<PAGE>
 
                                                                     EXHIBIT 4.2


                         REGISTRATION RIGHTS AGREEMENT

     THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of May 21,
1997, is by and among J.L. Holloway, Carl M. Crawford, Ronald W. Schnoor, James
A. Lowe, III and John F. Alford (collectively, the "Holders") and Friede Goldman
International Inc., a Delaware corporation (the "Company").

                                R E C I T A L S:
                               ---------------- 

     WHEREAS, the Company intends to sell up to 2,870,000 shares of its common
stock (the "Common Stock") through an initial public offering (the "IPO"); and
in connection with such IPO, the Company has filed a registration statement with
the Securities and Exchange Commission (the "SEC") under the Securities Act of
1933, as amended (the "Securities Act"); and

     WHEREAS, following the IPO, the Common Stock will be registered under
Section 12 of the Securities and Exchange Act of 1934 (the "Exchange Act"); and
under the provisions of the Securities Act and the rules and regulations
promulgated thereunder, the Holders are or may be limited in the manner of the
sale of the shares of Common Stock owned by them, absent registration under the
Securities Act of the sale of such Common Stock or the availability of exemption
from the registration requirements of the Securities Act; and

                               A G R E E M E N T:
                               ----------------- 

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein, the parties hereby agree as follows:
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     1.   Demand Registration.
          ------------------- 

          (A) Request for Registration.  As used in this Agreement, "Restricted
Stock" shall mean all shares of Common Stock received by the Holders pursuant to
the Stock Exchange Agreement, dated as of May 21, 1997, by and among the
Company, HAM Marine, Inc., Friede & Goldman, Ltd. and each of the Holders,
together with any securities issued or issuable with respect to any such Common
Stock by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise. As to any particular issued Restricted Stock, such
securities shall cease to be Restricted Stock when (i) a registration statement
with respect to the sale of such securities shall have become effective under
the Securities Act and such securities shall have been disposed of in accordance
with such registration statement, (ii) such securities shall have been
distributed by the Holders to the public pursuant to Rule 144 (or any successor
provision) under the Securities Act, (iii) such securities shall have been
otherwise transferred by the Holders, new certificates representing the
transferred securities not bearing a legend restricting further transfer shall
have been delivered by the Company to the transferees thereof the and subsequent
disposition of such securities shall not require registration or qualification
of such securities under the Securities Act or any similar state law then in
force, (iv) such securities shall have ceased to be outstanding, or (v) the
Holders thereof shall agree in writing that such Restricted Stock shall no
longer be Restricted Stock.  The Holders and any permitted assignee of any of
the Holder's rights and duties hereunder are referred to herein as the "Holders"
and a Holder selling or distributing Restricted Stock pursuant hereto is
referred to herein as a "selling Holder."  Subject to the conditions and
limitations set forth in Section 5 of this Agreement, at any time and from time
to time after the limitation period referred to in Section 1, the 

                                      -2-
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Holder or Holders of Restricted Stock holding in the aggregate Twenty Percent
(20%) of the number of shares of Restricted Stock then outstanding may make a
written request for registration under the Securities Act of all or part of its
or their Restricted Stock pursuant to this Section 2 ("Demand Registration"),
provided that the number of shares of Restricted Stock proposed to be sold or
distributed shall be at least Twenty Percent (20%) of the aggregate number of
shares of Restricted Stock then outstanding. Such request will specify the
aggregate number of shares of Restricted Stock proposed to be sold or
distributed and will also specify the intended method of disposition thereof.
Within ten (10) business days after receipt of such request, the Company will
give written notice of such registration request to all other Holders of
Restricted Stock and include in such registration all Restricted Stock with
respect to which the Company has received written requests for inclusion therein
within fifteen (15) business days after the receipt by the applicable Holder of
the Company's notice. Each such request will also specify the aggregate number
of shares of Restricted Stock to be registered and the intended method of
disposition thereof. No other party, including the Company (but excluding
another Holder of Restricted Stock), shall be permitted to offer securities
under any such Demand Registration unless the Holder or Holders requesting the
Demand Registration shall consent thereto in writing.

          (B) Priority on Demand Registrations.  If the Holders of a majority in
number of shares of the Restricted Stock to be registered in a Demand
Registration so elect, the offering of such Restricted Stock pursuant to such
Demand Registration shall be in the form of an underwritten offering.  In such
event, if the managing underwriter or underwriters of such offering advise the
Company and the Holders in writing that in their opinion the aggregate amount of
Restricted Stock requested to be included in such offering is so large that it
will materially and adversely affect the 

                                      -3-
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success of such offering, the Company will include in such registration only the
aggregate number of shares of Restricted Stock which in the opinion of such
managing underwriter or underwriters can be sold without any such material
adverse effect, and such number of shares shall be allocated pro rata among the
Holders of Restricted Stock on the basis of the number of shares of Restricted
Stock requested by such Holders to be included in such registration. To the
extent Restricted Stock so requested to be registered is excluded from the
offering based on the provisions of the foregoing sentence, then the Holders of
such Restricted Stock shall have the right to one additional Demand Registration
under this Section with respect to such Restricted Stock.

          (C) Selection of Underwriters and Counsel.  If any Demand Registration
is in the form of an underwritten offering, the Holders of a majority in number
of shares of Restricted Stock to be registered will select and obtain the
services of the investment banker or investment bankers and manager or managers
that will administer the offering and the counsel to such investment bankers and
managers; provided that such investment bankers, managers and counsel are
approved by the Company, which approval shall not be unreasonably withheld.

     3.   Piggyback Registration.  If the Company proposes to file a
registration statement under the Securities Act with respect to an offering for
its own account or for the account of any of its respective securityholders of
any class of its equity securities (other than a registration statement on Form
S-8 (or any successor form) or any other registration statement relating solely
to an employee benefit plan or filed in connection with an exchange offer, a
transaction to which Rule 145 under the Securities Act applies or an offering of
securities solely to the Company's existing stockholders), then the Company
shall in each case give written notice of such proposed filing to the Holders of
Restricted Stock as soon as practicable (but no later than ten (10) business
days) before 

                                      -4-
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the anticipated filing date, and such notice shall offer such Holders the
opportunity to register such number of shares of Restricted Stock as each such
Holder may request. Each Holder desiring to have Restricted Stock included in
such registration statement shall so advise the Company in writing within ten
(10) business days after the date of the Company's notice, setting forth the
amount of such Holder's Restricted Stock for which registration is requested. If
the Company's offering is to be an underwritten offering, the Company shall,
subject to the further provisions of this Agreement, use its reasonable efforts
to cause the managing underwriter or underwriters to permit the Holders of the
Restricted Stock requested to be included in the registration for such offering
to include such securities in such offering on the same terms and conditions as
any similar securities of the Company included therein. The right of each Holder
to registration pursuant to this Section 3 shall, unless the Company otherwise
assents, be conditioned upon such Holder's participation as a seller in such
underwriting and its execution of an underwriting agreement with the managing
underwriter or underwriters selected by the Company. Notwithstanding the
foregoing, if the managing underwriter or underwriters of such offering deliver
a written opinion to the Holders of Restricted Stock that either because of (A)
the kind of securities which the Holders, the Company and any other persons or
entities intend to include in such offering or (B) the size of the offering
which the Holders, the Company and other persons intend to make, the success of
the offering would be materially and adversely affected by inclusion of the
Restricted Stock requested to be included, then (i) in the event that the size
of the offering is the basis of such managing underwriter's opinion, the number
of shares to be offered for the accounts of Holders of Restricted Stock shall be
reduced pro rata on the basis of the number of securities requested by such
Holders to be offered to the extent necessary to reduce the total amount of
securities to be included in such offering to the amount recommended by 

                                      -5-
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such managing underwriter or underwriters; provided that if securities are being
offered for the account of other persons or entities as well as the Company,
such reduction shall not represent a greater fraction of the number of
securities intended to be offered by Holders of Restricted Stock than the
fraction of similar reductions imposed on such other persons or entities over
the amount of securities they intended to offer; and (ii) in the event that the
kind of securities to be offered is the basis of such managing underwriter's
opinion, (x) the Restricted Stock to be included in such offering shall be
reduced as described in clause (i) above (subject to the proviso in clause (i))
or, (y) if such actions would, in the judgment of the managing underwriter, be
insufficient to substantially eliminate the adverse effect that inclusion of the
Restricted Stock requested to be included would have on such offering, such
Restricted Stock will be excluded entirely from such offering. Any Restricted
Stock excluded from an underwriting shall be withdrawn from registration and
shall not, without the consent of the Company and the managing underwriter, be
transferred in a public distribution or a sale into the public trading markets
prior to the earlier of 120 days (or such other shorter period of time as the
managing underwriter may require) after the effective date of the registration
statement or 180 days after the date the Holders of such Restricted Stock are
notified of such exclusion.

     4.   Registration Procedures.  Whenever, pursuant to Section 2 or 3, the
Holders of Restricted Stock have requested that any Restricted Stock be
registered, the Company will, subject to the provisions of Section 5, use all
reasonable efforts to effect the registration and the sale or distribution of
such Restricted Stock in accordance with the intended method of disposition
thereof as promptly as practicable, and in connection with any such request, the
Company shall:

                                      -6-
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          (A) in connection with a request pursuant to Section 2, prepare and
     file with the SEC, not later than 45 days after receipt of such a request,
     a registration statement on any form for which the Company then qualifies
     and which counsel for the Company shall deem appropriate and which form
     shall be available for the sale or distribution of such Restricted Stock in
     accordance with the intended method of distribution thereof, and use its
     reasonable efforts to cause such registration statement to become
     effective; provided that if the Board of Directors of the Company has
     determined in its good faith judgment that the filing of such registration
     statement would materially adversely affect a pending or proposed public
     offering of the Company's securities or would otherwise be significantly
     disadvantageous to the Company and the Company shall furnish to Holders
     making such a request a certificate signed by either the chief executive
     officer or the chief financial officer of the Company stating that the
     Board of Directors has made such determination the Company shall have an
     additional period of not more than 180 days within which to file such
     registration statement (provided that the Company shall be entitled to
     furnish such a certificate only once in any 12-month period); and provided
     further, (i) that before filing a registration statement or prospectus or
     any amendments or supplements thereto, the Company will furnish to one
     counsel selected by the Holders of a majority in number of shares of the
     Restricted Stock covered by such registration statement copies of all such
     documents proposed to be filed, which documents will be subject to the
     review and comment of such counsel, and (ii) that after the filing of the
     registration statement, the Company will promptly notify each selling
     Holder of Restricted Stock of any stop order issued or, to the knowledge of
     the Company, threatened by the SEC and take all reasonable actions to
     prevent the entry of such stop order or to remove it if entered;

                                      -7-
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          (B) in connection with a registration pursuant to Section 2, prepare
     and file with the SEC such amendments and supplements to such registration
     statement and the prospectus used in connection therewith as may be
     necessary to keep such registration statement effective for a period of not
     less than 180 days or such shorter period as shall terminate when the
     distribution of all Restricted Stock covered by such registration statement
     shall have terminated (but not before the expiration of the applicable
     period referred to in Section 4(3) of the Securities Act and Rule 174
     thereunder), and comply with the provisions of the Securities Act with
     respect to the disposition of all securities covered by such registration
     statement during such period in accordance with the intended methods of
     disposition by the selling Holders thereof set forth in such registration
     statement;

          (C) as soon as reasonably practicable, furnish to such selling
     Holders, prior to filing a registration statement, copies of such
     registration statement as proposed to be filed, and thereafter furnish to
     such selling Holders such number of copies of such registration statement,
     each amendment and supplement thereto (in each case, if specified by such
     Holders, including all exhibits thereto), the prospectus included in such
     registration statement (including each preliminary prospectus) and such
     other documents as such selling Holders may reasonably request in order to
     facilitate the disposition of the Restricted Stock owned by such selling
     Holders;

          (D) with reasonable promptness, use its reasonable efforts to register
     or qualify such Restricted Stock under such other securities or blue sky
     laws of such jurisdictions within the United States and Canada as any
     selling Holder reasonably (in light of such selling Holder's intended plan
     of distribution) requests and do any and all other acts and things 

                                      -8-
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     which may be reasonably necessary or advisable to enable such selling
     Holder to consummate the disposition in such jurisdictions of the
     Restricted Stock owned by such selling Holder; provided that the Company
     will not be required to (i) qualify generally to do business in any
     jurisdiction where it would not otherwise be required to qualify but for
     this subsection (D), or (ii) subject itself to taxation in any such
     jurisdiction.

          (E) with reasonable promptness, use reasonable efforts to cause the
     Restricted Stock covered by such registration statement to be registered
     with or approved by such other governmental agencies or authorities as may
     be necessary by virtue of the business and operations of the Company to
     enable the selling Holders thereto to consummate the disposition of such
     Restricted Stock;

          (F) promptly notify each selling Holder of such Restricted Stock, at
     any time when a prospectus relating thereto is required to be delivered
     under the Securities Act, of the occurrence of any event known to the
     Company requiring the preparation of a supplement or amendment to such
     prospectus so that, as thereafter delivered to the purchasers or recipients
     of such Restricted Stock, such prospectus will not contain an untrue
     statement of a material fact or omit to state any material fact required to
     be stated therein or necessary to make the statements therein not
     misleading and promptly make available to each selling Holder any such
     supplement or amendment;

          (G) in connection with a request pursuant to Section 2, enter into an
     underwriting agreement in customary form, the form and substance of such
     underwriting agreement being subject to the reasonable satisfaction of the
     Company and the Holders;

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          (H) with reasonable promptness make available for inspection by any
     selling Holder, any underwriter participating in any disposition pursuant
     to such registration statement, and any attorney, accountant or other agent
     retained by any such selling Holder or underwriter (collectively, the
     "Inspectors"), all financial and other records, pertinent corporate
     documents and the properties of the Company (collectively, the "Records")
     as shall be reasonably necessary to enable them to exercise their due
     diligence responsibility, and cause the Company's officers and employees to
     supply all information reasonably requested for such purpose by any such
     Inspector in connection with such registration statement.  Each Inspector
     that actually reviews Records supplied by the Company that include
     information that the Company identifies, in good faith, to be confidential
     ("Confidential Information") shall be required, prior to any such review,
     to execute an agreement with the Company providing that such Inspector
     shall not publicly disclose any Confidential Information unless such
     disclosure is required by applicable law or legal process.  Each selling
     Holder of Restricted Stock agrees that Confidential Information obtained by
     it as a result of such inspections shall not be used by it as the basis for
     any transactions in securities of the Company unless and until such
     information is made generally available to the public.  Each selling Holder
     of Restricted Stock further agrees that it will, upon learning that
     disclosure of Confidential Information is sought in a court of competent
     jurisdiction, give notice to the Company and allow the Company, at its
     expense, to undertake appropriate action to prevent disclosure of the
     Confidential Information.  Each selling Holder also agrees that the due
     diligence investigation made by the Inspectors shall be conducted in a
     manner which shall 

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     not unreasonably disrupt the operations of the Company or the work
     performed by the Company's officers and employees;

          (I) in the event such sale is pursuant to an underwritten offering,
     use its reasonable efforts to obtain a comfort letter or letters from the
     Company's independent public accountants in customary form and covering
     such matters of the type customarily covered by comfort letters as the
     managing underwriter reasonably requests;

          (J) otherwise use its reasonable efforts to comply with all applicable
     rules and regulations of the SEC, and make available to its security
     holders, as soon as reasonably practicable, an earnings statement covering
     a period of twelve months, beginning within three months after the
     effective date of the registration statement, which earnings statement
     shall satisfy the provisions of Section 11(a) of the Securities Act; and

          (K) with reasonable promptness, use its reasonable efforts to cause
     all such Restricted Stock to be listed on each securities exchange on which
     the Common Stock of the Company is then listed, provided that the
     applicable listing requirements are satisfied.

          Each selling Holder of Restricted Stock agrees that, upon receipt of
     any notice from the Company of the happening of any event of the kind
     described in subsection (F) hereof, such selling Holder will forthwith
     discontinue disposition of Restricted Stock pursuant to the registration
     statement covering such Restricted Stock until such selling Holder's
     receipt of the copies of the supplemented or amended prospectus
     contemplated by subsection (F) hereof.  In the event the Company shall give
     any such notice, the Company shall extend the period during which such
     registration statement shall be maintained effective pursuant to this
     Agreement (including the period referred to in subsection (B)) by the
     number of days during 

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     the period from and including the date of the giving of such notice
     pursuant to subsection (F) hereof to and including the date when each
     selling Holder of Restricted Stock covered by such registration statement
     shall have received the copies of the supplemented or amended prospectus
     contemplated by subsection (F) hereof. Each selling Holder also agrees to
     notify the Company if any event relating to such selling Holder occurs
     which would require the preparation of a supplement or amendment to the
     prospectus so that such prospectus will not contain an untrue statement of
     a material fact or omit to state a material fact required to be stated
     therein or necessary to make the statements therein not misleading.

     5.   Conditions and Limitations.
          -------------------------- 

          (A) The Company's obligations under Section 2 shall be subject to the
following limitations:

          (i) the Company need not file a registration statement either (x)
     during the period starting with the date 60 days prior to the Company's
     estimated date of filing of, and ending 90 days after the effective date
     of, any registration statement pertaining to securities of the Company
     (other than a registration statement on Form S-8 (or any successor form) or
     any other registration statement relating solely to employee benefit plans
     or filed in connection with an exchange offer, a transaction to which Rule
     145 under the Securities Act applies or an offering of securities solely to
     the Company's existing stockholders), provided that if such Company
     registration statement is not filed within 90 days after the first date on
     which the Company notifies a Holder of Restricted Stock that it will delay
     a Demand Registration pursuant to this clause (x), the Company may not
     further postpone such Demand Registration 

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     pursuant to this clause; or (y) during the period specified in the first
     proviso of subparagraph (A) of Section 4;

          (ii) except as provided in Section 2(B), the Company shall not be
     required to file more than three Demand Registrations.  A registration
     statement will not count as a Demand Registration until it has become
     effective and the Holder or Holders have sold or distributed Restricted
     Stock thereunder; and

          (iii)  the Company shall have received the information and documents
     specified in Section 6 and each selling Holder shall have observed or
     performed its other covenants and conditions contained in such Section and
     Section 8.

          (B) The Company's obligation under Section 3 shall be subject to the
limitations and conditions specified in such Section and in clause (iii) of
subsection (A) of this Section 5, and to the condition that the Company may at
any time terminate its proposal to register its shares and discontinue its
efforts to cause a registration statement to become or remain effective.

     6.   Information From and Certain Covenants of Holders of Restricted Stock.
Notices and requests delivered to the Company by Holders from whom Restricted
Stock is to be registered pursuant to this Agreement shall contain such
information regarding the Restricted Stock to be so registered, the Holder and
the intended method of disposition of such Restricted Stock as shall reasonably
be required in connection with the action to be taken.  Any Holder whose
Restricted Stock is included in a registration statement pursuant to this
Agreement shall execute all consents, powers of attorney, registration
statements and other documents reasonably required to be signed by it in order
to cause such registration statement to become effective.  Each selling Holder
covenants that, in disposing of such Holder's shares, such Holder shall comply
with Rules 10b-2, 

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10b-5 and Regulation M of the SEC adopted pursuant to the Exchange Act (and any
successor rules thereto).

     7.   Registration Expenses.  All Registration Expenses (as defined herein)
will be borne by the Company.  Underwriting discounts and commissions applicable
to the sale of Restricted Stock shall be borne by the Holder of the Restricted
Stock to which such discount or commission relates, and each selling Holder
shall be responsible for the fees and expenses of any legal counsel, accountants
or other agents retained by such selling Holder and all other out-of-pocket
expenses incurred by such selling Holder in connection with any registration
under this Agreement.

     As used herein, the term Registration Expenses means all expenses incident
to the Company's performance of or compliance with this Agreement (whether or
not the registration in connection with which such expenses are incurred
ultimately becomes effective), including, without limitation, all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws (including reasonable fees and disbursements of counsel in connection with
blue sky qualifications of the Restricted Stock), rating agency fees, printing
expenses, messenger and delivery expenses incurred by the Company, internal
expenses incurred by the Company (including, without limitation, all salaries
and expenses of its officers and employees performing legal or accounting
duties), the fees and expenses incurred in connection with the listing of the
securities to be registered on each securities exchange on which similar
securities issued by the Company are then listed, NASD fees (including filing
fees and reasonable fees and disbursements of counsel in connection with
compliance with NASD rules and regulations), and fees and disbursements of
counsel for the Company and its independent certified public accountants
(including the expenses of any special audit or comfort letters required by or
incident to such performance), securities act liability insurance 

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(if the Company elects to obtain such insurance), the reasonable fees and
expenses of any special experts retained by the Company in connection with such
registration and the fees and expenses of other persons retained by the Company
in connection with such registration.

     8.   Indemnification; Contribution.
          ----------------------------- 

          (A) Indemnification by the Company.  The Company agrees to indemnify
and hold harmless each selling Holder of Restricted Stock from and against any
and all losses, claims, damages, liabilities and expenses (including reasonable
costs of counsel) (i) arising out of or based upon (1) any untrue statement or
alleged untrue statement of a material fact contained in any registration
statement or prospectus relating to the Restricted Stock or in any amendment or
supplement thereto or in any preliminary prospectus relating to the Restricted
Stock, or (2) any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
expenses arise out of, or are based upon, any such untrue statement or omission
or allegation thereof based upon information furnished in writing to the Company
by such selling Holder, or (ii) arising out of or based upon any violation of
any Federal or state securities laws or rules or regulations thereunder
committed by the Company in connection with the performance of its obligations
hereunder.  The Company also agrees to include in any underwriting agreement
with any underwriters of the Restricted Stock provisions indemnifying and
providing for contribution to such underwriters and their officers and directors
and each person who controls such underwriters on substantially the same basis
as the provisions of this Section 8 indemnifying and providing for contribution
to the selling Holders.

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          (B) Indemnification by Holders of Restricted Stock.  Each selling
Holder agrees to indemnify and hold harmless the Company, its officers,
directors and agents and each person (other than a selling Holder), if any, who
controls the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act, from and against any and all losses,
claims, damages, liabilities and expenses (including reasonable costs of
counsel) (i) arising out of or based upon (1) any untrue statement or alleged
untrue statement of a material fact contained in any registration statement or
prospectus relating to the Restricted Stock or in any amendment or supplement
thereto or in any preliminary prospectus relating to the Restricted Stock, or
(2) any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or (ii) arising out of or based upon any violation of any Federal or state
securities laws or rules or regulations thereunder committed by such Holder in
connection with the disposition of such Holder's Restricted Stock, provided (x)
that such losses, claims, damages, liabilities or expenses arise out of or are
based upon any such untrue statement or omission or allegation thereof based
upon information furnished in writing to the Company by such selling Holder or
upon such selling Holder's behalf expressly for use therein, and (y) that no
selling Holder shall be liable for any indemnification under this Section 8 in
an aggregate amount which exceeds the total net proceeds received by such
selling Holder from the offering.  Each selling Holder also agrees to include in
any underwriting agreement with underwriters of the Restricted Stock provisions
indemnifying and providing for contribution to such underwriters, their officers
and directors and each person who controls such underwriters on substantially
the same basis as the provisions of this Section 8 indemnifying and providing
for contribution to the Company.

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          (C) Conduct of Indemnification Proceedings.  If any action or
proceeding (including any governmental investigation) shall be brought or any
claim shall be asserted against any indemnified party in respect of which
indemnity may be sought from an indemnifying party, the indemnifying party shall
assume the defense thereof, including the employment of counsel reasonably
satisfactory to such indemnified party, and shall assume the payment of all
expenses incurred in connection with the defense thereof; provided, that the
indemnifying party may require such indemnified party to undertake to reimburse
all such fees and expenses if it is ultimately determined that such indemnified
party is not entitled to indemnification or advancement of expenses hereunder.
Such indemnified party shall have the right to employ separate counsel in any
such action and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party has agreed to pay such fees and expenses, (ii) the
indemnifying party shall have failed to promptly assume the defense of such
action, claim or proceeding and to employ counsel reasonably satisfactory to
such indemnified party, or (iii) the named parties to any such action, claim or
proceeding (including any impleaded parties) include both such indemnified party
and such indemnifying party, and such indemnified party shall have been advised
in writing by counsel that there may be one or more legal defenses available to
such indemnified party which are different from or additional to those available
to the indemnifying party (in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such action, claim or proceeding on behalf of
such indemnified party, it being understood, however, that the indemnifying
party shall not, in connection with any one such action or proceeding or
separate but substantially similar or 

                                      -17-
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related actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (together with appropriate
local counsel, subject to the indemnifying party's approval of counsel, which
approval shall not be unreasonably withheld) at any time for such indemnified
party. The indemnifying party shall not be liable for any settlement of any such
action, claim or proceeding effected without its written consent (such consent
which shall not be unreasonably withheld), but if settled with its written
consent, or if there is a final judgment for the plaintiff in any such action or
proceeding, the indemnifying party agrees to indemnify and hold harmless such
indemnified party from and against any loss or liability (to the extent stated
above) by reason of such settlement or judgment.

          (D) Contribution.  If the indemnification provided for in this Section
8 is unavailable to the Company or the selling Holders in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each such
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments, in such proportion
as is appropriate to reflect the relative fault of each such party in connection
with such statements or omissions, as well as any other relevant equitable
considerations.  The relative fault of each such party shall be determined by
reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact, has been taken or made by, or relates to
information supplied by, such indemnifying or indemnified party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission.

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     The Company and the selling Holders agree that it would not be just and
equitable if contribution pursuant to this Section 8(D) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph.  The amount paid or payable by an indemnified party as a result of
the losses, claims, damages, liabilities or judgments referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claims.  Notwithstanding the provisions of this Section 8(D), no
selling Holder shall be required to contribute an amount in excess of the amount
by which the total price at which the Restricted Stock of such selling Holder
was offered to the public exceeds the amount of any damages which such selling
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission.  No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.

     9.   Amendments.  This Agreement may be amended or modified upon the
written consent thereto of the Company and the Holders of a majority in number
of shares of Restricted Stock.

     10.  Assignments.  This Agreement shall be binding on and inure to the
benefit of the respective successors and assigns of the parties hereto.  Without
the written consent of the Company, a Holder may not assign any rights hereunder
except to a transferee of such Holder of Restricted Stock aggregating Ten
Percent (10%) or more of the Restricted Stock then outstanding, provided that

                                      -19-
<PAGE>
 
the foregoing will not prevent any successor by merger, consolidation or
transfer of substantially all the assets of such Holder from succeeding to a
Holder's rights hereunder.

     11.  GOVERNING LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE,
WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW.

     12.  Notices.  Any notice, request, instruction, correspondence or other
documents to be given hereunder by either party to the other (herein
collectively called "Notice") shall be in writing and delivered personally or
mailed, postage prepaid, or by telecopier, as follows:

          If to J.L. Holloway:
 
          J.L. Holloway
          525 E. Capital Street, Suite 402
          Jackson, Mississippi   39201
          Telecopier No.: (601) 352-0588
 
          If to Carl M. Crawford:
 
          Carl M. Crawford
          3500 Port Authority Road
          Pascagoula, Mississippi 39567
          Telecopier No.: (601) 769-1826
 
          If to Ronald W. Schnoor:
 
          Ronald W. Schnoor
          3500 Port Authority Road
          Pascagoula, Mississippi 39567
          Telecopier No.: (601) 769-1826

          If to James A. Lowe, III:
 
          James A. Lowe III
          525 E. Capital Street, Suite 402
          Jackson, Mississippi   39201
          Telecopier No.: (601) 352-0588

                                      -20-
<PAGE>
 
          If to John F. Alford:

          John F. Alford
          525 E. Capital Street, Suite 402
          Jackson, Mississippi 39201
          Telecopier No.: (601) 352-0588

          If to the Company:

          Friede Goldman International Inc.
          525 E. Capital Street, Suite 402
          Jackson, Mississippi   39201
          Attention:  James A. Lowe, III
          Telecopier No.  (601) 352-0588

Notice given by personal delivery or mail shall be effective upon actual
receipt.  Notice given by telecopier shall be effective upon actual receipt if
received during the recipient's normal business hours, or at the beginning of
the recipient's next business day after receipt if not received during the
recipient's normal business hours.  Any party may change any address to which
Notice is to be given to it by giving Notice as provided above of such change of
address.

     13.  Severability.  In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

     14.  Entire Agreement.  This Agreement is intended by the parties as a
final expression of their agreement and a complete and exclusive statement of
the agreement and understanding of the parties hereto in respect of the subject
matter contained herein.  There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein.  This 

                                      -21-
<PAGE>
 
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.

     15.  Attorneys' Fees.  In any action or proceeding brought to enforce any
provision of this Agreement, or where any provision hereof is validly asserted
as a defense, the prevailing party, as determined by the court, shall be
entitled to recover reasonable attorneys' fees in addition to its costs and
expenses and any other available remedy.

                                      -22-
<PAGE>
 
     IN WITNESS WHEREOF, the Holders and the Company have caused this Agreement
to be signed by their respective officers thereunto duly authorized.
 

                              By:____________________________________
                                  J.L. Holloway


                              By:____________________________________
                                  Carl M. Crawford


                              By:____________________________________
                                  Ronald W. Schnoor

 
                              By:____________________________________
                                  James A. Love, III


                              By:____________________________________
                                  John F. Alford


                              FRIEDE GOLDMAN INTERNATIONAL INC.


                              By:____________________________________
                                  J.L. Holloway
                                  Chairman of the Board, President and Chief
                                      Executive Officer

                                      -23-