on some of its floating rate debt.  The agreement provides
     that, rather than using a ninety day LIBOR rate base in calculating  the
     interest rate, a fixed rate base of 7.08% will be used on $20,000,000 of
     floating rate debt for three years.  A second layer of $20,000,000  will
     use  a  fixed rate base of 7.28% for five years.  At December 31,  1998,
     based   on  the  quoted  market  price  as  provided  by  the  financial
     institution  which  is the counterparty to the swap, the  Company  could
     purchase  a swap that would cancel the effects of the existing swap  for
     $540,705.

     The  aggregate payments due on long-term debt in each of the  next  five
     years are as follows:

                         Year ending                   
                         December 31,                    Amount
                         ------------                  -----------
                             1999                      $ 5,673,332
                             2000                       23,710,678
                             2001                       29,447,536
                             2002                        6,084,283
                             2003                       26,798,043
                         Thereafter                        815,110
                                                        ----------
                                                       $92,528,982
                                                        ==========

     Debt  payments  scheduled  for  1999 have  been  excluded  from  current
     maturities as the Company has the intent and ability to refinance  these
     amounts under existing lines of credit on a long term basis.

(4)  INCOME TAXES

     Although the Company's corporate tax status changed to S Corporation  in
     1991,  the  Company remains subject to federal income taxes on "built-in
     gains"  as a result of the change in tax status.  The Company recognized
     no  built-in  gains  taxes in 1997 or 1998. Management  believes  future
     taxes  on  built-in  gains,  if  any,  will  not  be  material  to   the
     consolidated financial statements of the Company.

                                                                  (Continued)

<PAGE>    20
                           HOLLYWOOD MARINE, INC.
                           AND AFFILIATED ENTITIES

                 Notes to Consolidated Financial Statements

                         December 31, 1997 and 1998
                              and June 30, 1999


     The tax effects of the principal temporary differences that give rise to
     deferred  tax assets and liabilities at December 31, 1997 and  1998  are
     approximately as follows:
     

<TABLE>
<CAPTION>
                                                              1997        1998
                                                           ----------   ---------
<S>                                                        <C>          <C>    
          Deferred state income tax assets:                                     
            Financial statement deferred compensation                           
              accruals                                     $  134,000     105,000
            Financial statement insurance accruals            249,000     144,000
            Difference between book and tax basis of                            
              minority interest                               120,000      86,000
            Other                                              10,000       3,000
                                                            ---------   ---------
                                                              513,000     338,000
                                                            ---------   ---------
                                                                        
          Deferred state income tax liabilities -                               
            depreciation                                    1,920,000   1,601,000
                                                            ---------   ---------
                                                           $1,407,000   1,263,000
                                                            =========   =========
</TABLE>


     Management  believes it is more likely than not that sufficient  taxable
     income will be generated in future years to fully utilize the deductible
     temporary  differences comprising deferred tax assets  at  December  31,
     1998 and, accordingly, has not recorded a valuation allowance.  In 1998,
     the Company revised its estimated state effective tax rate resulting  in
     a realization of deferred income taxes in the amount of $307,000.

     The  tax basis of the Company's net assets is approximately  $31,000,000
     less than net book value as of December 31, 1998.

(5)  MINORITY INTEREST
     
     During  1998,  the  Company purchased some of  the  limited  partnership
     interests in several affiliated entities for a total purchase  price  of
     approximately  $5,875,000.  The excess of the purchase  price  over  the
     book  value  of the limited partnership interests has been  recorded  as
     marine equipment, but not in excess of fair value.

                                                                  (Continued)

<PAGE>    21
                           HOLLYWOOD MARINE, INC.
                           AND AFFILIATED ENTITIES

                 Notes to Consolidated Financial Statements

                         December 31, 1997 and 1998
                              and June 30, 1999
                                      

(6)  STOCKHOLDER'S EQUITY

     The  Company  has  authorized 300,000 shares of $.10  par  value  common
     stock.

     Certain stockholders were given the right, a put option, to require  the
     Company  to  purchase their shares of common stock at a mutually  agreed
     upon  price, or, if such price cannot be mutually agreed upon, at a fair
     market value.  The Company purchased the remaining 17,009 shares subject
     to  this  option  in two separate transactions in 1996 for  a  total  of
     approximately $14,011,000.

     During 1995, the Company advanced $1,000,000 to these stockholders, with
     the  loan  subject to interest at prime and due on or before  March  15,
     1998.   During 1995, $133,478 was repaid leaving a balance  of  $866,522
     which  was  recorded  as  a  reduction  of  stockholders'  equity.   The
     remaining balance was repaid during 1996.

(7)  PENSION PLAN

     On   January  1,  1998,  the  Company  adopted  Statement  of  Financial
     Accounting Standards No. 132, "Employers' Disclosures about Pension  and
     Other  Post  Retirement  Benefits".   This  statement  revises  required
     disclosures for pension and other post retirement benefits, but does not
     change the method of accounting for such plans.

     The  Company  has a non-contributory defined benefit pension  plan  (the
     Plan)  covering substantially all of its employees.  Plan  benefits  are
     based on the participants' years of service and compensation.

                                                                  (Continued)

<PAGE>    22
                           HOLLYWOOD MARINE, INC.
                           AND AFFILIATED ENTITIES

                 Notes to Consolidated Financial Statements

                         December 31, 1997 and 1998
                              and June 30, 1999


     The  Company  also  provides, through nonqualified  plans,  supplemental
     pension  payments in excess of qualified plan limits imposed by  Federal
     tax law.  These plans cover officers and certain key employees and serve
     to  restore  the  combined  pension amount to original  benefit  levels.
     These  plans are unfunded apart from the general assets of the  Company.
     The  pension  benefit obligation and pension expense under  these  plans
     follow:
      

<TABLE>
<CAPTION>
                                                       Fiscal year
             Change in projected          --------------------------------------
              benefit obligation              1996        1997         1998     
     -----------------------------------  ------------  -----------  -----------
<S>                                       <C>           <C>          <C>       
     Projected benefit obligation at                                           
       January 1                          $16,785,430   19,373,468   21,479,627
     Service cost                           1,132,191    1,180,085    1,364,911
     Interest cost                          1,282,281    1,429,895    1,652,736
     Plan amendments                                -            -            -
     Actuarial loss (gain)                    501,102     (101,387)   2,748,520
     Benefits paid                           (327,536)    (402,434)    (411,572)
                                           ----------   ----------   ----------
                                                                                                         
          Benefit obligation at                                                
            December 31                   $19,373,468   21,479,627   26,834,222
                                           ==========   ==========   ==========


                                                       Fiscal year
                                          --------------------------------------
            Change in plan assets             1996         1997         1998    
     -----------------------------------  ------------  -----------  -----------
     Fair value of plan assets at                                               
       January 1                          $11,934,700   13,826,583   17,789,935
     Actual return on plan assets           1,068,419    2,345,786    2,606,137
     Employer contribution                  1,151,000    2,020,000    2,015,500
     Benefits paid                           (327,536)    (402,434)    (411,572)
                                           ----------   ----------   ----------
          Fair value of plan assets at                                         
            December 31                   $13,826,583   17,789,935   22,000,000
                                           ==========   ==========   ==========
</TABLE>

                                                                     (Continued)

<PAGE>    23
                           HOLLYWOOD MARINE, INC.
                           AND AFFILIATED ENTITIES

                 Notes to Consolidated Financial Statements

                         December 31, 1997 and 1998
                              and June 30, 1999


<TABLE>
<CAPTION>
                                                      Fiscal year
                                         --------------------------------------
      Reconciliation of Funded Status        1996          1997         1998    
    -----------------------------------  ------------  -----------  -----------
<S>                                      <C>           <C>          <C>        
    Funded status at December 31         $(5,546,885)  (3,689,692)  (4,834,222)
    Unrecognized (gain)/loss               2,349,795      926,237    2,475,645
    Unrecognized prior service cost        3,162,381    2,757,504    2,352,627
    Unrecognized transition                                                   
      (asset)/obligation                     (37,704)           -            -
                                          ----------   ----------   ----------
                                                                              
        Net amount recognized at                                              
          December 31                    $   (72,413)      (5,951)      (5,950)
                                          ==========   ==========   ==========
                                                                              
    Prepaid benefit cost                 $   810,725    1,351,345    1,870,125
    Accrued benefit liability             (1,238,314)  (1,441,764)  (1,903,719)
    Intangible asset                         355,176       84,468       27,644
                                          ----------   ----------   ----------
                                                                              
        Net amount recognized            $   (72,413)      (5,951)      (5,950)
                                          ==========   ==========   ==========
                                                                              
                                                      Fiscal year         
                                         --------------------------------------
          Plan Obligations                   1996          1997         1998       
    -----------------------------------  ------------  -----------  -----------
    Projected benefit obligation at                                            
      December 31                        $19,373,468   21,479,627   26,834,222
    Accumulated benefit obligation at                                         
      December 31                         13,703,030   15,463,008   19,021,221
                                                                                
                                                      Fiscal year         
                                         --------------------------------------
         Net Periodic Pension Cost           1996          1997         1998        
    -----------------------------------  ------------  -----------  -----------
    Service cost                         $ 1,132,191    1,180,085    1,364,911
    Interest cost                          1,282,281    1,429,895    1,652,736
    Expected return on plan assets          (943,729)  (1,090,477)  (1,407,025)
    Amortization of prior service cost       404,877      404,877      404,877
    Amortization of transition                                                
     (asset)/obligation                      (75,100)     (37,704)           -
    Recognized loss/(gain)                   104,772       66,862            -
                                          ----------   ----------   ----------
                                                                              
        Net periodic benefit cost        $ 1,905,292    1,953,538    2,015,499
                                          ==========   ==========    =========
</TABLE>


                                                                  (Continued)

<PAGE>    24
                           HOLLYWOOD MARINE, INC.
                           AND AFFILIATED ENTITIES

                 Notes to Consolidated Financial Statements

                         December 31, 1997 and 1998
                              and June 30, 1999


                                                        Fiscal year
                                              ----------------------------
             Actuarial assumptions             1996        1997       1998
     -------------------------------------    ------      -----      -----
                                                                              
     Discount rate                             7.50%      7.50%      7.00%
     Expected return on plan assets            8.00       8.00       8.00
     Average rate of compensation increase     5.00       5.00       5.00

     The  Company's  funding policy for the plans is to  fund  at  least  the
     minimum  annual  contribution required by applicable regulations.   Plan
     assets  consist  of  fixed  income  investments  and  marketable  equity
     securities.  There is a reasonable possibility that discount  rates  can
     change which could materially affect the benefit obligations and prepaid
     pension cost.

     The  Company  sponsors a 401(k) benefit plan covering substantially  all
     employees.   These  plans  provide  for  employer  contributions   based
     primarily  on employee participation. The total expense under the  plans
     was   $344,000,   $543,000  and  $666,000  in  1996,  1997   and   1998,
     respectively.

(8)  COMMITMENTS AND CONTINGENCIES

     LEASES

     The  Company rents office and warehouse space, land, and equipment under
     non-cancelable  operating leases.  Future minimum lease  payments  under
     such leases as of December 31, 1998 were approximately as follows:

                         Year ending                   
                         December 31,                    Amount
                         ------------                  -----------
                             1999                      $ 1,982,000
                             2000                        1,787,000
                             2001                        1,638,000
                             2002                        1,324,000
                             2003                        1,344,000
                          Thereafter                     3,247,000
                                                        ----------
                                                       $11,322,000
                                                        ==========

     Total  rental  expense  was  approximately  $1,993,000,  $2,418,000  and
     $2,221,000 in 1996, 1997 and 1998, respectively.

                                                                  (Continued)

<PAGE>    25
                           HOLLYWOOD MARINE, INC.
                           AND AFFILIATED ENTITIES

                 Notes to Consolidated Financial Statements

                         December 31, 1997 and 1998
                              and June 30, 1999


     CONTINGENCIES

     Weather can be a major factor in the day-to-day operations of the marine
     transportation business.  Adverse weather conditions, such as fog in the
     winter  and spring months, can impair the operating efficiencies of  the
     fleet.  Shipments of products can be significantly delayed or  postponed
     by   weather  conditions,  which  are  totally  beyond  the  control  of
     management.   River  conditions  are  also  factors  which  impair   the
     efficiency  of  the  fleet  and can result  in  delays,  diversions  and
     limitations on night passages, horsepower requirements and size of tows.
     Additionally,  much  of the inland waterway system is  controlled  by  a
     series  of  locks  and dams designed to provide flood control,  maintain
     pool  levels  of  water in certain areas of the country  and  facilitate
     navigation on the inland river system. Maintenance and operations of the
     navigable  inland  waterway  infrastructure  is  a  government  function
     handled  by  the  Corps  of  Engineers with costs  shared  by  industry.
     Significant  changes  in  governmental policies or  appropriations  with
     respect  to  maintenance  and  operations of  the  infrastructure  could
     adversely affect the Company.

     The  marine  transportation business is subject to  regulations  by  the
     United  States  Coast  Guard and federal and state  laws.   The  Company
     operates  in  markets  subject to the Jones  Act,  a  federal  law  that
     restricts domestic marine transportation to vessels built and registered
     in  the  United  States.  The Company believes that  additional  safety,
     environmental and occupational health regulations may be imposed on  the
     marine  industry.  The Company believes that is currently  operating  to
     standards at least the equal of such anticipated additional regulations.
     However,  there  can  be no assurance that any such new  regulations  or
     requirements,  or any discharge of pollutants by the Company,  will  not
     have an adverse effect on the Company.

     LITIGATION

     The  Company is involved in various claims and legal actions arising  in
     the  ordinary  conduct of business.  In the opinion of  management,  the
     disposition of these matters will not have a material adverse effect  on
     the Company's consolidated financial position, results of operations  or
     liquidity.

(9)  MAJOR CUSTOMER

     No  one  customer  represented more than 10% of the Company's  sales  in
     1996, 1997 or 1998.

                                                                  (Continued)

<PAGE>    26
                           HOLLYWOOD MARINE, INC.
                           AND AFFILIATED ENTITIES

                 Notes to Consolidated Financial Statements

                         December 31, 1997 and 1998
                              and June 30, 1999



(10) SUPPLEMENTAL CASH FLOW INFORMATION

     The Company paid approximately $7,142,000, $7,936,000 and $8,101,000 for
     interest  and $187,000, $311,000 and $100,000 for state income taxes  in
     1996, 1997 and 1998, respectively.

<PAGE>    27

I
TEM 7    FINANCIAL STATEMENTS AND EXHIBITS

   (b)    Pro Forma Financial Information

<PAGE>    28

                              KIRBY CORPORATION
                   UNAUDITED PRO FORMA CONDENSED COMBINED
                            FINANCIAL STATEMENTS
                                      
      The  following  table sets forth summary unaudited pro forma  condensed
combined  financial  statements which are presented to  give  effect  to  the
merger.  The information was prepared based on the following assumptions:

     *    The merger will be accounted for pursuant to the purchase method of
          accounting   in  accordance  with  generally  accepted   accounting
          principles.

     *    The  statements of earnings assume that the merger was  consummated
          on  January 1, 1998.  The balance sheet assumes that the merger was
          consummated on June 30, 1999.

     *    The   expected  cost  savings  through  the  consolidation  of  the
          corporate  headquarters of the two companies,  the  elimination  of
          duplicate  shoreside  staffs and expenses, and  improved  operating
          efficiencies within the marine transportation operations, which are
          estimated  to  be at least $10 million, are excluded from  the  pro
          forma combined financial statements.  A significant portion of  the
          $10 million of savings is expected to be realized in the year ended
          December  31, 2000 and substantially all of the amount is  expected
          to be realized in the year ended December 31, 2001.

      The unaudited pro forma condensed combined financial statements are not
necessarily indicative of the results of operations or the financial position
which would have occurred had the merger been consummated at January 1, 1998,
nor  are  they  necessarily  indicative of future results  of  operations  or
financial  position.   The unaudited pro forma condensed  combined  financial
statements  should  be  read in conjunction with the historical  consolidated
financial  statements of Kirby, incorporated by reference in  this  document,
and  the historical consolidated financial statements of Hollywood, presented
in this document.   Certain reclassifications  have been  made to Hollywood's
historical financial statements to reflect  Kirby's presentation of financial
information.

<PAGE>    29
                              KIRBY CORPORATION
            UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
                                JUNE 30, 1999
                               (In thousands)

<TABLE>
<CAPTION>
                                                 Historical                  Pro Forma
                                            --------------------   ----------------------------
                                              Kirby     Hollywood  Adjustments         Combined
                                            --------    ---------  -----------        ---------
<S>                                         <C>         <C>        <C>           <C>  <C>
Current assets:                                                            
 Cash and cash equivalents                  $     882   $     89                      $     971
 Available-for-sale securities                 17,378                                    17,378
 Accounts receivable, net                      67,070     20,119                         87,189
 Inventory - finished goods                    13,323                                    13,323
 Other current assets                           7,481      2,488                          9,969
                                             --------    -------       -------         --------
  Total current assets                        106,134     22,696                        128,830
Property - net                                252,749    121,395       131,432   (b)  
                                                                          (772)  (j)    504,804
Goodwill - net                                  5,111                  137,778   (a)    142,889
Other assets                                   15,476      3,841           775   (d)  
                                                                          (697)  (i)  
                                                                          (407)  (k)  
                                                                         2,396   (h)     21,384
                                             --------    -------       -------         --------
                                            $ 379,470   $147,932      $270,505        $ 797,907
                                             ========    =======       =======         ========
Current liabilities:                                                       
 Current portion of long-term debt          $   5,333   $  5,534      $ (5,534)  (d)  $   5,333
 Accounts payable and accrued liabilities      65,040     15,492         3,225   (e)     83,757
                                             --------    -------       -------         --------
  Total current liabilities                    70,373     21,026        (2,309)          89,090
Long-term debt - less current portion         122,969     91,923       136,771   (d)  
                                                                         2,285   (k)  
                                                                         4,233   (l)    358,181
Deferred income taxes                          40,605      1,309        63,349   (c)    105,263
Other long-term liabilities                     6,165      9,056         1,208   (i)     16,429
                                             --------    -------       -------         --------
  Total liabilities                           240,112    123,314       205,537          568,963
                                             --------    -------       -------         --------
Stockholders' equity:                                                      
 Common stock                                   3,091         12           (12)  (g)      3,091
 Additional paid-in capital                   158,892        360          (360)  (g)  
                                                                        16,487   (f)    175,379
 Accumulated other comprehensive income          (241)                                     (241)
 Retained earnings                            157,657     47,803       (43,570)  (g)  
                                                                        (4,233)  (l)    157,657
 Treasury stock                              (180,041)   (23,557)       23,557   (g)  
                                                                        73,099   (f)   (106,942)
                                             --------    -------       -------         --------
  Total stockholders' equity                  139,358     24,618        64,968          228,944
                                             --------    -------       -------         --------
                                            $ 379,470   $147,932      $270,505        $ 797,907
                                             ========    =======       =======         ========
See accompanying notes to unaudited pro forma condensed combined financial statements.
</TABLE>


<PAGE>    30
                              KIRBY CORPORATION
        UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF EARNINGS
                        YEAR ENDED DECEMBER 31, 1998
                  (In thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                Historical                Pro Forma
                                           --------------------  ---------------------------
                                             Kirby    Hollywood  Adjustments       Combined
                                           --------   --------   -----------       ---------
<S>                                        <C>        <C>        <C>          <C>  <C>
Revenues:                                                               
  Marine transportation                    $244,839   $167,335                     $412,174
  Diesel engine services                     82,241                                  82,241
  Other                                       5,175         43                        5,218
                                            -------    -------      -------         -------
                                            332,255    167,378            -         499,633
                                            -------    -------      -------         -------
Costs and expenses:                                                     
  Cost of sales and operating expenses      212,242    117,883      (10,032)  (m)   320,093
  Selling, general and administrative        39,473     19,572       (1,575)  (n)  
                                                                         93   (m)  
                                                                     (1,323)  (o)    56,240
  Taxes other than income                     7,646      4,035                       11,681
  Depreciation and amortization              27,383     13,036          556   (p)  
                                                                       (150)  (o)  
                                                                      4,592   (p)  
                                                                      2,243   (m)    47,660
  Impairment of long-lived assets             8,333                                   8,333
                                            -------    -------      -------         -------
                                            295,077    154,526       (5,596)        444,007
                                            -------    -------      -------         -------
                                                                        
     Operating income                        37,178     12,852        5,596          55,626
Equity in earnings of insurance affiliate     1,325                                   1,325
Loss on sale of insurance affiliate         (10,536)                                (10,536)
Equity in earnings of marine affiliates         946        618         (220)  (q)     1,344
Interest expense                            (11,898)    (7,956)     (15,221)  (r)  
                                                                      7,956   (s)   (27,119)
                                            -------    -------      -------         -------
     Earnings before taxes on income         17,015      5,514       (1,889)         20,640
(Provision) credit for taxes on income       (6,906)        88         (950)  (t)  
                                                                     (1,961)  (u)    (9,729)
                                            -------    -------      -------         -------
     Net earnings                          $ 10,109   $  5,602     $ (4,800)       $ 10,911
                                            =======    =======      =======         =======
Net earnings per share of common stock:                                                         
     Basic                                 $    .46                                $    .42
                                            =======                                 =======
     Diluted                               $    .46                                $    .41
                                            =======                                 =======
Common stock outstanding:                                               
     Basic                                   21,847                   4,384   (v)    26,231
     Diluted                                 22,113                   4,384   (v)    26,497

See accompanying notes to unaudited pro forma condensed combined financial statements.
</TABLE>


<PAGE>    31
                              KIRBY CORPORATION
        UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF EARNINGS
                       SIX MONTHS ENDED JUNE 30, 1999
                  (In thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                Historical                Pro Forma
                                           --------------------  ---------------------------
                                             Kirby    Hollywood  Adjustments       Combined
                                           --------   ---------  -----------       ---------
<S>                                        <C>        <C>        <C>          <C>  <C>
Revenues:                                                               
  Marine transportation                    $121,401   $81,389                      $202,790
  Diesel engine services                     41,135                                  41,135
  Other                                         381        26                           407
                                            -------    -------       ------         -------
                                                                        
                                            162,917    81,415             -         244,332
                                            -------    ------        ------         -------
                                                                        
Costs and expenses:                                                     
  Cost of sales and operating expenses      107,095    56,256        (4,501)  (m)   158,850
  Selling, general and administrative        17,900     8,398          (372)  (n)  
                                                                          -   (m)  
                                                                       (626)  (o)    25,300
  Taxes other than income                     3,689     2,041                         5,730
  Depreciation and amortization              13,509     6,604          (438)  (p)  
                                                                        (89)  (o)  
                                                                      2,296   (p)  
                                                                      1,766   (m)    23,648
                                            -------    ------        ------         -------
                                                                        
                                            142,193    73,299        (1,964)        213,528
                                            -------    ------        ------         -------
                                                                        
     Operating income                        20,724     8,116         1,964          30,804
Equity in earnings of marine affiliates       1,490       278          (111)  (q)     1,657
Interest expense                             (5,114)   (4,148)       (7,611)  (r)  
                                                                      4,148   (s)   (12,725)
                                            -------    ------        ------         -------
     Earnings before taxes on income         17,100     4,246        (1,610)         19,736
Provision for taxes on income                (6,497)     (176)         (234)  (t)  
                                                                     (1,425)  (u)    (8,332)
                                            -------    ------        ------         -------
                                                                        
     Net earnings                          $ 10,603   $ 4,070       $(3,269)       $ 11,404
                                            =======    ======        ======         =======
Net earnings per share of common stock:                                                         
     Basic                                 $    .52                                $    .46
                                            =======                                 =======
     Diluted                               $    .52                                $    .46
                                            =======                                 =======
Common stock outstanding:                                               
     Basic                                   20,230                  4,384    (v)    24,614
     Diluted                                 20,341                  4,384    (v)    24,725

See accompanying notes to unaudited pro forma condensed combined financial statements.
</TABLE>


<PAGE>    32

                              KIRBY CORPORATION
                        NOTES TO UNAUDITED PRO FORMA
                   CONDENSED COMBINED FINANCIAL STATEMENTS
                                      
     The merger will be accounted for using the purchase method of accounting
with  Kirby acquiring Hollywood.  Under this method of accounting, Kirby will
record the assets and liabilities of Hollywood at fair market value as of the
date of closing, with the remaining purchase price reflected as goodwill.

      The following notes set forth the explanations and assumptions used  in
the  preparation  of  the  unaudited pro forma condensed  combined  financial
statements.   The  pro forma adjustments are based on the  best  estimate  of
Kirby management using information currently available.

      The preliminary pro forma allocation of the purchase price paid and the
financing of the transaction are summarized as follows (in thousands):


<TABLE>
<CAPTION>
<S>                                                                  <C>
Estimated purchase price paid:                                   
                                                                 
   Common stock (4,384 shares at $20.44 per share)                    $ 89,586
   Proceeds of bank debt issued for cash portion of purchase price 
     and repayment of Hollywood's June 30, 1999 existing debt          231,712
   Estimated merger costs                                                3,500
                                                                       -------
                                                                       324,798
                                                                       -------
                                                                            
Allocated to:                                                               
   Historical book value of Hollywood's assets and liabilities              
     at June 30, 1999.                                                 122,075
   Adjust Hollywood's assets and liabilities to fair value:                 
      Property                                                         131,432
      Other assets                                                       2,067
      Accrued liabilities                                               (4,433)
      Deferred income taxes                                            (63,349)
      Assets excluded from sale pursuant to merger agreement              (772)
                                                                       -------
                                                                            
         Total allocation                                              187,020
                                                                       -------
                                                                            
Goodwill (excess purchase price over allocation to identifiable             
   assets and liabilities)                                            $137,778
                                                                       =======
</TABLE>


<PAGE>    33

     The following adjustments were made to the unaudited pro forma condensed
combined balance sheet pursuant to the purchase method of accounting:

     (a)  To record the goodwill associated with the merger.
     
     (b)  To adjust Hollywood's property to fair value.
     
     (c)  To record the pro forma deferred income tax effect of the merger.
     
     (d)  To  reflect  the  issuance of new debt, and related  debt  issuance
          costs,  to finance the cash portion of the purchase price  and  the
          estimated merger costs.
     
     (e)  To  reflect  the adjustment to the fair value for other liabilities
          and  record an accrual for estimated severance.
     
     (f)  To  record  the issuance of 4,384,000 shares of Kirby common  stock
          from  treasury stock at a price of $20.44 per share.  The price  of
          $20.44 per share was the average trading price of the stock on  the
          New  York  Stock  Exchange  during the  20 trading  day period from
          September 13, 1999 through October 8, 1999.  The average  price per
          share of common stock held in Kirby's treasury was $16.67 per share
          at October 11, 1999.
     
     (g)  To eliminate Hollywood's stockholder's equity accounts.
     
     (h)  To adjust Hollywood's equity investments to fair value.
     
     (i)  To  adjust  Hollywood's prepaid pension costs and the  supplemental
          executive  retirement  plan liability to the  excess  of  the  plan
          assets at fair value over the projected benefit obligation.

     (j)  To  adjust  Hollywood's property for items excluded from  the  sale
          pursuant to the merger agreement.
     
     (k)  To  record  the  estimated fair value of Hollywood's existing  debt
          and the write off of existing deferred debt issue costs.
     
     (l)  To  record estimated  cash distribution to Hollywood's shareholders
          prior to closing.
     
     The following adjustments were made to the unaudited pro forma condensed
combined   statements  of  earnings  pursuant  to  the  purchase  method   of
accounting:

     (m)  To  adjust  Hollywood's  historical cost  of  sales  and  operating
          expense,  depreciation  expense and minority  interest  expense  to
          conform  Hollywood's equipment capitalization  policy  to  that  of
          Kirby's.
     
     (n)  To  reflect the cancellation of Hollywood's supplemental  executive
          retirement plan and deferred compensation benefit plans which  will
          not be offered by Kirby.

<PAGE>    34

     (o)  To    adjust   Hollywood's   historical   selling,   general    and
          administrative expense and depreciation expense for items  excluded
          from sale pursuant to the merger agreement (see (j) above).
     
     (p)  To  record pro forma depreciation and amortization expense  on  the
          preliminary   purchase   price  allocation   to   depreciable   and
          amortizable assets.  Goodwill amortized over a period of  30  years
          and  property  depreciated  on the straight-line  method  over  the
          estimated   useful   lives  of  the  assets  as   follows:   marine
          transportation  equipment,  5-37  years;  buildings  and  leasehold
          improvements, 10-40 years; other equipment, 5-20 years.
     
     (q)  To  adjust  Hollywood's  historical equity in  earnings  of  marine
          affiliates for the increase in the fair value of Hollywood's equity
          investments.
     
     (r)  To  reflect  the  increase in interest expense resulting  from  the
          issuance  of  debt  for  the cash portion of  the  purchase  price,
          estimated merger costs and repayment of Hollywood's existing  debt.
          The  interest rate on the new debt of $235.2 million is assumed  to
          be  6.40%.   Debt  issue costs of $.8 million  are  assumed  to  be
          amortized over five years.
     
     (s)  To eliminate Hollywood's historical interest expense to reflect the
          repayment of Hollywood's existing debt.
     
     (t)  To adjust the income tax effect on the pro forma pretax adjustments
          after  excluding nondeductible goodwill amortization, based on  the
          applicable statutory tax rate.
     
     (u)  To  record the income tax effect at the federal statutory  rate  on
          Hollywood's historical financials.
     
     (v)  To  reflect  the  issuance of Kirby common stock  pursuant  to  the
          merger agreement.

<PAGE>    35

ITEM 7    FINANCIAL STATEMENTS AND EXHIBITS

   (c)    Exhibits

   10.1   Credit Agreement

<PAGE>    36

                             CREDIT AGREEMENT
                                     
                                   among

                            KIRBY CORPORATION,
                                     
                          THE BANKS NAMED HEREIN,

                 CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
                         as Administrative Agent,

                           BANK OF AMERICA, N.A.
                           as Syndication Agent,

                           BANK ONE, TEXAS, N.A.
                          as Documentation Agent,

                        FIRST UNION NATIONAL BANK,
                               as Co-Agent,

                  THE INDUSTRIAL BANK OF JAPAN, LIMITED,
                             NEW YORK BRANCH,
                               as Co-Agent,

                                    and

              WELLS FARGO BANK (TEXAS), NATIONAL ASSOCIATION,
                                as Co-Agent



                      BANC OF AMERICA SECURITIES LLC
                     Co-Lead Arranger and Book Manager

                           CHASE SECURITIES INC.
                             Co-Lead Arranger

                       Dated as of October 12, 1999

<PAGE>    37
                                     
                             Table of Contents

ARTICLE I  DEFINITIONS, ETC.                                               
     Section 1.01. Certain Defined Terms                                  
     Section 1.02. Accounting Terms                                       
     Section 1.03. Computation of Time Periods                            
     Section 1.04. References, Etc.                                       
     
ARTICLE II  COMMITMENTS AND TERMS OF CREDIT                                
     Section 2.01. Commitments.                                            
     Section 2.02. Borrowing Procedures; Conversions and Continuations.    
     Section 2.03. The Notes.                                              
     Section 2.04. Reduction of the Commitments.                           
     Section 2.05. Optional Prepayments                                    
     Section 2.06. Mandatory Prepayments and Repayment                     
     Section 2.07. Interest Accrual, Payment, Etc.                         
     Section 2.08. Payments and Computations.                              
     Section 2.09. Fees.                                                   
     Section 2.10. Setoff, Counterclaims and Taxes.                        
     Section 2.11. Funding Losses                                         
     Section 2.12. Change of Law.                                         
     Section 2.13. Increased Costs.                                       
     Section 2.14. Substitution of Banks.                                 
     
ARTICLE III  CONDITIONS OF CREDIT                                         
     Section 3.01. Conditions Precedent to the Initial Borrowing.         
     Section 3.02. Conditions Precedent to All Borrowings.                
     
ARTICLE IV  REPRESENTATIONS AND WARRANTIES                                
     Section 4.01. Corporate Existence; Etc.                              
     Section 4.02. Corporate Authority; Binding Obligations.              
     Section 4.03. No Conflict.                                           
     Section 4.04. No Consent.                                            
     Section 4.05. No Defaults or Violations of Law.                      
     Section 4.06. Financial Position.                                    
     Section 4.07. Litigation.                                            
     Section 4.08. Use of Proceeds.                                       
     Section 4.09. Governmental Regulation.                               
     Section 4.10. Disclosure.                                            
     Section 4.11. ERISA.                                                 
     Section 4.12. Payment of Taxes.                                      
     Section 4.13. Title and Liens.                                       
     Section 4.14. Pari Passu Ranking.                                    
     Section 4.15. Environmental Matters.                                 
     Section 4.16. Year 2000.                                             
     Section 4.17. Citizenship.                                           

<PAGE>    38

ARTICLE V  AFFIRMATIVE COVENANTS                                          
     Section 5.01. Reporting Requirements.                                
     Section 5.02. Taxes; Claims.                                         
     Section 5.03. Compliance with Laws.                                  
     Section 5.04. Insurance.                                             
     Section 5.05. Corporate Existence; Etc.                              
     Section 5.06. Inspections; Etc.                                      
     Section 5.07. Maintenance of Properties.                             
     Section 5.08. Accounting Systems; Etc.                               
     Section 5.09. Contractual Obligations.                               
     Section 5.10. Use of Loan Proceeds.                                  
     Section 5.11. Further Assurances in General.                         
     Section 5.12. Year 2000.                                             
     
ARTICLE VI  NEGATIVE COVENANTS                                            
     Section 6.01. Financial Covenants.                                   
     Section 6.02. Restrictions on Debt.                                  
     Section 6.03. Restriction on Liens.                                  
     Section 6.04. Restrictions on Negative Pledge.                       
     Section 6.05. Consolidated Subsidiaries Dispositions.                
     Section 6.06. Restrictions on Consolidated Subsidiary Distributions. 
     Section 6.07. Mergers and Acquisitions.                              
     Section 6.08. Restricted Investments.                                
     Section 6.09. Restricted Payments.                                   
     Section 6.10. Lines of Business.                                     
     Section 6.11. Transactions with Affiliates.                          
     Section 6.12. Pari Passu Liens.                                      

ARTICLE VII  DEFAULT                                                      
     Section 7.01. Events of Default.                                     
     Section 7.02. Setoff in Event of Default.                            
     Section 7.03. No Waiver; Remedies.                                   
     
ARTICLE VIII  THE ADMINISTRATIVE AGENT                                    
     Section 8.01. Authorization and Action.                              
     Section 8.02. Reliance, Etc.                                         
     Section 8.03. Chase and Affiliates.                                  
     Section 8.04. Bank Credit Decision.                                  
     Section 8.05. Indemnification.                                       
     Section 8.06. Employees of the Administrative Agent, Etc.            
     Section 8.07. Successor Administrative Agent.                        
     Section 8.08. Notice of Default.                                     
     Section 8.09. Execution of Loan Documents.                           
     Section 8.10. Syndication Agent, Documentation Agent,
                   Co-Agents, Co-Lead Arrangers and Book Manager.         

<PAGE>    39

ARTICLE IX  MISCELLANEOUS                                                 
     Section 9.01. Amendments, Etc.                                       
     Section 9.02. Participation Agreements and Assignments.              
     Section 9.03. Notices.                                               
     Section 9.04. Costs and Expenses.                                    
     Section 9.05. Successors and Assigns.                                
     Section 9.06. Independence of Covenants.                             
     Section 9.07. Survival of Representations and Warranties.            
     Section 9.08. Severability.                                          
     Section 9.09. Captions.                                              
     Section 9.10. Limitation by Law.                                     
     Section 9.11. Counterparts.                                          
     Section 9.12. Governing Law.                                         
     Section 9.13. Limitation on Interest.                                
     Section 9.14. Indemnification.                                       
     Section 9.15  Submission to Jurisdiction.                            
     Section 9.16. WAIVER OF JURY TRIAL.                                  
     Section 9.17. FINAL AGREEMENT OF THE PARTIES.                        

<PAGE>    40

Annexes
-------

Annex A        Defined Terms

Schedules
---------

Schedule 2.01  Commitments
Schedule 4.01  Consolidated Subsidiaries and Excluded Affiliates
Schedule 9.03  Lending Offices and Address for Notices

Exhibits
--------

Exhibit A      Form of Borrowing Request
Exhibit B      Form of Conversion/Continuation Notice
Exhibit C      Form of Note
Exhibit D      Form of Assignment and Acceptance

<PAGE>    41
                             CREDIT AGREEMENT

      THIS  CREDIT AGREEMENT dated as of October 12, 1999 (this "Agreement"
is  among  KIRBY  CORPORATION, a Nevada corporation (the  "Borrower"),  the
banks  named on the signature pages hereto (together with their  respective
successors and assigns in such capacity, the "Banks"), CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION, as administrative agent for the Banks (together  with
its  successors and assigns in such capacity, the "Administrative  Agent"),
BANK OF AMERICA, N.A., as syndication agent (the "Syndication Agent"), BANK
ONE, TEXAS, N.A., as documentation agent (the "Documentation Agent"), FIRST
UNION  NATIONAL  BANK, as Co-Agent, THE INDUSTRIAL BANK OF JAPAN,  LIMITED,
NEW  YORK  BRANCH,  as  Co-Agent  and WELLS FARGO  BANK  (TEXAS),  NATIONAL
ASSOCIATION, as Co-Agent.  Unless otherwise defined herein, all capitalized
terms used herein and defined in Article I are used herein as so defined.

     PRELIMINARY STATEMENT

      The  Borrower has requested that the Banks enter into this  Agreement
and  provide the Borrower with a $200,000,000 credit facility and the  Bank
Group has agreed to do so upon terms and conditions set forth herein.

      Accordingly,  in  consideration  of  the  foregoing  and  the  mutual
covenants set forth herein, the parties hereto agree as follows:

                        ARTICLE I DEFINITIONS, ETC.

      Section 1.01.  Certain Defined Terms.  Capitalized terms used in this
Agreement  and  not  otherwise defined herein  shall  have  the  respective
meanings  set  forth  in  Annex  A hereto  (such  meanings  to  be  equally
applicable to both singular and plural forms of the terms defined).

       Section   1.02.   Accounting  Terms.   All  accounting   terms   not
specifically defined herein shall be construed in accordance with generally
accepted  accounting  principles  consistent  with  those  applied  in  the
preparation of the consolidated financial statements referred to in Section
4.06.

      Section 1.03.  Computation of Time Periods.  In this Agreement in the
computation  of periods of time from a specified date to a later  specified
date,  unless  otherwise  indicated,  the  word  "from"  means  "from   and
including" and the words "to" and "until" each mean "to but excluding."

      Section  1.04.   References, Etc. 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.  All references herein to Sections, Annexes, Exhibits  and
Schedules  shall, unless the context requires a different construction,  be
deemed  to be references to the Sections of this Agreement and the Annexes,
Exhibits  and  Schedules attached hereto and made a part hereof.   In  this
Agreement,  unless a clear contrary intention appears, the word "including"
(and  with correlative meaning "include") means including, without limiting
the  generality  of any description preceding such term.  No  provision  of
this  Agreement shall be interpreted or construed against any Person solely
because that Person or its legal representative drafted such provision.

<PAGE>    42

                ARTICLE II COMMITMENTS AND TERMS OF CREDIT

      Section  2.01.  Commitments. (a) Each Bank severally agrees,  on  the
terms  and conditions hereinafter set forth, to make loans to the  Borrower
(the  "Loans") from time to time on any Business Day during the period from
the Effective Date up to, but excluding, the Revolving Termination Date, in
an  aggregate amount outstanding for such Bank not to exceed  at  any  time
such  Bank's  Commitment.   Subject to the terms  and  conditions  of  this
Agreement  until the Revolving Termination Date, the Borrower  may  borrow,
repay  pursuant  to  Section 2.07 or prepay pursuant to  Section  2.07  and
reborrow under this Section 2.01 (a).

           (b)   Each Base Rate Borrowing shall consist of Base Rate  Loans
made  on  the  same day by the Banks ratably according to their  respective
Commitment  Percentages, and Base Rate Borrowings may  be  in  any  amount.
Each  Fixed  Rate Borrowing shall be in an aggregate amount not  less  than
$1,000,000  or an integral multiple of $500,000.00 in excess  thereof,  and
shall consist of Fixed Rate Loans of the same Type made on the same day  by
the  Banks  ratably  according to their respective Commitment  Percentages.
Borrowings of more than one Type may be outstanding at the same  time,  but
the  Borrower shall not be entitled to request any Borrowing or to  Convert
Loans  comprising any Borrowing into Loans of another Type, if after giving
effect to such Borrowing or Conversion, as the case may be, any Bank  would
have  outstanding  at  any one time more than six (6)  different  Types  of
Loans.

           (c)   Notwithstanding any other term or provision hereof no Loan
shall be made if after giving effect thereto the aggregate principal amount
of Loans outstanding would exceed the Total Commitment.

      Section  2.02.   Borrowing Procedures; Conversions and Continuations.
(a)  Each Borrowing shall be made upon the written, telecopied or facsimile
transmitted request of the Borrower, given to the Administrative Agent  not
later than 10:00 a.m. (Houston time) on (i) the third Business Day prior to
the  proposed  Borrowing Date in the case of a Eurodollar  Rate  Borrowing,
(ii)  the second Business Day prior to the proposed Borrowing Date  in  the
case of an Adjusted CD Rate Borrowing or (iii) the Business Day immediately
preceding the proposed Borrowing Date in the case of a Base Rate Borrowing,
and  upon receipt the Administrative Agent shall give each other member  of
the Bank Group prompt notice of such request by telecopier, telex or cable.
Each  request for a Borrowing (a "Borrowing Request") made by the  Borrower
shall be in substantially the form of Exhibit A, specifying therein (A) the
Borrowing  Date  for such Borrowing, (B) the Type of Loans comprising  such
Borrowing, (C) the aggregate amount of such Borrowing, and (D) in the  case
of  a  Fixed  Rate Borrowing, the Interest Period for the Loans  comprising
such Borrowing.  Each Bank shall, before 11:30 a.m.  (Houston time) on  the
date  of  such Borrowing, make available for the account of its  Applicable
Lending  Office to the Administrative Agent at its address referred  to  in
Section  9.03,  in  same  day funds, such Bank's ratable  portion  of  such
Borrowing.  After the Administrative Agent's receipt of such funds and upon
fulfillment  of  the applicable conditions set forth in  Article  III,  the
Administrative Agent will make such funds available to the Borrower at  the
Administrative Agent's aforesaid address.  Each Borrowing Request shall  be
irrevocable and binding on the Borrower.

<PAGE>    43

           (b)   Unless the Administrative Agent shall have received notice
from  a  Bank  prior  to any Borrowing Date that such Bank  will  not  make
available to the Administrative Agent such Bank's ratable portion  of  such
Borrowing, the Administrative Agent may assume that such Bank has made such
portion  available  to the Administrative Agent on such Borrowing  Date  in
accordance  with  Section  2.02(a) and the  Administrative  Agent  may,  in
reliance  upon  such  assumption, make available to the  Borrower  on  such
Borrowing Date a corresponding amount.  If and to the extent that such Bank
shall not have so made such ratable portion available to the Administrative
Agent,  such  Bank  and  the  Borrower severally  agree  to  repay  to  the
Administrative  Agent  forthwith  on  demand  such  corresponding   amount,
together  with interest thereon for each day from the date such  amount  is
made available to the Borrower until the date such amount is repaid to  the
Administrative Agent at (i) in the case of the Borrower, the interest  rate
applicable at the time to the Loans comprising such Borrowing and  (ii)  in
the case of such Bank, the Federal Funds Rate.  If such Bank shall repay to
the  Administrative Agent such corresponding amount, such amount so  repaid
shall constitute such Bank's Loan as part of such Borrowing for purposes of
this Agreement.  The failure of any Bank to make the Loan to be made by  it
as  part  of  any  Borrowing  shall not  relieve  any  other  Bank  of  its
obligation,  if any, hereunder to make its Loan on such Borrowing  Date  or
any  subsequent  Borrowing Date, but no Bank shall be responsible  for  the
failure of any other Bank to make the Loan to be made by such other Bank on
the date of any Borrowing.

          (c)  The Borrower may, subject to the terms of this Agreement, on
any  Business  Day,  upon written or facsimile transmitted  notice  to  the
Administrative  Agent, given not later than 10:00 a.m.  (Houston  time)  on
(i)  the  third Business Day prior to the proposed Conversion Date  in  the
case  of a Conversion of Loans into Eurodollar Rate Loans, (ii) the  second
Business  Day  prior  to the proposed Conversion Date  in  the  case  of  a
Conversion  of Loans into Adjusted CD Rate Loans or (iii) the Business  Day
immediately  preceding  the proposed Conversion  Date  in  the  case  of  a
Conversion  of  Loans  into  Base Rate Loans, Convert  some  or  all  Loans
comprising one or more Borrowings into Loans of another Type comprising one
or  more  Borrowings, and the Administrative Agent shall promptly  transmit
the  contents  of  such notice to each other member of the  Bank  Group  by
telecopier,  telex  or cable.  Each notice of a Conversion  (a  "Conversion
Notice")  given  by  the  Borrower shall be in substantially  the  form  of
Exhibit  B, specifying therein (A) the Conversion Date for such Conversion,
(B)  the  Loans to be Converted, (C) the Type of Loans to which such  Loans
are  to  be  Converted and (D) in the case of a Conversion into Fixed  Rate
Loans,  the Interest Period for such Converted Loans.  Notwithstanding  any
other term or provision hereof, after giving effect to any such Conversion,
the  size  of  all  Borrowings  outstanding hereunder  and  the  number  of
different  Types  of  Loans  outstanding hereunder  shall  conform  to  the
requirements of Section 2.01.  In the event of any Conversion of Fixed Rate
Loans  on any day other than the last day of the Interest Period applicable
thereto, the Borrower shall be obligated to reimburse the Banks in  respect
thereof  pursuant to Section 2.11.  If the Borrower shall fail  to  give  a
timely  Conversion Notice conforming to the requirements of this  Agreement
with  respect  to  any  Fixed Rate Loans prior to  the  expiration  of  the
Interest   Period  applicable  thereto,  such  Fixed  Rate   Loans   shall,
automatically  on the last day of such Interest Period, be  Converted  into
Base Rate Loans.

<PAGE>    44

          (d)  The Borrower may, subject to the terms of this Agreement, on
any  Business  Day,  upon written or facsimile transmitted  notice  to  the
Administrative Agent, given not later than 11:00 a.m. (Houston time) on (i)
the  third Business Day prior to the proposed Continuation Date in the case
of a continuation of Eurodollar Rate Loans, or (ii) the second Business Day
prior  to  the proposed Continuation Date in the case of a continuation  of
Adjusted CD Rate Loans, elect as of the last day of the applicable Interest
Period,  to continue any Loans having Interest Periods that expire on  such
day  (or any part thereof in an amount not less than $1,000,000 or that  is
in  an integral multiple of $500,000.00 in excess thereof).  Each notice of
a  continuation (a "Continuation Notice") given by the Borrower shall be in
substantially the form of Exhibit B.

      Section  2.03.   The  Notes. The Loans made by  each  Bank  shall  be
evidenced  by a single Note issued to such Bank by the Borrower  (a)  dated
the  date  of  this Agreement (or such other date as may  be  specified  in
Section 9.02), (b) payable to the order of such Bank in a principal  amount
equal  to  such  Bank's Commitment and (c) otherwise duly completed.   Each
Loan made by a Bank to the Borrower and all payments made on account of the
principal amount thereof shall be entered by such Bank in its records or on
the schedule (or a continuation thereof) attached to the Note of such Bank,
provided,  however, that prior to any transfer of any such Note, such  Bank
shall  endorse  the  amount and maturity of any outstanding  Loans  on  the
schedule (or a continuation thereof) attached to such Note.

      Section 2.04.  Reduction of the Commitments. The Borrower shall  have
the  right, upon at least three Business Days' notice to the Administrative
Agent  to  terminate in whole or reduce ratably in part the unused portions
of  the  respective Commitments of the Banks, provided, that  each  partial
reduction  shall be in the aggregate amount of $1,000,000  or  an  integral
multiple of $1,000,000 in excess thereof.  Once reduced in accordance  with
this  Section, the Commitments may not be increased.  Any reduction of  the
Commitments  shall  be  applied to each Bank according  to  its  Commitment
Percentage.   All  accrued  commitment fees  to,  but  not  including,  the
effective  date  of any reduction or termination of Commitments,  shall  be
paid on the effective date of such reduction or termination.

      Section 2.05.  Optional Prepayments. The Borrower may, from  time  to
time  on any Business Day, upon at least one Business Day's notice  to  the
Administrative  Agent  stating the proposed date  and  aggregate  principal
amount thereof, and if such notice is given, the Borrower shall, prepay the
outstanding principal amount of the Base Rate Loans comprising part of  the
same  Borrowing  in whole or ratably in part; provided,  that  any  partial
prepayment  of  such  Base Rate Loans shall be in  an  aggregate  principal
amount of not less than $ 100,000.  The Borrower may from time to time upon
at  least  three Business Days' notice to the Administrative Agent  stating
the  proposed date and the aggregate principal amount thereof, and if  such
notice  is  given,  the  Borrower shall, prepay the  outstanding  principal
amount  of  the Fixed Rate Loans comprising part of the same  Borrowing  in
whole  or  ratably in part; provided, that any partial prepayment  of  such
Fixed Rate Loans shall be in an aggregate principal amount of not less than
$2,000,000 or an integral multiple of $1,000,000 in excess thereof.  During
the Availability Period, the Borrower may apply any optional prepayment  of
the  Loans to such  portions of  the Loans as the Borrower may elect.  Each

<PAGE>    45

prepayment of Fixed Rate Loans shall be accompanied by a payment of accrued
interest  to  the date of such prepayment on the principal amount  prepaid.
Each  prepayment  in  full of Base Rate Loans shall  be  accompanied  by  a
payment of accrued interest to the date of such prepayment on the principal
amount  prepaid.  In the event of any prepayment of a Fixed Rate Loan,  the
Borrower  shall  be  obligated to reimburse the Banks  in  respect  thereof
pursuant  to  Section 2.11.  Prepayments of Loans made after the  Revolving
Termination Date shall be applied in inverse order of maturity.

      Section  2.06.  Mandatory Prepayments and Repayment.   (a)  Mandatory
Prepayments.   (i) In the event the Borrower issues any Debt  of  the  type
described in clause (a) or (b) of the definition of Debt set forth in  this
Agreement  (whether  public or privately placed)  during  the  Availability
Period,  the Total Commitment shall be reduced by the principal  amount  of
such Debt and the Borrower shall make the prepayment required by Subsection
(a)(ii)  of  this  Section  2.06.   If  such  Debt  is  issued  after   the
Availability Period, the Borrower shall make a prepayment of the  principal
of  the Loans in an amount equal to the principal amount of such Debt,  and
such   prepayment  shall  be  made  on  the  date  such  Debt  is   issued.
Notwithstanding the foregoing, no prepayment shall be required pursuant  to
this Section 2.06(a) to the extent that the proceeds of such Debt are used,
at  the  time  of  issuance  thereof, for the purpose  of  consummating  an
Acquisition that is permitted under this Agreement.

                (ii)  The Borrower shall from time to time prepay the Loans
in  such  amounts as shall be necessary so that at all times the  aggregate
amount of Loans outstanding shall not be in excess of the Total Commitment.
Any  prepayment required by this Section 2.06(a) shall be due on  the  date
such prepayment accrues pursuant to the preceding sentence.

                (iii)      Each  prepayment of Fixed Rate  Loans  shall  be
accompanied by a payment of accrued interest to the date of such prepayment
on  the  principal amount prepaid.  Each prepayment in full  of  Base  Rate
Loans shall be accompanied by a payment of accrued interest to the date  of
such  prepayment  on  the principal amount prepaid. In  the  event  of  any
prepayment  of  a  Fixed  Rate Loan, the Borrower  shall  be  obligated  to
reimburse  the Banks in respect thereof pursuant to Section  2.11.   Unless
otherwise specified by the Borrower, all mandatory prepayments of the Loans
shall  first be applied to Base Rate Borrowings, and second to  such  Fixed
Rate  Borrowings  as the Administrative Agent may select.   Prepayments  of
Loans made after the Revolving Termination Date shall be applied in inverse
order of maturity.

           (b)   Repayment of Loans.  The principal balance  of  the  Loans
outstanding  on  the Revolving Termination Date shall  be  payable  by  the
Borrower  in  quarterly principal payments of $12,500,000.00 each  together
with  accrued interest thereon, with the first such payment due on the date
that  is two years after the Revolving Termination Date and each subsequent
payment due every three (3) months thereafter.  The outstanding Loans shall
be  fully  due and payable on the Maturity Date, together with  any  unpaid
interest accrued thereon.

<PAGE>    46

      Section  2.07.   Interest Accrual, Payment, Etc. (a) Subject  to  the
provisions  of Section 9.13, the Borrower shall pay interest on the  unpaid
principal amount of each Loan made by each Bank from the date of such  Loan
until  such principal amount shall be paid in full, at the rates per  annum
specified as follows:

               (i)  if such Loan is a Base Rate Loan, a rate per annum
     equal  to the lesser of (A) the Highest Lawful Rate and  (B)  the
     Base  Rate in effect from time to time plus the Applicable Amount
     in  effect from time to time, and unpaid accrued interest on such
     Loans  shall be paid on each Interest Payment Date and  the  date
     such Base Rate Loan shall be paid in full;

                (ii) if such Loan is an Adjusted CD Rate Loan, a  rate
     per  annum equal at all times during the Interest Period for such
     Loan to the lesser of (A) the Highest Lawful Rate and (B) the sum
     of  the  Adjusted  CD  Rate  for such Interest  Period  plus  the
     Applicable Amount in effect as of the first day of such  Interest
     Period and unpaid accrued interest on such Loans shall be payable
     on each Interest Payment Date; or

                (iii)      if such Loan is a Eurodollar Rate  Loan,  a
     rate per annum equal at all times during the Interest Period  for
     such  Loan to the lesser of (A) the Highest Lawful Rate  and  (B)
     the  sum of the Eurodollar Rate for such Interest Period plus the
     Applicable Amount in effect as of the first day of such  Interest
     Period,  and  unpaid  accrued interest on  such  Loans  shall  be
     payable on each Interest Payment Date.

Any  amount  of  principal or, to the extent permitted by  applicable  law,
interest  which  is  not  paid when due (whether  at  stated  maturity,  by
acceleration or otherwise) shall bear interest from the date on which  such
amount  is due until such amount is paid in full, at a rate per annum  (the
"Default Rate") equal at all times to the lesser of (A) the Highest  Lawful
Rate  and  (B)  the  Base  Rate in effect from  time  to  time  during  the
applicable  period plus the Applicable Amount in effect from time  to  time
during such period plus two percent (2%), payable on demand.

           (b)  The Borrower shall pay to each Bank additional interest  on
the unpaid principal amount of each Eurodollar Rate Loan of such Bank, from
the  date of such Loan until such principal amount is paid in full,  at  an
interest  rate  per annum equal at all times to the remainder  obtained  by
subtracting (i) the Eurodollar Rate for the Interest Period for  such  Loan
from  (ii)  the  rate  obtained  by dividing  such  Eurodollar  Rate  by  a
percentage  equal to 100% minus the Eurodollar Rate Reserve  Percentage  of
such  Bank for such Interest Period, payable on each date on which interest
is  payable on such Loan.  Such additional interest shall be calculated  by
such Bank and notified to the Borrower (together with a copy of such Bank's
calculations) through the Administrative Agent.

           (c)   (i)  The Administrative Agent shall give prompt notice  to
the  Borrower  and  each other member of the Bank Group of  the  applicable
interest  rate  determined by the Administrative Agent hereunder  for  each
Borrowing.  Each determination by the Administrative Agent (or, in the case
of  Section  2.07(b),  by a Bank) of an interest rate  hereunder  shall  be
conclusive and binding for all purposes, absent manifest error.

<PAGE>    47

                (ii)  If  one  or  more Banks holding aggregate  Commitment
Percentages  of at least fifty percent (50%) shall, at least  one  Business
Day  before the date of any requested Eurodollar Rate Borrowing, notify the
Administrative Agent that the Eurodollar Rate applicable to such  Borrowing
will  not  adequately reflect the cost to such Banks of making, funding  or
maintaining their respective Eurodollar Rate Loans for such Borrowing,  the
right of the Borrower to select Eurodollar Rate Loans for such Borrowing or
any  subsequent Borrowing shall be suspended until the Administrative Agent
shall notify the Borrower and each other member of the Bank Group that  the
circumstances  causing  such  suspension no longer  exist,  and  each  Loan
comprising  such  Borrowing  shall  be  made  as,  or  Converted  into,  as
applicable, a Base Rate Loan.

               (iii)     If the Administrative Agent is unable to determine
the  Adjusted  CD  Rate in accordance with the definition thereof  for  any
Adjusted  CD Rate Borrowing or the Eurodollar Rate in accordance  with  the
definition   thereof   for   any  Eurodollar  Rate   Borrowing,   (A)   the
Administrative  Agent shall forthwith notify the Borrower  and  each  other
member  of  the Bank Group that the interest rate cannot be determined  for
such  Adjusted CD Rate Borrowing or Eurodollar Rate Borrowing, as the  case
may  be,  (B) each Adjusted CD Rate Borrowing or Eurodollar Rate Borrowing,
as  the  case may be, previously requested but not yet funded or Converted,
as  applicable,  will  automatically be  made  as  or  Converted  into,  as
applicable, a Base Rate Borrowing, and (C) the obligation of the  Banks  to
make  Adjusted CD Rate Loans or Eurodollar Rate Loans, as the case may  be,
shall be suspended until the Administrative Agent shall notify the Borrower
and each other member of the Bank Group that the circumstances causing such
suspension no longer exist.

      Section  2.08.   Payments  and  Computations.  (a)  All  payments  of
principal, interest, commitment fees and other amounts payable to the Banks
under  the  Loan  Documents shall be made in Dollars to the  Administrative
Agent  at its address specified in Section 9.03 for the account of each  of
the  Banks,  in  immediately  available funds not  later  than  12:00  Noon
(Houston  time) on the date when due.  Upon receipt of such  payments,  the
Administrative  Agent  will  promptly cause to be  distributed  like  funds
relating to the payment of principal or interest or commitment fees ratably
(other  than  amounts  payable pursuant to Section 2.07(b),  Section  2.10,
Section 2.11, Section 2.12 or Section 2.13) to the Banks for the account of
their respective Applicable Lending Offices, and like funds relating to the
payment  of  any  other amount payable to any Bank to  such  Bank  for  the
account  of  its Applicable Lending Office, in each case to be  applied  in
accordance   with  the  terms  of  this  Agreement.   In  the   event   the
Administrative  Agent  receives any such payment in  immediately  available
funds  not  later than 12:00 Noon (Houston time) on any Business  Day,  but
fails  to  distribute to any Bank entitled thereto like funds  relating  to
such  payment  by  the  close of business on such Business  Day,  then  the
Administrative  Agent shall pay such Bank interest thereon at  the  Federal
Funds  Rate  for  each day from the date such amount  is  received  by  the
Administrative Agent until the date distributed to such Bank.

<PAGE>    48

           (b)   Unless the Administrative Agent shall have received notice
from  the  Borrower prior to the date on which any payment is  due  to  the
Banks under the Loan Documents that the Borrower will not make such payment
in  full,  the Administrative Agent may assume that the Borrower  has  made
such  payment  in  full to the Administrative Agent on such  date  and  the
Administrative  Agent may, in reliance upon such assumption,  cause  to  be
distributed  to each Bank on such due date an amount equal  to  the  amount
then  due such Bank.  If and to the extent the Borrower shall not have made
such  payment in full to the Administrative Agent each Bank shall repay  to
the  Administrative  Agent forthwith on demand such amount  distributed  to
such  Bank, together with interest thereon for each day from the date  such
amount  is  distributed to such Bank until the date such Bank  repays  such
amount to the Administrative Agent at the Federal Funds Rate.

          (c)  All computations of interest based on the Base Rate shall be
made on the basis of a year of 365 or 366 days, as the case may be, and all
computations  of  interest based on the Adjusted CD  Rate,  the  Eurodollar
Rate,  the  Federal Funds Rate, or Section 2.07(b), as well  as  commitment
fees and utilization fees, shall be made on the basis of a year of 360 days
(unless  use  of  a 360 day year would cause the interest  contracted  for,
charged  or received hereunder to exceed the Highest Lawful Rate, in  which
case  such computations shall be made on the basis of a year of 365 or  366
days,  as  the  case may be), in each case for the actual  number  of  days
(including  the  first  day but excluding the last day)  occurring  in  the
period for which such interest or commitment fees are payable.

           (d)   Whenever  any  payment under the Loan Documents  shall  be
stated to be due on a day other than a Business Day, such payment shall  be
made  on the next succeeding Business Day, and such extension of time shall
in  such  case  be included in the computation of payment  of  interest  or
commitment  fee, as the case may be; provided, however, if  such  extension
would cause payment of interest on or principal of Eurodollar Rate Loans to
be made in the next following calendar month, such payment shall be made on
the next preceding Business Day.

           (e)   If  any Bank shall obtain any payment (whether  voluntary,
involuntary, through the exercise of any right of setoff, or otherwise)  on
account  of  the Loans made by it (other than pursuant to Section  2.07(b),
Section 2.10, Section 2.11, Section 2.12 or Section 2.13) in excess of  its
ratable  share  of  payments on account of the Loans obtained  by  all  the
Banks,  such  Bank  shall  forthwith purchase from  the  other  Banks  such
participations in the Loans made by such other Banks as shall be  necessary
to cause such purchasing Bank to share the excess payment ratably with each
of  them.   The Borrower agrees that any Bank so purchasing a participation
from  another  Bank pursuant to this Section 2.08(e) may,  to  the  fullest
extent  permitted  by law and this Agreement, exercise all  its  rights  of
payment  (including the right of setoff) with respect to such participation
as  fully as if such Bank were the direct creditor of the Borrower  in  the
amount of such participation.

<PAGE>    49

      Section 2.09.  Fees. (a) The Borrower shall pay to the Administrative
Agent  for  the  account of each Bank pro rata according to its  Commitment
Percentage, a commitment fee equal to the Applicable Amount on the  average
unused  portion of the Commitment of such Bank as in effect  from  time  to
time  for  the period from the date hereof to, but excluding, the Revolving
Termination  Date.   Accrued commitment fees shall be due  and  payable  in
arrears  on  each Quarterly Payment Date in each year, on the date  of  any
reduction  or  termination  of the Commitment  of  such  Bank  and  on  the
Revolving Termination Date, and shall be computed for the period commencing
with  the day to which such fee was last paid (or, in the case of the first
commitment  fee payment date, for the period commencing with and  including
the date hereof to the date such fee is due and payable).

           (b)  The Borrower shall pay to the Administrative Agent for  the
account  of  each Bank pro rata, according to its Commitment Percentage,  a
utilization fee equal to the utilization fee set forth in the definition of
Applicable Amount times the outstanding Loans, for each day during the term
hereof  that the outstanding Loans exceed 33% of the Total Commitment.   If
there  is  any  change  in the Applicable Amount during  any  quarter,  the
outstanding Loans shall be computed and multiplied by the Applicable Amount
separately for each period that such Applicable Amount was in effect during
such quarter.  Such utilization fee shall accrue from the Effective Date to
the  Maturity Date and shall be due and payable quarterly in arrears on the
last Business Day of each calendar quarter and on the Maturity Date.

           (c)   Subject  to the provisions of Section 9.13,  the  Borrower
shall  pay  to the Administrative Agent the fees specified in that  certain
letter agreement dated October 1, 1999 between the Administrative Agent and
the  Borrower concerning the same (the "Administrative Agent's Fee Letter")
and  shall pay to the Syndication Agent the fees specified in that  certain
letter agreement dated September 9, 1999 between the Syndication Agent  and
the  Borrower (the "Syndication Agent's Fee Letter").  All payments by  the
Borrower  of  the  fees  payable  to  the  Administrative  Agent  and   the
Syndication Agent pursuant to the Administrative Agent's Fee Letter and the
Syndication  Agent's Fee Letter, respectively, shall  be  made  in  Dollars
directly  to  the  Administrative Agent or to  the  Syndication  Agent,  as
applicable  at  its  address  specified  in  Section  9.03  in  immediately
available  funds not later than 12:00 Noon (Houston time) on the date  when
due.

      Section  2.10.  Setoff, Counterclaims and Taxes. (a) All payments  of
principal,  interest,  expenses, reimbursements,  compensation,  commitment
fees,  letter of credit fees, arrangement fees or administration  fees  and
any  other  amount from time to time due under any Loan Document  shall  be
made  by the Borrower without setoff or counterclaim and shall be made free
and clear of and without deduction for any and all present or future taxes,
levies,  imposts, deductions, charges or withholdings, and all  liabilities
with  respect thereto, excluding, in the case of each member  of  the  Bank
Group, taxes imposed on its income (or a taxable base in the nature of  net
income,  or,  in  lieu of taxes so imposed or measured,  on  overall  gross
receipts  and  capital),  and  franchise  taxes  imposed  on  it,  by   the
jurisdiction  under  the laws of which such member of  the  Bank  Group  is
organized  or  any political subdivision thereof and, in the case  of  each
Bank,  taxes imposed on its income, and franchise taxes imposed on  it,  by
the  jurisdiction of such Bank's Applicable Lending Office or any political
subdivision   thereof  (all  such  non-excluded  taxes,  levies,   imposts,
deductions,  charges,   withholdings  and  liabilities  being  hereinafter

<PAGE>    50

referred  to  as  "Taxes").  If the Borrower shall be required  by  law  to
deduct  any  Taxes  from or in respect of any sum payable  under  any  Loan
Document  to  any  member of the Bank Group, (i) the sum payable  shall  be
increased  as may be necessary so that after making all required deductions
(including  deductions  applicable to additional sums  payable  under  this
Section 2.10) such member of the Bank Group receives an amount equal to the
sum  it  would  have received had no such deductions been  made,  (ii)  the
Borrower  shall make such deductions and (iii) the Borrower shall  pay  the
full  amount deducted to the relevant taxation authority or other authority
in  accordance with applicable law; provided that the Borrower shall not be
required to pay any increased amount on account of Taxes to the extent that
any  such  Bank shall not have furnished the Borrower with such  forms,  or
shall  not have taken such other action, as reasonably may be available  to
it  under  applicable tax laws and any applicable tax treaty to  obtain  an
exemption from, or reduction of, such Taxes.

           (b)   In  addition, the Borrower agrees to pay  any  present  or
future  stamp  or documentary taxes or any other excise or property  taxes,
charges or similar levies which arise from any payment made under any  Loan
Document  or from the execution, delivery or registration of, or  otherwise
with  respect  to,  any Loan Document (hereinafter referred  to  as  "Other
Taxes").

           (c)   The Borrower will indemnify each member of the Bank  Group
for the full amount of Taxes or Other Taxes (including, without limitation,
any  Taxes  or  Other Taxes imposed by any jurisdiction on amounts  payable
under  this  Section 2.10) paid by such member of the Bank  Group  (whether
paid  on its own behalf or on behalf of any other member of the Bank Group)
and  any  liability  (including penalties, interest and  expenses)  arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes
were  correctly or legally asserted.  This indemnification  shall  be  made
within  30  days from the date such member of the Bank Group makes  written
demand therefor.

           (d)  Within 30 days after the date of any payment of Taxes,  the
Borrower  will furnish to the Administrative Agent, at its address referred
to  in  Section  9.03,  the  original or a  certified  copy  of  a  receipt
evidencing  payment thereof.  If no Taxes are payable  in  respect  of  any
payment   made   under  any  Loan  Document,  upon  the  request   of   the
Administrative  Agent,  the  Borrower will furnish  to  the  Administrative
Agent, at its address referred to in Section 9.03, a certificate from  each
appropriate  taxing authority, or an opinion of counsel acceptable  to  the
Administrative  Agent, in either case stating that such payment  is  exempt
from or not subject to Taxes.

           (e)  Without prejudice to the survival of any other agreement of
the  Borrower  hereunder, the agreements and obligations  of  the  Borrower
contained  in this Section 2.10 shall survive the payment in  full  of  the
Loans  and  all  other amounts owing under the other Loan  Documents.   The
provisions of this Section 2.10 are in all respects subject to Section 9.13
hereof.

<PAGE>    51

           (f)   Each  Bank  represents and warrants to the  Administrative
Agent,  the Administrative Agent and the Borrower that such Bank is  either
(i)  a  corporation organized under the laws of the United States, a  state
thereof or the District of Columbia, or (ii) entitled to complete exemption
from  United  States  withholding tax imposed on or  with  respect  to  any
payments,  including fees, to be made to it pursuant to this Agreement  and
the  other  Loan  Documents  (x) under an applicable  provision  of  a  tax
convention  or treaty to which the United States is a party or (y)  because
it  is  acting through a branch, agency or office in the United States  and
any payment to be received by it hereunder is effectively connected with  a
trade  or  business in the United States.  Upon becoming a  party  to  this
Agreement  (whether by assignment or as an original signatory hereto),  and
in  any  event,  from  time to time upon the request of the  Administrative
Agent or the Borrower, each Bank which is not a corporation organized under
the  laws  of  the  United States or any state thereof or the  District  of
Columbia  shall deliver to the Administrative Agent and the  Borrower  such
forms,  certificates  or  other instruments  as  may  be  required  by  the
Administrative  Agent in order to establish that such Bank is  entitled  to
complete exemption from United States withholding taxes imposed on or  with
respect to any payments, including fees, to be made to such Bank under this
Agreement  and the other Loan Documents.  Each Bank also agrees to  deliver
to  the Borrower, the Administrative Agent such other supplemental forms as
may  at  any time be required as a result of the passage of time or changes
in  applicable law or regulation in order to confirm or maintain in  effect
its  entitlement  to exemption from U.S.  withholding tax on  any  payments
hereunder;  provided, that the circumstances of the Bank  at  the  relevant
time  and applicable laws permit it to do so.  If a Bank determines,  as  a
result of any change in either (1) applicable law, regulation or treaty, or
in  any official application thereof or (2) its circumstances, that  it  is
unable  to  submit any form or certificate that it is obligated  to  submit
pursuant  to  this Section 2.10(f), or that it is required to  withdraw  or
cancel  any  such  form or certificate  previously   submitted,   it  shall
promptly  notify  the Borrower, the Administrative Agent such fact.   If  a
Bank  is  organized  under the laws of a jurisdiction  outside  the  United
States,  and  the Borrower and the Administrative Agent have  not  received
forms,  certificates or other instruments indicating to their  satisfaction
that  all  payments to be made to such Bank, hereunder are not  subject  to
United  States  withholding tax or the Administrative Agent  otherwise  has
reason  to believe that such Bank is subject to U.S. withholding  tax,  the
Borrower  shall  withhold  taxes  from  such  payments  at  the  applicable
statutory  rate.  Each Bank shall indemnify and hold the Borrower  and  the
Administrative  Agent  harmless from any United  States  taxes,  penalties,
interest and other expenses, costs and losses incurred or payable  by  them
as  a  result  of  either (A) such Bank's failure to  submit  any  form  or
certificate that it is required to provide pursuant to this Section 2.10(f)
or  (B)  reliance by the Borrower or the Administrative Agent on  any  such
form  or certificate which such Bank has provided to them pursuant to  this
Section 2.10(f).

          (g)  Any Bank claiming any additional amounts payable pursuant to
this  Section 2.10 shall use reasonable efforts (consistent with legal  and
regulatory  restrictions) to file any certificate or document requested  by
the Borrower or to change the jurisdiction of its Applicable Lending Office
if such a filing or change would avoid the need for or reduce the amount of
any  such additional amounts which may thereafter accrue and would not,  in
the  sole determination of such Bank, be otherwise disadvantageous to  such
Bank.

<PAGE>    52

      Section  2.11.   Funding Losses.  The Borrower shall  indemnify  each
member of the Bank Group against any loss or reasonable expense (including,
but not limited to, any loss or reasonable expense sustained or incurred or
to  be  sustained or incurred in liquidating or reemploying  deposits  from
third  parties acquired to effect or maintain such Loan or any part thereof
as  a  Fixed  Rate  Loan)  which such Person may  sustain  or  incur  as  a
consequence  of (a) any failure by the Borrower to fulfill on the  date  of
any Borrowing hereunder the applicable conditions set forth in Article III,
(b)  any  failure by the Borrower to borrow hereunder or to  Convert  Loans
hereunder after a Borrowing Request or Conversion Notice, respectively, has
been  given, (c) any payment, prepayment or Conversion of a Fixed Rate Loan
required or permitted by any other provisions of this Agreement, including,
without  limitation, payments made due to the acceleration of the  maturity
of  the  Loans pursuant to Section 7.01, or otherwise made on a date  other
than the last day of the applicable Interest Period, (d) any default in the
payment  or  prepayment of the principal amount of any  Loan  or  any  part
thereof  or interest accrued thereon, as and when due and payable  (at  the
due  date  thereof,  by  notice of prepayment  or  otherwise)  or  (e)  the
occurrence  of an Event of Default.  Such loss or reasonable expense  shall
include,  without  limitation, an amount equal to the excess,  if  any,  as
determined by each Bank of (i) its cost of obtaining the funds for the Loan
being paid, prepaid or Converted or not borrowed or Converted (based on the
Fixed  Rate  applicable  thereto) for the period  from  the  date  of  such
payment,  prepayment or Conversion or failure to borrow or Convert  to  the
last day of the Interest Period for such Loan (or, in the case of a failure
to  borrow  or Convert, the Interest Period for the Loan which  would  have
commenced on the date of such failure to borrow or Convert) over  (ii)  the
amount  of  interest (as estimated by such Bank) that would be realized  by
such  Bank  in reemploying the funds so paid, prepaid or Converted  or  not
borrowed  or Converted for such period or Interest Period, as the case  may
be.   A  certificate  of each member of the Bank Group  setting  forth  any
amount or amounts which such Person is entitled to receive pursuant to this
Section  2.11  shall  be delivered to the Borrower  (with  a  copy  to  the
Administrative  Agent)  and shall be conclusive, if  made  in  good  faith,
absent  manifest  error.  The Borrower shall  pay  to  the   Administrative
Agent  for the account of each such Person the amount shown as due  on  any
certificate  within 30 days after its receipt of the same.  Notwithstanding
the  foregoing,  in  no event shall any Bank be permitted  to  receive  any
compensation  hereunder  constituting interest in  excess  of  the  Highest
Lawful Rate.  Without prejudice to the survival of any other obligations of
the  Borrower hereunder, the obligations of the Borrower under this Section
2.11 shall survive the termination of this Agreement and/or the payment  or
assignment of any of the Notes.

<PAGE>    53

      Section 2.12.  Change of Law.  (a) If at any time any Bank determines
in  good faith (which determination shall be conclusive) that any change in
any   applicable   law,  rule  or  regulation  or  in  the  interpretation,
application  or  administration thereof makes it unlawful, or  any  central
bank  or other Governmental Authority asserts that it is unlawful, for such
Bank  or  its foreign branch or branches to fund or maintain any Eurodollar
Rate Loan (any of the foregoing determinations being a "Eurodollar Event"),
then, such Bank, at its option, may: (i) declare that Eurodollar Rate Loans
will  no longer be made or maintained by such Bank, whereupon the right  of
the  Borrower  to select Eurodollar Rate Loans for any Borrowing  shall  be
suspended  until such Bank shall notify the Administrative Agent  that  the
circumstances  causing  such Eurodollar Event no longer  exist;  (ii)  with
respect to any Eurodollar Rate Loans of such Bank then outstanding, require
that  all  such Eurodollar Rate Loans be Converted to Base Rate  Loans,  in
which event all such Eurodollar Rate Loans shall automatically be Converted
into  Base  Rate  Loans on the effective date of notice of such  Eurodollar
Event  and  all  payments  or  prepayments of  principal  that  would  have
otherwise been applied to repay such Converted Eurodollar Rate Loans  shall
instead  be  applied  to  repay the Base Rate  Loans  resulting  from  such
Conversion;  and/or  (iii)  with  respect  to  any  Eurodollar  Rate  Loans
requested of such Bank but not yet made as or Converted into such,  require
that  such  Eurodollar  Rate  Loans  be  made  as  or  Converted  into,  as
applicable, Base Rate Loans.

          (b)  Upon the occurrence of any Eurodollar Event, and at any time
thereafter so long as such Eurodollar Event shall continue, such  Bank  may
exercise  its  aforesaid option by giving written  notice  thereof  to  the
Administrative  Agent and the Borrower, such notice to  be  effective  upon
receipt  thereof  by the Borrower.  Any Conversion of any  Eurodollar  Rate
Loan which is required under this Section 2.12 shall be made, together with
accrued  and  unpaid interest and all other amounts payable  to  such  Bank
under  this  Agreement  with  respect to such  Converted  Loan  (including,
without  limitation, amounts payable pursuant to Section 2.11  hereof),  on
the date stated in the notice to the Borrower referred to above.

      Section  2.13.   Increased Costs.  (a) If,  due  to  either  (i)  the
introduction  of or any change in or in the interpretation of  any  law  or
regulation or (ii) the compliance with any guideline issued or request made
after  the  Effective  Date  by  any central  bank  or  other  Governmental
Authority  (whether  or not having the force of law), there  shall  be  any
increase in the cost to any Bank of agreeing to make or making, funding  or
maintaining  Adjusted  CD Rate Loans or Eurodollar  Rate  Loans,  then  the
Borrower  shall  from  time to time, subject to the provisions  of  Section
9.13,  pay  to  the  Administrative Agent for  the  account  of  such  Bank
additional  amounts sufficient to compensate such Bank for  such  increased
cost upon demand by such Bank.

           (b)   If  any Bank shall have determined in good faith that  any
law,  rule, regulation or guideline adopted pursuant to or arising  out  of
the  July  1988  report of the Basle Committee on Banking  Regulations  and
Supervisory  Practices  entitled  "International  Convergence  of   Capital
Measurement  and Capital Standards" and becoming applicable  to  such  Bank
after the Effective Date, or that the adoption after the Effective Date  of
any  applicable  law,  rule,  regulation  or  guideline  regarding  capital
adequacy, or any change in any of the foregoing or in the interpretation or

<PAGE>    54

administration thereof by any central bank or other Governmental  Authority
charged with the interpretation or administration thereof, or compliance by
such  Bank  (or  any  lending  office of such Bank)  with  any  request  or
directive  regarding capital adequacy (whether or not having the  force  of
law) issued after the Effective Date by any such Governmental Authority  or
comparable  agency, affects or would affect the amount of capital  required
or  expected  to be maintained by such Bank or any corporation  controlling
such Bank and that the amount of such capital is increased by or based upon
the existence of such Bank's Commitment hereunder and other commitments  of
this  type,  then  the  Borrower shall from time to time,  subject  to  the
provisions of Section 9.13, pay to such Bank upon demand additional amounts
sufficient to compensate such Bank or such corporation in the light of such
circumstances,  to  the  extent that such Bank reasonably  determines  such
increase  in  capital  to  be allocable to the  existence  of  such  Bank's
Commitment  hereunder  and similar amounts are being charged  generally  to
other borrowers with similar commitments from such Bank.

           (c)   Each  Bank will notify the Borrower of any event occurring
after  the  date  of  this  Agreement  which  will  entitle  such  Bank  to
compensation pursuant to this Section 2.13 as promptly as practicable after
such  Bank obtains knowledge of the occurrence of such event.  In no  event
shall  the  Borrower be obligated to compensate any Bank pursuant  to  this
Section 2.13 for any amounts described in paragraphs (a) or (b) above  that
accrued  more  than one hundred eighty (180) days prior  to  the  date  the
notice described in the preceding sentence is given by the party requesting
such  compensation, but the foregoing shall in no way limit  the  right  of
such  Bank  to  request compensation for amounts accrued  during  such  one
hundred  eighty  (180) day period or any future period.  A  certificate  of
such Bank setting forth in reasonable detail (i) such amount or amounts  as
shall be necessary to compensate such Bank (or participating banks or other
entities  pursuant  to  Section  9.02) as  specified  above  and  (ii)  the
calculation  of such amount or amounts shall be delivered to  the  Borrower
and  shall be conclusive absent manifest error.  The Borrower shall pay  to
such  Bank  the  amount shown as due on any such certificate within  thirty
(30) days after its receipt of the same.  The failure of any Bank to demand
compensation  for any increased costs or reduction in amounts  received  or
receivable or reduction in return on capital shall not constitute a  waiver
of the right of such Bank or any other Bank, to demand compensation for any
increased costs or reduction in amounts received or receivable or reduction
in  return  on  capital.   The protection of this  Section  2.13  shall  be
available  to the Banks regardless of any possible contention of invalidity
or  inapplicability of law, regulation or condition which shall  have  been
imposed.

      Section  2.14.  Substitution of Banks. If one or more Banks  requests
compensation  pursuant  to  Section 2.13 or  declares  a  Eurodollar  Event
pursuant  to  Section  2.12 or the Borrower is required  to  deduct  United
States  withholding taxes pursuant to Section 2.10(f) from amounts  payable
to  one  or  more  Banks  under  the  Loan  Documents  (any  such  request,
declaration or withholding is herein called a "Substitution Event" and  any
such Bank is herein called an "Affected Bank") the Borrower may give notice
to  such  Affected Bank (with a copy to the Administrative Agent)  that  it
wishes to seek one or more Eligible Assignees (which may be one or more  of
the  other  Banks) to assume the Commitment of such Affected  Bank  and  to
purchase  the  Loans of such  Affected Bank and the other interests of such

<PAGE>    55

Affected   Bank   in  the  Loan  Documents  (collectively,  the   "Affected
Interests").   Each  Affected  Bank agrees to  sell  all  of  its  Affected
Interests  pursuant to Section 9.02 to any such Eligible  Assignee  for  an
amount  equal to the sum of the outstanding unpaid principal of and accrued
interest  on  the Loans of such Affected Bank and all commitment  fees  and
other  fees  and  amounts due such Affected Bank under the Loan  Documents,
calculated,  in  each  case,  to  the  date  such  Affected  Interests  are
purchased, whereupon such Affected Bank shall have no further Commitment or
other obligation to the Borrower under the Loan Documents.  Notwithstanding
the  foregoing, the Borrower may not replace any Affected Bank if  (a)  the
Bank or Banks involved in such Substitution Event have aggregate Commitment
Percentages in excess of thirty five percent (35%) or (b) the Borrower does
not seek to replace each Bank involved in such Substitution Event.

                     ARTICLE III CONDITIONS OF CREDIT
                                     
      Section  3.01.   Conditions Precedent to the Initial  Borrowing.  The
obligation  of  each Bank to make its initial Loan on the occasion  of  the
initial Borrowing hereunder is subject to the conditions precedent that the
Administrative  Agent shall have received on or before  the  date  of  such
initial  Borrowing  all  of  the following, each  dated  (unless  otherwise
indicated)  on or about  the date hereof, in form and substance  reasonably
satisfactory to the Bank Group and in such number of counterparts as may be
reasonably requested by the Administrative Agent:

           (a)   The following Loan Documents duly executed by the  Persons
indicated below:

                (i)   this Agreement executed by the Borrower and each
     member of the Bank Group,

               (ii) the Notes executed by the Borrower,

                 (iii)       the  Administrative  Agent's  Fee  Letter
     executed by the Borrower and the Administrative Agent,

               (iv) the Syndication Agent's Fee Letter executed by the
     Borrower and the Syndication Agent; and

                (v)   the  Joint Letter executed by the Borrower,  the
     Administrative Agent and the Syndication Agent.

           (b)  A certificate of a Responsible Officer and of the secretary
or  an assistant secretary of the Borrower certifying, inter alia, (i) true
and  correct copies of resolutions adopted by the Board of Directors of the
Borrower   (A)  authorizing  the  transactions  contemplated  hereby,   (B)
authorizing  officers  of  the Borrower to execute  and  deliver  the  Loan
Documents to which it is or will be a party and any related documents, (ii)
true  and  correct copies of the articles of incorporation and  bylaws  (or
other  similar charter documents) of the Borrower and (iii) the  incumbency
and  specimen  signatures  of the officers of the  Borrower  executing  any
documents on behalf of it.


<PAGE>    56

           (c)   A  certificate of a Responsible Officer  of  the  Borrower
certifying  that:  (i)  the  representations and  warranties  contained  in
Article  IV are true and correct on and as of such date, as though made  on
and  as of such date; (ii) no Default or Event of Default exists; and (iii)
there has occurred since December 31, 1998, no Material Adverse Effect with
respect to the Borrower or any Material Subsidiary.

           (d)   The  favorable, signed opinion of Jenkens &  Gilchrist,  a
Professional Corporation, special counsel to the Borrower, addressed to the
Bank  Group,  in  form and substance reasonably satisfactory  to  the  Bank
Group.

           (e)   Certificates  of appropriate public officials  as  to  the
existence  and  good standing of the Borrower in the States of  Nevada  and
Texas.

           (f)  The payment to the Bank Group of the fees due to them as of
such date under the Loan Documents, the payment to the Syndication Agent of
the  fees  due  to  it  as of such date under the Syndication  Agent's  Fee
Letter, the payment to the Administrative Agent of the fees due to it as of
such  date under the Administrative Agent's Fee Letter, and the payment  of
all  legal  fees and expenses of Haynes and Boone, LLP, special counsel  to
the Syndication Agent, in connection with the preparation of this Agreement
and the other Loan Documents and the closing of this transaction.

           (g)   Such  other  documents, certificates and opinions  as  the
Administrative Agent may reasonably request relating to this Agreement  and
the other Loan Documents.

     Section 3.02.  Conditions Precedent to All Borrowings.  The obligation
of  each  Bank to make any Loan or to continue or convert any Loan pursuant
to  Section 2.02 shall be subject to the further conditions precedent  that
(a)  in the case of the initial Borrowing, prior to or simultaneously  with
such  Borrowing,  the  Borrower shall consummate or  have  consummated  the
Hollywood   Marine   Merger,   (b)  on   the   Borrowing   Date   or   such
Conversion/Continuation  Date, as applicable, of such  Loan  the  following
statements shall be true, and the Borrower, by virtue of its delivery of  a
Borrowing Request or request for Conversion or continuation shall be deemed
to  have  certified  to the Bank Group as of such Borrowing  Date  or  such
Conversion/Continuation  Date, as applicable that (i)  the  representations
and  warranties contained in Article IV are true and correct on and  as  of
such  Borrowing  Date or such Conversion/Continuation Date, as  applicable,
both before and after giving effect to such Loan, and as though made on and
as  of  such  date,  except  to the extent that  such  representations  and
warranties  specifically refer to any earlier date and (ii) no  Default  or
Event of Default  has occurred and is continuing, or would result from such
Loan  or continuation or Conversion and (c) the Administrative Agent  shall
have    received   on   or   before   such   Borrowing   Date    or    such
Conversion/Continuation  Date,  as  applicable,   such   other   documents,
certificates   and  opinions  as the  Administrative  Agent may  reasonably
request  relating to this Agreement and the other Loan Documents,  each  in
form and substance reasonably satisfactory to the Administrative Agent.

<PAGE>    57

                 ARTICLE IV REPRESENTATIONS AND WARRANTIES
                                     
      In  order to induce the Bank Group to enter into this Agreement,  the
Borrower hereby represents and warrants to the Bank Group as follows:

     Section 4.01.  Corporate Existence; Etc. Each of the Borrower and each
of  its  Material  Subsidiaries is a corporation  duly  organized,  validly
existing  and  in good standing under the laws of the jurisdiction  of  its
incorporation, and is duly qualified or licensed to transact business as  a
foreign  corporation  and  is  in good standing  under  the  laws  of  each
jurisdiction  in  which the conduct of its operations or the  ownership  or
leasing of its properties requires such qualification or licensing,  except
where  the failure to be so qualified or licensed will not have a  Material
Adverse Effect on either the Borrower individually or the Borrower and  its
Subsidiaries  taken as a whole.  Schedule 4.01 sets forth a  complete  list
(including  the Borrower's percentage equity interest therein)  as  of  the
date  hereof  of (a) all Consolidated Subsidiaries (Part A),  and  (b)  all
Excluded Affiliates (Part B), and a complete list as of the date hereof  of
(c)  all  Consolidated Subsidiaries of Hollywood Marine, Inc. and  (d)  all
other subsidiaries of Hollywood Marine, Inc. and other Persons in which  it
owns or controls five percent (5%) or more of the equity interests.

      Section 4.02.  Corporate Authority; Binding Obligations. Each of  the
Borrower and each of its Material Subsidiaries has all requisite power  and
authority, corporate or otherwise, to conduct its business and own, operate
and  encumber  its  property.   Each  of  the  Borrower  and  each  of  its
Subsidiaries has all requisite power and authority, corporate or otherwise,
to  execute,  deliver  and perform all of its obligations  under  the  Loan
Documents  executed by, or to be executed by, such Person.  The  execution,
delivery  and  performance  of  each of the Loan  Documents  to  which  the
Borrower or any of its Subsidiaries is a party and the consummation of  the
transactions  contemplated  thereby,  have  been  duly  authorized  by  all
necessary corporate and shareholder action.  Each of the Loan Documents  to
which  the  Borrower or any of its Subsidiaries is a party  has  been  duly
executed  and  delivered by such Person, is in full force  and  effect  and
constitutes  the  legal,  valid  and binding  obligation  of  such  Person,
enforceable  against  it  in  accordance with its  terms,  except  as  such
enforceability  may  be limited by bankruptcy, insolvency,  reorganization,
moratorium  or  other similar laws affecting the enforcement of  creditor's
rights generally and general principles of equity.

     Section 4.03.  No Conflict. The execution, delivery and performance by
the Borrower or any of its Subsidiaries of each Loan Document to which such
Person  is  a  party  and  the consummation of  each  of  the  transactions
contemplated thereby do not and shall not, by the lapse of time, the giving
of  notice  or otherwise: (a) constitute a violation of any Requirement  of
Law  or  a breach of any provision contained in the articles or certificate
of  incorporation  or  bylaws of such Person, or any shareholder  agreement
pertaining  to  such  Person,  or  contained  in  any  material  agreement,
instrument  or document to which it is now a party or by which  it  or  its
properties is bound, except for such violations or breaches that  will  not
have  a Material Adverse Effect on either the Borrower individually or  the
Borrower and its Subsidiaries taken as a whole; or (b) result in or require
the  creation  or  imposition  of  any Lien  whatsoever  upon  any  of  the
properties or assets of the Borrower or any of its Subsidiaries.

<PAGE>    58

      Section  4.04.   No  Consent.  No authorization,  consent,  approval,
license,  or  exemption of or filing or registration with, any Governmental
Authority  or any other Person, was, is or will be necessary for the  valid
execution,  delivery  or  performance  by  the  Borrower  or  any  of   its
Subsidiaries  of any of the Loan Documents to which it is a party  and  the
consummation  of each of the transactions contemplated thereby  other  than
those  that  the failure to obtain, file or make will not have  a  Material
Adverse Effect on either the Borrower individually or the Borrower and  its
Subsidiaries taken as a whole.

      Section 4.05.  No Defaults or Violations of Law. No Default or  Event
of  Default   has  occurred and is continuing.  No  default  (or  event  or
circumstance occurred which, but for the passage of time or the  giving  of
notice, or both, would constitute a default) has occurred and is continuing
with  respect to any note, indenture, loan agreement, mortgage, lease, deed
or  other agreement to which the Borrower or any of its Subsidiaries  is  a
party or by which any of them or their properties is bound, except for such
defaults  that  will  not  have a Material Adverse  Effect  on  either  the
Borrower  individually  or the Borrower and its  Subsidiaries  taken  as  a
whole.  Neither the Borrower nor any of its Subsidiaries is in violation of
any  applicable Requirement of Law except for such violations that will not
have  a Material Adverse Effect on either the Borrower individually or  the
Borrower and its Subsidiaries taken as a whole.

      Section 4.06.  Financial Position. (a) The consolidated balance sheet
of  the  Borrower  and its Subsidiaries as at December 31,  1998,  and  the
related consolidated statements of income, retained earnings and cash flows
for  the  fiscal year then ended, audited by KPMG Peat Marwick, independent
public  accountants, copies of which have been furnished to the Bank Group,
fairly present the consolidated financial condition of the Borrower and its
Subsidiaries at such date and the consolidated results of their  operations
and  the  consolidated cash flows of the Borrower and its Subsidiaries  for
the  fiscal  period  ended on such date, all in accordance  with  generally
accepted accounting principles applied on a consistent basis.

          (b)  The unaudited consolidated balance sheet of the Borrower and
its Subsidiaries as at June 30, 1999 and the related unaudited consolidated
statements  of income, retained earnings and cash flows for the  six  month
period  then ended, copies of which have been furnished to the Bank  Group,
fairly present the consolidated financial condition of the Borrower and its
Subsidiaries at such date and the consolidated results of their  operations
and  the  consolidated cash flows of the Borrower and its Subsidiaries  for
the  six  month period ended on such date, all in accordance with generally
accepted  accounting principles applied on a consistent basis,  subject  to
normal year-end adjustments.

           (c)  Since December 31, 1998, there has been no material adverse
change  in  the  consolidated  financial condition  or  operations  of  the
Borrower and its Subsidiaries.

           (d)   Except as fully reflected in financial statements referred
to  in  paragraphs (a) and (b) of this Section 4.06, as of the date hereof,
there  are  no  liabilities or obligations of the Borrower or  any  of  its
Subsidiaries   of   any  nature  whatsoever  (whether  absolute,   accrued,
contingent  or otherwise and whether or not due) which, either individually
or  in aggregate, would be material to either the Borrower individually  or
the Borrower and its Subsidiaries taken as a whole.

<PAGE>    59

      Section 4.07.  Litigation. There are no actions, suits or proceedings
pending  or,  to  the  knowledge  of the Borrower,  threatened  against  or
affecting the Borrower or any of its Subsidiaries, or the properties of any
such Person, before or by any Governmental Authority or other Person, which
could  reasonably be expected to have a Material Adverse Effect  on  either
the  Borrower individually or the Borrower and its Subsidiaries taken as  a
whole.

      Section  4.08.   Use  of  Proceeds. (a) The Borrower's  uses  of  the
proceeds  of  the  Loans are, and will continue to  be,  legal  and  proper
corporate uses (duly authorized by the Borrower's board of directors),  and
such  uses  are  permitted by the terms of the Loan  Documents,  including,
without limitation, Section 5.10, and all Requirements of Law.

           (b)  Neither the Borrower nor any of its Subsidiaries is engaged
in  the  business  of  extending credit for the purpose  of  purchasing  or
carrying margin stock (within the meaning of Regulation U).  No part of the
proceeds  of any Loan will be used, directly or indirectly, (i) to purchase
or  carry any margin stock or to extend credit to others for the purpose of
purchasing  or  carrying  any  margin stock or  (ii)  for  the  purpose  of
purchasing,  carrying or trading in any securities, in  either  case  under
such  circumstances  as  to involve any member  of  the  Bank  Group  in  a
violation of Regulation U or the Borrower or any of its Subsidiaries  in  a
violation  of Regulation X.  Following the application of the  proceeds  of
each Loan, not more than 25% of the value of the assets of the Borrower, or
of  the Borrower and its Subsidiaries, which are subject to any arrangement
with  any member of the Bank Group (herein or otherwise) whereby the  right
or ability of the Borrower or its Subsidiaries to sell, pledge or otherwise
dispose of such assets is in any way restricted, will be such margin stock.

      Section 4.09.  Governmental Regulation. Neither the Borrower nor  any
of  its Subsidiaries is subject to regulation under the Interstate Commerce
Act,  as  amended, the Investment Company Act of 1940, as amended,  or  any
other  Requirement of Law such that the ability of any such Person to incur
indebtedness  is  limited  or  its ability to consummate  the  transactions
contemplated  by this Agreement, the other Loan Documents or  any  document
executed in connection therewith is impaired.

       Section  4.10.   Disclosure.  The  schedules,  documents,  exhibits,
reports,   certificates  and  other  written  statements  and   information
furnished by or on behalf of the Borrower or any of its Subsidiaries to the
Bank  Group  do not contain any material misstatement of fact, or  omit  to
state  a  material fact necessary in order to make the statements contained
therein,  in  light of the circumstances under which they  were  made,  not
misleading.   Neither  the  Borrower  nor  any  of  its  Subsidiaries   has
intentionally  withheld any fact known to it which  has  or  is  reasonably
likely   to  have  a  Material  Adverse  Effect  on  either  the   Borrower
individually or the Borrower and its Subsidiaries taken as a whole.

      Section  4.11.  ERISA. The Borrower and its ERISA Affiliates  are  in
compliance in all material respects with ERISA and all Requirements of  Law
related  thereto.  No Reportable Event has occurred and is continuing  with
respect  to any Plan.  Neither the Borrower nor any of its ERISA Affiliates
has any accumulated funding deficiency (as defined in Section 302(a)(2)  of
ERISA) under any Plan.

<PAGE>    60

      Section  4.12.   Payment of Taxes. The Borrower has  filed,  and  has
caused  each of its Material Subsidiaries to file, all federal,  state  and
local  tax  returns  and  other reports that the  Borrower  and  each  such
Material Subsidiary are required by law to file and have paid all taxes and
other similar charges that are due and payable pursuant to such returns and
reports,  except  to the extent any of the same may be  contested  in  good
faith   by   appropriate  proceedings  promptly  initiated  and  diligently
conducted, and with respect to which adequate reserves have been set  aside
on  the  books  of  such  Person  in  accordance  with  generally  accepted
accounting principles.

      Section 4.13.  Title and Liens. Each of the Borrower and its Material
Subsidiaries  has  good  and  marketable title  to  each  of  the  material
properties  and assets of such Person.  All properties of the Borrower  and
its  Material  Subsidiaries  and  such Person's  use  thereof  comply  with
applicable  zoning  and use restrictions, except where the  failure  to  so
comply will not have a Material Adverse Effect upon any such Person.

      Section 4.14.  Pari Passu Ranking. The obligations of the Borrower to
pay  the  principal  of  and interest on the Loans and  all  other  amounts
payable  under  the  Loan Documents will rank at least  pari  passu  as  to
payment  with  all  other Debt of the Borrower now  existing  or  hereafter
incurred.

      Section  4.15.  Environmental Matters. The Borrower and each  of  its
Subsidiaries  possess  all  environmental,  health  and  safety   licenses,
permits,  authorizations,  registrations,  approvals  and  similar   rights
necessary  under law or otherwise for such Person to conduct its operations
as  now  being  conducted, each of such licenses, permits,  authorizations,
registrations,  approvals and similar rights is valid  and  subsisting,  in
full force and effect and enforceable by such Person, and such Person is in
compliance with all terms, conditions or other provisions of such  permits,
authorizations, registrations, approvals and similar rights except for such
noncompliance  that will not have a Material Adverse Effect on  either  the
Borrower  individually  or the Borrower and its  Subsidiaries  taken  as  a
whole.   Neither the Borrower nor any of its Subsidiaries has received  any
notices  of  any  violation of, noncompliance with, or remedial  obligation
under,  Requirements  of  Environmental  Laws,  and  there  are  no  writs,
injunctions, decrees, orders or judgments outstanding, or lawsuits, claims,
proceedings,  investigations or inquiries pending or, to the  knowledge  of
the  Borrower,  threatened,  relating to  the  ownership,  use,  condition,
maintenance,  or  operation  of, or conduct of  business  related  to,  any
property  owned,  leased  or  operated  by  the  Borrower  or  any  of  its
Subsidiaries,  or other assets of the Borrower or any of its  Subsidiaries,
other  than  those  violations,  instances of  noncompliance,  obligations,
writs,   injunctions,   decrees,  orders,  judgments,   lawsuits,   claims,
proceedings,  investigations or inquiries that will  not  have  a  Material
Adverse Effect on either the Borrower individually or the Borrower and  its
Subsidiaries  taken  as  a  whole.   There  are  no  material  obligations,
undertakings  or  liabilities arising out of or relating  to  Environmental
Laws  to which the Borrower or any of its Material Subsidiaries has  agreed
to,  assumed  or retained, or by which the Borrower or any of its  Material
Subsidiaries is adversely affected, by contract or otherwise.  Neither  the
Borrower nor any of its Material Subsidiaries has received a written notice
or  claim to the effect that such Person is or may be liable to any  Person
as the result of a Release or threatened Release of a Hazardous Material.

<PAGE>    61

      Section 4.16.  Year 2000. The Borrower has (a) initiated a review and
assessment  of all areas within its and each of its Subsidiaries'  business
and  operations  (including those affected by customers and  vendors)  that
could  be adversely affected by the "Year 2000 Problem" (that is, the  risk
that  computer applications and devices containing embedded computer  chips
used  by Borrower or any of its Subsidiaries (or their respective customers
and vendors) may be unable to recognize and perform properly date-sensitive
functions involving certain dates prior to and any date after December  31,
1999),  (b)  developed  a plan and timeline for addressing  the  Year  2000
Problem  on  a  timely  basis, and (c) to date, implemented  that  plan  in
accordance  with that timetable.  The Borrower believes that  all  computer
applications  and  devices containing  imbedded computer  chips  (including
those of its and its Subsidiaries' customers and vendors) that are material
to  its  or any of its Subsidiaries' business and operations are reasonably
expected   on  a timely basis to be able to perform properly date-sensitive
functions for all dates before and after January 1, 2000 (that is, be "Year
2000  compliant"), except to the extent that a failure to do so  could  not
reasonably be expected to have a Material Adverse Effect.

       Section  4.17.   Citizenship.  The  Borrower  and  its  Consolidated
Subsidiaries that are engaged in the operation of vessels in the  coastwise
trade  of  the  United States are in compliance with the  U.S.  citizenship
requirements  applicable  to Persons entitled to  operate  vessels  in  the
coastwise  trade of the United States to the extent required by  the  Jones
Act, 46 U.S.C. Sec. 802, and other applicable Requirements of Law.

                      ARTICLE V AFFIRMATIVE COVENANTS
                                     
      So  long  as any principal amount of any Loan, any amount of interest
accrued under any Loan Document, or any commitment, facility or other  fee,
expense, compensation or any other amount payable to any member of the Bank
Group  under the Loan Documents shall remain unpaid or outstanding  or  any
Bank shall have any Commitment hereunder:

      Section 5.01.  Reporting Requirements. The Borrower shall deliver  or
cause  to be delivered to the Administrative Agent (with sufficient  copies
for the Administrative Agent to distribute the same to the other members of
the Bank Group):

          (a)  As soon as available and in any event within forty five (45)
days  after  the  end  of  each calendar quarter  (other  than  the  fourth
quarter):

                (i)   copies  of  the consolidated  and  consolidating
     balance sheets of the Borrower and its Subsidiaries as of the end
     of  such period, and consolidated and consolidating statements of
     income and retained earnings and a statement of cash flows of the
     Borrower and its Subsidiaries for that fiscal period and for  the
     portion of the fiscal year ending with such period, in each  case
     setting forth in comparative form (on a consolidated, but  not  a
     consolidating basis) the figures for the corresponding period  of
     the preceding fiscal year, all in reasonable detail; and

<PAGE>    62

                (ii)  a  certificate of a Responsible Officer  of  the
     Borrower  (A)  stating  that  such  financial  statements  fairly
     present  the  consolidated  financial  position  and  results  of
     operations  of  the Borrower and its Subsidiaries  in  accordance
     with   generally  accepted  accounting  principles   consistently
     applied, subject to normal year-end adjustments, (B) stating that
     no Default or Event of Default has occurred and is continuing or,
     if   any  Default  or  Event  of  Default  has  occurred  and  is
     continuing, the action the Borrower is taking or proposes to take
     with    respect   thereto,   (C)   setting   forth   calculations
     demonstrating  compliance by the Borrower with Section  6.01  and
     Section  6.08, accompanied by a summary (on an entity-  by-entity
     basis)  of Investments in Excluded Affiliates and Funded Debt  of
     the  Borrower and its Consolidated Subsidiaries, as well  as  any
     Funded Debt or Fixed Charges resulting from a Guaranty of Debt of
     an  Excluded  Affiliate, and (D) identifying any changes  in  the
     Consolidated Subsidiaries and Excluded Affiliates since the  date
     of  the  most  recent certificate delivered pursuant  to  Section
     5.01(a)(ii) or Section 5.01(b)(ii) (or in the case of the initial
     certificate, any changes from those specified in Schedule 4.01).

           (b)   As  soon as available and in any event within ninety  (90)
days after the end of each calendar year:

                (i)   copies  of  the consolidated  and  consolidating
     balance  sheet  of the Borrower and its Subsidiaries  as  of  the
     close  of  such  calendar year and consolidated and consolidating
     statements  of  income and retained earnings and a  statement  of
     cash flows of the Borrower and its Subsidiaries for such calendar
     year,  in  each  case  setting forth in comparative  form  (on  a
     consolidated basis) the figures for the preceding calendar  year,
     all  in  reasonable detail and accompanied by an opinion  thereon
     (which shall not be qualified or limited because of restricted or
     limited  examination  by  the  independent  accountants  of   any
     material  portion of the Borrower's or any Subsidiary's  records)
     of   independent  accountants  of  recognized  national  standing
     selected  by  the  Borrower and reasonably  satisfactory  to  the
     Majority  Banks,  to the effect that such consolidated  financial
     statements  have  been  prepared  in  accordance  with  generally
     accepted  accounting principles consistently applied (except  for
     changes   in  which  such  accountants  concur)  and   that   the
     examination  of  such accounts in connection with such  financial
     statements  has  been made in accordance with generally  accepted
     auditing standards; and

                (ii)  a  certificate of a Responsible Officer  of  the
     Borrower  (A)  stating that no Default or Event  of  Default  has
     occurred and is continuing or, if any Default or Event of Default
     has occurred and is continuing, the action the Borrower is taking
     or  proposes  to  take with respect thereto, (B)  setting,  forth
     calculations  demonstrating  compliance  by  the  Borrower   with
     Section  6.01 and Section 6.08, accompanied by a summary  (on  an
     entity-by-entity basis) of Investments in Excluded Affiliates and
     Funded Debt of the Borrower and its Consolidated Subsidiaries, as
     well  as  any  Funded  Debt  or Fixed Charges  resulting  from  a
     Guaranty  of Debt  of an Excluded  Affiliate, and (C) identifying

<PAGE>    63

     any   changes  in  the  Consolidated  Subsidiaries  and  Excluded
     Affiliates   since  the  date  of  the  most  recent  certificate
     delivered pursuant to Section 5.01(a)(ii) or Section 5.01(b)(ii).

           (c)  Promptly after the sending or filing thereof, copies of all
proxy  statements and reports which the Borrower or any of its Subsidiaries
sends  to  any  holders of its respective securities,  and  copies  of  all
regular, periodic and special reports and all registration statements which
the  Borrower  or  any of its Subsidiaries files with  the  Securities  and
Exchange Commission or any national securities exchange.

          (d)  Promptly after the receipt thereof, copies of any reports or
notices  that  the  Borrower  may receive from  the  PBGC  or  the  U.   S.
Department of Labor indicating that a Reportable Event has occurred  or  an
accumulated funding deficiency (as defined in Section 302(a)(2)  of  ERISA)
exists  under any Plan or that any such Person or its ERISA Affiliates  has
failed  to  comply in all material respects with ERISA and all Requirements
of Law related thereto.

          (e)  Promptly after a Responsible Officer of the Borrower becomes
aware of the occurrence of a Default or Event of Default, a certificate  of
a Responsible Officer of the Borrower setting forth details of such Default
or  Event of Default and the action which has been taken or is to be  taken
with respect thereto.

           (f)   As soon as possible and in any event within ten (10)  days
after  a Responsible Officer of the Borrower becomes aware thereof, written
notice from a Responsible Officer of the Borrower of (i) the institution of
or  threat of, any action, suit, proceeding, governmental investigation  or
arbitration  by  any  Governmental Authority or  other  Person  against  or
affecting  the  Borrower  or  any of its Subsidiaries  that  could  have  a
Material Adverse Effect on the Borrower or any of its Material Subsidiaries
and that has not previously disclosed in writing to the Bank Group pursuant
to  this  Section 5.01(f) or (ii) any material development in  any  action,
suit,   proceeding,  governmental  investigation  or  arbitration   already
disclosed to the Bank Group pursuant to this Section 5.01(f).

           (g)   Promptly  upon  a  Responsible  Officer  of  the  Borrower
obtaining  knowledge thereof, notice of (i) any violation of, noncompliance
with,  or  remedial  obligations under, Requirements of Environmental  Laws
that  could  have a Material Adverse Effect on the Borrower or any  of  its
Material Subsidiaries, (ii) any Release or threatened Release affecting any
property  owned,  leased  or  operated  by  the  Borrower  or  any  of  its
Subsidiaries that could have a Material Adverse Effect on the  Borrower  or
any  of its Material Subsidiaries, (iii) the amendment or revocation of any
permit,  authorization, registration, approval or similar right that  could
have  a  Material  Adverse Effect on the Borrower or any  of  its  Material
Subsidiaries   or   (iv)  new  or  proposed  changes  to  Requirements   of
Environmental  Laws  that  could  have a Material  Adverse  Effect  on  the
Borrower or any of its Material Subsidiaries.

           (h)  Such other information as any member of the Bank Group  may
from  time  to time reasonably request respecting the business, properties,
operations or condition, financial or otherwise, of the Borrower or any  of
its Subsidiaries.

<PAGE>    64

     Section 5.02.  Taxes; Claims. The Borrower will pay and discharge, and
will  cause  each  of  its Subsidiaries to pay and  discharge,  all  taxes,
assessments and governmental charges or levies imposed upon such Person  or
upon  its  income  or  profits, or upon any properties  belonging  to  such
Person, prior to the date on which penalties attach thereto, and all lawful
claims  which,  if unpaid, might become a Lien upon any properties  of  the
Borrower  or  any of its Material Subsidiaries, other than  any  such  tax,
assessment, charge, levy or claim which is being contested in good faith by
appropriate  proceedings promptly initiated and diligently  conducted,  and
with  respect to which adequate reserves are set aside on the books of such
Person in accordance with generally accepted accounting principles.

      Section  5.03.  Compliance with Laws. The Borrower will  comply,  and
will  cause  each  of  its  Subsidiaries to  comply,  with  all  applicable
Requirements  of Law imposed by, any Governmental Authority,  noncompliance
with  which might have a Material Adverse Effect on the Borrower or any  of
its  Material  Subsidiaries.   Without limitation  of  the  foregoing,  the
Borrower  shall, and shall cause each of its Subsidiaries to,  comply  with
all  Requirements of Environmental Laws, operate its properties and conduct
its  business in accordance with good environmental practices, and  handle,
treat,  store and disposed of Hazardous Materials in accordance  with  such
practices,  except  where the failure to do so will  not  have  a  Material
Adverse Effect on the Borrower or any of its Material Subsidiaries.

      Section 5.04.  Insurance. The Borrower will maintain, and will  cause
each  of  its Subsidiaries to maintain, with financially sound, responsible
and  reputable  insurance companies or associations,  insurance,  or  self-
insure  against such risks, and in such amounts (and with co-insurance  and
deductibles),  as  are  usually insured against by Persons  of  established
reputation  engaged  in  the  same  or  similar  businesses  and  similarly
situated.

      Section  5.05.  Corporate Existence; Etc. The Borrower will  preserve
and  maintain,  and  (except as otherwise permitted by Section  6.05)  will
cause  each  of  its  Material Subsidiaries to preserve and  maintain,  its
existence,  rights,  franchises and privileges in the jurisdiction  of  its
incorporation,  and qualify and remain qualified, and  cause  each  of  its
Material  Subsidiaries  to  qualify and  remain  qualified,  as  a  foreign
corporation in each jurisdiction in which such qualification is material to
the  business and operations of such Person or the ownership or leasing  of
the properties of such Person.

      Section  5.06.   Inspections; Etc. From time to time  during  regular
business hours upon reasonable prior notice, the Borrower will permit,  and
will   cause   each  of  its  Subsidiaries  to  permit,   any   agents   or
representatives of any member of the Bank Group to examine and make  copies
of  and  abstracts from the records and books of account of, and visit  the
properties  of,  the  Borrower  and its Subsidiaries  and  to  discuss  the
affairs,  finances  and  accounts of any such  Person  with  any  of  their
respective  independent public accountants, officers or directors,  all  at
the expense of the Borrower.

      Section  5.07.  Maintenance of Properties. The Borrower will maintain
and  preserve, and will cause each of its Material Subsidiaries to maintain
and  preserve,  all  of its material properties necessary  for  the  proper
conduct of its business in good working order and condition, ordinary  wear
and tear excepted.

<PAGE>    65

      Section  5.08.  Accounting Systems; Etc. The Borrower will keep,  and
will cause each of its Subsidiaries to keep, adequate records and books  of
account in which complete entries will be made in accordance with generally
accepted  accounting principles consistently applied (subject to  year  end
adjustments),  reflecting all financial transactions of such  Person.   The
Borrower  shall maintain or cause to be maintained a system  of  accounting
established and administered in accordance with sound business practices to
permit  preparation  of financial statements in conformity  with  generally
accepted  accounting  principles,  and each  of  the  financial  statements
described herein shall be prepared from such system and records.

      Section 5.09.  Contractual Obligations. The Borrower will comply, and
will  cause  each  of  its Subsidiaries to comply,  with  their  respective
contractual  obligations, except where failure to do so  will  not  have  a
Material   Adverse  Effect  on  the  Borrower  or  any  of   its   Material
Subsidiaries.

      Section  5.10.   Use  of  Loan Proceeds. The Borrower  will  use  the
proceeds  of  all Loans hereunder for the following purposes:  for  working
capital,  capital expenditures, to provide liquidity for commercial  paper,
to finance the acquisition of Hollywood Marine, Inc., and general corporate
purposes of the Borrower and its Consolidated Subsidiaries ; provided  that
such  uses  are, at the time made, otherwise consistent with the  terms  of
this  Agreement  and  all Requirements of Law and no Default  or  Event  of
Default would result therefrom.

      Section  5.11.   Further Assurances in General. The Borrower  at  its
expense  shall,  and  shall  cause each of its  Subsidiaries  to,  promptly
execute  and  deliver all such other and further documents, agreements  and
instruments  in  compliance with or accomplishment  of  the  covenants  and
agreements  of  the  Borrower  or  any of  its  Subsidiaries  in  the  Loan
Documents,  including,  without  limitation,  the  accomplishment  of   any
condition  precedent that may have been waived by the Banks  prior  to  the
initial Borrowing or any subsequent Borrowings.

      Section 5.12.  Year 2000. The Borrower has implemented and will cause
each  of  its Subsidiaries to implement a plan and timeline for  addressing
the  Year  2000  Problem,  and will continue  to  implement  that  plan  in
accordance with that timetable.  The Borrower will take and will cause each
of its Subsidiaries to take all such actions as are reasonably necessary to
successfully implement the plan and to assure that Year 2000 Problems  will
not  have  a Material Adverse Effect.  At the request of the Administrative
Agent  or  any Bank, the Borrower will provide a description of  the  plan,
together with any update or progress reports thereto.

                       ARTICLE VI NEGATIVE COVENANTS

      So  long  as any principal amount of any Loan, any amount of interest
accrued under any Loan Document, or any commitment, facility or other  fee,
expense, compensation or any other amount payable to any member of the Bank
Group  under the Loan Documents shall remain unpaid or outstanding  or  any
Bank shall have any Commitment hereunder:

<PAGE>    66

     Section 6.01.  Financial Covenants. The Borrower will not:

           (a)   Fixed Charge Coverage Ratio.  Permit the ratio of (i)  Net
Cash  Flow  to  (ii)  Fixed Charges, measured as of the  last  day  of  any
calendar  quarter for the twelve month period then ended, to be  less  than
1.25 to 1.0.

          (b)  Debt Coverage Ratio.  Permit the ratio of (i) Funded Debt as
of  the last day of any calendar quarter to (ii) Modified Net Cash Flow for
the twelve month period then ended, to equal or exceed 3.5 to 1.0.

           (c)   Minimum Net Worth.  Permit Net Worth, measured as  of  the
last  day  of  any  calendar  quarter, to be  less  than  the  sum  of  (i)
$185,000,000, plus (ii) a cumulative amount (calculated as of  the  end  of
each  fiscal  year during the term of this Agreement) equal  (x)  to  fifty
percent  (50%), if positive, zero percent (0%), if negative, of Net  Income
for  the  period  July  1, 1999 through December 31, 1999  plus  (y)  fifty
percent  (50%), if positive, zero percent (0%), if negative, of Net  Income
for each fiscal year ending thereafter plus (iii) 100% of net cash proceeds
from  the  issuance and sale (other than to a Subsidiary of  the  Borrower)
after the Effective Date of the Borrower's capital stock.

      Section  6.02.  Restrictions on Debt. (a) The Borrower will not,  and
will  not  permit any of its Consolidated Subsidiaries to,  create,  incur,
assume or suffer to exist, any Debt other than:

               (i)  Debt of the Borrower under the Loan Documents, and
     the loans outstanding under the Existing Credit Agreement;

               (ii) Debt in respect of reimbursement obligations under
     letters   of   credit  or  similar  instruments   not   exceeding
     $5,000,000;

                (iii)     unsecured Debt owing by the Borrower to  any
     Consolidated Subsidiary;

                 (iv)   unsecured  Debt  owing  by  any   Consolidated
     Subsidiary  to the Borrower or any other Consolidated  Subsidiary
     so long as such Debt ranks pari passu with all other Debt of such
     Consolidated  Subsidiary  (except  as  contemplated  by   Section
     6.02(d));

                (v)   Debt  (other  than  Derivative  Obligations)  of
     Consolidated Subsidiaries, so long as (A) no Default or Event  of
     Default exists on the date such Debt is incurred or would  result
     from the incurrence of such Debt, and (B) the aggregate amount of
     such Debt does not exceed twenty percent (20%) of Net Worth;

                (vi)  Debt (other than Derivative Obligations) of  the
     Borrower,  so  long  as (A) such Debt is not  Guaranteed  by  any
     Subsidiary of the Borrower and (B) no Default or Event of Default
     exists on the date such Debt is incurred or would result from the
     incurrence of such Debt; and

<PAGE>    67

                (vii)      Derivative Obligations of the Borrower  and
     its Consolidated Subsidiaries, so long as (A) no Default or Event
     of  Default  exists on the date such Derivative  Obligations  are
     incurred or would result from the incurrence thereof and (B)  the
     aggregate amount of such Derivative Obligations do not exceed ten
     percent (10%) of Net Worth.

           (b)   The  Borrower  will not, and will not permit  any  of  its
Consolidated Subsidiaries to, create, incur, assume or suffer to exist, any
Guaranties  or  other contingent liabilities other than (i)  Guaranties  by
Consolidated  Subsidiaries  that  constitute  Debt  permitted  by   Section
6.02(a)(v), (ii) Guaranties by the Borrower that constitute Debt  permitted
by  Section  6.02(a)(vi),  (iii)  other contingent  liabilities  (including
undrawn  letters  of credit) in an amount not exceeding $5,000,000  at  any
time,  and  (iv)  contingent liabilities arising under  guaranties  by  the
Borrower   or  its  Subsidiaries  of  the  obligations  of  the  Borrower's
Subsidiaries   under  Environmental  Laws,  including   the   Comprehensive
Environmental Response, Compensation and Liability Act, as amended, and the
Oil Pollution Act of 1990, as amended.

           (c)   The  Borrower  will not permit any Excluded  Affiliate  to
create,  incur,  assume or suffer to exist any Debt unless  the  agreements
evidencing  or  providing for such Debt contain a provision to  the  effect
that  the  holders of such Debt shall have no recourse against the Borrower
or any of its Consolidated Subsidiaries, or any of their respective assets,
for  the payment of such Debt; provided, however, that the foregoing  shall
not  apply to any such Debt of an Excluded Affiliate that is covered  by  a
Guaranty  from  the  Borrower  or a Consolidated  Subsidiary  permitted  by
Section 6.02(b).

          (d)  The Borrower shall not permit Kirby Inland Marine to create,
incur,  assume or suffer to exist any Debt or other obligation  that  would
constitute  "Senior Obligations" (as such term is defined in  that  certain
Revolving  Credit  Loan Agreement dated as of July 31,  1990,  as  amended,
between  Kirby  Inland  Marine, as borrower, and the Borrower,  as  lender)
other  than  Debt  arising under the Dixie Note Purchase  Agreement  as  in
effect on the Effective Date.

      Section 6.03.  Restriction on Liens. The Borrower will not, and  will
not  permit any of its Consolidated Subsidiaries to, create, incur,  assume
or suffer to be created, assumed or incurred or to exist, any Lien upon any
of  their property or assets, whether now owned or hereafter acquired other
than:

           (a)  Liens arising after the date hereof pursuant to Section 6.9
(but not Section 7.3) of the Dixie Note Purchase Agreement as in effect  on
the Effective Date;

           (b)   Liens  against assets of the Borrower  or  a  Consolidated
Subsidiary  securing  Debt of such Person, so long  as  (i)  the  aggregate
amount  of all such secured Debt does not exceed $5,000,000, and (ii)  such
secured Debt is otherwise permitted by Section 6.02(a)(vi), in the case  of
the  Borrower,  or  Section  6.02(a)(v), in  the  case  of  a  Consolidated
Subsidiary;

<PAGE>    68

           (c)   Liens imputed to Capital Leases under which a Consolidated
Subsidiary  is  the  lessee,  so  long as the  Debt  of  such  Consolidated
Subsidiary  in  respect  of  such Capital Lease  is  permitted  by  Section
6.02(a)(v);

          (d)  Liens on property of any Consolidated Subsidiary that attach
concurrently  with  such Consolidated Subsidiary's  purchase  thereof,  and
securing  only  Debt of such Consolidated Subsidiary permitted  by  Section
6.02(a)(v)  and  incurred to finance all or part of the purchase  price  of
such property, and any extensions and renewals of such Liens so long as the
Debt secured thereby is not greater than the Debt secured immediately prior
to  such  extension  and  renewal and such Debt  is  permitted  by  Section
6.02(a)(v) at the time of such extension and renewal;

           (e)   Liens  for taxes, assessments or governmental  charges  or
levies if the same shall at the time not be delinquent or thereafter may be
paid  without penalty, or the validity of which are being contested in good
faith   by   appropriate  proceedings  promptly  initiated  and  diligently
conducted  and as to which adequate reserves shall have been set  aside  on
the  books of the Borrower in accordance with generally accepted accounting
principles;

           (f)   carriers', warehousemen's and mechanics' liens  and  other
similar  Liens  which  arise in the ordinary course  of  business,  do  not
materially  impair  the use or value of its properties  or  assets  or  the
conduct  of its business, and secure obligations that are not yet  due  and
payable  or  are  being contested in good faith by appropriate  proceedings
promptly  initiated  and  diligently conducted and  as  to  which  adequate
reserves  shall  have  been  set aside on the  books  of  the  Borrower  in
accordance  with generally accepted accounting principles or  as  to  which
adequate bonds shall have been obtained;

           (g)   pledges or deposits to secure obligations under  workmen's
compensation  laws or similar legislation or to secure public or  statutory
obligations of the Borrower;

          (h)  Liens created in favor of a Governmental Authority to secure
partial,  progress, advance or other contractual payments pursuant  to  any
agreement or statute;

           (i)   attachment,  judgment and other similar Liens  arising  in
connection  with  court  proceedings,  provided  the  execution  or   other
enforcement  of  such Liens is effectively stayed and  the  claims  secured
thereby  are  being  actively contested in good faith  and  by  appropriate
proceedings  in  such manner as not to have the property  subject  to  such
Liens forfeitable;

           (j)   easements, rights-of-way, reservations, exceptions,  minor
encroachments, restrictions and similar charges created or incurred in  the
ordinary  course  of  business  which in the aggregate  do  not  materially
interfere with the business operations of the Borrower and its Subsidiaries
taken  as  a  whole,  and which were not incurred in  connection  with  the
borrowing of money; and

<PAGE>    69

           (k)  Liens against the capital stock, promissory notes and other
equity  or  debt  interests  of  any Consolidated  Subsidiary,  subject  to
compliance with Section 6.12.

     Section 6.04.  Restrictions on Negative Pledge. The Borrower will not,
and  will  not permit any of its Subsidiaries to, enter into any  agreement
prohibiting  or  having  the effect of prohibiting  the  Borrower  and  its
Subsidiaries  from granting a Lien against or otherwise  disposing  of  the
capital  stock, promissory notes or other equity or debt interests  of  any
Consolidated  Subsidiary, other than (i) this Agreement, and  the  Existing
Credit  Agreement,  and  (ii)  in the case  of  Kirby  Inland  Marine,  the
provisions of Section 7.3 of the Dixie Note Purchase Agreement as in effect
on  the Effective Date and as thereafter amended to lessen or eliminate the
restrictions contained therein.

      Section  6.05.  Consolidated Subsidiaries Dispositions. The  Borrower
will not, and will not permit any of its Subsidiaries to, sell, transfer or
otherwise dispose of (i) any capital stock or other equity interests of any
Consolidated Subsidiary or (ii) all or substantially all of the  assets  of
the   Borrower  or  any  Consolidated  Subsidiary  (whether  in  a   single
transaction or series of transactions), other than (A) any such disposition
made  to  the Borrower or a wholly-owned Consolidated Subsidiary,  (B)  any
disposition  of  capital stock or other equity interests  in  Kirby  Inland
Marine so long as after giving effect to such disposition the Borrower owns
(either   directly  or  indirectly  through  a  wholly-owned   Consolidated
Subsidiary) at least 90% of the capital stock or other equity interests  of
Kirby  Inland  Marine,  and (C) the disposition of  the  capital  stock  of
Mariner  Reinsurance Company, a company organized under the laws of Bermuda
and   a  Consolidated  Subsidiary,  arising  out  of  the  liquidation  and
dissolution of such entity.

      Section 6.06.  Restrictions on Consolidated Subsidiary Distributions.
The  Borrower  will  not, and will not permit any of its  Subsidiaries  to,
enter  into  any  agreement  restricting the ability  of  any  Consolidated
Subsidiary to (a) pay dividends or make other distributions on the  capital
stock or other equity interests of such Consolidated Subsidiary or (b) make
loans  or advances to the Borrower or any Subsidiary of the Borrower, other
than  (i) this Agreement, and (ii) in the case of Kirby Inland Marine,  the
provisions of Section 7.4 of the Dixie Note Purchase Agreement as in effect
on  the Effective Date and as thereafter amended to lessen or eliminate the
restrictions contained therein.

      Section  6.07.  Mergers and Acquisitions. The Borrower will not,  and
will  not  permit any of its Consolidated Subsidiaries to, acquire (whether
in one transaction or a series of transactions) all or substantially all of
the  assets of any Person or the capital stock or securities of any Person,
or  consolidate  with  or merge into any Person or  permit  any  Person  to
consolidate  or  merge into it, unless: (a) in the case of an  acquisition,
such acquisition is not a Hostile Acquisition; (b) any business acquired in
such transaction is similar or related to the businesses engaged in by  the
Borrower and its Consolidated Subsidiaries on the date hereof, (c)  in  the
case  of  a  merger  (i) if the Borrower is a party  to  such  merger,  the
Borrower  is the surviving entity and the management of the Borrower  shall
be substantially unchanged and (ii) if a Consolidated Subsidiary is a party

<PAGE>    70

to  such  merger, either the Borrower or a Consolidated Subsidiary  is  the
surviving entity; (d) immediately after giving effect and pro forma  effect
thereto,  no  Default  or Event of Default shall  exist;  and  (e)  if  the
Borrower  incurs  Funded  Debt  in excess of  $25,000,000  to  finance,  or
otherwise in connection with, any acquisition or merger otherwise permitted
by  this Agreement, then (i) the ratio of (A) the total consideration given
by  the  Borrower and its Subsidiaries in connection therewith to  (B)  the
projected  net  cash  flow  from  the  assets  acquired  pursuant  to  such
transaction  for the twelve-month period immediately following the  closing
of such transaction, must not be greater than 8.00 to 1.00 (for purposes of
this  clause  (a)  "projected  net cash flow"  shall  mean  the  Borrower's
estimate  of  the operating earnings from the assets acquired  pursuant  to
such transaction for the twelve (12) month period immediately following the
closing  of  such  transaction,  before  tax,  plus  any  depreciation  and
amortization included in such estimated operating earnings, all  determined
in  accordance with generally accepted accounting principles and based upon
such  assumptions as are reasonably acceptable to the Majority  Banks)  and
(ii)  the Administrative Agent shall have received (A) a certificate  of  a
Responsible  Officer   of   the Borrower  showing   satisfaction   of   the
condition  set forth in Section  6.07(e)(i),  and (B) such other documents,
opinions  and  information that the Administrative Agent  or  the  Majority
Banks may reasonably request in order to substantiate the same.

      Section 6.08.  Restricted Investments. (a) The Borrower will not, and
will  not  permit any Consolidated Subsidiary to, make, or enter  into  any
commitment  to  make, any Restricted Investment if a Default  or  Event  of
Default exists either before or after giving effect thereto.

           (b)  The Borrower will not, and will not permit any Consolidated
Subsidiary  to, make, or enter into any commitment to make,  or  permit  to
exist  any Restricted Investment other than Restricted Investments that  do
not in the aggregate exceed twenty percent (20%) of Net Worth.

           (c)   The Borrower will not permit the sum (without duplication)
of   (i)  all  Restricted  Investments,  made  by  the  Borrower  and   its
Consolidated  Subsidiaries, plus (ii) all commitments by the  Borrower  and
its  Consolidated Subsidiaries to make Restricted Investments,  plus  (iii)
all  Debt (other than Derivative Obligations) of Consolidated Subsidiaries,
to at any time exceed thirty-five percent (35%) of Net Worth.

      Section  6.09.  Restricted Payments. The Borrower will not, and  will
not  permit any of its Subsidiaries to, at any time, declare or  make,  any
Restricted Payment unless immediately after giving effect to such action no
Default or Event of Default would exist.

      Section 6.10.  Lines of Business. The Borrower will not, and will not
permit  any  of  its Consolidated Subsidiaries to, directly  or  indirectly
engage to a material extent in any business other than those in which it is
presently engaged or that are directly related thereto, or discontinue  any
of  its  existing lines of business or substantially alter  its  method  of
doing business.

<PAGE>    71

     Section 6.11.  Transactions with Affiliates. Neither the Borrower, nor
any  of its Consolidated Subsidiaries, will enter into any transaction with
an  Affiliate  other  than (a) transactions entered into  in  the  ordinary
course  of  business and upon terms no less favorable than those  that  the
Borrower or its Consolidated Subsidiary, as applicable, could obtain in  an
arms  length  transaction with a Person that is not an  Affiliate  and  (b)
transactions between the Borrower and any of its Consolidated Subsidiaries,
or between such Consolidated Subsidiaries, that do not and will not, either
directly or indirectly, cause a Default or an Event of Default.

      Section  6.12.   Pari Passu Liens. In the event the Borrower  or  any
Consolidated Subsidiary creates, incurs, assumes, or suffers to be created,
assumed,  incurred or permits to exist, a Lien on capital stock, promissory
notes or other equity or debt interests of any Consolidated Subsidiary, the
Borrower   or   such   Consolidated  Subsidiary,   as   applicable,   shall
contemporaneously thereon grant a pari passu lien on such assets, on  terms
and  conditions satisfactory to the Administrative Agent and  the  Majority
Banks,  so  that all Indebtedness and obligations of the Borrower hereunder
and under the other Loan Documents will be secured equally and ratably with
any and all other Indebtedness secured thereby.

                            ARTICLE VII DEFAULT
                                     
     Section 7.01.  Events of Default. If any of the following events (each
an "Event of Default") shall occur and be continuing:

           (a)  the Borrower shall fail to pay when due any installment  of
principal of the Loans; or

           (b)  the Borrower shall fail to pay any interest on any Loan  or
any  arrangement fee, commitment fee, utilization fee, administration  fee,
commission, expense, compensation, reimbursement or other amount when  due,
or any Person (other than a member of the Bank Group) shall fail to pay any
amount payable by such Person hereunder or under any other Loan Document or
other  agreement or security document contemplated by or delivered pursuant
to  or  in  connection with this Agreement when due, and, in either  event,
such failure shall continue for five (5) Business Days; or

           (c)   the  Borrower shall fail to perform any term, covenant  or
agreement contained in Article VI or Section 5.01(e) of this Agreement; or

           (d)   the  Borrower shall fail to perform any term, covenant  or
agreement  contained  in  this Agreement (other than  those  referenced  in
subsections  (a), (b) and (c) of this Section 7.01) and such failure  shall
not have been remedied within ten (10) days after the earlier of (i) notice
thereof  from  the Administrative Agent to the Borrower or  (ii)  discovery
thereof by the Borrower; or

           (e)   any  Person (other than a member of the Bank Group)  shall
fail  to  perform  any term, covenant or agreement contained  in  any  Loan
Document (other than those referenced in subsections (a), (b), (c) and  (d)
of  this  Section 7.01) to which it is a party and such failure  shall  not
have  been remedied within thirty (30) days after the earlier of (i) notice
thereof  from  the Administrative Agent to the Borrower or  (ii)  discovery
thereof by the Borrower; or

<PAGE>    72

           (f)   any  representation or warranty made by any Person  (other
than  a  member of the Bank Group), or any such Person's officers,  in  any
Loan  Document  to  which  it is a party or in any certificate,  agreement,
instrument  or statement contemplated by or delivered pursuant  to,  or  in
connection  with, any Loan Document shall prove to have been  incorrect  in
any material respect when made; or

          (g)  the Borrower or any of its Subsidiaries shall (i) default in
the  payment of any Debt (other than the amounts referred to in subsections
(a)  and  (b)  of this Section 7.01) owing by such Person that  constitutes
Material  Debt as of the date of such default, or any interest  or  premium
thereon,  when due (or, if permitted by the terms of the relevant document,
within any applicable grace period), whether such Debt shall become due  by
scheduled  maturity, by required prepayment, by acceleration, by demand  or
otherwise; or (ii) fail to perform any term, covenant or condition  on  its
part to be performed under any agreement or instrument evidencing, securing
or  relating  to  any  such Debt, when required to be performed,  and  such
failure shall continue after the applicable grace period, if any, specified
in  such  agreement  or instrument, if the effect of  such  failure  is  to
accelerate,  or to permit the holder or holders of such Debt to accelerate,
the maturity of such Debt; or

           (h)  any Loan Document shall (other than with the consent of the
Majority Banks), at any time after its execution and delivery and  for  any
reason,  cease  to be in full force and effect (except for such  provisions
that  the Majority Banks determine are not material either individually  or
in  the  aggregate),  or  shall be declared to be null  and  void,  or  the
validity  or enforceability thereof shall be contested by any Person  party
to  the  Loan Documents or any such Person shall deny that it  has  any  or
further liability or obligation under any Loan Document; or

           (i)  any Reportable Event that might constitute grounds for  the
termination  of  any Plan, or for the appointment by an appropriate  United
States  district  court of a trustee to administer  any  Plan,  shall  have
occurred and be continuing for at least thirty (30) days, or any Plan shall
be  terminated,  or  a trustee shall be appointed by an appropriate  United
States  district court to administer any Plan, or the PBGC shall  institute
proceedings to terminate any Plan or to appoint a trustee to administer any
Plan,  and,  in  any  such event, the then-current  value  of  such  Plan's
benefits  guaranteed under Title IV of ERISA at the time  shall  exceed  by
more than $5,000,000 the then-current value of such Plan's assets allocable
to such benefits at such time; or

          (j)  the Borrower or any of its Subsidiaries shall be adjudicated
insolvent, or shall make a general assignment for the benefit of creditors,
or  any  proceeding  shall  be instituted by any  such  Person  seeking  to
adjudicate  it  insolvent, seeking liquidation, winding-up, reorganization,
arrangement,  adjustment, protection, relief or composition of  it  or  its
debts under any law relating to bankruptcy, insolvency or reorganization or
relief  of  debtors, or seeking the entry of an order  for  relief  or  the
appointment of a receiver, trustee, or other similar official for it or for
any  substantial  part  of its property, or the  Borrower  or  any  of  its
Subsidiaries shall take any action in furtherance of any of the actions set
forth above in this Section 7.01 (j); or

<PAGE>    73

          (k)  any proceeding of the type referred to in Section 7.01(j) is
filed,  or any such proceeding is commenced against the Borrower or any  of
its  Subsidiaries  or  any such Person by any act  indicates  its  approval
thereof, consent thereto or acquiescence therein, or an order for relief is
entered  in  an  involuntary case under the bankruptcy law  of  the  United
States,  or  an order, judgment or decree is entered appointing a  trustee,
receiver,  custodian, liquidator or similar official  or  adjudicating  any
such  Person  insolvent, or approving the petition in any such proceedings,
and  such order, judgment or decree remains in effect for sixty (60)  days;
or

          (l)  a final judgment or order for the payment of money in excess
of  $5,000,000 (net of acknowledged, uncontested insurance coverage from  a
financially   sound,  responsible  and  reputable  insurance   company   or
association)  shall  be  rendered  against  the  Borrower  or  any  of  its
Subsidiaries  and  either  (i)  enforcement  proceedings  shall  have  been
commenced  by any creditor upon such judgment or order or (ii)  a  stay  of
enforcement  of  such judgment or order by reason of a  pending  appeal  or
otherwise, shall not be in effect for any period of thirty (30) consecutive
days; or

          (m)  a Change of Control occurs with respect to the Borrower;

then,  (i) upon the occurrence of any Event of Default described in Section
7.01(j)  or  Section  7.01(k),  (A)  the  Commitments  shall  automatically
terminate  and  (B) the entire unpaid principal amount of  all  Loans,  all
interest accrued and unpaid thereon, and all other amounts payable  by  the
Borrower or any other Person under this Agreement, the Notes and the  other
Loan  Documents  shall automatically become immediately  due  and  payable,
without  presentment  for payment, demand, protest,  notice  of  intent  to
accelerate,  notice of acceleration or further notice of any kind,  all  of
which  are  hereby expressly waived by the Borrower and each other  Person,
and  (ii)  upon  the occurrence of any Event of Default, the Administrative
Agent may, and upon the direction of the Majority Banks shall, by notice to
the  Borrower  (A) declare the Commitments to be terminated, whereupon  the
same  shall forthwith terminate and (B) declare the entire unpaid principal
amount of all Loans, all interest accrued and unpaid thereon, and all other
amounts  payable by the Borrower or any other Person under this  Agreement,
the  Notes  and the other Loan Documents, to be forthwith due and  payable,
whereupon  all such amounts shall become and be forthwith due and  payable,
without  presentment  for payment, demand, protest,  notice  of  intent  to
accelerate,  notice of acceleration or further notice of any kind,  all  of
which are hereby expressly waived by the Borrower and each other Person.

<PAGE>    74

      Section  7.02.   Setoff in Event of Default. Upon the occurrence  and
during  the  continuance of any Event of Default, each member of  the  Bank
Group  is  hereby  authorized, at any time and from time to  time,  without
notice  to  the  Borrower (any such notice being expressly  waived  by  the
Borrower) and to the fullest extent permitted by applicable law, to  setoff
and  apply any and all deposits at any time held and other indebtedness  at
any  time owing by such member of the Bank Group (or any branch, subsidiary
or  affiliate of such member of the Bank Group) to or for the credit or the
account  of  the  Borrower against any and all of the  obligations  of  the
Borrower  or  any  other  Person,  now or  hereafter  existing  under  this
Agreement,  the Notes or the other Loan Documents, irrespective of  whether
or  not  such  member  of the Bank Group shall have  made  any  demand  for
satisfaction  of  such  obligations and although such  obligations  may  be
unmatured.   Any member of the Bank Group exercising such right  agrees  to
notify the Borrower promptly after any such setoff and application made  by
such  Person;  provided, that the failure to give  such  notice  shall  not
affect the validity of such setoff and application.  The rights of the Bank
Group  under this Section 7.02 are in addition to other rights and remedies
(including,  without  limitation, other rights of setoff)  which  the  Bank
Group may have hereunder or under any applicable law.

      Section  7.03.  No Waiver; Remedies. No failure on the  part  of  any
member of the Bank Group to exercise, or any delay in exercising, any right
hereunder  shall  operate  as a waiver thereof, nor  shall  any  single  or
partial  exercise  of  any right hereunder preclude any  other  or  further
exercise thereof or the exercise of any other right.  The remedies provided
in this Agreement are cumulative and not exclusive of any remedies provided
in any of the other Loan Documents or by applicable law.

                   ARTICLE VIII THE ADMINISTRATIVE AGENT
                                     
     Section 8.01.  Authorization and Action. Each Bank hereby appoints and
authorizes the Administrative Agent to take such action in such capacity on
such Bank's behalf and to exercise such powers under this Agreement and the
other  Loan Documents as are delegated to the Administrative Agent  by  the
terms  hereof  and  thereof, together with such powers  as  are  reasonably
incidental thereto.  As to any matters not expressly provided for  by  this
Agreement (including, without limitation, enforcement or collection of  the
Notes   or   of  amounts  owing  under  the  other  Loan  Documents),   the
Administrative  Agent shall not be required to exercise any  discretion  or
take  any  action, but such Person shall be required to act or  to  refrain
from  acting (and shall be fully protected in so acting or refraining  from
acting)  upon the instructions of the Majority Banks, and such instructions
shall  be  binding upon all Banks and any other holders of Notes; provided,
however,  that the Administrative Agent shall not be required to  take  any
action which exposes such Person to personal liability or which is contrary
to  the  Loan  Documents  or applicable law.  The Administrative  Agent  is
hereby  expressly  authorized on behalf of the other members  of  the  Bank
Group,  (a) to receive on behalf of each of the other members of  the  Bank
Group  any  payment  of principal of or interest on the  Loans  outstanding
hereunder and all other amounts accrued hereunder paid to such Persons, and
promptly  to distribute to each other member of the Bank Group  its  proper
share  of all payments so received; (b) to give notice within a  reasonable

<PAGE>    75

time  on  behalf of each other member of the Bank Group to the Borrower  of
any  Default  or  Event  of Default of which the Administrative  Agent  has
actual  knowledge  as provided in Section 8.08; (c) to  distribute  to  the
other members of the Bank Group copies of all notices, agreements and other
material as provided for in this Agreement as received by such Person;  and
(d)  to  distribute  to  the  Borrower any and all  requests,  demands  and
approvals received by such Person from any other member of the Bank  Group.
Nothing   herein   contained   shall  be  construed   to   constitute   the
Administrative  Agent as a trustee for any holder of  the  Notes  or  of  a
participation  therein,  nor to impose on any such  Person  any  duties  or
obligations other than those expressly provided for in the Loan Documents.

      Section  8.02.   Reliance, Etc.   The Administrative  Agent  and  its
directors, officers, agents or employees shall not be liable for any action
taken or omitted to be taken by it or them under or in connection with this
Agreement,  except  for such acts or omissions of such Person  constituting
gross negligence or willful misconduct on the part of such Person (IT BEING
THE  EXPRESS INTENTION OF THE PARTIES THAT THE ADMINISTRATIVE AGENT AND ITS
DIRECTORS,  OFFICERS,  EMPLOYEES AND  AGENTS SHALL HAVE  NO  LIABILITY  FOR
ACTIONS   AND  OMISSIONS  HEREUNDER  RESULTING  THAT  CONSTITUTE   ORDINARY
NEGLIGENCE,  WHETHER SOLE OR CONTRIBUTORY) OR RESULT IN  STRICT  LIABILITY.
Without  limitation of the generality of the foregoing, the  Administrative
Agent: (a) may treat the payee of any Note as the holder thereof until  the
Administrative  Agent  receives and accepts an  Assignment  and  Acceptance
entered into by the Bank which is the payee of such Note, as assignor,  and
an  Eligible  Assignee, as assignee, as provided in Section 9.02,  and  the
Administrative  Agent notifies such Person thereof, (b)  may  consult  with
legal  counsel  (including  counsel for the Borrower),  independent  public
accountants  and other experts selected by it and shall not be  liable  for
any  action  taken or omitted to be taken in good faith by it in accordance
with  the  advice  of such counsel, accountants or experts;  (c)  makes  no
warranty or representation to any Bank and shall not be responsible to  any
Bank for any statements, warranties or representations (whether written  or
oral)  made  in  or  in connection with this Agreement or  the  other  Loan
Documents;  (d) shall not have any duty to ascertain or  to inquire  as  to
the  performance or observance of any of the terms, covenants or conditions
of  this  Agreement or the other Loan Documents on the part of the Borrower
or  any  other Person or to inspect the property (including the  books  and
records)  of the Borrower or any other Person; (e) shall not be responsible
to  any  Bank  for  the due execution, legality, validity,  enforceability,
genuineness,  sufficiency  or value of any Loan  Document,  any  collateral
provided  for  therein,  or  any  other instrument  or  document  furnished
pursuant  thereto; and (f) shall incur no liability under or in respect  of
this  Agreement  by acting upon any notice, consent, certificate  or  other
instrument  or  writing  (which may be by telecopier,  telegram,  cable  or
telex) believed by it to be genuine and signed or sent by the proper  party
or  parties.  The Administrative Agent, its directors, officers,  employees
or  agents shall not have any responsibility to the Borrower on account  of
the  failure or delay in performance or breach by any Bank of  any  of  its
obligations hereunder or to any Bank on account of the failure of or  delay
in  performance or breach by any other Bank or the Borrower of any of their
respective obligations hereunder or in connection herewith.

<PAGE>    76

      Section 8.03.  Chase and Affiliates.   Without limiting the right  of
any other Bank to engage in any business transactions with the Borrower  or
any  of  its Affiliates, with respect to its Commitment, the Loans made  by
it,  the  Note issued to it, and its interest in the Loan Documents,  Chase
shall  have  the same rights and powers under this Agreement as  any  other
Bank  and  may  exercise the same as though it were not the  Administrative
Agent;  and  the  term "Bank" or "Banks" shall, unless otherwise  expressly
indicated, include Chase in its individual capacity.  Chase, or any of  its
Affiliates,  may  be engaged in, or may hereafter engage in,  one  or  more
loan,  letter  of  credit, leasing or other financing  activities  not  the
subject  of  the Loan Documents (such financing activities of Chase  being,
collectively,  the  "Other Financings") with the Borrower  or  any  of  its
Affiliates,  or  may  act as trustee on behalf of, or  depositary  for,  or
otherwise engage in other business transactions with the Borrower or any of
its  Affiliates (all Other Financings and other such business  transactions
of   Chase   being,   collectively,  the  "Other   Activities")   with   no
responsibility  to  account therefor to the Banks.   Without  limiting  the
rights  and  remedies  of the Banks specifically  set  forth  in  the  Loan
Documents,  no  other  Bank  shall have  any  interest  in  (a)  any  Other
Activities,  (b) any present or future guarantee by or for the  account  of
the  Borrower not contemplated or included in the Loan Documents,  (c)  any
present  or future offset exercised by the Administrative Agent  in respect
of  any such Other Activities, (d) any present or future property taken  as
security for any such Other Activities or (e) any property now or hereafter
in  the possession or control of the Administrative Agent which may  be  or
become  security  for  the  obligations of  the  Borrower  under  the  Loan
Documents by reason of the general description of indebtedness secured,  or
of  property,  contained in any other agreements, documents or  instruments
related to such Other Activities; provided, however, that if any payment in
respect  of such guarantees or such property or the proceeds thereof  shall
be  applied to reduction of the obligations evidenced hereunder and by  the
Notes,  then  each  Bank  shall be entitled to share  in  such  application
according to its pro rata portion of such obligations.

      Section 8.04.  Bank Credit Decision. Each Bank acknowledges  that  it
has,  independently and without reliance upon any other member of the  Bank
Group and based on the financial statements referred to in Section 4.06 and
such other documents and information as it has deemed appropriate, made its
own  credit analysis and decision to enter into this Agreement.  Each  Bank
also acknowledges that it will, independently and without reliance upon any
other  member of the Bank Group 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.

<PAGE>    77

     Section 8.05.  Indemnification.   The Banks agree to indemnify each of
the Administrative Agent, the Syndication Agent and the Documentation Agent
(for  purposes  of  this paragraph, each, an "Agent") and their  respective
officers,   employees,  agents,  Affiliates,  directors  and   shareholders
(collectively, for purposes of this Section, "Indemnitees") (to the  extent
not  reimbursed by the Borrower) from and against any and all  liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,  costs,
expenses  or  disbursements of any kind or nature whatsoever which  may  be
imposed  on,  incurred  by, or asserted against an Indemnitee  in  any  way
relating to or arising out of this Agreement or the other Loan Documents or
any  action taken or omitted by an Agent under this Agreement or the  other
Loan Documents, provided, that no Bank shall be liable to an Indemnitee for
any  portion of such liabilities, obligations, losses, damages,  penalties,
actions, judgments, suits, costs, expenses or disbursements resulting  from
such  Indemnitee's  gross  negligence or willful  misconduct.   IT  IS  THE
EXPRESS  INTENTION  OF  THE PARTIES HERETO THAT THE  INDEMNITEES  SHALL  BE
INDEMNIFIED AND HELD HARMLESS AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS,
LOSSES,  DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES  OR
DISBURSEMENTS  OF  ANY KIND ARISING OUT OF OR RESULTING FROM  THE  ORDINARY
NEGLIGENCE  (WHETHER  SOLE  OR CONTRIBUTORY) OR  STRICT  LIABILITY  OF  THE
INDEMNITEES.  The Administrative Agent shall not be required to do any  act
hereunder or under any other document or instrument delivered hereunder  or
in  connection  herewith  or  take  any  action  toward  the  execution  or
enforcement of the agencies hereby created, or to prosecute or  defend  any
suit  in  respect of this Agreement or the Loan Documents or any collateral
security,  unless  indemnified to its satisfaction by the  holders  of  the
Notes  against  loss,  cost,  liability, and  expense.   If  any  indemnity
furnished to the Administrative Agent for any purpose is, in the opinion of
the   Administrative   Agent,  insufficient  or   becomes   impaired,   the
Administrative Agent may call for additional indemnity and not commence  or
cease to do the acts indemnified against until such additional indemnity is
furnished.   Without  limitation  of the foregoing,  each  Bank  agrees  to
reimburse  the  Administrative Agent promptly upon demand for  its  ratable
share  of  any out-of-pocket expenses (including external counsel fees  and
the  allocated  costs of internal counsel) incurred by  the  Administrative
Agent  in  connection with the administration, modification,  amendment  or
enforcement (whether through negotiations, legal proceedings or  otherwise)
of,  or  legal advice in respect of rights or responsibilities under,  this
Agreement   and  the  other  Loan  Documents,  to  the  extent   that   the
Administrative Agent is not reimbursed for such expenses by the Borrower.

      Section  8.06.   Employees  of  the Administrative  Agent,  Etc.  The
Administrative  Agent may execute any of its respective duties  under  this
Agreement,  the  other  Loan  Documents and any  instrument,  agreement  or
document  executed, issued or delivered pursuant hereto or  thereto  or  in
connection  herewith  or  therewith, by or through  employees,  agents  and
attorneys-in-fact,  and  shall  not  be  answerable  for  the  default   or
misconduct of any such employee, agent or attorney-in-fact selected  by  it
with  reasonable care.  The Administrative Agent may, and upon the  written
instruction of the Majority Banks shall, enforce on behalf of the Banks any
claims which the Administrative Agent and/or the Banks may have against any
such  employee, agent or attorney-in-fact, and any recovery therefrom shall
be applied for the pro rata benefit of the Banks.

<PAGE>    78

      Section  8.07.   Successor Administrative Agent.  The  Administrative
Agent  may resign at any time by giving written notice thereof to the other
members  of the Bank Group and the Borrower and may be removed at any  time
with or without cause by the Majority Banks.  Upon any such resignation  or
removal,  the  Majority Banks shall have the right to appoint  a  successor
Administrative Agent.  If no successor Administrative Agent shall have been
so   appointed  by  the  Majority  Banks,  and  shall  have  accepted  such
appointment,  within  thirty  (30) days after the  retiring  Administrative
Agent's  giving of notice of resignation or the Majority Banks' removal  of
the  retiring Administrative Agent, then the retiring Administrative  Agent
may,  on  behalf  of  the Banks, appoint a successor Administrative  Agent,
which  shall  be a commercial bank organized under the laws of  the  United
States of America or of any State thereof and having a combined capital and
surplus  of  at least $500,000,000.  Upon the acceptance of any appointment
as Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested
with  all  the  rights,  powers, privileges  and  duties  of  the  retiring
Administrative  Agent,  and  the  retiring Administrative  Agent  shall  be
discharged from its duties and obligations under this Agreement, subject to
the  requirement that such retiring Administrative Agent will execute  such
documents and take such actions as may be necessary or desirable  to  cause
the  successor  Administrative Agent to be vested  with  all  such  rights,
powers,  privileges and duties.  After any retiring Administrative  Agent's
resignation or removal hereunder as Administrative Agent, the provisions of
this  Article  VIII shall inure to its benefit as to any actions  taken  or
omitted  to  be  taken by it while it was Administrative Agent  under  this
Agreement.  All costs and expenses incurred by the Bank Group in connection
with  any  amendments or other documentation required by this Section  8.07
shall be paid by the Borrower pursuant to Section 9.04 hereof.

      Section 8.08.  Notice of Default. The Administrative Agent shall  not
be  deemed to have knowledge or notice of the occurrence of any Default  or
Event  of Default unless it shall have received notice from a Bank  or  the
Borrower  referring to this Agreement, describing such Default or Event  of
Default and stating that such notice is a "notice of default" or "notice of
event  of  default," as applicable.  If the Administrative  Agent  receives
such a notice from the Borrower, the Administrative Agent shall give notice
thereof  to  the  other members of the Bank Group and, if  such  notice  is
received from a Bank, the Administrative Agent shall give notice thereof to
the  other  members of the Bank Group and the Borrower.  The Administrative
Agent  shall be entitled to take action or refrain from taking action  with
respect  to  such Default or Event of Default as provided in  this  Article
VIII.

      Section  8.09.  Execution of Loan Documents. Each member of the  Bank
Group hereby authorizes and directs the Administrative Agent to execute and
deliver  each Loan Document (including, without limitation; those specified
in Section 3.01) to be executed by the Administrative Agent on or about the
Effective  Date pursuant to the terms of this Agreement and the other  Loan
Documents.

<PAGE>    79

      Section 8.10.  Syndication Agent, Documentation Agent, Co-Agents, Co-
Lead  Arrangers and Book Manager. None of Banks identified  on  the  facing
page  or  signature  pages  of this Agreement  as  a  "Syndication  Agent",
"Documentation  Agent", "Co-Agents", "Co-Lead Arranger" or  "Book  Manager"
shall have any right, power, obligation, liability, responsibility or  duty
under  this  Agreement other than those applicable to all  Banks  as  such.
Without  limiting  the  foregoing,  none  of  Banks  so  identified  as   a
"Syndication Agent", "Documentation Agent", "Co-Agents", "Co-Lead Arranger"
or   "Book  Manager"  shall  have  or  be  deemed  to  have  any  fiduciary
relationship with any Bank.  Each Bank acknowledges that it has not relied,
and  will  not  rely, on any of such Persons so identified in  deciding  to
enter into this Agreement or in taking or not taking action hereunder.

                                ARTICLE IX
                               MISCELLANEOUS
                                     
      Section  9.01.   Amendments,  Etc. No  amendment  or  waiver  of  any
provision  of  this  Agreement, any Note or any  other  Loan  Document,  or
consent to any departure by any Person herefrom or therefrom, shall in  any
event  be effective unless the same shall be in writing and signed  by  the
Borrower  and the Majority Banks, and then such waiver or consent shall  be
effective  only in the specific instance and for the specific  purpose  for
which given; provided, however, that no amendment, waiver or consent shall,
unless in writing and signed by all the Banks, do any of the following: (a)
waive  or  amend any of the conditions specified in Section  3.01,  (b)  to
extend the term of or increase the Commitments of the Banks, (c) reduce the
principal  of,  or  interest on, the Notes or any  fees  or  other  amounts
payable hereunder, (d) postpone any date fixed for any payment of principal
of,  or  interest  on,  the  Notes or any fees  or  other  amounts  payable
hereunder,  (e) release the Borrower or any other Person from  its  payment
obligations  to the Bank Group, regardless of whether such obligations  are
those  of a primary obligor, a guarantor or surety, or otherwise, (f)  take
action  which expressly requires the signing of all the Banks  pursuant  to
the  terms of this Agreement, (g) change the Commitment Percentages or  the
aggregate unpaid principal amount of the Notes, or the number of Banks,  as
the  case may be, required for the Administrative Agent or the Banks or any
of  them to take any action under this Agreement or amend the definition of
Majority Banks or (h) amend this Section 9.01; provided, further,  that  no
amendment,  waiver  or consent shall unless in writing and  signed  by  the
Administrative Agent in addition to the Banks required above to  take  such
action, affect the rights or duties of the Administrative Agent under  this
Agreement  or any other Loan Document.  No notice to or demand on  Borrower
or  any other Person in any case shall entitle them to any other or further
notice or demand in similar or other circumstances.

<PAGE>    80

      Section  9.02.  Participation Agreements and Assignments.    (a)  (i)
Subject  to  Section  9.02(a)(ii), each Bank may  assign  to  one  or  more
Eligible  Assignees  all or a portion of its rights and  obligations  under
this  Agreement  (including, without limitation, all or a  portion  of  its
Commitment,  the Loans owing to it and the Note held by it) and  the  other
Loan  Documents;  provided, however, that (A) no such assignment  shall  be
made   unless  such  assignment and assignee  have  been  approved  by  the
Administrative Agent and, so long as no Default or Event of Default exists,
the Borrower, such approvals not to be unreasonably withheld, provided that
such approvals shall not be required if the assignee is an Affiliate of the
assignor Bank, (B) each such assignment shall be of a constant, and  not  a
varying,  percentage of all rights and obligations of  the  assignor  under
this  Agreement  and the other Loan Documents, and no assignment  shall  be
made  unless   it covers a pro rata share of all rights and obligations  of
such  assignor under this Agreement and the other Loan Documents,  (C)  the
amount  of the Commitment of the assigning Bank being assigned pursuant  to
each  such  assignment  (determined as of the date of  the  Assignment  and
Acceptance with respect to such assignment) shall, unless otherwise  agreed
to  by  the  Administrative Agent, in no event be less than $5,000,000  and
shall  be  an  integral multiple of $ 1,000,000, (D) each  such  assignment
shall  be  to an Eligible Assignee, (E) the parties to each such assignment
shall  execute and deliver to the Administrative Agent, for its  acceptance
and   recording  in  the  Register  (defined  below),  an  Assignment   and
Acceptance, together with any Note subject to such assignment, and (F) such
parties  shall  pay  to  the  Administrative  Agent  a  processing  fee  of
$2,500.00.  Upon  such execution, delivery, acceptance and recording,  from
and  after  the effective date specified in each Assignment and Acceptance,
(1) the assignee thereunder shall be a party hereto and, to the extent that
rights  and obligations under the Loan Documents have been assigned  to  it
pursuant to such Assignment and Acceptance, have the rights and obligations
of  a  Bank  under the Loan Documents and (2) the assigning Bank thereunder
shall,  to  the extent that rights and obligations under the Loan Documents
have  been  assigned  by  it  pursuant to such Assignment  and  Acceptance,
relinquish its rights and be released from its obligations under  the  Loan
Documents (and, in the case of an Assignment and Acceptance covering all or
the  remaining portion of an assigning Bank's rights and obligations  under
this Agreement, such Bank shall cease to be a party hereto).

                (ii)  In the event any Bank desires to transfer all or  any
portion  of  its  rights and obligations under the Loan  Documents  to  any
Person other than an Affiliate of such Bank, it shall give the Borrower and
the  Administrative  Agent prior written notice of  the  identity  of  such
transferee  and  the  terms and conditions of such  transfer  (a  "Transfer
Notice").   So long as no Default or Event of Default has occurred  and  is
continuing, the Borrower may, no later than ten (10) days following receipt
of  such Transfer Notice, designate an alternative transferee and such Bank
shall  thereupon  be  obligated to sell the  interests  specified  in  such
Transfer  Notice to such alternative transferee, subject to the  following:
(A)  such  transfer shall be made on the same terms and conditions outlined
in  such Transfer Notice, (B) such transfer shall otherwise comply with the
terms  and conditions of the Loan Documents (including Section 9.02(a)(i)),
and  (C)  such alternative transferee must be an Eligible Assignee approved
by  the  Administrative Agent.  If the Borrower shall fail to designate  an
alternative  transferee within such ten (10) day period, such  Bank  shall,
subject  to compliance with the other terms and provisions hereof, be  free
to consummate the transfer described in such Transfer Notice.

<PAGE>    81

           (b)   By  executing and delivering an Assignment and Acceptance,
the  assigning Bank thereunder and the assignee thereunder confirm  to  and
agree  with each other and the other parties hereto as follows:  (i)  other
than  as  provided in such Assignment and Acceptance, such  assigning  Bank
makes  no  representation or warranty and assumes  no  responsibility  with
respect  to  any statements, warranties or representations made  in  or  in
connection  with  the Loan Documents or the execution, legality,  validity,
enforceability, genuineness, sufficiency or value of this Agreement or  any
other instrument or document furnished pursuant hereto; (ii) such assigning
Bank makes no representation or warranty and assumes no responsibility with
respect  to  the financial condition of the Borrower or the performance  or
observance  by the Borrower of any of its obligations under this  Agreement
or  any other instrument or document furnished pursuant hereto; (iii)  such
assignee  confirms  that it has received a copy of this Agreement  and  the
other  Loan  Documents,  together with copies of the  financial  statements
referred  to   in  Section  4.06  and  such  ther documents and information
as  it  has deemed appropriate to make its own credit analysis and decision
to  enter  into  such Assignment and Acceptance; (iv) such  assignee  will,
independently  and  without reliance upon any  member  of  the  Bank  Group
(including such assigning Bank) 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;  (v)  such
assignee  confirms  that  it is an Eligible Assignee;  (vi)  such  assignee
appoints and authorizes the Administrative Agent to take such action on its
behalf and to exercise such powers under this Agreement and the other  Loan
Documents  as  are  delegated  to the Administrative  Agent  by  the  terms
thereof,  together  with such powers as are reasonably incidental  thereto;
and  (vii)  such  assignee agrees that it will perform in  accordance  with
their terms all of the obligations which by the terms of this Agreement and
the other Loan Documents are required to be performed by it as a Bank.

           (c)   The  Administrative Agent shall maintain  at  its  address
referred  to  in  Section  9.03 a copy of each  Assignment  and  Acceptance
delivered to and accepted by it and a register for the recordation  of  the
names  and  addresses  of the Banks and the Commitment  of,  and  principal
amount of the Loans owing to, each Bank from time to time (the "Register").
The  entries  in  the  Register shall be conclusive  and  binding  for  all
purposes,  absent manifest error, and the Borrower and each member  of  the
Bank Group may treat each Person whose name is recorded in the Register  as
a Bank hereunder for all purposes of this Agreement.  The Register shall be
available for inspection by the Borrower or any member of the Bank Group at
any reasonable time and from time to time upon reasonable prior notice.

<PAGE>    82

          (d)  Upon its receipt of an Assignment and Acceptance executed by
an  assigning  Bank  and an assignee representing that it  is  an  Eligible
Assignee,   together  with  any  Note  subject  to  such  assignment,   the
Administrative  Agent  shall, if such Assignment and  Acceptance  has  been
completed  and is in substantially the form of Exhibit D and satisfies  all
other  requirements  set  forth  in this  Section  9.02,  (i)  accept  such
Assignment and Acceptance, (ii) record the information contained therein in
the  Register and (iii) give prompt notice thereof to the Borrower and  the
other  members of the Bank Group.  Within five (5) Business Days after  its
receipt of such notice, the Borrower, at its own expense, shall execute and
deliver to the Administrative Agent, in exchange for the surrendered Notes,
new Notes to the order of such Eligible Assignee in an amount corresponding
to  the  Commitment  assumed  by such Eligible Assignee  pursuant  to  such
Assignment  and  Acceptance  and, if the  assigning  Bank  has  retained  a
Commitment  hereunder, new Notes to the order of the assigning Bank  in  an
amount corresponding to the Commitment retained by it hereunder.  Such  new
Notes  shall  be  in an aggregate principal amount equal to  the  aggregate
principal  amount of such surrendered Notes, shall be dated  the  effective
date  of  such  Assignment  and  Acceptance  and  shall  otherwise  be   in
substantially the form prescribed by Section 2.03 hereto.

           (e)   Each Bank may sell participations to one or more banks  or
other  entities  in  or to all or a portion of its rights  and  obligations
under  this  Agreement  and  the other Loan Documents  (including,  without
limitation, all or a portion of its Commitment and the Loans owing to  it);
provided,  however, that (i) such Bank's obligations under  this  Agreement
(including,  without limitation, its Commitment to the Borrower  hereunder)
and  the other Loan Documents shall remain unchanged, (ii) such Bank  shall
remain  solely responsible to the other parties hereto for the  performance
of  such obligations, and the participating banks or other  entities  shall
not   be  considered a  "Bank"  for  purposes  of the Loan Documents, (iii)
the  participating banks or other entities shall be entitled  to  the  cost
protection  provisions contained in Section 2.10 through Section  2.13  and
the  rights of setoff contained in Section 7.02, in each case to  the  same
extent  that  the Bank from which such participating bank or  other  entity
acquired  its participation would be entitled to the benefit of  such  cost
protection  provisions and rights of setoff and (iv) the Borrower  and  the
other  members of the Bank Group shall continue to deal solely and directly
with  such Bank in connection with such Bank's rights and obligations under
this Agreement and the other Loan Documents, and such Bank shall retain the
sole right to enforce the obligations of the Borrower relating to the Loans
and  to  approve any amendment, modification or waiver of any provision  of
this  Agreement  (other  than  amendments, modifications  or  waivers  with
respect  to  the  amounts of any fees payable hereunder or  the  amount  of
principal of or the rate at which interest is payable on the Loans, or  the
dates fixed for payments of principal or interest on the Loans).

            (f)    Anything   in  this  Section  9.02   to   the   contrary
notwithstanding,  any  Bank may at any time, without  the  consent  of  the
Borrower or the Administrative Agent, assign and pledge all or any  portion
of  its Note and the Loans owing to it to any Federal Reserve Bank (and its
transferees) as collateral security pursuant to Regulation A of the Federal
Reserve  Board  and any Operating Circular issued by such  Federal  Reserve
Bank.   No  such  assignment  shall release the  assigning  Bank  from  its
obligations hereunder.

<PAGE>    83

           (g)   Any  Bank  may,  in  connection  with  any  assignment  or
participation  or  proposed assignment or participation  pursuant  to  this
Section  9.02, disclose to the assignee or participant or proposed assignee
or  participant, any information relating to the Borrower furnished to such
Bank  by  or  on behalf of the Borrower; provided that prior  to  any  such
disclosure,  each  such  assignee or participant or  proposed  assignee  or
participant  shall agree (subject to customary exceptions) to preserve  the
confidentiality  of any confidential information relating to  the  Borrower
received from such Bank.

      Section  9.03.   Notices.   All correspondence, statements,  notices,
requests  and demands (collectively "Communications") shall be  in  writing
(including telegraphic Communications) and mailed, telegraphed, telecopied,
facsimile transmitted or delivered as follows:

          if to the Borrower:

                    Kirby Corporation
                    1775 St. James Place, Suite 200
                    Houston, Texas  77056
                    Attention:  Chief Financial Officer
                    Telecopier:  (713) 435-1010

           if to the Administrative Agent:

                    Chase Bank of Texas, National Association
                    712 Main Street
                    Houston, Texas  77002
                    Attention:  Houston Diversified Industries
                    Telecopier:  (713) 216-6004

          with a copy to:

                    Chase Securities Inc.
                    Muniram Apanna
                    Agency Services
                    One Chase Manhattan Plaza
                    8th Floor
                    New York, New York 10081
                    Telephone: (212) 552-7943
                    Telecopier:  (212) 552-7490

if  to any Bank, at its address for notices set forth in Schedule 9.03,  or
as  to each such party, at such other address as such party shall designate
in  a  written Communication to each of the other parties hereto.  All such
Communications  shall be effective, in the case of written  or  telegraphed
Communications, when deposited in the mails or delivered to  the  telegraph
company,  respectively, and, in the case of a Communication by telecopy  or
facsimile transmission, when telecopied or transmitted against receipt of a
confirmation,   in   each   case  addressed  as  aforesaid,   except   that
Communications to any member of the Bank Group pursuant to Article  II  and
Article VIII shall not be effective until received by such Persons.

<PAGE>    84

      Section  9.04.  Costs and Expenses.   The Borrower agrees to  pay  on
demand  (a) all reasonable costs and expenses of the Syndication  Agent  in
connection  with  the preparation, execution, delivery and  syndication  of
this  Agreement,  including, without limitation, the  reasonable  fees  and
expenses  of  counsel,  (b)  all  reasonable  costs  and  expenses  of  the
Administrative Agent incurred in connection with the administration of  the
Loan Documents and any other agreements or security documents delivered  in
connection  with  or  pursuant  to any of the  Loan  Documents,  including,
without limitation, the reasonable fees and expenses of counsel and (c) all
costs and expenses of the Administrative Agent, and during the existence of
an  Event of Default, any Bank, incurred in connection with the enforcement
of  the  Loan  Documents  and any other agreements  or  security  documents
executed  in  connection  with or pursuant to any of  the  Loan  Documents,
including,  but  not  limited to, the fees and  out-of-pocket  expenses  of
counsel with respect thereto, and the costs and expenses in connection with
the  custody,  preservation,  use or operation  of,  or  the  sale  of,  or
collection from, or other realization upon the sale of, or collection from,
or  other  realization  upon any collateral covered  by  any  of  the  Loan
Documents or any other documents executed in connection with or pursuant to
any  of  the Loan Documents.  The agreements of Borrower contained in  this
Section  9.04  shall  survive the termination of the  Commitments  and  the
payment of all other amounts owing hereunder or under any of the other Loan
Documents.

      Section  9.05.   Successors and Assigns.   This  Agreement  shall  be
binding  upon  and inure to the benefit of the Borrower, the Administrative
Agent,  the Banks and their respective successors and assigns, except  that
the  Borrower may not assign or transfer its rights hereunder  without  the
prior written consent of the Banks.

     Section 9.06.  Independence of Covenants.   All covenants contained in
the  Loan  Documents  shall  be  given independent  effect  so  that  if  a
particular  action or condition is not permitted by any of such  covenants,
the  fact  that such action or condition would be permitted by an exception
to,  or otherwise be within the limitations of, another covenant shall  not
avoid the occurrence of a Default or an Event of Default if such action  is
taken or condition exists.

      Section  9.07.   Survival of Representations  and  Warranties.    All
representations and warranties contained in this Agreement  and  the  other
Loan Documents or made in writing by the Borrower in connection herewith or
therewith, shall survive the execution and delivery of this Agreement,  the
Notes  and  the other Loan Documents and the repayment of the  Loans.   Any
investigation  by any member of the Bank Group shall not  diminish  in  any
respect   whatsoever  its  right  to  rely  on  such  representations   and
warranties.

     Section 9.08.  Severability.   Should any clause, sentence, paragraph,
subsection, Section or Article of this Agreement be judicially declared  to
be  invalid, unenforceable or void, such decision will not have the  effect
of invalidating or voiding the remainder of this Agreement, and the parties
hereto  agree  that  the  part or parts of this Agreement  so  held  to  be
invalid,  unenforceable  or  void will be  deemed  to  have  been  stricken
herefrom by the parties hereto, and the remainder will have the same  force
and effectiveness as if such stricken part or parts had never been included
herein.

<PAGE>    85

      Section  9.09.  Captions.   The captions in this Agreement have  been
inserted for convenience only and shall be given no substantive meaning  or
significance  whatsoever in construing the terms  and  provisions  of  this
Agreement.

      Section  9.10.  Limitation by Law.   All provisions of this Agreement
and  the  other Loan Documents are intended to be subject to all applicable
mandatory  provisions of law which may be controlling and to be limited  to
the  extent  necessary so that they will not render this Agreement  or  any
other  Loan Document invalid or unenforceable, in whole or in part, or  not
entitled  to be recorded, registered or filed under the provisions  of  any
applicable law.

      Section 9.11.  Counterparts.   This Agreement may be executed in  any
number  of  counterparts  and  by  different  parties  hereto  in  separate
counterparts,  each  of which when so executed shall be  deemed  to  be  an
original, and all of which taken together shall constitute one and the same
agreement.

      Section 9.12.  Governing Law.   This Agreement shall be governed  by,
and  construed  in  accordance with, the laws of the  State  of  Texas  and
applicable federal law; provided, however, notwithstanding the foregoing or
any other provision of this Agreement, nothing in this Agreement, the Notes
or  the other Loan Documents shall be deemed to constitute a waiver of  any
rights  which any Bank may have under federal legislation relating  to  the
rate  of  interest which such Bank may contract for, take, reserve, receive
or  charge  in  respect  of any Debt owing to such Bank  hereunder.   Texas
Finance  Code, Chapter 346 (formerly Chapter 15, Subtitle 3, Title  79,  of
the  Revised  Civil  Statutes  of Texas, 1925),  as  amended  (relating  to
revolving  loan and revolving triparty accounts), shall not apply  to  this
Agreement or the Notes or the transactions contemplated hereby.

      Section  9.13.   Limitation on Interest.    Each  provision  in  this
Agreement and each other Loan Document is expressly limited so that  in  no
event whatsoever shall the amount paid, or otherwise agreed to be paid,  by
the  Borrower  for the use, forbearance or detention of  the  money  to  be
loaned  under  this  Agreement  or any other  Loan  Document  or  otherwise
(including  any  sums  paid  as  required by  any  covenant  or  obligation
contained  herein  or  in any other Loan Document which  is  for  the  use,
forbearance or detention of such money), exceed that amount of money  which
would  cause  the effective rate of interest thereon to exceed the  Highest
Lawful Rate, and all amounts owed under this Agreement and each other  Loan
Document  shall be held to be subject to reduction to the effect that  such
amounts so paid or agreed to be paid which are for the use, forbearance  or
detention of money under this Agreement or such Loan Document shall  in  no
event  exceed that amount of money which would cause the effective rate  of
interest thereon to exceed the Highest Lawful Rate.  To the extent that the
Highest Lawful Rate applicable to a Bank is at any time determined by Texas
law,  such  rate  shall be the weekly ceiling (formerly the indicated  rate
ceiling) determined in accordance with Tex.Rev.Civ.Stat., Title 79, Article
5069-1D.003, also codified at Texas Finance Code, Section 303.301 (formerly
Article  5069-1.01(a)(i)), as amended; provided, however, to the extent the

<PAGE>    86

Loans   are   deemed  open  end  accounts  as  such  term  is  defined   in
Tex.Rev.Civ.Stat., Title 79, Article 5069-1B.002(14) (formerly Article 5069-
1.01(f)),  the  Banks from time to time by notice from  the  Administrative
Agent  to Borrower may revise the aforesaid election of such interest  rate
ceiling as such ceiling affects the then-current or future balances of  the
Loans  outstanding under the Notes.  Notwithstanding any provision in  this
Agreement  or any other Loan Document to the contrary, if the  maturity  of
the  Notes  or  the obligations in respect of the other Loan Documents  are
accelerated  for any reason, or in the event of prepayment of  all  or  any
portion  of  the  Notes or the obligations in respect  of  the  other  Loan
Documents  by  the Borrower or in any other event, earned interest  on  the
Loans  and  such  other obligations of the Borrower may  never  exceed  the
maximum  amount  permitted  by applicable law, and  any  unearned  interest
otherwise  payable  under the Notes or the obligations in  respect  of  the
other  Loan Documents that is in excess of the maximum amount permitted  by
applicable  law  shall be cancelled automatically as of the  date  of  such
acceleration  or  prepayment or other such event and, if theretofore  paid,
shall be credited on the principal of the Notes or, if the principal of the
Notes  has  been  paid in full, refunded to the Borrower.   In  determining
whether   or  not  the  interest  paid  or  payable,  under  any   specific
contingency,  exceeds the Highest Lawful Rate, the Borrower and  the  Banks
shall,  to  the  maximum  extent  permitted by  applicable  law,  amortize,
prorate,  allocate  and spread, in equal parts during  the  period  of  the
actual  term  of  this Agreement, all interest at any time contracted  for,
charged, received or reserved in connection with the Loan Documents.

      Section  9.14.  Indemnification.   The Borrower agrees to  indemnify,
defend  and hold each member of the Bank Group, the Syndication  Agent  and
the  Documentation Agent, as well as their respective officers,  employees,
agents,  Affiliates, directors and shareholders (collectively, "Indemnified
Persons")  harmless  from and against any and all loss, liability,  damage,
judgment,  claim,  deficiency  or reasonable expense  (including  interest,
penalties,  reasonable  attorneys' fees (including without  limitation  the
allocated  cost  of  internal  counsel) and  amounts  paid  in  settlement)
incurred by or asserted against any Indemnified Person arising out  of,  in
any way connected with, or as a result of (i) the execution and delivery of
this Agreement and the other documents contemplated hereby, the performance
by the parties hereto and thereto of their respective obligations hereunder
and thereunder (including but not limited to the making  of  the  Loans  by
each  Bank)  and consummation of the transactions contemplated  hereby  and
thereby,  (ii)  the actual or proposed use of the proceeds  of  the  Loans,
(iii)  any  violation  by the Borrower or any of its  Subsidiaries  of  any
Requirement of Law, including but not limited to Environmental  Laws,  (iv)
any  member  of  the Bank Group being deemed an operator  of  any  real  or
personal   property  of  the  Borrower  or  any  of  its  Subsidiaries   in
circumstances  in which no member of the Bank Group is generally  operating
or  generally  exercising control over such property, to  the  extent  such
losses,  liabilities, damages, judgments, claims, deficiencies or  expenses
arise out of or result from any Hazardous Materials located in, on or under
such  property  or (v) any claim, litigation, investigation  or  proceeding
relating to any of the foregoing, whether or not any Indemnified Person  is
a  party  thereto; provided that such indemnity shall not apply to any such

<PAGE>    87

losses,   claims,  damages,  liabilities  or  related  expenses  that   are
determined  by a court of competent jurisdiction by final and nonappealable
judgment  to have resulted from the gross negligence or willful  misconduct
of, or willful violation of the Loan Documents by, such Indemnified Person.
WITHOUT  LIMITING ANY PROVISION OF THIS AGREEMENT OR ANY OF THE OTHER  LOAN
DOCUMENTS,  IT  IS  THE  EXPRESS  INTENTION  OF  THE  BORROWER  THAT   EACH
INDEMNIFIED PERSON SHALL BE INDEMNIFIED AND HELD HARMLESS AGAINST  ANY  AND
ALL  LOSSES,  LIABILITIES, CLAIMS, DEFICIENCIES,  JUDGMENTS  OR  REASONABLE
EXPENSES  ARISING OUT OF OR RESULTING FROM THE ORDINARY NEGLIGENCE (WHETHER
SOLE OR CONTRIBUTORY) OR STRICT LIABILITY OF SUCH INDEMNIFIED PERSON.  Each
Indemnified  Person  will attempt to consult with  the  Borrower  prior  to
entering  into any settlement of any lawsuit or proceeding that could  give
rise  to  a  claim for indemnity under this Section 9.14, although  nothing
herein  shall  give the Borrower the right to direct or  control  any  such
settlement negotiations or any related lawsuit or proceeding on  behalf  of
such Indemnified Party.  The obligations of the Borrower under this Section
9.14 shall survive the termination of this Agreement.

      Section  9.15    Submission  to  Jurisdiction.  The  Borrower  hereby
irrevocably submits to the jurisdiction of any Texas state or federal court
sitting in Houston, Texas over any action or proceeding arising out  of  or
relating  to  this  Agreement or any of the other Loan Documents,  and  the
Borrower  irrevocably agrees that all claims in respect of such  action  or
proceeding  may  be  heard and determined in such Texas  state  or  federal
court; provided, however, nothing in this Section 9.15 is intended to waive
the  right  of  any member of the Bank Group to remove any such  action  or
proceeding commenced in any such Texas state court to an appropriate  Texas
federal  court  to  the  extent the basis for  such  removal  exists  under
applicable  law.  The Borrower irrevocably consents to the service  of  any
and  all  process  in  any  such action or proceeding  by  the  mailing  by
certified  mail  of  copies of such process to it at its address  specified
herein.   The Borrower agrees that a final judgment in any such  action  or
proceeding  shall be conclusive and may be enforced in other  jurisdictions
by suit on the judgment or in any other manner provided by law.  Nothing in
this Section 9.15 shall affect the right of any member of the Bank Group to
serve  legal  process in any other manner permitted by law  or  affect  the
right  of  any  member of the Bank Group to bring any action or  proceeding
against any of the Borrower, or such person's properties, in the courts  of
any other jurisdiction.

     Section 9.16.  WAIVER OF JURY TRIAL.   TO THE FULLEST EXTENT PERMITTED
BY  APPLICABLE LAW, THE BORROWER AND THE BANK GROUP HEREBY IRREVOCABLY  AND
EXPRESSLY  WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING  OR
COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) ARISING  OUT
OF OR RELATING TO THIS AGREEMENT, THE NOTES, OR ANY OTHER LOAN DOCUMENTS OR
THE  TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF THE BANK GROUP  IN
THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT THEREOF.

<PAGE>    88

      Section 9.17   FINAL AGREEMENT OF THE PARTIES. THIS AGREEMENT AND THE
OTHER  LOAN  DOCUMENTS CONSTITUTE A LOAN AGREEMENT FOR PURPOSES OF  SECTION
26.02(a)  OF THE TEXAS BUSINESS AND COMMERCE CODE, AND REPRESENT THE  FINAL
AGREEMENT  BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY  EVIDENCE  OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
                                     
                    [SIGNATURES BEGIN ON THE NEXT PAGE]

<PAGE>    89

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

                    KIRBY CORPORATION

                    By:  /S/ Norman W. Nolen
                         -------------------------------------
                         Norman W. Nolen
                         Senior Vice President
                         Chief Financial Officer and Treasurer



                    CHASE BANK OF TEXAS,
                    NATIONAL ASSOCIATION, as
                    Administrative Agent and as a Bank

                    By:  /S/ Michael Ondruch
                         -------------------------------------
                             Name:  Michael Ondruch
                             Title: Vice President



                    BANK OF AMERICA, N.A., as
                    Syndication Agent and as a Bank

                    By:  /S/ Claire Liu
                         -------------------------------------
                             Name:  Claire Liu
                             Title: Managing Director



                    BANK ONE, TEXAS, N.A.,
                    as Documentation Agent and as a Bank

                    By:  /S/ John J. Zollinger, IV
                         -------------------------------------
                             Name:  John J. Zollinger, IV
                             Title: Vice President



                    FIRST UNION NATIONAL BANK,
                    as Co-Agent and as a Bank

                    By:  /S/ Roy O. Young
                         -------------------------------------
                             Name:  Roy O. Young
                             Title: Vice President



            [THIS IS A SIGNATURE PAGE TO THE CREDIT AGREEMENT]

<PAGE>    90

                    THE INDUSTRIAL BANK OF JAPAN, LIMITED, NEW YORK
                    BRANCH, as Co-Agent and as a Bank

                    By:  /S/ Michael N. Oakes
                         -------------------------------------
                             Name:  Michael N. Oakes
                             Title: Senior Vice President,
                                    Houston Office



                    WELLS FARGO BANK (TEXAS),
                    NATIONAL ASSOCIATION, as Co-Agent and as a Bank

                    By:  /S/ Nipul V. Patel
                         -------------------------------------
                             Name:  Nipul V. Patel
                             Title: Assistant Vice President



                    BANKBOSTON, N.A.

                    By:  /S/ Sean F. McCarthy
                         -------------------------------------
                             Name:  Sean F. McCarthy
                             Title: Vice President



                    THE BANK OF TOKYO-MITSUBISHI, LTD.,
                    HOUSTON AGENCY

                    By:  /S/ John W. McGhee
                         -------------------------------------
                             Name:  John W. McGhee
                             Title: Vice President and Manager



                    DEN NORSKE BANK ASA

                    By:  /S/ Barbara Gronquist
                         -------------------------------------
                             Name:  Barbara Gronquist
                             Title: First Vice President

                    By:  /S/ Chr. Tobias Backer
                         -------------------------------------
                             Name:  Chr. Tobias Backer
                             Title: Assistant Vice President



            [THIS IS A SIGNATURE PAGE TO THE CREDIT AGREEMENT]

<PAGE>    91

                    HIBERNIA NATIONAL BANK

                    By:  /S/ S. John Castellano
                         -------------------------------------
                             Name:  S. John Castellano
                             Title: Senior Vice President



                    SOUTHWEST BANK OF TEXAS, N.A.

                    By:  /S/ Gary Tolbert
                         -------------------------------------
                             Name:  Gary Tolbert
                             Title: Senior Vice President



            [THIS IS A SIGNATURE PAGE TO THE CREDIT AGREEMENT]

<PAGE>    92

                                  ANNEX A
                                DEFINITIONS

      "Acquisition" means a transaction resulting in (a) acquisition by the
Borrower, directly or indirectly, of all or substantially all of the assets
of a Person, or of any business or division of a Person, (b) acquisition by
the  Borrower  of   in  excess  of 50% of the  capital  stock,  partnership
interests, or other equity of any Person, or otherwise causing such  Person
to become a Subsidiary of the Borrower, or (c) a merger or consolidation of
other combination of the Borrower with another Person.

     "Adjusted CD Rate" means, for any Interest Period for each Adjusted CD
Rate Loan comprising part of the same Borrowing, an interest rate per annum
equal  to the sum of.  (a) the rate per annum obtained by dividing (i)  the
rate  of  interest  determined  by  the  Administrative  Agent  to  be  the
arithmetic average (rounded upward to the nearest whole multiple  of  1/100
of  1%  per annum, if such average is not such a multiple) of the consensus
bid  rate  determined by the Administrative Agent for  the  bid  rates  per
annum,  on  or  about 9:00 A.M.  (Houston time) (or as soon  thereafter  as
practicable) one Business Day before the first day of such Interest Period,
of  certificate of deposit dealers of recognized standing selected  by  the
Administrative  Agent  for the purchase at face value  of  certificates  of
deposit of the Administrative Agent in an amount approximately equal to the
Adjusted  CD  Rate  Loan  to  be made by the Administrative  Agent  in  its
capacity  as  a  Bank  and comprising part of such  Borrowing  and  with  a
maturity equal to such Interest Period, by (ii) a percentage equal to  100%
minus  the  Adjusted CD Rate Reserve Percentage for such  Interest  Period,
plus  (b)  the  Assessment Rate in effect from time  to  time  during  such
Interest Period.

      "Adjusted CD Rate Borrowing" means a Borrowing consisting of Adjusted
CD Rate Loans.

     "Adjusted CD Rate Loan" means a Loan that the Borrower has designated,
or is deemed to have designated, as such in accordance with Article II.

      "Adjusted CD Rate Reserve Percentage" means, for the Interest  Period
for  each Adjusted CD Rate Loan comprising part of the same Borrowing,  the
reserve percentage applicable one Business Day before the first day of such
Interest Period under regulations issued from time to time by the Board  of
Governors  of the Federal Reserve System (or any successor) for determining
the  maximum  reserve  requirement (including,  but  not  limited  to,  any
emergency, supplemental or other marginal reserve requirement) for a member
bank  of  the  Federal  Reserve  System in  Houston,  Texas  with  deposits
exceeding one billion dollars, or with respect to liabilities consisting of
or  including  (among  other  liabilities)  U.S.  dollar  nonpersonal  time
deposits  in  the  United  States with a maturity equal  to  such  Interest
Period.

<PAGE>    93

      "Adjusted  Net  Income" means, for any period, Net  Income  for  such
period;  less, to the extent otherwise included in such Net Income (a)  any
gain  or  loss arising from the sale of capital assets of the Borrower  and
its  Consolidated Subsidiaries; (b) any gain arising from any  write-up  of
assets  of the Borrower and its Consolidated Subsidiaries; (c) earnings  of
any  other  Person,  substantially all of the assets  of  which  have  been
acquired  by  the Borrower or any of its Consolidated Subsidiaries  in  any
manner, to the extent that such earnings were realized by such other Person
prior to the date of such acquisition;(d) net earnings of any Person (other
than  a  Consolidated Subsidiary) in  which  the Borrower or   any  of  its
Consolidated Subsidiaries has an ownership interest, except for the portion
of  such  net  earnings that have been distributed to  the  Borrower  or  a
Consolidated Subsidiary; (e) the earnings of any Person to which assets  of
the  Borrower or any of its Consolidated Subsidiaries shall have been sold,
transferred  or disposed of, to the extent that such earnings  arise  after
the date of such transaction; (f) the earnings of any Person into which the
Borrower or any of its Consolidated Subsidiaries shall have merged, to  the
extent  that such earnings arise prior to the date of such merger; (g)  any
gain arising from the acquisition of any securities of the Borrower or  any
of  its  Consolidated Subsidiaries; and (h) the taxes, if any, included  in
the  calculation  of the consolidated net earnings, if  any,  described  in
clauses (a) through (g); plus, to the extent not otherwise included in such
Net  Income, all distributions, other than returns of capital,  which  have
been made to the Borrower or a Consolidated Subsidiary by any Person, other
than   a  Consolidated  Subsidiary,  in  which  Borrower  or  any  of   its
Consolidated Subsidiaries has an ownership interest.

     "Affected Bank" has the meaning specified in Section 2.14.

     "Affected Interests" has the meaning specified in Section 2.14.

     "Affiliate" means, when used with respect to any Person, (a) any other
Person  (including any member of the immediate family of any  such  natural
person)  who  directly  or indirectly beneficially owns  or  controls  five
percent  (5%) or more of the total voting power of shares of capital  stock
of such Person having the right to vote for directors (or other individuals
performing similar functions) under ordinary circumstances, (b) any  Person
controlling,  controlled by or under common control with  any  such  Person
(within  the meaning of Rule 405 under the Securities Act of 1933) and  (c)
any director or executive officer of such Person.

      "Administrative Agent" has the meaning specified in the  introduction
to this Agreement.

      "Administrative  Agent's  Fee Letter" has the  meaning  specified  in
Section 2.09.

      "Agreement" means this Credit Agreement, as the same may from time to
time be amended, supplemented or modified and in effect.

      "Applicable  Lending Office" means, with respect to each  Bank,  such
Bank's  Domestic Lending Office in the case of a Base Rate Loan,  and  such
Bank's Eurodollar Lending Office in the case of a Eurodollar Rate Loan.

<PAGE>    94

      "Applicable  Amount" means, for any day, with respect to  outstanding
Loans  of  the  Types  referred  to below,  and  the  commitment  fees  and
utilization fees referred to below (expressed in basis points), as the case
may  be, the per annum amount set forth below under the caption "Commitment
Fee," "Applicable Margin for Eurodollar Rate Loans," "Applicable Margin for
Base  Rate  Loans,"  "Applicable Margin for  Adjusted  CD  Rate  Loans"  or
"Utilization  Fee",  as the case may be, based upon the  two  highest  Debt
Ratings applicable on such date:


<TABLE>
<CAPTION>
                                   Applicable                                  
                                     Margin     Applicable   Applicable        
                                      for       Margin for   Margin For        
    Debt              Commitment   Eurodollar   Base Rate   Adjusted CD  Utilization
   Rating                Fee       Rate Loans     Loans      Rate Loans      Fee
-----------          -----------  -----------  -----------  ----------   ----------
<S>                  <C>          <C>          <C>          <C>          <C>
>BBB+/Baa1             17.5 bps      75.0 bps       0           87.5       12.5 bps
-
                                                                 
>BBB/Baa2              20.0 bps      87.5 bps       0          100.00      12.5 bps
-
                                                                 
>BBB-/Baa3             25.0 bps     100.0 bps       0          112.5       25.0 bps
-
                                                                 
>BB+/Ba1               30.0 bps     125.0 bps       0          137.5       25.0 bps
-
                                                                 
<BB+/Ba1 or unrated    35.0 bps     150.0 bps       0          162.5       25.0 bps
</TABLE>


      For  purpose of the foregoing, (i) if either Moody's, S&P or  Duff  &
Phelps shall not have in effect a Debt Rating (other than by reason of  the
circumstances  referred to in the last sentence of this  definition),  then
such  rating  agency shall be deemed to have established a  rating  in  the
lowest of the categories above; (ii) if the two highest ratings established
or  deemed  to  have established by Moody's, S&P and Duff  &  Phelps  shall
differ  by  more  than one level, the rating which is one level  above  the
lower  rating shall apply; and (iii) if the  ratings established or  deemed
to  have  been  established by Moody's, S&P or Duff & Phelps for  the  Debt
Rating  shall be changed (other than as a result of a change in the  rating
system of Moody's, S&P or Duff & Phelps), such change shall be effective as
of the date on which it is first announced by the applicable rating agency.
Each  change  in  the  Applicable  Amount shall  apply  during  the  period
commencing  on  the effective date of such change and ending  on  the  date
immediately preceding the effective date of the next such change.   If  the
rating  system of Moody's,  S&P or Duff & Phelps shall change, or if either
such  rating  agency shall cease to be in the business of rating  corporate
debt  obligations, the Borrower and the Banks shall negotiate in good faith
to  amend  this  definition to reflect such changed rating  system  or  the
unavailability  of  ratings  from  such  rating  agency  and,  pending  the
effectiveness  of  any  such  amendment, the  Applicable  Amount  shall  be
determined by reference to the rating most recently in effect prior to such
change or cessation.

<PAGE>    95

      "Assessment Rate" means, for any day, the annual assessment  rate  in
effect on such day which is payable by a member of the Bank Insurance  Fund
classified as well capitalized and within supervisory subgroup  "B"  (or  a
comparable successor assessment risk classification) within the meaning  of
12  C.F.R.   327.4  (or  any successor provision) to  the  Federal  Deposit
Insurance Corporation (or any successor thereto) for such Corporation's (or
such successor's) insuring time deposits at offices of such institution  in
the United States.  The Adjusted CD Rate shall be adjusted automatically on
and as of the effective date of any change in the Assessment Rate.

     "Assignment and Acceptance" means an assignment and acceptance entered
into  by a Bank and an Eligible Assignee and accepted by the Administrative
Agent, in substantially the form of Exhibit D.

      "Availability Period" means the period from the Effective Date to the
Revolving Termination Date.

      "Bank  Group" means, collectively, the Administrative Agent  and  the
Banks.

      "Banks"  has  the  meaning  specified in  the  introduction  to  this
Agreement.

      "Base Rate" means, as of any particular date, a rate per annum  equal
to  the  higher of (a) the Federal Funds Rate plus one-half of one  percent
(1/2%), and (b)  the  Base Rate per annum most recently  announced  by  the
Administrative Agent as its base rate of interest per annum,  automatically
fluctuating  upward or downward, as the case may be, on  the  day  of  each
announcement  without special notice to the Borrower or any  other  Person.
The  Borrower acknowledges that the base rate referred to in clause (b)  of
the preceding sentence may not be the Administrative Agent's best or lowest
rate,  or  favored rate, and any statement, representation or  warranty  in
that  regard  or  to  that  effect is hereby expressly  disclaimed  by  the
Administrative Agent.

     "Base Rate Borrowing" means a Borrowing consisting of Base Rate Loans.

      "Base Rate Loan" means a Loan that the Borrower has designated, or is
deemed to have designated, as such in accordance with Article II.

      "Borrower"  has  the  meaning specified in the introduction  to  this
Agreement.

     "Borrowing" means a group of Loans of a single Type made by the Banks,
or  Converted into such, as applicable, on a single date and as to which  a
single Interest Period is in effect.

      "Borrowing  Date" means, with respect to the initial funding  of  any
Borrowing, the date on which the proceeds of such Borrowing are to be  made
available to the Borrower.

     "Borrowing Request" has the meaning specified in Section 2.02.

<PAGE>    96

     "Business Day" means a day of the year on which banks are not required
or  authorized to close in Houston, Texas or in New York, New York and,  if
the  applicable Business Day relates to any Eurodollar Rate Loans, on which
dealings are carried on in the applicable Eurodollar interbank market.

      "Capital  Expenditures" means, for any period, the  expenditures  and
costs  made  by  the  Borrower  and  its Consolidated  Subsidiaries  (on  a
consolidated basis) during such period (whether paid in cash or accrued  as
liabilities during that period and including that portion of Capital Leases
that  is capitalized on the consolidated balance sheet of the Borrower  and
its  Consolidated Subsidiaries) that, in accordance with generally accepted
accounting principles consistently applied, are required to be included  in
or  reflected  by the property, plant or equipment or similar  fixed  asset
accounts reflected in the consolidated balance sheet of the Borrower.

     "Capital Lease" means, as to any Person, any lease or rental agreement
in respect of which such Person's obligations as lessee under such lease or
rental  agreement, constitute obligations which shall have been  or  should
be,   in   accordance   with  generally  accepted   accounting   principles
consistently applied, capitalized on the balance sheet of such Person.

      "CD  Lending Office" means, with respect to any Bank, the  office  of
such Bank specified as its "CD Lending Office" on Schedule 2.01 (or, if  no
such  office  is  specified, its Domestic Lending Office),  or  such  other
office  of  such  Bank as such Bank may from time to time  specify  to  the
Borrower and the Administrative Agent.

      "Change of Control" means any of (a) the acquisition by any Person or
two  or  more  Persons  (excluding underwriters  in  the  course  of  their
distribution of voting stock in an underwritten public offering) acting  in
concert, of beneficial ownership (within the meaning of Rule l3d-3  of  the
Securities  and  Exchange  Commission) of 25% or more  of  the  outstanding
shares  of voting stock of the Borrower, (b) 30% or more of the members  of
the  Board of Directors of the Borrower on any date shall not have been (i)
members  of  the Board of Directors of the Borrower on the date  12  months
prior  to such date or (ii) approved by Persons who constitute at  least  a
majority  of  the  members of the Board of Directors  of  the  Borrower  as
constituted  on  the  date  12  months prior  to  such  date,  (c)  all  or
substantially  all  of  the assets of the Borrower are  sold  in  a  single
transaction  or  series or related transactions to any Person  or  (d)  the
Borrower  merges  or consolidates with or into any other Person,  with  the
effect  that  immediately after such transaction the  stockholders  of  the
Borrower  immediately prior to such transaction hold less than 75%  of  the
total  voting power entitled to vote in the election of directors, managers
or trustees of the Person surviving such transaction.

     "Chase" means Chase Bank of Texas, National Association.

      "Commitment"  means,  as  to any Bank,  the  amount  of  such  Bank's
Commitment set forth on Schedule 2.01, as such Commitment may be reduced or
terminated pursuant to Section 2.04 or Section 7.01.

<PAGE>    97

     "Commitment Percentage" means, as to any Bank, a percentage determined
pursuant  to  the  following formula: C / T) x 100 = CP; where  C  is  such
Bank's  Commitment  (without  giving  effect  to  any  termination  of  the
Commitments  pursuant to Section 7.01), T is the Total Commitment  (without
giving  effect  to any termination of the Commitments pursuant  to  Section
7.01) and CP is such percentage.

     "Communications" has the meaning specified in Section 9.03.

     "Consolidated Subsidiary" means, as of any date, any Subsidiary of the
Borrower that, in accordance with generally accepted accounting principles,
would  be included in the consolidated financial statements of the Borrower
prepared as of such date.

      "Continuation  Date",  "Conversion Date" and "Continuation/Conversion
Date"  means,  when used with respect to the Conversion or continuation  of
any  group  of Loans, (a) the date such Loans are to be (i) Converted  into
Loans of another Type or (ii) continued as Loans of the same Type, but with
a  different  Interest Period, in each case pursuant  to  Section  2.02  or
otherwise in accordance with Article II.

     "Continuation Notice" has the meaning specified in Section 2.02.

     "Conversion Notice" has the meaning specified in Section 2.02.

     "Convert," "Conversion" and "Converted" each refers to a conversion of
Loans  of one Type into Loans of another Type pursuant to Section  2.02  or
otherwise in accordance with Article II.

       "Current  Liabilities"  means,  as  of  any  date,  all  liabilities
(including,  without  limitation, accounts payable  incurred  for  services
rendered  and property purchased in the ordinary course of business)  which
would  be reflected as current liabilities on a consolidated balance  sheet
of  the Borrower and its Consolidated Subsidiaries prepared as of such date
in  accordance  with generally accepted accounting principles  consistently
applied,  but  excluding current maturities of Funded Debt of the  Borrower
and its Consolidated Subsidiaries as of such date.

      "Debt"  of  any  Person  shall  mean, without  duplication:  (a)  any
obligation  of such Person for borrowed money, (b) any obligation  of  such
Person  evidenced  by  bonds,  debentures,  notes  or  other  similar  debt
instruments, (c) all obligations of such Person under conditional  sale  or
other  title  retention agreements relating to property purchased  by  such
Person,  (d) any obligation of such Person for the deferred purchase  price
of  any  property  or  services, except accounts  payable  arising  in  the
ordinary  course of such Person's business that have been outstanding  less
than  ninety  (90)  days  since the date of the related  invoice,  (e)  the
present  value (discounted at the implicit rate, if known, or  ten  percent
(10%)  per annum otherwise) of all Capital Leases of such Person,  (f)  any
Derivative Obligations of such Person, (g) any reimbursement obligations of
such  Person  in  respect of drawings under a letter of credit  or  similar
instrument, and (h) any indebtedness or obligations of others of  the  type
described  in clauses (a) through (g) that is Guaranteed by such Person  or
secured by a Lien on any asset of such Person.

<PAGE>    98

      "Debt  Rating"  means  the  rating for senior,  unsecured,  long-term
indebtedness  for borrowed money of the Borrower that is not guaranteed  by
any other Person or subject to any other credit enhancement.

      "Default" means an event which with the giving of notice or the lapse
of time or both could, unless cured or waived, become an Event of Default.

     "Default Rate" has the meaning specified in Section 2.06.

      "Derivative  Obligations" means, with respect to any Person,  payment
obligations  with  respect  to foreign exchange transactions  and  interest
rate,  currency  and commodity swaps, caps, floors, collars,  forward  sale
contracts,  other  similar obligations and combinations  of  the  foregoing
(collectively, "swaps").  For the purposes of this Agreement, the amount of
any  Derivative  Obligations  shall be the  amount  determined  in  respect
thereof  as  of the end of the then most recently ended fiscal  quarter  of
such  Person, based on the assumption that all swaps had terminated at  the
end  of  such  fiscal  quarter, and in making such  determination,  if  any
agreement  relating  to any such swap provides for the netting  of  amounts
payable  by and to such Person thereunder or if any such agreement provides
for the simultaneous payment of amounts by and to such Person, then in each
such  case,  the  amount of such obligation shall  be  the  net  amount  so
determined.

      "Distribution" means, in respect of any corporation,  association  or
other business entity: (a) dividends or other distributions or payments  on
capital stock or other equity interest of such corporation, association  or
other  business  (except  distributions  in  such  stock  or  other  equity
interest);  and  (b) the redemption or acquisition of such stock  or  other
equity  interests or of warrants, rights or other options to purchase  such
stock  or  other equity interests (except when solely in exchange for  such
stock  or other equity interests) unless made, contemporaneously, from  the
net proceeds of a sale of such stock or other equity interests.

     "Dixie Note Purchase Agreement" shall mean the Note Purchase Agreement
dated  as  of August 12, 1992 among Dixie Carriers, Inc., now called  Kirby
Inland  Marine,  Inc., and the note purchasers named therein,  relating  to
Kirby Inland Marine's $50,000,000 8.22% Senior Notes due June 30, 2002.

     "Dollars" and "$" each means lawful money of the United States.

      "Domestic Lending Office" means, with respect to any Bank, the office
of  such Bank specified as its "Domestic Lending Office" on Schedule  2.01,
or  such  other  office of such Bank as such Bank may  from  time  to  time
specify to the Borrower and the Administrative Agent.

     "Duff & Phelps" means Duff & Phelps Credit Rating Co.

      "Effective Date" means October 12, 1999, which is the date  on  which
the  conditions to effectiveness set forth in Article III to this Agreement
are first satisfied.

<PAGE>    99

      "Eligible Assignee" means (a) any Bank or any Affiliate of any  Bank;
(b) a commercial bank organized under the laws of the United States, or any
state  thereof,  and  having total assets in excess of  $1,000,000,000  and
having  deposits rated in either of the two highest generic  letter  rating
categories (without regard to subcategories) from either Standard &  Poor's
Rating  Group  or  Moody's Investors Service, Inc.; (c) a  commercial  bank
organized  under  the laws of any other country which is a  member  of  the
Organization  for  Economic  Cooperation and  Development  ("OECD"),  or  a
political  subdivision  of any such country, and  having  total  assets  in
excess  of  $  1,000,000,000, provided that such bank is acting  through  a
branch or agency located in the country in which it is organized or another
country  which is also a member of the OECD; (d) the central  bank  of  any
country  which  is  a  member  of the OECD; and  (e)  any  other  financial
institution approved by the Administrative Agent and the Syndication Agent.

      "Environmental  Laws" means federal, state or local  laws,  rules  or
regulations,  and any judicial, arbitral or administrative  interpretations
thereof,   including,  without  limitation,  any  judicial,   arbitral   or
administrative order, judgment, permit, approval, decision or determination
pertaining  to health, safety or the environment in effect at the  time  in
question, including, without limitation, the Clean Air Act, as amended, the
Oil  Pollution  Act  of  1990, as amended, the Comprehensive  Environmental
Response,  Compensation and Liability Act, as amended,  the  Federal  Water
Pollution Control Act, as amended, the Occupational Safety and Health  Act,
as  amended,  the Resource Conservation and Recovery Act, as  amended,  the
Safe  Drinking Water Act, as amended, the Toxic Substances Control Act,  as
amended,  the  Superfund  Amendment and Reauthorization  Act  of  1986,  as
amended, the Hazardous Materials Transportation Act, as amended, comparable
state  and  local laws, and other environmental conservation and protection
laws.

     "ERISA" means the Employee Retirement Income Security Act of 1974, 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  ERISA  shall  be construed to also  refer  to  any  successor
sections.

      "ERISA Affiliate" means any (i) corporation which is a member of  the
same controlled group of corporations (within the meaning of Section 414(b)
of  the  Internal Revenue Code) as the Borrower, (ii) partnership or  other
trade  or  business  (whether  or not incorporated)  under  common  control
(within  the meaning of Section 414(c) of the Internal Revenue  Code)  with
the Borrower, (iii) member of the same affiliated service group (within the
meaning  of  Section 414(m) of the Internal Revenue Code) as the  Borrower,
any  corporation described in clause (i) above or any partnership or  trade
or business described in clause (ii) above or (iv) other Person required to
be  aggregated with the Borrower or an ERISA Affiliate thereof, as  defined
above, pursuant to Section 414(o) of the Internal Revenue Code.

      "Eurocurrency Liabilities" has the meaning assigned to that  term  in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.

<PAGE>    100

     "Eurodollar Event" has the meaning specified in Section 2.12.

      "Eurodollar  Lending Office" means, with respect  to  any  Bank,  the
office  of  such  Bank  specified  as its "Eurodollar  Lending  Office"  on
Schedule  2.01  (or, if no such office is specified, its  Domestic  Lending
Office),  or such other office of such Bank as such Bank may from  time  to
time specify to the Borrower and the Administrative Agent.

      "Eurodollar Rate" means, for the Interest Period for each  Eurodollar
Rate Loan comprising part of the same Borrowing, an interest rate per annum
equal to the average (rounded upward to the nearest whole multiple of  1/16
of  1% per annum, if such average is not such a multiple) of the rates  per
annum  at  which deposits in U.S. dollars are offered to the Administrative
Agent  by  prime  banks  in  whatever Eurodollar interbank  market  may  be
selected by the Administrative Agent in its sole discretion, acting in good
faith,  on  or  about 9:00 a.m.  (Houston time) (or as soon  thereafter  as
practicable)  two  Business  Days before the first  day  of  such  Interest
Period,  and  in  accordance  with  the  then  existing  practice  in  such
Eurodollar interbank market for delivery of such deposits on the first  day
of  such  Interest  Period in immediately available  funds,  in  an  amount
substantially  equal  to  the  Eurodollar Rate  Loan  to  be  made  by  the
Administrative Agent in its capacity as a Bank and comprising part of  such
Borrowing and for a period equal to such Interest Period.

     "Eurodollar Rate Borrowing" means a Borrowing consisting of Eurodollar
Rate Loans.

      "Eurodollar Rate Loan" means a Loan that the Borrower has designated,
or is deemed to have designated, as such in accordance with Article II.

      "Eurodollar  Rate Reserve Percentage" means, as to any Bank  for  the
Interest  Period  for  any  Eurodollar Rate Loan,  the  reserve  percentage
applicable during such Interest Period (or if more than one such percentage
shall  be  so applicable, the daily average of such percentages  for  those
days  in such Interest Period during which any such percentage shall be  so
applicable)  under regulations issued from time to time  by  the  Board  of
Governors  of the Federal Reserve System (or any successor) for determining
the   maximum  reserve  requirement  (including,  without  limitation,  any
emergency,  supplemental or other marginal reserve  requirement)  for  such
Bank  with  respect  to liabilities or assets consisting  of  or  including
Eurocurrency Liabilities having a term equal to such Interest Period.

     "Events of Default" has the meaning specified in Section 7.01.

      "Excluded  Affiliate" means (a) any Subsidiary of the Borrower  other
than   a   Consolidated  Subsidiary,  and  (b)  all  Persons,  other   than
Subsidiaries,  in  which  the Borrower, directly  or  indirectly,  owns  or
controls five percent (5%) or more of the equity interests of such Person.

      "Existing  Credit Agreement" means the Credit Agreement dated  as  of
September  19,  1997,  by  and among the Borrower,  Chase  Bank  of  Texas,
National  Association as Funds Administrator and Agent and the other  banks
therein named, as in effect on the date hereof.

<PAGE>    101

      "Fair  Market Value" shall mean (a) with respect to any asset  (other
than  Dollars) the price at which a willing buyer would buy and  a  willing
seller  would  sell such asset in an arms length transaction and  (b)  with
respect to Dollars, the amount of such Dollars.

      "Federal  Funds  Rate" means, for any period, a fluctuating  interest
rate  per  annum  equal  for each day during such period  to  the  weighted
average  of the rates on overnight Federal funds transactions with  members
of  the  Federal  Reserve  System arranged by  Federal  funds  brokers,  as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of Dallas, or, if  such
rate  is  not so published for any day which is a Business Day, the average
of  the  quotations  for  such  day on such transactions  received  by  the
Administrative  Agent  from  three  Federal  funds  brokers  of  recognized
standing selected by it.

      "Fixed Charges" means, for any period, (without duplication) the  sum
of (a) all Interest Expense for such period, plus (b) the aggregate rentals
paid  by  the Borrower and its Consolidated Subsidiaries (on a consolidated
basis)  under  Capital  Leases during such period,  plus  (c)  all  Capital
Expenditures made by the Borrower and its Consolidated Subsidiaries  during
such period (excluding any Capital  Expenditures  made after  the Effective
Date for  the expansion of such Person's fleet of marine barges, boats  and
other  operating  equipment, as opposed to the  mere  replacement  of  such
Person's  existing  fleet  of  marine barges,  boats  and  other  operating
equipment),  plus  (d) the aggregate amount of (i) all scheduled  principal
payments required or made during such period on account of Funded Debt that
provides for scheduled principal payments prior to final maturity, (ii)  in
the  case  of  any  Funded  Debt (other than Debt  under  revolving  credit
facilities) that has an original term in excess of three years and does not
provide  for  scheduled principal payments prior to its final maturity,  an
amount  equal to one-sixtieth (1/60th) per calendar quarter of the  average
outstanding  principal  balance thereof, provided,  however,  that  to  the
extent such Funded Debt is attributable to a Guaranty by the Borrower or  a
Consolidated  Subsidiary of a limited portion of any Debt  of  an  Excluded
Affiliate, the amount included in Fixed Charges pursuant to this clause (d)
shall  be limited to the Borrower's proportionate share of such Debt (based
upon the amount so Guaranteed relative to the total amount of such Debt).

     "Fixed Rate" means the Adjusted CD Rate or the Eurodollar Rate.

      "Fixed  Rate  Borrowing" means an Adjusted CD  Rate  Borrowing  or  a
Eurodollar Rate Borrowing.

      "Fixed Rate Loan" means an Adjusted CD Rate Loan or a Eurodollar Rate
Loan.

<PAGE>    102

     "Funded Debt" means, as of any date, the sum of the following: (a) all
Debt  of  the  Borrower and its Consolidated Subsidiaries on a consolidated
basis  as  of  such  date, less (b) to the extent included  in  the  amount
described  in  clause (a), the sum of the following (without  duplication):
(i)  all Current Liabilities (other than Current Liabilities that represent
Debt  for borrowed money or Capital Leases) on a consolidated basis  as  of
such  date, (ii) any Debt of any Consolidated Subsidiary in excess  of  the
Borrower's  proportionate share thereof (based on its  direct  or  indirect
equity  interest  therein), (iii) all other deferred long term  liabilities
that  do not represent Debt for borrowed money or Capital Leases, including
deferred compensation, deferred revenue and other deferred items classified
as other liabilities of the Borrower and its Consolidated Subsidiaries on a
consolidated basis as of such date, and (iv) all Derivative Obligations  of
the Borrower and its Consolidated Subsidiaries as of such date; plus (c) to
the  extent  not otherwise included in the amount described in clause  (a),
the  sum  of  the  following (without duplication): (1)  all  Debt  of  the
Borrower  and its Consolidated Subsidiaries outstanding under  a  revolving
credit  or  similar  agreement, (ii) the present value (discounted  at  the
implicit rate, if known, or ten percent (10%) per annum otherwise)  of  all
obligations  in  respect  of  Capital  Leases  of  the  Borrower  and   its
Consolidated  Subsidiaries, and (iii) all obligations of the  Borrower  and
its Consolidated Subsidiaries under Guaranties of Debt.

      "Governmental Authority" means any nation or government, any federal,
state, province, city, town, municipality, county, local or other political
subdivision  thereof  or  thereto  and  any  court,  tribunal,  department,
commission,   board,  bureau,  instrumentality,  agency  or  other   entity
exercising  executive, legislative, judicial, regulatory or  administrative
functions of or pertaining to government.

      "Guaranties"  means,  as to any Person, all obligations  (other  than
endorsements  in the ordinary course of business of negotiable  instruments
for  deposit  or  collection) of such Person guaranteeing  or,  in  effect,
guaranteeing  any Debt of any other Person (the "primary obligor")  in  any
manner,  whether directly or indirectly, including all obligations incurred
through  an  Agreement, contingent or otherwise, by  such  Person:  (a)  to
purchase  such  Debt  or  any  property  or  assets  constituting  security
therefor, (b) to advance or supply funds (i) for the purchase or payment of
such  Debt  or  (ii)  to maintain working capital or  other  balance  sheet
conditions or otherwise to advance or make available funds for the purchase
or payment of such Debt, (c) to lease property or to purchase securities or
other  property or services primarily for the purpose of assuring the owner
of  such Debt of the ability of the primary obligor to make payment of  the
Debt  or  (d)  otherwise to assure the owner of the  Debt  of  the  primary
obligor against loss in respect thereof.

      "Hazardous Materials" means any pollutant, contaminant, solid  waste,
asbestos, petroleum product, crude oil or a fraction thereof, any toxic  or
hazardous  substance,  material  or  waste,  any  flammable,  explosive  or
radioactive  material,  any chemical which causes  cancer  or  reproductive
effects,  or any other material or substance not mentioned above  which  is
regulated under any Environmental Law.

<PAGE>    103

     "Highest Lawful Rate" means, as to any Bank, at the particular time in
question,  the maximum nonusurious rate of interest which, under applicable
law, such Bank is then permitted to charge the Borrower on the Loans or the
other  obligations of the Borrower under the Loan Documents, and as to  any
other  Person, at the particular time in question, the maximum  nonusurious
rate of interest which, under applicable law, such Person is then permitted
to  charge with respect to the obligation in question.  If the maximum rate
of  interest which, under applicable law, the Banks are permitted to charge
the  Borrower  on the Loans or the other obligations of the Borrower  under
the  Loan Documents shall change after the date hereof, the Highest  Lawful
Rate shall be automatically increased or decreased, as the case may be,  as
of  the effective time of such change without notice to the Borrower or any
other Person.

      "Hollywood Marine Merger" means the merger of Hollywood Marine,  Inc.
with  and  into Kirby Inland Marine pursuant to the Agreement and  Plan  of
Merger  dated July 28, 1999 by and among the Borrower, Kirby Inland Marine,
Hollywood Marine, Inc. and the shareholders of Hollywood Marine, Inc.

      "Hostile  Acquisition"  shall  mean  any  transaction  or  series  of
transactions in which the Borrower or any of its Subsidiaries, directly  or
indirectly,  purchases or acquires, or offers to purchase  or  acquire,  an
aggregate  of  five  percent  (5%) or more  of  the  equity  securities  or
controlling interest of any Person, for any type of consideration,  without
the  prior  written  consent of such Person's Board of Directors  or  other
controlling body.

      "Interest  Expense"  means,  for any period,  the  aggregate  of  all
interest  expense  deducted in the calculation of the  Net  Income  of  the
Borrower  for such period, determined in accordance with generally accepted
accounting principles.

      "Interest Payment Date" means, as to any Loan other than a Base  Rate
Loan, the last day of each Interest Period applicable to such Loan and,  as
to  any Base Rate Loan, the last Business Day of each calendar quarter  and
each  date  such  Loan  is converted in full into  another  Type  of  Loan,
provided, however, that if any Interest Period for an Adjusted CD Rate Loan
or  Eurodollar Rate Loan exceeds 90 days or three months, respectively, the
date  that  falls 90 days or three months (as the case may  be)  after  the
beginning  of  such  Interest Period and after each Interest  Payment  Date
thereafter is also an Interest Payment Date.

      "Interest  Period" means, for each Loan comprising part of  the  same
Borrowing,  the period commencing on the date of such Loan or the  date  of
the  Conversion of such Loan, as applicable, and ending on the last day  of
the  period selected by the Borrower pursuant to the provisions below.  The
duration  of  each  such Interest Period shall be (a) in  the  case  of  an
Adjusted  CD Rate Loan, 30, 60, 90 or 180 days, (b) in the case of  a  Base
Rate  Loan, a period ending on the Maturity Date, and (c) in the case of  a
Eurodollar Rate Loan, 1, 2, 3 or 6 months; provided, however, that:

                (i)  the Borrower may not select any Interest Period for  a
Loan that ends after the Maturity Date;

<PAGE>    104

                (ii) Interest Periods commencing on the same date for Loans
comprising part of the same Borrowing shall be of the same duration;

               (iii)     whenever the last day of any Interest Period would
otherwise  occur on a day other than a Business Day, the last day  of  such
Interest  Period shall be extended to occur on the next succeeding Business
Day,  provided,  in the case of any Interest Period for a  Eurodollar  Rate
Loan,  that  if  such extension would cause the last day of  such  Interest
Period to occur in the next following calendar month, the last day of  such
Interest Period shall occur on the next preceding Business Day;

                (iv)  no  Interest  Period shall extend  beyond  the  Final
Maturity Date; and

                (v)   after  the Revolving Termination Date, the  aggregate
principal amount of Loans represented by Base Rate Loans, Eurodollar  Loans
or  Adjusted CD Rate Loans having Interest Periods that will expire  on  or
before  the due date of a scheduled principal payment shall equal or exceed
the amount of such principal payment.

      "Internal Revenue Code" means the Internal Revenue Code of  1986,  as
amended  from time to time (or any successor statute), and the  regulations
promulgated thereunder.

      "Investment"  means any direct or indirect investment by  one  Person
(the  "investor")  in another Person (the "investee"),  including,  without
limitation,  (a)  any  loan or advance, whether  initially  funded  by  the
investor  or  acquired  by  the  investor  from  a  third  party,  (b)  any
acquisition of equity interests by the investor, whether directly from  the
investee  or  from  a  third  party by way of  share  purchase,  merger  or
otherwise,  (c) any capital or other contribution to the investee,  whether
made  in cash or other assets, or by contributing a promissory note payable
by the investor to the investee, (d) any Guarantee by the investor of  Debt
of  the  investee, and (e) the Fair Market Value of any assets or  services
transferred to the investee less the Fair Market Value of any consideration
received by the investor in exchange therefor; provided, however, that  the
term   "Investment"  shall  not  include  undistributed  earnings   on   an
Investment; and the amount of an "Investment," for purposes of Section 6.08
hereof,  shall be reduced by the amount of capital returned to the investor
by the investee.  The amount of any Investment that is made by transferring
property  other than Dollars shall be the Fair Market Value of the property
so transferred.

      "Joint Letter" means the letter agreement dated October 1, 1999 among
the Borrower, the Administrative Agent and the Syndication Agent.

      "Kirby  Inland  Marine" means Kirby Inland Marine, Inc.,  a  Delaware
corporation, formerly known as Dixie Carriers, Inc.

<PAGE>    105

      "Lien"  means,  when used with respect to any Person,  any  mortgage,
lien, charge, pledge, security interest or encumbrance of any kind (whether
voluntary  or  involuntary, and whether imposed or created by operation  of
law  or  otherwise)  upon,  or pledge of, any of its  property  or  assets,
whether now owned or hereafter acquired, or any conditional sale agreement,
Capital Lease or other title retention agreement.

     "Loan" has the meaning specified in Section 2.01.

       "Loan   Documents"  shall  mean  this  Agreement,  the  Notes,   the
Administrative Agent's Fee Letter and all other agreements, instruments and
documents,  including,  without  limitation,  security  agreements,  notes,
warrants,  guaranties, mortgages, deeds of trust, subordination agreements,
pledges, powers of attorney, consents, assignments, collateral assignments,
letter   agreements,  contracts,  notices,  leases,  amendments,  financing
statements, letter of credit applications and reimbursement agreements, and
all  other writings heretofore, now, or hereafter executed by or on  behalf
of  the  Borrower, any of its Affiliates or any other Person in  connection
with   or  relating  to  this  Agreement,  together  with  all  agreements,
instruments and documents referred to therein or contemplated thereby.

      "Majority Banks" means at any time Banks holding at least  sixty  six
and  two-thirds  percent (66 2/3%) of the then aggregate  unpaid  principal
amount  of  the  Loans  or,  if  no  Loans are  outstanding,  Banks  having
Commitment Percentages in the aggregate equal to at least sixty six and two-
thirds percent (66 2/3%).

      "Material Adverse Effect" means, as to any Person, a material adverse
effect  on  (a)  the business, property, assets, operations  or  condition,
financial or otherwise, of such Person or (b) on the ability of such Person
to  perform its obligations under the Loan Documents to which it is a party
or  to  consummate  the  transactions  contemplated  thereby;  or  (c)  the
legality, validity, binding effect or enforceability against such Person of
any Loan Document.

     "Material Debt" means, as at any date, an amount equal to five percent
(5 %) of the Borrower's Funded Debt as of such date.

       "Material   Subsidiaries"  means,  collectively,  each  Consolidated
Subsidiary of the Borrower that meets any of the following conditions:  (a)
the  aggregate  Investment  of  the Borrower  and  its  other  Consolidated
Subsidiaries in such Consolidated Subsidiary exceeds five percent  (5%)  of
the  total assets of the Borrower and its Consolidated Subsidiaries  as  of
the  end  of the most recently completed calendar year; or (b) the Borrower
and  its other Consolidated Subsidiaries' proportionate share of the  total
assets  (after  intercompany eliminations) of such Consolidated  Subsidiary
exceeds  five  percent  (5%) of the total assets of the  Borrower  and  its
Consolidated  Subsidiaries  as of the end of the  most  recently  completed
calendar year; or (c) the Borrower and its other Consolidated Subsidiaries'
equity  in  the  income  from continuing operations  before  income  taxes,
extraordinary  items  and  cumulative effect  of  a  change  in  accounting
principle of such Consolidated Subsidiary exceeds five percent (5%) of  Net
Income for the most recently completed calendar year.

<PAGE>    106

      "Maturity  Date" means October 9, 2004 or the earlier termination  in
whole  of  the  Commitments  in  accordance with  the  provisions  of  this
Agreement.

      "Modified Net Cash Flow" means, for any period, (without duplication)
the  sum  of (a) Net Cash Flow for such period plus (b) the amount  of  any
current tax expense deducted from gross income in determining Net Cash Flow
for  such period, plus (c) to the extent not included in Net Cash Flow  for
such  period by reason of clause (c) of the definition Adjusted Net Income,
Net  Cash  Flow,  adjusted in the manner described in clause  (b)  of  this
definition, for such period of any Person acquired by the Borrower  or  any
of its Consolidated Subsidiaries during such period.

     "Moody's" means Moody's Investors Service, Inc.

      "Net Cash Flow" means, for any period, the sum of the following:  (a)
Adjusted Net Income for such period, plus (b) all non-cash charges (such as
deferred taxes, depreciation expense and amortization of intangibles) which
were deducted from gross income in determining Adjusted Net Income for such
period, plus (c) the amount of Interest Expense which was deducted  in  the
calculation of Adjusted Net Income for such period.

      "Net Income" means, for any period, the consolidated net earnings  of
the  Borrower and its Consolidated Subsidiaries for such period, determined
in accordance with generally accepted accounting principles.

      "Net  Worth"  means,  as of any date, the total shareholder's  equity
(including capital stock, additional paid-in capital and retained  earnings
after  deducting  treasury  stock) which would  appear  on  a  consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries prepared as
of such date in accordance with generally accepted accounting principles.

     "Note" means a promissory note of the Borrower payable to the order of
a  Bank,  in substantially the form of Exhibit C, evidencing the  aggregate
indebtedness of the Borrower to such Bank resulting from the Loans made  by
such  Bank,  together  with  all modifications,  extensions,  renewals  and
rearrangements thereof from time to time in effect.

     "Other Taxes" has the meaning specified in Section 2.10.

      "PBGC"  means  the  Pension Benefit Guaranty Corporation  established
pursuant to Subtitle A of Title IV of ERISA and any successor thereto.

      "Person"  means  an  individual,  partnership,  corporation,  limited
liability   company,   business   trust,  joint   stock   company,   trust,
unincorporated association, joint venture or other entity, or  Governmental
Authority.

      "Plan"  means any employee pension benefit plan which is  covered  by
Title IV of ERISA or subject to the minimum funding standards under Section
412 of the Internal Revenue Code, and in respect of which the Borrower,  or
any ERISA Affiliate is an "employer" as defined in Section 3(5) of ERISA.

<PAGE>    107

      "Quarterly  Payment Date" means each of September  30,  December  31,
March 31 and June 30 of each year.

     "Register" has the meaning specified in Section 9.02.

      "Regulation  U" means Regulation U of the Board of Governors  of  the
Federal Reserve System (respecting margin credit extended by banks), as the
same  is  from  time  to  time  in effect, and  all  official  rulings  and
interpretations thereunder or thereof

      "Regulation  X" means Regulation X of the Board of Governors  of  the
Federal  Reserve System (respecting borrowers who obtain margin credit)  as
the  same  is  from  time to time in effect, and all official  rulings  and
interpretations thereunder or thereof.

      "Release"  means  any spilling, leaking, pumping, pouring,  emitting,
emptying,  discharging, injecting, escaping, leaching, dumping or disposing
into  the  environment (including the abandonment or discarding of barrels,
containers and other closed receptacles).

      "Reportable  Event"  means any of the events  set  forth  in  Section
4043(b) of ERISA or the regulations thereunder.

      "Requirements  of Environmental Laws" means the requirements  of  any
applicable Environmental Law relating to or affecting the Borrower  or  any
of its Subsidiaries or the condition or operation of such Person's business
or its properties, both real and personal.

     "Requirements of Law" shall mean any federal, state or local law, rule
or  regulation,  permit or other binding determination of any  Governmental
Authority.

      "Responsible  Officer" means, as to any Person, the  Chief  Executive
Officer,  the  President, the Chief Financial Officer or the  Treasurer  of
such  Person,  or any employee of such Person designated in  writing  as  a
Responsible Officer by the Chief Executive Officer of such Person.

      "Restricted Investment" means (a) any Investment by the Borrower or a
Consolidated Subsidiary in an Excluded Affiliate and (b) any payment by the
Company or any Consolidated Subsidiary of Debt of any Excluded Affiliate to
the  extent  the  Company or such Consolidated Subsidiary  is  not  legally
obligated to make such payment under the terms of such Debt.

     "Restricted Payment" means any Distribution in respect of the Borrower
or  any Subsidiary of the Borrower (other than on account of capital  stock
or  other  equity  interests of a Subsidiary of the  Borrower),  including,
without  limitation, any Distribution resulting in the acquisition  by  the
Borrower of securities which would constitute treasury stock.  For purposes
of  this  Agreement, the amount of any Restricted Payment made in  property
shall  be  the  greater of (x) the fair market value of such  property  (as
determined by good faith by the board of directors (or equivalent governing
body)  of  the person making such Restricted Payment) and (y) the net  book
value  thereof on the books of such Person, in each case determined  as  of
the date on which such Restricted Payment is made.

<PAGE>    108

     "Revolving Termination Date" means the earlier to occur of (a) October
9,  2000, and (b) the date on which the Commitments terminate in accordance
with the provisions of this Agreement.

      "S&P"  means  Standard & Poor's Rating Services, a  division  of  The
McGraw-Hill Companies, Inc.

      "Subsidiary" means, with respect to any Person, each other Person  of
which  or  in  which such Person and its other Subsidiaries  own,  hold  or
control, directly or indirectly, securities or other ownership interests  `
having  ordinary voting power, in the absence of contingencies, to elect  a
majority  of the board of directors of such other Person, or other  persons
performing  similar functions for such Person, or, if  there  are  no  such
directors  or  persons, having general voting power  with  respect  to  the
activities  of  such Person, it being understood that the  power  to  elect
exactly  50%  of  the  board of directors or such other  persons  does  not
constitute  a  "majority"  as used herein.  Unless  the  context  otherwise
requires,  all  references  to  a Subsidiary  shall  be  considered  to  be
references to Subsidiaries of the Borrower.

     "Substitution Event" has the meaning specified in Section 2.14.

      "Syndication Agent's Fee Letter" has the meaning specified in Section
2.09.

     "Taxes" has the meaning specified in Section 2.10.

      "Total  Commitment" means an amount equal to the sum  of  the  Banks'
Commitments.

     "Transfer Notice" has the meaning specified in Section 9.02.

      "Type"  means,  with respect to any Loan, the type of  interest  rate
applicable to such Loan pursuant to this Agreement, and refers  to  a  Base
Rate  Loan  or a Eurodollar Rate Loan, each of which shall be a  "Type"  of
Loan.

      "Year  2000  Problem" means the inability of computers,  as  well  as
imbedded  microchips  in non-computing devices, to perform  properly  date-
sensitive functions after December 31, 1999.

     "Year 2000 Program" has the meaning set forth in Section 4.16.

<PAGE>    109
                                     
                               SCHEDULE 2.01

                  COMMITMENTS AND COMMITMENT PERCENTAGES


<TABLE>
<CAPTION>
                 Bank                      Commitment        Commitment
                                                             Percentage
--------------------------------------  ---------------  ------------------
<S>                                     <C>              <C>
Bank of America, N.A.                    $39,000,000        19.5000000%
                                                         
Chase Bank of Texas, National                            
     Association                          $9,000,000         4.5000000%
                                                         
Bank One, Texas, N.A.                    $27,000,000        13.5000000%
                                                         
First Union National Bank                $20,000,000        10.0000000%
                                                         
Industrial Bank of Japan, Limited,                       
     New York Branch                     $20,000,000        10.0000000%
                                                         
Wells Fargo Bank (Texas), National                       
     Association                         $20,000,000        10.0000000%
                                                         
BankBoston, N.A.                         $15,000,000         7.5000000%
                                                         
The Bank of Tokyo-Mitsubishi, Ltd.,                      
     Houston Agency                      $15,000,000         7.5000000%
                                                         
Den norske Bank, ASA                     $15,000,000         7.5000000%
                                                         
Hibernia National Bank                   $10,000,000         5.0000000%
                                                         
Southwest Bank of Texas                  $10,000,000         5.0000000%
                                                                        
          TOTAL:                        $200,000,000            100%
</TABLE>


<PAGE>    110

ITEM 7    FINANCIAL STATEMENTS AND EXHIBITS

    (c)   Exhibits

    23.1  Consent of KPMG LLP

<PAGE>    111
                                                     Exhibit 23.1

                      [KPMG LLP LETTERHEAD]
                                
                                
                  INDEPENDENT AUDITORS' CONSENT


The Board of Directors
Hollywood Marine, Inc.:

We  consent to the incorporation by reference in the registration
statements (No. 33-62116), (No. 33-56195) on Form S-3 and (No. 33-
681400),  (No. 2-67954), (No. 2-84789), (No. 33-57621), (No.  33-
57625) on Form S-8 of Kirby Corporation of our report dated March
15,  1999,  with  respect to the consolidated balance  sheets  of
Hollywood Marine, Inc. and affiliated entities as of December 31,
1998  and  1997,  and  the  related  consolidated  statements  of
operations, stockholder's equity, and cash flows for each of  the
years  in  the three-year period ended December 31,  1998,  which
report appears in the Form 8-K of Kirby Corporation dated October
14, 1999.

KPMG LLP


Houston, Texas
October 14, 1999