LOAN AGREEMENT
                                                
                                                
                             Among
                                                
                                                
                GE CAPITAL PUBLIC FINANCE, INC.,
                                                
                           as Lender,
                                                
                                                
                              and
                                                
                                                
            MISSISSIPPI BUSINESS FINANCE CORPORATION,
                                                
                           as Issuer,
                                                
                                                
                              and
                                                
                                                
               FRIEDE GOLDMAN INTERNATIONAL INC.,
                                                
                          as Borrower
                                                
                                                
                  Dated as of December 1, 1998
                                
                                
                                
                _______________________________
                                
        This instrument constitutes a security agreement
         under the Mississippi Uniform Commercial Code.
               _________________________________
     
WATKINS & EAGER PLLC
400 EAST CAPITOL, SUITE 300
JACKSON, MS 39201
(601) 948-6470
<PAGE>
                        TABLE OF CONTENTS
                                                           Page
                           ARTICLE I
                    DEFINITIONS AND EXHIBITS

Section 1.01.  Definitions . . . . . . . . . . . . . . . . . . . . . .2
Section 1.02.  Exhibits. . . . . . . . . . . . . . . . . . . . . . . .5
Section 1.03.  Rules of Construction . . . . . . . . . . . . . . . . .5

                           ARTICLE II

           FINANCING OF COLLATERAL AND TERMS OF LOAN

Section 2.01.  Acquisition of Collateral . . . . . . . . . . . . . . .6
Section 2.02.  Loan. . . . . . . . . . . . . . . . . . . . . . . . . .6
Section 2.03.  Interest. . . . . . . . . . . . . . . . . . . . . . . .6
Section 2.04.  Payments. . . . . . . . . . . . . . . . . . . . . . . .6
Section 2.05.  Payment on Non-Business Days. . . . . . . . . . . . . .7
Section 2.06.  Loan Payments To Be Unconditional . . . . . . . . . . .7
Section 2.07.  Prepayments . . . . . . . . . . . . . . . . . . . . . .7

                          ARTICLE III

CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . .8

                           ARTICLE IV

REPRESENTATIONS, WARRANTIES AND COVENANTS OF ISSUER. . . . . . . . . 11

                           ARTICLE V

REPRESENTATIONS, WARRANTIES AND COVENANTS OF 
   BORROWER AND LENDER . . . . . . . . . . . . . . . . . . . . . . . 13

                           ARTICLE VI

             TITLE TO COLLATERAL; SECURITY INTEREST

Section 6.01.  Title to Collateral . . . . . . . . . . . . . . . . . 17
Section 6.02.  Security Interest in Collateral . . . . . . . . . . . 17
Section 6.03.  Change in Name or Corporate Structure of
                  Borrower; Change in Location of 
                  Borrower's Principal Place of Business . . . . . . 18
<PAGE>
Section 6.04.  Liens and Encumbrances to Title . . . . . . . . . . . 18
Section 6.05.  Personal Property . . . . . . . . . . . . . . . . . . 18
Section 6.06.  Assignment of Insurance . . . . . . . . . . . . . . . 18
Section 6.07.  Occupancy . . . . . . . . . . . . . . . . . . . . . . 19
Section 6.08.  Agreement as Financing Statement. . . . . . . . . . . 19

                          ARTICLE VII

               AFFIRMATIVE COVENANTS OF BORROWER

Section 7.01.  Reporting Requirements. . . . . . . . . . . . . . . . 19
Section 7.02.  Books and Records; Inspection and 
                 Examination . . . . . . . . . . . . . . . . . . . . 21
Section 7.03.  Compliance With Laws; Environmental 
                 Indemnity . . . . . . . . . . . . . . . . . . . . . 21
Section 7.04.  Payment of Taxes and Other Claims . . . . . . . . . . 22
Section 7.05.  Maintenance of Collateral . . . . . . . . . . . . . . 22
Section 7.06.  Insurance and Indemnification . . . . . . . . . . . . 23
Section 7.07.  Preservation of Corporate Existence . . . . . . . . . 24
Section 7.08.  Performance by Lender . . . . . . . . . . . . . . . . 24

                          ARTICLE VIII

                 NEGATIVE COVENANTS OF BORROWER

Section 8.01.  Lien. . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 8.02.  Sale of Assets. . . . . . . . . . . . . . . . . . . . 25
Section 8.03.  Consolidation and Merger. . . . . . . . . . . . . . . 25
Section 8.04.  Accounting. . . . . . . . . . . . . . . . . . . . . . 26
Section 8.05.  [INTENTIONALLY OMITTED] . . . . . . . . . . . . . . . 26
Section 8.06.  Other Defaults. . . . . . . . . . . . . . . . . . . . 27
Section 8.07.  Place of Business . . . . . . . . . . . . . . . . . . 27
Section 8.08.  Modifications and Substitutions . . . . . . . . . . . 27
Section 8.09.  Use of the Collateral . . . . . . . . . . . . . . . . 27
Section 8.10.  Location of the Collateral. . . . . . . . . . . . . . 27

                           ARTICLE IX

DAMAGE AND DESTRUCTION; USE OF NET PROCEEDS. . . . . . . . . . . . . 28

                           ARTICLE X

               ASSIGNMENT, SUBLEASING AND SELLING

Section 10.01. Assignment by Lender. . . . . . . . . . . . . . . . . 28
Section 10.02. No Sale or Assignment by Borrower . . . . . . . . . . 29
<PAGE>
                           ARTICLE XI

                 EVENTS OF DEFAULT AND REMEDIES

Section 11.01. Events of Default . . . . . . . . . . . . . . . . . . 29
Section 11.02. Remedies on Default . . . . . . . . . . . . . . . . . 30
Section 11.03. Return of Collateral. . . . . . . . . . . . . . . . . 32
Section 11.04. No Remedy Exclusive . . . . . . . . . . . . . . . . . 32
Section 11.05. Late Charge . . . . . . . . . . . . . . . . . . . . . 32

                          ARTICLE XII

THE ACT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

                          ARTICLE XIII

                         MISCELLANEOUS
Section 13.01. Costs and Expenses of Lender. . . . . . . . . . . . . 35
Section 13.02. Disclaimer of Warranties. . . . . . . . . . . . . . . 35
Section 13.03. Notices . . . . . . . . . . . . . . . . . . . . . . . 36
Section 13.04. Further Assurance and Corrective 
                 Instruments . . . . . . . . . . . . . . . . . . . . 36
Section 13.05. Binding Effect; Time of the Essence . . . . . . . . . 36
Section 13.06. Severability. . . . . . . . . . . . . . . . . . . . . 36
Section 13.07. Amendments. . . . . . . . . . . . . . . . . . . . . . 36
Section 13.08. Execution in Counterparts . . . . . . . . . . . . . . 37
Section 13.09. Applicable Law. . . . . . . . . . . . . . . . . . . . 37
Section 13.10. Captions. . . . . . . . . . . . . . . . . . . . . . . 37
Section 13.11. Entire Agreement. . . . . . . . . . . . . . . . . . . 37
Section 13.12. Usury . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 13.13. Waiver of Jury Trial. . . . . . . . . . . . . . . . . 37
EXHIBIT A1 - Friede Goldman Offshore, Inc. Schedule of 
               Collateral
EXHIBIT A2 - HAM Marine, Inc. Schedule of Collateral
EXHIBIT A3-  Loan Payments
EXHIBIT B - Form of Certificate of Acceptance 
EXHIBIT C - Form of Opinion of Counsel to Borrower and Guarantors
EXHIBIT D - Form of Opinion of Counsel to Issuer
EXHIBIT E - Form of Opinion of Bond Counsel
EXHIBIT F - Form of Bond
<PAGE>

                         LOAN AGREEMENT

Lender:        GE Capital Public Finance, Inc.
               Suite 470
               8400 Normandale Lake Boulevard
               Minneapolis, MN  55437
               Telephone: (800) 346-3164
               Telecopier: (612) 897-5601

Issuer:        Mississippi Business Finance Corporation
               550 High Street
               13th Floor, Sillers Building
               Jackson, MS  39201
               Telephone: (601) 359-3552
               Telecopier: (601) 359-2832

Borrower:      Friede Goldman International Inc.
               Bank of Mississippi Building
               525 East Capitol Street, Suite 402
               Jackson, MS  39201
               Telephone: (601) 352-1107
               Telecopier: (601) 352-0588


     THIS LOAN AGREEMENT dated as of December 1, 1998 (this
"Agreement") among GE Capital Public Finance, Inc., a Delaware
corporation, as lender (with its successors and assigns,
"Lender"), Mississippi Business Finance Corporation, a public
body corporate and political subdivision duly organized and
validly existing under the laws of the state of Mississippi (the
"State"), as issuer ("Issuer"), and Friede Goldman International
Inc., a Mississippi corporation, as borrower ("Borrower").

     WHEREAS, Issuer is authorized by law including Title 57,
Chapter 10, Articles 7 and 11 of the Mississippi Code of 1972, as
amended and supplemented (the "Act"), to among other things,
provide and finance economic development projects to eligible
companies in the State; and 

     WHEREAS, the Issuer has determined that the proposed project
by the Borrower is an eligible "economic development project" as
defined by the Act and that the Borrower is an "eligible
company" as defined by the Act; and

     WHEREAS, the Issuer is authorized pursuant to the Act to
issue its revenue bonds to finance the cost of said project; and

     WHEREAS, in furtherance of the purposes of the Act, Issuer
proposes to finance or refinance all or a portion of the
acquisition and installation of the Collateral (as hereinafter
defined) by
<PAGE>
Borrower pursuant to this Agreement by issuing its revenue bond
and obtaining a loan from Lender and lending the proceeds thereof
to Borrower; and

     WHEREAS, the Issuer has, by due corporate action, authorized
the issuance, from time to time, of its Taxable Industrial
Development Revenue Bonds, Series 1998 (Friede Goldman
International Inc. Project) dated the date of delivery (the
"Bond") pursuant to the Act in the maximum aggregate principal
amount of $18,000,000 in order to loan the proceeds thereof to
the Borrower to finance the Project; and 

     WHEREAS, Borrower proposes to borrow the proceeds of the
loan made by Lender to Issuer upon the terms and conditions set
forth herein to finance or refinance the acquisition and
installation of the Collateral and contribute as capital the
proceeds thereof to each of the Guarantors in consideration of
Guarantors' granting of security interests and lien interests in
certain of the Collateral to Lender and each providing to Lender
a Guaranty; and 

     WHEREAS, Guarantors have purchased the Collateral either
directly from Vendors or from Borrower for adequate consideration
as set forth in Exhibit A hereto.

     WHEREAS, Borrower shall make Loan Payments (as hereinafter
defined) directly to Lender as assignee of Issuer and holder of
the Bond (as hereinafter defined); and

     WHEREAS, this Agreement and the Bond shall not be deemed to
constitute a debt or liability or moral obligation of the State
or any political subdivision thereof, or a pledge of the faith
and credit or taxing power of the State or any political
subdivision thereof, but shall be a special obligation
payable solely from the Loan Payments payable hereunder by
Borrower to Lender as assignee of Issuer;

     NOW, THEREFORE, for good and valuable consideration, receipt
of which is hereby acknowledged, and in consideration of the
premises contained in this Agreement, Lender, Issuer and
Borrower agree as follows:

                           ARTICLE I
                                
                    DEFINITIONS AND EXHIBITS

     Section 1.01.  Definitions.  The following terms used herein
will have the meanings indicated below unless the context clearly
requires otherwise:

     "Acquisition Costs" means the contract price paid or to be
paid to the Vendors or reimbursed to Borrower or either Guarantor
for any portion of the Collateral upon Borrower's or either
Guarantor's acceptance thereof, including administrative,
engineering, legal, financial and other costs incurred by Lender,
Issuer, Borrower, Escrow Agent and Vendors in connection with the
acquisition, installation and financing by Lender of such
Collateral, which Acquisition Costs are set forth in Exhibit A
hereto.
<PAGE>
     "Administrative Expenses" means the reasonable and necessary
fees, costs or expenses incurred or payable by Borrower to the
Issuer pursuant to this Agreement, including (without
limitation) a one time fee of $20,000 to Issuer.

     "Assignment of Earnings and Charter" means the Assignment of
Earnings and Charter of even date herewith executed on behalf of
HAM Marine, Inc. for the benefit of Lender.

     "Assignment of Insurances" means the Assignment of
Insurances of even date herewith executed on behalf of HAM
Marine, Inc. for the benefit of Lender.

     "Agreement" means this Agreement, including all exhibits
hereto, as any of the same may be supplemented or amended from
time to time in accordance with the terms hereof.

     "Bond" means Issuer's $18,000,000 Taxable Industrial
Development Revenue Bond, Series 1998 (Friede Goldman
International Inc. Project) in the form attached hereto as
Exhibit F. 

     "Borrower" means Friede Goldman International Inc., a
Mississippi corporation.

     "Business Day" means a day other than a Saturday or Sunday
on which banks are generally open for business in New York, New
York.

     "Certificate of Acceptance" means a Certificate of
Acceptance, in substantially the form set forth as Exhibit B
hereto, whereby Borrower and each Guarantor acknowledges receipt
in good condition of particular items of Collateral identified
therein and confirms the date of delivery thereof and certain
other matters.

     "Collateral" means the property identified in Exhibit A
hereto together with all replacement parts, additions, repairs,
accessions and accessories incorporated therein and/or affixed to
such property and the proceeds of all of the foregoing.

     "Default" means an event that, with giving of notice or
passage of time or both, would constitute an Event of Default as
provided in Article XI hereof.

     "Environmental Laws" has the meaning ascribed thereto in
paragraph (h) of Article V hereof.

     "Escrow Agent" means National City Bank of Minneapolis, as
escrow agent under the Escrow Agreement, and its successors and
assigns permitted under the Escrow Agreement.

     "Escrow Agreement" means the Escrow Agreement dated as of
December 1, 1998 among Lender, Issuer, Borrower and Escrow Agent.

     "Escrow Fund" means the fund established and held by Escrow
Agent pursuant to the Escrow Agreement.

     "Guarantor" means each of Friede Goldman Offshore, Inc., a
Mississippi corporation and
<PAGE>
HAM Marine, Inc., a Mississippi corporation.

     "Guaranty" means each Guaranty Agreement of even date
herewith executed by each Guarantor for the benefit of Lender.

     "HAM Security Agreement" means the Security Agreement of
even date herewith by and between HAM Marine, Inc and Lender.

     "Interest" means the portion of any payment from Issuer to
Lender designated as and comprising interest as shown in Exhibit
A hereto.

     "Issuer" means Mississippi Business Finance Corporation,
acting as issuer under this Agreement.

     "Lender" means (i) GE Capital Public Finance, Inc., acting
as lender under this Agreement, (ii) any surviving, resulting or
transferee corporation of GE Capital Public Finance, Inc. and
(iii) except where the context requires otherwise, any
assignee(s) of Lender.

     "Loan" means the loan from Issuer to Borrower pursuant to
this Agreement. 

     "Loan Payments" means the loan payments payable by Borrower
pursuant to the provisions of this Agreement and the Bond as
specifically set forth in Exhibit A hereto.  As provided in
Article II hereof, Loan Payments shall be payable by Borrower
directly to Lender, as assignee of Issuer and holder of the Bond,
in the amounts and at the times as set forth in Exhibit A hereto.

     "Loan Proceeds" means the total amount of money to be paid
pursuant to Section 2.02 hereof by Lender to Borrower, Guarantors
or Vendor(s) on behalf of Issuer or, upon agreement among
Lender, Issuer and Borrower, to be paid to Escrow Agent for
deposit and application in accordance with the Escrow Agreement.

     "Offshore Security Agreement" means the Security Agreement
of even date herewith by and between Friede Goldman Offshore,
Inc. and Lender.

     "Paying Agent Agreement" means the Paying Agent Agreement
dated as of December 1, 1998 by and among Lender, Issuer,
Borrower and Paying Agent.

     "Prepayment Amount" means the amount which Borrower may or
must from time to time pay or cause to be paid to Lender as
assignee of Issuer and holder of the Bond in order to prepay the
Loan and the Bond, as provided in Article XII hereof, such
amounts being set forth in Exhibit A hereto, together with
accrued interest and all other amounts due hereunder.

     "Principal" means the portion of any Loan Payment designated
as principal in Exhibit A hereto.

     "Purchase Agreements" means Borrower's or either Guarantor's
purchase agreements with
<PAGE>
Vendors of the Collateral.

     "Security Agreement" means each of the HAM Security
Agreement and the Offshore Security Agreement.

     "Ship Mortgage(s)" means, collectively or individually as
the case may be, the First Preferred Mortgage dated of even date
herewith executed on behalf of HAM Marine, Inc. for the benefit
of Lender regarding the "Dual Carrier"and the First Preferred
Mortgage dated of even date herewith executed on behalf of Friede
Goldman Offshore, Inc. regarding the "Jack King" and the "Maggie
D." 

     "State" means the State of Mississippi.

     "UCC" means the Uniform Commercial Code as adopted and in
effect in the State.

     "Vendor" means the manufacturer or vendor of an item of
Collateral, as well as the agents or dealers of the manufacturer,
from whom Borrower or a Guarantor has purchased or is purchasing
items of Collateral.

     Section 1.02.  Exhibits.  The following exhibits are
attached hereto and made a part hereof:

     Exhibit A:  Form of Schedule of Collateral and Loan Payments
describing the Collateral and setting forth the Loan Payments and
Prepayment Amounts.  Issuer hereby authorizes Lender to insert
in Exhibit A the serial or other identifying numbers relating to
the Collateral when available.

     Exhibit B:  Form of Certificate of Acceptance.

     Exhibit C:  Form of opinion of counsel to Borrower.

     Exhibit D:  Form of opinion of counsel to Issuer.

     Exhibit E:   Form of opinion of Bond Counsel

     Exhibit F:  Form of Bond.

     Section 1.03.  Rules of Construction.  (a) The singular form
of any word used herein, including the terms defined in Section
1.01 hereof, shall include the plural, and vice versa.  The use
herein of a word of any gender shall include correlative words of
all genders.

     (b)  Unless otherwise specified, references to Articles,
Sections and other subdivisions of this Agreement are to the
designated Articles, Sections and other subdivision of this
Agreement as originally executed.  The words "hereof," "herein,"
"hereunder" and words of similar import refer to this Agreement
as a whole.

     (c)  The headings or titles of the several articles and
sections shall be solely for
<PAGE>
convenience of reference and shall not affect the meaning,
construction or effect of the provisions hereof.

                           ARTICLE II
                                
           FINANCING OF COLLATERAL AND TERMS OF LOAN

     Section 2.01.  Acquisition of Collateral.  Borrower or
Guarantors either have ordered or shall order the Collateral
pursuant to one or more Purchase Agreements from one or more
Vendors.  Borrower and Guarantors shall remain liable to the
Vendor or Vendors in respect of their duties and obligations in
accordance with each Purchase Agreement and shall bear the risk
of loss with respect to any loss or claim relating to any item of
Collateral covered by any Purchase Agreement, and neither Lender
nor Issuer shall assume any such liability or risk of loss. 
Borrower either has transferred or shall transfer title to the
Collateral to HAM Marine, Inc. or Friede Goldman Offshore,
Inc.

     Section 2.02.  Loan.  Lender hereby agrees, subject to the
terms and conditions of this Agreement, to purchase the Bond in
the amount of $18,000,000; Issuer hereby agrees, subject to the
terms and conditions of this Agreement, to sell the bond to
Lender and to lend such amount to Borrower; and Borrower hereby
agrees to borrow such amount from Issuer.  Upon fulfillment of
the conditions set forth in Article III hereof, Lender shall
disburse the Loan Proceeds to the Escrow Agent for distribution
as follows: (x) $________________ to Borrower of which (a)
$__________________ shall be distributed to HAM Marine, Inc. and
(b) $______________ shall be distributed to Friede Goldman
Offshore, Inc. and (y) $________________ deposited in the
Escrow Fund to be held, invested and disbursed as provided in the
Escrow Agreement.  Issuer's obligation to repay the loan from
Lender and to make payments on the Bond, and Borrower's
obligation to repay the Loan, shall commence, and interest shall
begin to accrue, on the date that Loan Proceeds are disbursed to
Borrower or Guarantors on behalf of Issuer or deposited in the
Escrow Fund.

     Section 2.03.  Interest.  The principal amount of the Bond
and the Loan hereunder outstanding from time to time shall bear
interest (computed on the basis of actual days elapsed in a
360-day year) at the rate of seven and ninety-nine hundredths
percent (7.99%).  Interest accruing on the principal balance of
such loans outstanding from time to time shall be payable as
provided in Exhibit A and in the Bond and upon earlier demand in
accordance with the terms hereof or prepayment in accordance with
the terms of the Bond and Section 2.07 hereof.  

     Section 2.04.  Payments.  Issuer shall pay the principal of,
premium, if any in accordance with Section 2.07 hereof, and
interest on the Bond, but only out of the amounts paid by
Borrower pursuant to this Agreement.  Borrower shall pay to
Lender, as assignee of Issuer, Loan Payments, in the amounts and
on the dates set forth in Exhibit A hereto.  Additionally,
Borrower shall pay to Lender, as assignee of Issuer and holder of
the Bond, an amount equal to the product of (i) 13% per
annum and (ii) the delinquent amount of any Loan Payment not paid
when due. As security for its obligation to pay the principal of,
premium, if any in accordance with Section 2.07 hereof, and
interest on the loan from Lender, Issuer assigns to Lender all of
Issuer's right to receive Loan
<PAGE>
Payments from Borrower hereunder, all of Issuer's rights
hereunder and all of Issuer's right, title and interest in and to
the Collateral, and Issuer irrevocably constitutes and appoints
Lender and any present or future officer or agent of Lender as
its lawful attorney, with full power of substitution and
resubstitution, and in the name of Issuer or otherwise, to
collect the Loan Payments and any other payments due hereunder
and under the Bond and to sue in any court for such Loan Payments
or other payments, to exercise all rights hereunder with respect
to the Collateral, and to withdraw or settle any claims, suits or
proceedings pertaining to or arising out of this Agreement upon
any terms.  Such Loan Payments and other payments shall be made
by Borrower directly to Lender, as Issuer's assignee and holder
of the Bond, and shall be credited against Issuer's payment
obligations hereunder and under the Bond.  No provision, covenant
or agreement contained in this Agreement or any obligation
imposed on Issuer herein or under the Bond, or the breach
thereof, shall constitute or give rise to or impose upon Issuer a
pecuniary liability, a charge upon its general credit or taxing
powers or a pledge of its general revenues.  In making the
agreements, provisions and covenants set forth in this Agreement,
Issuer has not obligated itself except with respect to the
Collateral and the application of the Loan Payments to be paid by
Borrower hereunder.  All amounts required to be paid by Borrower
hereunder shall be paid in lawful money of the United States of
America in immediately available funds.  No recourse shall be had
by Lender or Borrower for any claim based on this Agreement or
the Bond against any director, officer, employee or agent of
Issuer alleging personal liability on the part of such person,
unless such claim is based on the willful dishonesty of or
intentional violation of law by such person.

     Section 2.05.  Payment on Non-Business Days.  Whenever any
payment to be made hereunder or under the Bond shall be stated to
be due on a day which is not a Business Day, such payment may be
made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of
interest or the fees hereunder, as the case may be.

     Section 2.06.  Loan Payments To Be Unconditional.  The
obligations of Borrower to make payment of the Loan Payments
required under this Article II and to make other payments
hereunder and to perform and observe the covenants and agreements
contained herein shall be absolute and unconditional in all
events, without abatement, diminution, deduction, setoff or
defense for any reason, including (without limitation) any
failure of the Collateral to be delivered or installed, any
defects, malfunctions, breakdowns or infirmities in the
Collateral or any accident, condemnation, destruction or
unforeseen circumstances.  Notwithstanding any dispute between
Borrower and any of Issuer, Lender, any Vendor or any other
person, Borrower shall make all Loan Payments when due
and shall not withhold any Loan Payments pending final resolution
of such dispute, nor shall Borrower assert any right of set-off
or counterclaim against its obligation to make such payments
required under this Agreement.

     Section 2.07.  Prepayments.  (a) Borrower may, in its
discretion, prepay the Loan in whole at any time after the third
anniversary of the date hereof by paying the applicable
Prepayment Amount.

     (b)  Borrower shall prepay the Loan and the Bond in whole or
in part at any time pursuant to Article IX hereof by paying the
applicable Prepayment Amount.
<PAGE>

     (c)  Borrower shall prepay the Loan and the Bond in full
immediately upon demand of Lender after the occurrence of an
Event of Default by paying the applicable Prepayment Amount.

     (d)  The amounts due hereunder shall be repaid, and the
amounts due under the Bond shall be paid, in part with funds
remaining in the Escrow Fund upon termination of the Escrow
Agreement as provided in Sections 2.03 or 2.04 of the Escrow
Agreement.

     Upon any prepayment in part of the Loan and the Bond, the
prepayment shall be applied first to interest accrued thereon and
next to the Principal portion of the Loan Payments in the inverse
order of maturity.

     Section 2.08.  Security.  The obligations of Borrower to
make Loan Payments required under this Article II and to make
other payments hereunder and to perform and observe the covenants
and agreements contained herein shall be secured, among other
things, by a security interest in the Collateral pursuant to the
HAM Security Agreement, the Offshore Security Agreement and the
Ship Mortgages.


                          ARTICLE III
                                
                      CONDITIONS PRECEDENT

     Lender's agreement to make the loan to Issuer hereunder and
to disburse the Loan Proceeds shall be subject to the condition
precedent that Lender shall have received all of the following,
each in form and substance satisfactory to Lender:

          (a)  This Agreement, properly executed on behalf of
     Issuer and Borrower, and each of the Exhibits hereto
     properly completed.
     
          (b)  The Bond, properly executed on behalf of Issuer.

          (c)  The HAM Security Agreement, properly executed by
     HAM Marine, Inc. for the benefit of Lender.
     
          (d)  The Guaranty Agreement, properly executed by HAM
     Marine, Inc. for the benefit of Lender.
     
          (e)  The Offshore Security Agreement, properly executed
     by Friede Goldman Offshore, Inc. for the benefit of Lender.
     
          (f)  The Guaranty Agreement, properly executed by
     Friede Goldman Offshore, Inc. for the benefit of Lender.
     
          (g)  The Paying Agent Agreement, properly executed on
     behalf of Issuer, Lender, Escrow Agent and Paying Agent.
<PAGE>     
          (h)  The Ship Mortgages, properly executed by HAM
     Marine, Inc. and Friede Goldman Offshore, Inc. for the
     benefit of Lender.
     
          (i)  An Assignment of Earnings and Charter, properly
     executed by HAM Marine, Inc. for the benefit of Lender.
     
          (j)  An Assignment of Insurances, properly executed by
     HAM Marine, Inc. for the benefit of Lender.
     
          (k)  The Escrow Agreement, properly executed on behalf
     of Issuer, Borrower, Lender and Escrow Agent.

          (l)  A certificate of the Secretary or an Assistant
     Secretary of Borrower, certifying as to (i) the resolutions
     of the board of directors and, if required, the shareholders
     of Borrower, authorizing the execution, delivery and
     performance of this Agreement, the Escrow Agreement and the
     Paying Agent Agreement and any related documents, (ii) the
     bylaws of Borrower, and (iii) the signatures of the officers
     or agents of Borrower authorized to execute and deliver this
     Agreement, the Escrow Agreement and the Paying Agent
     Agreement and other instruments, agreements and certificates
     on behalf of Borrower.

          (m)  Currently certified copies of the Articles of
     Incorporation of Borrower.
     
          (n)  A Certificate of Good Standing issued as to
     Borrower by the Secretary of the State of the state of
     Borrower's incorporation not more than 10 days prior to the
     date hereof.
     
          (o)  A certificate of the Secretary or an Assistant
     Secretary of each Guarantor, certifying as to (i) the
     resolutions of the board of directors and, if required, the
     shareholders of each Guarantor, authorizing the execution,
     delivery and performance of each Guaranty and each Security
     Agreement and any related documents, (ii) the bylaws of each
     Guarantor, and (iii) the signatures of the officers or
     agents of each Guarantor authorized to execute and deliver
     each Guaranty and each Security Agreement and other
     instruments, agreements and certificates on behalf of each
     Guarantor.

          (p)  Currently certified copies of the Articles of
     Incorporation of each Guarantor.

          (q)  A Certificate of Good Standing issued as to each
     Guarantor by the Secretary of the State of the state of each
     Guarantor's incorporation not more than 10 days prior to the
     date hereof.

          (r)  Certificates of the insurance required hereunder
     or under the Security Agreements, containing a lender's loss
     payable clause or endorsement in favor of Lender.

          (s)  A resolution or evidence of other official action
     taken by or on behalf of Issuer to authorize the
     transactions contemplated hereby.
<PAGE>
          (t)  A true and correct copy of any and all leases
     pursuant to which Borrower or either Guarantor is leasing
     the property where the Collateral will be located, together
     with a landlord's disclaimer and consent with respect to
     each such lease.

          (u)  A true and correct copy of any and all mortgages,
     deeds of trust or similar agreements (whether or not
     Borrower or any Guarantor is a party to any such agreement)
     relating to the property where the Collateral will be
     located, together with a mortgagee's waiver with respect to
     each such mortgage, deed of trust or similar agreement.

          (v)  As applicable, financing statements executed by
     Borrower or either Guarantor (as the case may be), as
     debtor, and naming Issuer, as secured party, and Lender, as
     assignee, and/or the original certificate of title or
     manufacturer's certificate of origin and title application
     if any of the Collateral is subject to certificate of title
     laws.

          (w)  Financing statements executed by Issuer, as
     debtor, and naming Lender, as secured party.

          (x)  Current searches of appropriate filing offices
     showing that (i) no state or federal tax liens have been
     filed and remain in effect against Borrower or either
     Guarantor, (ii) no financing statements have been filed and
     remain in effect against Borrower or either Guarantor
     relating to the Collateral except those financing statements
     filed by Lender, (iii) Lender has duly filed all financing
     statements necessary to perfect the security interest
     created pursuant to this Agreement and (iv) Lender has duly
     filed all financing statements necessary to perfect the
     transfer of Issuer's interest in this Agreement and the Loan
     Payments.
     
          (y)  A current abstract of title for the "Dual
     Carrier", the "Jack King" and the "Maggie D" from the United
     States Coast Guard, National Vessel Documentation Center
     showing the fee title of the "Dual Carrier" vested in HAM
     Marine, Inc. and fee title of the "Jack King" and the
     "Maggie D" vested in Friede Goldman Offshore, Inc.
     containing no liens which are unacceptable to Lender and
     showing the Ship Mortgages as first-priority liens
     on the vessels and related collateral.  

          (z)  An opinion of counsel to Borrower and Guarantors,
     addressed to Lender and Issuer, in the form attached hereto
     as Exhibit C.

          (aa) An opinion of counsel to Issuer, addressed to
     Lender and Borrower, in the form attached hereto as Exhibit
     D.

          (bb) An opinion of bond counsel, addressed to Lender,
     in the form attached hereto as Exhibit E.

          (cc) Payment of Lender's fees, commissions and expenses
     required by Section 12.01 hereof.
<PAGE>

          (dd) Payment of Issuer's fees, commissions and expenses
     incurred in connection with this Agreement and the
     transactions contemplated hereby.

          (ee) Any other documents or items required by Lender.

     Lender's agreement to make the loan to Issuer hereunder, to
disburse the Loan Proceeds and to consider approval of any
disbursement from the Escrow Fund shall be subject to the further
conditions precedent that on the date thereof:

          (ff) Lender shall have received each of the items
     required for a disbursement pursuant to the Escrow
     Agreement;

          (gg) Lender shall have received in form and substance
     satisfactory to Lender Vendor invoice(s) and/or bill(s) of
     sale relating to the Collateral and, if such invoices have
     been paid by Issuer, Borrower or either Guarantor (as the
     case may be), evidence of payment thereof;

          (hh) the representations and warranties contained in
     Articles IV and V hereof are correct on and as of the date
     of such disbursement as though made on and as of such date,
     except to the extent that such representations and  
     warranties relate solely to an earlier date; and
     
          (ii) no event has occurred and is continuing, or would
     result from such loan to Issuer or the Loan which
     constitutes a Default or an Event of Default.

                           ARTICLE IV
                                
      REPRESENTATIONS, WARRANTIES AND COVENANTS OF ISSUER

     Issuer represents, warrants and covenants for the benefit of
Lender and Borrower, as follows:

          (a)  Issuer is a body corporate and a political
     subdivision duly created and validly existing under the laws
     of the State.

          (b)  Issuer will exercise its best efforts to preserve
     and keep in full force and effect its existence as a public
     body corporate and political subdivision.

          (c)  Issuer is authorized under the Constitution and
     laws of the State to issue the Bond and to enter into this
     Agreement, the Escrow Agreement, the Paying Agent Agreement
     and the transactions contemplated hereby and to perform all
     of its obligations hereunder.

          (d)  Issuer has duly authorized the issuance of the
     Bond and the execution and delivery of this Agreement, the
     Escrow Agreement and the Paying Agent Agreement under the
     terms and provisions of the resolution of its governing body
     or by other appropriate official approval, and further
     represents, covenants and warrants that all requirements
     have
<PAGE>
     been met and procedures have occurred in order to ensure the
     enforceability of the Bond, this Agreement, the Escrow
     Agreement and the Paying Agent Agreement against Issuer, and
     Issuer has complied with such public bidding requirements as
     may be applicable to the Bond, this Agreement, the Escrow
     Agreement, the Paying Agent Agreement and the Collateral.
     Issuer has taken all necessary action and has complied with
     all provisions of the Act, including but not limited to the
     making of the findings required by the Act, required to make
     the Bond, this Agreement, the Escrow Agreement and the
     Paying Agent Agreement the valid and binding obligation of
     Issuer.

          (e)  The officer of Issuer executing the Bond, this
     Agreement and any related documents has been duly authorized
     to issue the Bond and to execute and deliver this Agreement,
     the Escrow Agreement and the Paying Agent Agreement and such
     related documents under the terms and provisions of a
     resolution of Issuer's governing body, or by other
     appropriate official action.

          (f)  The Bond, this Agreement, the Escrow Agreement and
     the Paying Agent Agreement are legal, valid and binding
     obligations of Issuer, enforceable in accordance with their
     respective terms, except to the extent limited by
     bankruptcy, reorganization or other laws of general
     application relating to or affecting the enforcement of
     creditors' rights.

          (g)  Issuer has assigned to Lender all of Issuer's
     rights in the Collateral and this Agreement (except any
     indemnification payable to Issuer pursuant to Section 7.06
     hereof and notice to Issuer pursuant to Section 12.03
     hereof) including the assignment of all rights in the
     security interest granted to Issuer by Borrower. 

          (h)  Issuer will not pledge, mortgage or assign this
     Agreement or its duties and obligations hereunder to any
     person, firm or corporation, except as provided under the
     terms hereof.

          (i)  None of the issuance of the Bond or the execution
     and delivery of this Agreement, the Escrow Agreement or the
     Paying Agent Agreement, the consummation of the transactions
     contemplated hereby or the fulfillment of or compliance with
     the terms and conditions of the Bond, this Agreement, the
     Escrow Agreement or the Paying Agent Agreement violates any
     law, rule, regulation or order, conflicts with or results in
     a breach of any of the terms, conditions or provisions of
     any restriction or any agreement or instrument to which
     Issuer is now a party or by which it is bound or constitutes
     a default under any of the foregoing or results in the
     creation or imposition of any prohibited lien, charge or
     encumbrance of any nature whatsoever upon any of the 
     property or assets of Issuer under the terms of any
     instrument or agreement.

          (j)  There is no action, suit, proceeding, claim,
     inquiry or investigation, at law or in equity, before or by
     any court, regulatory agency, public board or body pending
     or, to the best of Issuer's knowledge, threatened against or
     affecting Issuer, challenging Issuer's authority to issue
     the Bond or to enter into this Agreement, the Escrow 
     Agreement or the Paying Agent Agreement or any other action
     wherein an unfavorable ruling or finding would 
<PAGE>
     adversely affect the enforceability of the Bond, this
     Agreement, the Escrow Agreement or the Paying Agent
     Agreement or any other transaction of Issuer which is
     similar hereto, or would materially and adversely affect any
     of the transactions contemplated by this Agreement.

          (k)  Issuer covenants that it will promptly pay or
     cause to be paid the principal and premium, if any, and
     interest at the place, on the dates and in the manner set
     forth herein and in the Paying Agent Agreement; PROVIDED,
     HOWEVER, THAT THE BOND DOES NOT NOW AND SHALL NEVER
     CONSTITUTE A GENERAL OBLIGATION OF ISSUER OR A DEBT OR
     PLEDGE OF THE FAITH AND CREDIT OF THE STATE OR ANY OTHER
     POLITICAL SUBDIVISION THEREOF, AND ALL COVENANTS AND
     UNDERTAKINGS BY ISSUER HEREUNDER TO MAKE PAYMENTS ARE
     SPECIAL OBLIGATIONS OF ISSUER PAYABLE SOLELY FROM THE LOAN
     PAYMENTS PLEDGED HEREUNDER.


                           ARTICLE V
                                
           REPRESENTATIONS, WARRANTIES AND COVENANTS
                     OF BORROWER AND LENDER 

     Section 5.01.  Borrower.  Borrower represents, warrants and
covenants for the benefit of Lender and Issuer, as follows:

          (a)  Borrower is a corporation duly organized, validly
     existing and in good standing under the laws of the state of
     Mississippi, has power to enter into this Agreement and by
     proper corporate action has duly authorized the execution
     and delivery of this Agreement, the Escrow Agreement and the
     Paying Agent Agreement.  Borrower is in good standing and is
     duly licensed or qualified to transact business in the State
     and in all jurisdictions where the character of the property
     owned or leased or the nature of the business transacted by
     it makes such licensing or qualification necessary.

          (b)  Borrower has been fully authorized to execute and
     deliver this Agreement, the Escrow Agreement and the Paying
     Agent Agreement under the terms and provisions of the
     resolution of its board of directors, or by other
     appropriate official approval, and further represents,
     covenants and warrants that all requirements have been met,
     and procedures have occurred in order to ensure the
     enforceability of this Agreement, the Escrow Agreement and
     the Paying Agent Agreement and this Agreement, the Escrow
     Agreement and the Paying Agent Agreement have been duly
     authorized, executed and delivered.

          (c)  The officer of Borrower executing this Agreement,
     the Escrow Agreement and the Paying Agent Agreement and any
     related documents has been duly authorized to execute and
     deliver this Agreement, the Escrow Agreement and the Paying
     Agent Agreement and such related documents under the terms
     and provisions of a resolution of Borrower's board of
     directors.
<PAGE>

          (d)  This Agreement, the Escrow Agreement and the
     Paying Agent Agreement constitute valid and legally binding
     obligations of Borrower, enforceable against Borrower in
     accordance with their respective terms, except to the extent
     limited by bankruptcy, reorganization or other laws of
     general application relating to effecting the enforcement of
     creditors' rights.

          (e)  The execution and delivery of this Agreement, the
     Escrow Agreement and the Paying Agent Agreement, the
     consummation of the transactions contemplated hereby and the
     fulfillment of the terms and conditions hereof do not and
     will not violate any law, rule, regulation or order,
     conflict with or result in a breach of any of the terms or
     conditions of the articles of incorporation or bylaws of
     Borrower or of any corporate restriction or of any agreement
     or instrument to which Borrower is now a party and do not
     and will not constitute a default under any of the foregoing
     or result in the creation or imposition of any liens,
     charges or encumbrances of any nature upon any of the
     property or assets of Borrower contrary to the terms of any
     instrument or agreement.

          (f)  The authorization, execution, delivery and
     performance of this Agreement by Borrower do not require
     submission to, approval of, or other action by any
     governmental authority or agency, which action with respect
     to this Agreement has not been taken and which is final and
     nonappealable.

          (g)  There is no action, suit, proceeding, claim,
     inquiry or investigation, at law or in equity, before or by
     any court, regulatory agency, public board or body pending
     or, to the best of Borrower's knowledge, threatened against
     or affecting Borrower, challenging Borrower's authority to
     enter into this Agreement, the Escrow Agreement or the
     Paying Agent Agreement or any other action wherein an
     unfavorable ruling or finding would adversely affect the
     enforceability of this Agreement, the Escrow Agreement or
     the Paying Agent Agreement or any other transaction of
     Borrower which is similar hereto, or would materially and
     adversely affect any of the transactions contemplated by
     this Agreement.

          (h)  The property at which the Collateral is located is
     properly zoned for its current and anticipated use and the
     use of the Collateral will not violate any applicable
     zoning, land use, environmental or similar law or
     restriction.  Borrower and Guarantors have all licenses and
     permits to use the Collateral.  Borrower and Guarantors have
     obtained all permits, licenses and other authorizations
     which are required under federal, state and local laws
     relating to emissions, discharges, releases of pollutants,
     contaminants, hazardous or toxic materials, or wastes into
     ambient air, surface water, ground water or land, or 
     otherwise relating to the manufacture, processing,
     distribution, use, treatment, storage, disposal, transport
     or handling of pollutants, contaminants or hazardous or
     toxic materials or wastes ("Environmental Laws") at
     Borrower's or Guarantors' facilities or in connection with
     the operation of their facilities.  Except as previously
     disclosed to Lender in writing, Borrower and Guarantors and
     all activities of Borrower and Guarantors at their 
     facilities comply with all Environmental Laws and with all
     terms and conditions of any required permits, licenses and
     authorizations applicable to Borrower and Guarantors with
     respect thereto.  Except as previously disclosed to Lender
     in writing, Borrower and Guarantors are also in compliance 
<PAGE>
     with all limitations, restrictions, conditions, standards,
     prohibitions, requirements, obligations, schedules and
     timetables contained in Environmental Laws or contained in
     any plan, order, decree, judgment or notice of which
     Borrower or Guarantors are aware.  Except as previously
     disclosed to Lender in writing, Borrower or Guarantors are
     not aware of, nor has Borrower or either Guarantor received
     notice of, any events, conditions, circumstances,
     activities, practices, incidents, actions or plans which may
     interfere with or prevent continued compliance with, or
     which may give rise to any liability under, any
     Environmental Laws.

          (i)  The Collateral is of the type authorized and
     permitted to be financed with the proceeds of the Bond
     pursuant to the Act.

          (j)  Borrower or Guarantors own or will own the
     Collateral and each intends to operate the Collateral, or
     cause the Collateral to be operated, as a "project," within
     the meaning of the Act, until the date on which all of the
     Loan Payments have been fully paid or the applicable
     Prepayment Amount has been fully paid.

          (k)  Borrower has heretofore furnished to Lender the
     consolidated audited financial statement of Borrower for its
     fiscal years ended December 31, 1997, December 31, 1996,
     December 31, 1995 and December 31, 1994 and the consolidated 
     unaudited financial statement of Borrower for the months
     ended June 30, 1998, and those statements fairly present the
     financial condition of Borrower on the dates thereof and the
     results of its operations and cash flows for the periods
     then ended and were prepared in accordance with generally
     accepted accounting principles.  Since the date of the most
     recent financial statements, there has been no material
     adverse change in the business, properties or condition
     (financial or otherwise) of Borrower.

          (l)  Borrower and Guarantors have paid or caused to be
     paid to the proper authorities when due all federal, state
     and local taxes required to be withheld by them.  Borrower
     and Guarantors have filed all federal, state and local tax
     returns which are required to be filed, and Borrower and
     Guarantors have paid or caused to be paid to the respective 
     taxing authorities all taxes as shown on said returns or on
     any assessment received by them to the extent such taxes
     have become due.

          (m)  Borrower or Guarantors have or will have good and
     absolute title to all Collateral and all proceeds thereof,
     free and clear of all mortgages, security interests, liens
     and encumbrances except for the security interest created
     pursuant to this Agreement, each Security Agreement and the
     Ship Mortgage.

          (n)  All financial and other information provided to
     Lender by or on behalf of Borrower and Guarantors in
     connection with Borrower's request for the Loan contemplated
     hereby is true and correct in all material respects and, as
     to projections, valuations or pro forma financial
     statements, present a good faith opinion as to such
     projections, valuations and pro forma condition and results.

          (o)  Borrower and Guarantors have provided to Lender
     signed financing
<PAGE>
     statements and other documents sufficient when filed to
     perfect the security interest created pursuant to this
     Agreement, the Security Agreements and the Ship Mortgage. 
     When such financing statements and other documents are filed
     in the offices noted therein, Lender, as assignee of Issuer
     and holder of the Bond, will have a valid and perfected
     security interest in the Collateral, subject to no other
     security interest, assignment, lien or encumbrance. None of
     the Collateral is or will become a fixture on real estate. 
     None of the Collateral constitutes a replacement of,
     substitution for or accessory to any property of Borrower
     subject to a lien of any kind.  Borrower leases the real
     property where the Collateral will be located subject to no
     liens or encumbrances of any kind.
     
          (p)  Borrower will comply fully at all times with the
     Paying Agent Agreement, and Borrower will not take any
     action, or omit to take any action, which, if taken or
     omitted, respectively, would violate the Paying Agent
     Agreement.

          (q)  No person other than Borrower or either Guarantor
     is in occupancy or possession of any portion of the real
     property where the Collateral is located.

     Section 5.02.  Lender.  Lender  represents, warrants and
covenants for the benefit of Borrower and Issuer, as follows:

          (a)  Lender  is a corporation, duly organized, validly
     existing and in good standing under the laws of the state of
     Delaware, has power to enter into this Agreement and by
     proper corporate action has duly authorized the execution
     and delivery of this Agreement and the documents
     contemplated to be entered into by the Lender by said
     Agreement.  Lender is in good standing and is duly licensed
     or qualified to transact business in the State and in all
     jurisdictions where the character of the property owned or
     leased or the nature of the business transacted by it makes
     such licensing or qualification necessary.

          (b)  Lender  has been fully authorized to execute and
     deliver this Agreement and related documents, under the
     terms and provisions of the resolution of its board of
     directors, or by other appropriate official approval, and
     further represents, covenants and warrants that all
     requirements have been met, and procedures have occurred in
     order to ensure the enforceability of this Agreement, and
     this Agreement has been duly authorized, executed and
     delivered.

          (c)  The officer of Lender executing this Agreement and
     any related documents has been duly authorized to execute
     and deliver this Agreement and such related documents under
     the terms and provisions of a resolution of Lender's board
     of directors.

          (d)  This Agreement constitutes the valid and legally
     binding obligation of Lender, enforceable against Lender in
     accordance with their respective terms, except to the extent
     limited by bankruptcy, reorganization or other laws of
     general application relating to effecting the enforcement of
     creditors' rights.

          (e)  The execution and delivery of this Agreement, the
     consummation of the
<PAGE>
     transactions contemplated hereby and the fulfillment of the
     terms and conditions hereof do not and will not violate any
     law, rule, regulation or order, conflict with or result in a
     breach of any of the terms or conditions of the articles of
     incorporation or bylaws of Lender or of any corporate
     restriction or of any agreement or instrument to which
     Lender is now a party.

          (f)  The authorization, execution, delivery and
     performance of this Agreement by Lender do not require
     submission to, approval of, or other action by any
     governmental authority or agency, which action with respect
     to this Agreement has not been taken and which is final and
     nonappealable.

          (g)  Lender is not subject to the Small Loan Regulatory
     Law and Small Loan Privilege Tax Law of the State of
     Mississippi.

          (h)  Lender is not subject to the Mississippi Finance
     Company Privilege Tax (Miss. Code Ann. Pargraph 27-21-1 et.
     seq.) with respect to the Loan. 

                           ARTICLE VI
                                
             TITLE TO COLLATERAL; SECURITY INTEREST

     Section 6.01.  Title to Collateral.  Legal title to the
Collateral and any and all repairs, replacements, substitutions
and modifications to such Collateral shall be in Borrower or
either Guarantor.  Borrower will, and will cause each Guarantor
to, at all times protect and defend, at its own cost and expense,
its title from and against all claims, liens and legal processes
of creditors of Borrower and Guarantos, and keep all Collateral
free and clear of all such claims, liens and processes.

     Section 6.02.  Security Interest in Collateral.  This
Agreement is intended to constitute a security agreement within
the meaning of the UCC.  As security for Borrower's payment to
Lender, as assignee of Issuer, of Loan Payments and all other
amounts payable to Lender hereunder, or any other obligation
(whether direct or indirect and whether now existing or hereafter
arising) to Lender or any of its affiliates, Borrower hereby
grants and agrees to cause each Guarantor to grant to Lender,
a security interest constituting a first lien on the Collateral,
all repairs, replacements, substitutions and modifications
thereto or thereof and all proceeds of the foregoing.  Issuer
agrees and Borrower agrees and hereby agrees to cause each
Guarantor to execute such additional documents, including
financing statements, assignments, affidavits, mortgages, notices
and similar instruments, in form satisfactory to Lender, and take
such other actions that Lender deems necessary or appropriate to
establish and maintain the security interest created by this
Section, and Issuer and Borrower hereby designate and appoint
Lender as their agent, and grant to Lender a power of attorney
(which is coupled with an interest), to execute on behalf of
Issuer and Borrower, as the case may be, such additional
documents and to take such other actions.  If requested by
Lender, Borrower shall obtain a landlord and/or mortgagee's
consent and waiver with respect to the property where the
Collateral is located.  If requested by Lender, Borrower shall,
and shall cause each Guarantor to, conspicuously mark the
Collateral with appropriate lettering, labels or tags, and
maintain such markings, so as clearly to disclose Lender's
security interest in the Collateral.
<PAGE>
     Section 6.03.  Change in Name or Corporate Structure of
Borrower; Change in Location of Borrower's Principal Place of
Business.  Borrower's chief executive office is located at the
address set forth above, and all of Borrower's records relating 
to its business and the Collateral are kept at such location or
the locations of Guarantors identified below.  Guarantors chief
executive offices are located at the following addresses and all
of Guarantors' records relating to their business are kept at
such location:

     HAM Marine, Inc.              Friede Goldman Offshore, Inc.
     3400 Litton Road              600 Louise Street
     Pascagoula, MS 39567          Pascagoula, MS 39581

Borrower hereby agrees to provide written notice to Lender and
Issuer of any change or proposed change in its or either
Guarantor's name, corporate structure, place of business or chief
executive office or change or proposed change in the location of
the Collateral.  Such notice shall be provided thirty (30) days
in advance of the date that such change or proposed change is
planned to take effect except as otherwise provided herein. 
Lender and Issuer hereby acknowledge the planned merger 
of Friede Goldman Offshore, Inc. into HAM Marine, Inc. with HAM
Marine, Inc. being the surviving corporation which shall
immediately thereafter change its name to Friede Goldman
Offshore, Inc., and no further notice to Lender or Issuer of such
planned change in corporate name and structure shall be required. 
Borrower and Guarantors do business, and have done business, only
under their own name and the trade names, if any, set forth on
the execution page hereof. 
     
     Section 6.04.  Liens and Encumbrances to Title.  Borrower
shall not, and shall not permit any Guarantor to, directly or
indirectly, create, incur, assume or suffer to exist any
mortgage, pledge, lien, charge, encumbrance, maritime lien or
claim on or with respect to the Collateral (together,
"Liens") other than the respective rights of Lender and Issuer as
herein provided.  Borrower shall and shall cause each Guarantor
to promptly, at its own expense, take such action as may be
necessary duly to discharge or remove any such Lien.  Borrower
shall reimburse Lender for any expenses incurred by Lender to
discharge or remove any Lien.

     Section 6.05.  Personal Property.  The parties hereby agree
that the Collateral is, and during the period this Agreement is
in force will remain, personal property and, when subjected to
use by Borrower hereunder, will not be or become fixtures;
provided, however, that if contrary to the parties' intent the
Collateral is or may be deemed to be a fixture, Borrower and
Guarantors shall cause filings to be made with the applicable
government officials or filing offices to create and preserve for
Lender as assignee of Issuer a perfected first priority security
interest in the Collateral.

     Section 6.06.  Assignment of Insurance.  As additional
security for the payment and performance of Borrower's
obligations hereunder, Borrower hereby assigns and shall cause
each Guarantor to assign to Lender, as assignee of Issuer, any
and all moneys (including, without limitation, proceeds of
insurance and refunds of unearned premiums) due or to become due
under, and all other rights of Borrower and Guarantors with
respect to, any and all policies of insurance now or at any time
hereafter covering the Collateral or any evidence thereof or any
business records or valuable papers pertaining thereto, and
Borrower hereby directs the issuer of any such policy to pay
all such moneys directly to Lender.  Borrower hereby assigns and
shall cause each Guarantor 
<PAGE>
to assing to Lender, as assignee of Issuer, any and all moneys
due or to become due with respect to any condemnation proceeding
affecting the Collateral.  At any time, whether before or after
the occurrence of any Event of Default, Lender may (but need
not), in Lender's name or in Borrower's name, execute and deliver
proof of claim, receive all such moneys, endorse checks and other
instruments representing payment of such moneys, and adjust,
litigate, compromise or release any claim against the issuer of
any such policy or party in any condemnation proceeding.

     Section 6.07.  Occupancy.  (a) Borrower hereby irrevocably
grants and shall cause each Guarantor to grant, to Lender the
right to occupy the property where the Collateral is located (the
"Premises") at any time after the occurrence and during the
continuance of an Event of Default.

     (b)  Lender may occupy the Premises only to hold, sell,
store, liquidate, realize upon or otherwise dispose of the
Collateral and for other purposes that Lender may in good faith
deem to be related or incidental purposes.

     (c)  The right of Lender to occupy the Premises shall cease
and terminate upon the earlier of (1) payment in full and
discharge of all obligations of Borrower and Issuer hereunder,
and (2) final sale or disposition of all of the Collateral and
delivery of all such Collateral to purchasers.

     (d)  Lender shall not be obligated to pay or account for any
rent or other compensation for the occupancy of the Premises. 
Borrower will pay, or reimburse Lender for, and shall cause each
Guarantor to pay or reimburse Lender for, all taxes, fees,
duties, levies, charges and expenses at any time incurred by or
imposed upon Lender by reason of the execution, delivery,
existence, recordation, performance or enforcement of this
Section.

     Section 6.08.  Agreement as Financing Statement.  To the
extent permitted by applicable law, a carbon, photographic or
other reproduction of this Agreement or of any financing
statements signed by signed by Borrower is sufficient as a
financing statement in any state to perfect the security
interests granted in this Agreement.

                          ARTICLE VII
                                
               AFFIRMATIVE COVENANTS OF BORROWER

     So long as the Loan shall remain unpaid, Borrower will
comply with the following requirements:

     Section 7.01.  Reporting Requirements.  Borrower will
deliver, or cause to be delivered, to Lender each of the
following, which shall be in form and detail acceptable to
Lender:

          (a)  as soon as available, and in any event within 120
     days after the end of each fiscal year of Borrower and each
     Guarantor, consolidated audited financial statements of
     Borrower and each Guarantor with the unqualified opinion of
     independent certified public accountants selected by
     Borrower or either Guarantor and acceptable to Lender, which
     annual financial statements shall include the balance sheet
     of Borrower and each Guarantor
<PAGE>
     as at the end of such fiscal year and the related statements
     of income, retained earnings and cash flows of Borrower and
     each Guarantor for the fiscal year then ended, all in
     reasonable detail and prepared in accordance with generally
     accepted accounting principles applied on a basis consistent
     with the accounting practices applied in the financial
     statements referred to in Article V hereof, together with
     (i) a report stating that in connection with their audit,
     nothing came to their attention that caused them to believe
     that the Company was not in compliance with any of the
     terms, covenants, provisions or conditions of Articles V,
     VI, VII, and VIII inclusive, of the Loan Agreement dated
     December 1, 1998, among Lender, Issuer, and Borrower insofar
     as they relate to accounting matters except as specifically
     stated; and (ii) a certificate of the chief financial
     officer of Borrower and each Guarantor stating that such
     financial statements have been prepared in accordance with
     generally accepted accounting principles applied on a basis
     consistent with the accounting practices reflected in the
     annual financial statements referred to in Article V hereof
     and whether or not such officer has knowledge of the
     occurrence of any Default or Event of Default hereunder and,
     if so, stating in reasonable detail the facts with respect
     thereto;

          (b)  as soon as available and in any event within 90
     days after the end of each fiscal quarter of Borrower and
     each Guarantor, a consolidated unaudited/internal balance
     sheet and statements of income and retained earnings of
     Borrower and each Guarantoras at the end of and for such
     month and for the year to date period then ended, in
     reasonable detail and stating in comparative form the
     figures for the corresponding date and periods in the
     previous year, all prepared in accordance with generally
     accepted accounting principles applied on a basis consistent
     with the accounting practices reflected in the financial
     statements referred to in Article V hereof and certified by
     the chief financial officer of Borrower and each Guarantor,
     subject to year-end audit adjustments; and accompanied by a
     certificate of that officer stating (i) that such financial
     statements have been prepared in accordance with generally
     accepted accounting principles applied on a basis consistent
     with the accounting practices reflected in the financial
     statements referred to in Article V hereof, and (ii) whether
     or not such officer has knowledge of the occurrence of any
     Default or Event of Default hereunder not theretofore
     reported and remedied and, if so, stating in reasonable
     detail the facts with respect thereto;

          (c)  immediately after the commencement thereof, notice
     in writing of all litigation and of all proceedings before
     any governmental or regulatory agency affecting Borrower or
     any Guarantor of the type described in Article V hereof or
     which seek a monetary recovery against Borrower or any
     Guarantor in excess of $500,000;
 
          (d)  as promptly as practicable (but in any event not
     later than ten Business Days) after an officer of Borrower
     obtains knowledge of the occurrence of any event that
     constitutes a Default or an Event of Default hereunder or
     under the Security Agreements, notice of such occurrence,
     together with a detailed statement by a responsible officer
     of Borrower of the steps being taken by Borrower to cure the
     effect of such Default or Event of Default;

          (e)  promptly upon knowledge thereof, notice of any
     loss or destruction of or
<PAGE>
     damage to any portion of the Collateral or of any material
     adverse change in any portion of the Collateral in an amount
     greater than $100,000 on a single occurrence or amounting to
     an aggregate of more than $500,000; 

          (f)  promptly upon their distribution, copies of all
     financial statements, reports and proxy statements that
     Borrower shall have sent to its stockholders; 

          (g)  promptly after the amending thereof, copies of any
     and all amendments to its certificate of incorporation,
     articles of incorporation or bylaws;

          (h)  promptly upon knowledge thereof, notice of the
     violation by Borrower or any Guarantor of any law, rule or
     regulation;

          (i)  promptly upon knowledge thereof, notice of any
     material adverse change in the financial or operating
     condition of Borrower or any Guarantor.

     Section 7.02.  Books and Records; Inspection and
Examination.  Borrower will keep and will cause each Guarantor to
keep, accurate books of record and account for itself pertaining
to the Collateral and pertaining to Borrower's and such
Guarantor's business and financial condition and such other
matters as Lender may from time to time request in which true and
complete entries will be made in accordance with generally
accepted accounting principles consistently applied and, upon
request of Lender (on two (2) days notice if no event of default
has occurred), will permit any officer, employee, attorney or
accountant for Lender to audit, review, make extracts from, or
copy any and all corporate and financial books, records and
properties of Borrower and Guarantors at all times during
ordinary business hours, and to discuss the affairs of Borrower
and Guarantors with any of their directors, officers, employees
or agents.  Borrower will permit and will cause each Guarantor
to permit Lender, or its employees, accountants, attorneys or
agents, to examine and copy any or all of its records and to
examine and inspect the Collateral at any time during Borrower's
or such Guarantor's business hours.  Lender agrees to take normal
and reasonable precautions and exercise due care to maintain the
confidentiality of all non-public information provided to it by
Borrower or any of its subsidiaries in connection with this
Agreement and agrees and undertakes that neither it nor any of
its affiliates shall use any such information for any purpose or
in any manner other than pursuant to the terms contemplated by
this Agreement.  Lender may disclose such information (i) at the
request of any regulatory authority or in connection with an
examination of Lender by any such authority; (ii) pursuant to
subpoena or other court process; (iii) when required to do so in
accordance with the provisions of any applicable law; and (iv) to
Lender's independent auditors and other professional auditors.  

     Section 7.03.  Compliance With Laws; Environmental
Indemnity.  Borrower will (a) comply and will cause each
Guarantor to comply with the requirements of applicable laws and
regulations, the noncompliance with which would materially and
adversely affect their business or its financial condition, (b)
comply and will cause each Guarantor to comply with all
applicable Environmental Laws and regulations and obtain any
permits, licenses or similar approvals required by any such laws
or regulations and (c) use and keep and cause each Guarantor to
use and keep the Collateral, and will require that others use and
keep the Collateral, only for lawful purposes, without
<PAGE>
violation of any federal, state or local law, statute or
ordinance.  Borrower shall secure and shall cause each Guarantor
to secure all permits and licenses, if any, necessary for the
installation and operation of the Collateral.  Borrower shall
comply and shall cause each Guarantor to comply in all respects
(including, without limitation, with respect to the use,
maintenance and operation of each item of the Collateral) with
all laws of the jurisdictions in which its operations involving
any component of Collateral may extend and of any legislative,
executive, administrative or judicial body exercising any power
or jurisdiction over the items of the Collateral or its interest
or rights under this Agreement.  Borrower will indemnify, defend
and hold Lender harmless from and against any claims, loss or
damage to which Lender may be subjected as a result of any past,
present or future existence, use, handling, storage,
transportation or disposal of any hazardous waste or substance or
toxic substance by Borrower or on property owned, leased or
controlled by Borrower.  This indemnification shall survive the
termination of this Agreement and payment of the indebtedness
hereunder and under the Bond.

     Section 7.04.  Payment of Taxes and Other Claims.  Borrower
will pay or discharge and will cause each Guarantor to pay or
discharge, when due, (a) all taxes, assessments and governmental
charges levied or imposed upon it or upon its income or profits,
upon any properties belonging to it (including, without
limitation, the Collateral) or upon or against the creation,
perfection or continuance of the security interest created
pursuant to this Agreement, prior to the date on which
penalties attach thereto, (b) all federal, state and local taxes
required to be withheld by it, and (c) all lawful claims for
labor, materials and supplies which, if unpaid, might by law
become a lien or charge upon any properties of Borrower;
provided, that Borrower and Guarantors shall not be required to
pay any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by
appropriate proceedings.  Borrower will pay, as the same
respectively come due, all taxes and governmental charges of any
kind whatsoever that may at any time be lawfully assessed or
levied against or with respect to the Collateral, as well as all
gas, water, steam, electricity, heat, power, telephone, utility
and other charges incurred in the operation, maintenance, use,
occupancy and upkeep of the Collateral.

     Section 7.05.  Maintenance of Collateral.  (a) Borrower
shall and shall cause each Guarantor to, at their own expense,
maintain, preserve and keep the Collateral in good repair,
working order and condition, and each shall from time to time
make all repairs and replacements necessary to keep the
Collateral in such condition, and in compliance with state and
federal laws, ordinary wear and tear excepted.  Borrower shall
and shall cause each Guarantor to maintain the Collateral in a
condition suitable for certification by the manufacturer thereof
(if certification is available) and in conformance with all
manufacturer's recommended maintenance requirements.  In the
event that any parts or accessories forming part of any item or
items of Collateral become worn out, lost, destroyed, damaged
beyond repair or otherwise rendered unfit for use, Borrower or
either Guarantor, at their own expense and expeditiously, will
replace or cause the replacement of such parts or accessories
by replacement parts or accessories free and clear of all liens
and encumbrances and with a value and utility at least equal to
that of the parts or accessories being replaced (assuming that
such replaced parts and accessories were otherwise in good
working order and repair).  All such replacement parts
and accessories shall be deemed to be incorporated immediately
into and to constitute an integral portion of the Collateral and,
as such, shall be subject to the terms of this Agreement. 
Neither Lender nor Issuer shall have any responsibility in any of
these matters, or for the making of
<PAGE>
improvements or additions to the Collateral.

          (b)  Borrower will defend and will cause each Guarantor
     to defend the Collateral against all claims or demands of
     all persons (other than Lender) claiming the Collateral or
     any interest therein.

          (c)  Borrower will keep and will cause each Guarantor
     to keep the Collateral free and clear of all security
     interests, liens and encumbrances except the security
     interest created pursuant to this Agreement.

     Section 7.06.  Insurance and Indemnification.  (a) Borrower
shall and shall cause each Guarantor to, at their own expense,
procure and maintain continuously in effect: (i) public liability
insurance for personal injuries, death or damage to or loss of
property arising out of or in any way relating to the Collateral
sufficient to protect Lender from liability in all events, with a
coverage limit of not less than $1,000,000 per occurrence unless
a different coverage minimum with respect to particular
Collateral is required by Lender, and (ii) insurance against such
hazards as Lender may require, including, but not limited to,
all-risk casualty and property insurance, in an amount equal
to the greater of the full replacement cost of the Collateral
with new Collateral having substantially similar specifications
or the applicable Prepayment Amount.

          (b)  If required by State law, Borrower shall carry and
     shall cause each Guarantor to carry workers' compensation
     insurance covering all employees on, in, near or about the
     Collateral, and upon request, shall furnish to Lender
     certificates evidencing such coverage.

          (c)  All insurance policies required by this Article
     shall be taken out and maintained with insurance companies
     acceptable to Lender; and shall contain a provision that the
     insurer shall not cancel or revise coverage thereunder
     without giving written notice to the insured parties at
     least 30 days before the cancellation or revision becomes
     effective.  No insurance shall be subject to any
     co-insurance clause.  Each insurance policy required by this
     Article shall name Lender as an additional insured party and
     loss payee without regard to any breach of warranty or other
     act or omission of Borrower or either Guarantor and shall
     include a lender's loss payable endorsement for the benefit
     of Lender.  Prior to the delivery of Collateral, Borrower
     shall deposit and shall cause each Guarantor to deposit with
     Lender evidence satisfactory to Lender of such insurance
     and, prior to the expiration thereof, shall provide Lender
     evidence of all renewals or replacements thereof.

          (d)  As among Lender, Borrower and Issuer, Borrower
     assumes all risks and liabilities from any cause whatsoever,
     whether or not covered by insurance, for loss or damage to
     any Collateral and for injury to or death of any person or
     damage to any property, whether such injury or death be with
     respect to agents or employees of Borrower, the Guarantors
     or of third parties, and whether such property damage be to
     Borrower's property, the Guarantor's property or the
     property of others.  

          (e) Whether or not covered by insurance, Borrower
     hereby assumes responsibility for and agrees to reimburse
     Lender and Issuer for and will indemnify, defend and hold
     Lender and Issuer
<PAGE>
     harmless from and against all liabilities, obligations,
     losses, damages, penalties, claims, actions, costs and
     expenses (including reasonable attorneys' fees) of
     whatsoever kind and nature, imposed on, incurred by or
     asserted against Lender or Issuer that in any way relate to
     or arise out of this Agreement, the transactions
     contemplated hereby and the Collateral, including but not
     limited to, (i) the selection, manufacture, purchase,
     acceptance or rejection of Collateral or the ownership of
     the Collateral, (ii) the delivery, lease, possession,
     maintenance, use, condition, return or operation of the
     Collateral, (iii) the condition of the Collateral sold or
     otherwise disposed of after possession by Borrower or either
     Guarantor, (iv) any patent or copyright infringement, (v)
     the conduct of Borrower or any Guarantor, their officers,
     employees and agents, (vi) a breach of Borrower of any of
     its covenants or obligations hereunder, (vii) a breach by
     either Guarantor of any covenant or obligation under either
     Security Agreement and (viii) any claim, loss, cost or
     expense involving alleged damage to the environment relating
     to the Collateral, including, but not limited to
     investigation, removal, cleanup and remedial costs.  All
     amounts payable by Borrower pursuant to the immediately
     preceding sentence shall be paid immediately upon demand of
     Issuer or Lender, as the case may be, but in no event prior
     to Lender or Issuer (as the case may be) actually incurring
     the liability or expense.  This provision shall survive the
     termination of this Agreement.

     Section 7.07.  Preservation of Corporate Existence. 
Borrower will preserve and maintain and shall cause each
Guarantor to preserve and maintain its corporate existence and
all of its rights, privileges and franchises necessary or
desirable in the normal conduct of its business; and shall
conduct its business in an orderly, efficient and regular manner.

     Section 7.08.  Performance by Lender.  If Borrower at any
time fails to perform or observe any of the covenants or
agreements contained in this Agreement, and if such failure shall
continue for a period of 10 calendar days after Lender gives
Borrower written notice thereof (or in the case of the agreements
contained in Section 7.06 hereof, immediately upon the occurrence
of such failure, without notice or lapse of time), Lender may,
but need not, perform or observe such covenant on behalf and in
the name, place and stead of Borrower (or, at Lender's option, in
Lender's name) and may, but need not, take any and all other
actions which Lender may reasonably deem necessary to cure or
correct such failure (including, without limitation, the payment
of taxes, the satisfaction of security interests, liens or
encumbrances, the performance of obligations owed to account
debtors or other obligors, the procurement and maintenance of
insurance, the execution of assignments, security agreements and
financing statements, and the endorsement of instruments); and
Borrower shall thereupon pay to Lender on demand the amount of
all moneys expended and all costs and expenses (including
reasonable attorneys' fees and legal expenses) incurred by Lender
in connection with or as a result of the performance or
observance of such agreements or the taking of such action
by Lender, together with interest thereon from the date expended
or incurred at the lesser of 12% per annum or the highest rate
permitted by law.  To facilitate the performance or observance by
Lender of such covenants of Borrower, Borrower hereby irrevocably
appoints Lender, or the delegate of Lender, acting alone, as the
attorney in fact of Borrower with the right (but not the duty)
from time to time to create, prepare, complete, execute, deliver,
endorse or file in the name and on behalf of Borrower any and all
instruments, documents, assignments, security agreements,
financing statements, applications for insurance and other
agreements and writings required to be obtained, executed,
delivered or endorsed by Borrower under this Agreement.
<PAGE>

                          ARTICLE VIII
                                
                 NEGATIVE COVENANTS OF BORROWER

     So long as the Loan and the Bond shall remain unpaid,
Borrower agrees that:

     Section 8.01.  Lien.  Borrower will not create, incur or
suffer to exist or permit either Guarantor to create, incur or
suffer to exist any mortgage, deed of trust, pledge, lien,
maritime lien, security interest, assignment or transfer upon or
of any of the Collateral except for the security interest created
pursuant to this Agreement, the Security Agreements and the Ship
Mortgage.

     Section 8.02.  Sale of Assets.  Borrower will not sell,
lease, assign, transfer or otherwise dispose of or permit either
Guarantor to sell, lease, assign, transfer or otherwise dispose
of all or a substantial part of its assets or of any of the
Collateral or any interest therein (whether in one transaction or
in a series of transactions).

     Section 8.03.  Consolidation and Merger. 
     
     Borrower will not, and will not permit any Guarantor to,
consolidate with or merge into any person, or permit any other
person to merge into it, or acquire (in a transaction analogous
in purpose or effect to a consolidation or merger) all or
substantially all of the assets of any other person; provided,
however, either Guarantor shall be permitted to participate in a
transaction described hereunder if:

          (a)  the resulting entity is a wholly owned subsidiary
     of Borrower; 

          (b)  Lender and Issuer shall have received an opinion
     of counsel to the resulting entity as to the enforceability
     of this Agreement against such entity;

          (c)  no default or Event of Default exists or would
     result from any such merger, consolidation, sale or
     conveyance; and

          (d)  Borrower shall comply with the following financial
     covenants:

               (i)  Ratio of Debt to Tangible Net Worth. 
          Borrower, on a consolidated basis, will maintain at all
          times its ratio of Debt (as defined below) to Tangible
          Net Worth (as defined below) at not more than 4.50 to
          1.00.  "Debt" shall mean (i) all items of indebtedness
          or liability which in accordance with generally
          accepted accounting principles or federal tax law would
          be included in determining total liabilities as shown
          on the liabilities side of a balance sheet, (ii)
          indebtedness secured by any mortgage, pledge, lien or
          security interest existing on property owned by
          Borrower, whether or not the indebtedness secured
          thereby shall have been assumed, and (iii) guaranties
          and endorsements (other than for purposes of collection
          in the ordinary course of business) by Borrower and
          other contingent obligations of Borrower in respect of,
          or to purchase or otherwise acquire, indebtedness of
          others.  "Tangible Net Worth" means the excess of:
<PAGE>
          (a)  the tangible assets of Borrower, which, in
     accordance with generally accepted accounting principles,
     are tangible assets, after deducting adequate reserves in
     each case where, in accordance with generally accepted
     accounting principles, a reserve is proper over 

          (b)  all Debt of Borrower;
     
provided, however, that (i) inventory shall be taken into account
on the bas is of the cost (determined on a first-in, first-out
basis) or current market value, whichever is lower, (ii) in no
event shall there be included as such tangible assets patents,
trademarks, trade names, copyrights, licenses, good will,
advances or loans to, or receivables from, directors, officers,
employees or affiliates, prepaid or intangible assets, amounts
relating to covenants not to compete, pensions assets, deferred
charges or treasury stock or any securities or Debt of Borrower
or any other securities unless the same are readily marketable in
the United States of America or entitled to be used as a credit
against federal income tax liabilities, (iii) securities included
as such tangible assets shall be taken into account at
their current market price or cost, whichever is lower, and (iv)
any write-up in the book value of any assets shall not be taken
into account.

               (ii)  Debt Service Coverage Ratio.  Borrower and
          the resulting entity, on a consolidated basis, shall
          have,  as of the effective date of the transaction and
          for each fiscal year thereafter, will maintain Debt
          Service Coverage Ratio (as defined below) at not less
          than 3.00 to 1.00.  "Debt Service Coverage Ratio" means
          the ratio of (i) Borrower's Cash Flow Available for
          Debt Service (as defined below) to (ii) Borrower's Debt
          Service (as defined below).  "Cash Flow Available for
          Debt Service" of Borrower means, with respect to the
          applicable period of determination, the Borrower's
          income, plus interest expense, depreciation,
          amortization and other non-cash charges.  "Debt
          Service" of Borrower means, with respect to the
          applicable period of determination, the aggregate of
          (i) interest expense of Borrower, (ii) all installments
          of principal on Debt of Borrower that are due on demand
          or during the period of determination, (iii) all
          installments of rent under capitalized lease
          obligations (to the extent not already accounted for in
          computation of net income or Debt) of Borrower that are
          due on demand or during the period of determination and
          (iv) distributions and dividends to stockholders and
          advances to affiliates of Borrower during the period of
          determination.

               (iii)  Tangible Net Worth.  Borrower, on a
          consolidated basis, will maintain at all times its
          Tangible Net Worth at not less than $60,000,000.

               (iv)  Total Assets.  Borrower, on a consolidated
          basis, shall maintain Total Assets of not less than
          $250,000,000.  Total Assets shall be determined in
          accordance with generally accepted accounting
          principles.
          
     Section 8.04.  Accounting.  Borrower will not, and will not
permit any Guarantor to, adopt, permit or consent to any material
change in accounting principles or any change in its fiscal year
other than as required by generally accepted accounting
principles unless Borrower provides restated financial statements
prepared on a consistent basis and satisfies the financial
covenants contained in Section 8.03 hereof with and without
giving effect to such change.  

     Section 8.05. [This section intentionally omitted.]
<PAGE>
     Section 8.06.  Other Defaults.  Borrower will not, and will
not permit any Guarantor to, permit any breach, default or event
of default to occur under any note, loan agreement, indenture,
lease, mortgage, contract for deed, security agreement or other
contractual obligation binding upon Borrower or any Guarantor or
any judgment, decree, order or determination applicable to
Borrower or any Guarantor.

     Section 8.07.  Place of Business.  Borrower will not permit
any of the Collateral or any records pertaining to the Collateral
to be located in any state or area in which, in the event of such
location, a financing statement covering such Collateral would be
required to be, but has not in fact been, filed in order to
perfect the security interest created pursuant to this Agreement.

     Section 8.08.  Modifications and Substitutions.  (a)
Borrower will not and will not permit either Guarantor to make
any material alterations, modifications or additions to the
Collateral which cannot be removed without materially damaging
the functional capabilities or economic value of the Collateral. 
Upon return of the Collateral to Lender and at the request of
Lender, Borrower, at its sole cost and expense, will remove all
alterations, modifications and additions and repair the
Collateral as necessary to return the Collateral to the condition
in which it was furnished, ordinary wear and tear and permitted
modifications excepted.

          (b)  Notwithstanding the provisions of subparagraph (a)
     of this section, Borrower may, with the prior written
     consent of Lender, substitute for parts, elements, portions
     or all of the Collateral, other parts, elements, portions,
     Collateral or facilities; provided, however, that any
     substitutions made pursuant to Borrower's obligations to
     make repairs referenced under any provision of this
     Agreement shall not require such prior written consent. 
     Borrower shall provide and shall cause each Guarantor to
     provide such documents or assurances as Lender may
     reasonably request to maintain or confirm the security
     interest assigned to Lender in the Collateral as so modified
     or substituted.

     Section 8.09.  Use of the Collateral.  Borrower will not and
will not permit either Guarantor to install, use, operate or
maintain the Collateral improperly, carelessly, in violation of
any applicable law or in a manner contrary to that contemplated
by this Agreement.

     Section 8.10.  Location of the Collateral.  Neither the
Borrower nor the Guarantors shall remove the Collateral from
Jackson County, Mississippi without prior approval of MBFC.  
<PAGE>
                           ARTICLE IX
                                
          DAMAGE AND DESTRUCTION; USE OF NET PROCEEDS

     Borrower shall provide and shall cause each Guarantor to
provide a complete written report to Lender immediately upon any
loss, theft, damage or destruction of any Collateral and of any
accident involving any Collateral.  If all or any part of the
Collateral is lost, stolen, destroyed or damaged beyond repair
("Damaged Collateral"), Borrower shall and shall cause each
Guarantor to, as soon as practicable after such event either: (a)
replace the same at Borrower's or such Guarantor's sole cost and
expense with Collateral having substantially similar depreciable
life and of equal or greater value to the Damaged Collateral
immediately prior to the time of the loss occurrence, such
replacement Collateral to be subject to Lender's approval,
whereupon such replacement Collateral shall be substituted in
this Agreement and the other related documents by appropriate
endorsement or amendment; or (b) pay the applicable Prepayment
Amount of the Damaged Collateral.  Borrower shall notify and
shall cause each Guarantor to notify Lender of which course of
action it will take within 15 calendar days after the loss
occurrence.  If, within 45 calendar days of the loss occurrence,
(a) Borrower or either Guarantor fails to notify Lender; (b)
Borrower or either Guarantor and Lender fail to execute an
amendment to this Agreement to delete the Damaged Collateral and
add the replacement Collateral or (c) Borrower or either
Guarantor fails to pay the applicable Prepayment Amount, then
Lender may, at its sole discretion, declare the applicable
Prepayment Amount to be immediately due and payable, and Borrower
or the appropriate Guarantor is required to pay the same. 
The Net Proceeds of insurance with respect to the Damaged
Collateral shall be made available by Lender to be applied to
discharge Borrower's obligation under this Article.  The payment
of the Prepayment Amount and the termination of Lender's interest
in the Damaged Collateral is subject to the terms of Section 2.07
hereof.  For purposes of this Article, the term "Net Proceeds"
shall mean the amount remaining from the gross proceeds of any
insurance claim or condemnation award after deducting all
expenses (including reasonable attorneys' fees) incurred in the
collection of such claim or award.

                           ARTICLE X
                                
               ASSIGNMENT, SUBLEASING AND SELLING

     Section 10.01.  Assignment by Lender.  This Agreement, and
the obligations of Borrower to make payments hereunder, may be
assigned and reassigned in whole or in part to one or more
assignees or subassignees (who shall be purchaser of the Bond or
an interest therein) by Lender at any time subsequent to its
execution, without the necessity of obtaining the consent of
Issuer or Borrower; provided, however, that no such assignment or
reassignment shall be effective unless and until (a) Issuer and
Borrower shall have received notice of the assignment or
reassignment disclosing the name and address of the assignee or
subassignee, which notice Issuer shall maintain as evidence
of the ownership and registration of the Bond, and (b) in the
event that such assignment or reassignment is made to a bank or
trust company as trustee for holders of certificates representing
interests in this Agreement and the Bond, such bank or trust
company agrees to maintain, or cause to be maintained, a
book-entry system by which a record of the names and addresses of
such holders as of any particular time is kept and agrees, upon
request of Issuer or Borrower, to furnish such
<PAGE>
information to Issuer or Borrower.  Upon receipt of notice of
assignment, Borrower will reflect in a book-entry the assignee
designated in such notice of assignment, and shall agree to make
all payments to the assignee designated in the notice of
assignment, notwithstanding any claim, defense, setoff or
counterclaim whatsoever (whether arising from a breach of this
Agreement or otherwise) that Issuer and Borrower may from time to
time have against Lender or the assignee.  Issuer and Borrower
agree to execute all documents, including notices of assignment
and chattel mortgages or financing statements, which may be
reasonably requested by Lender or its assignee to protect their
interest in the Collateral and in this Agreement.

     Section 10.02.  No Sale or Assignment by Borrower.  This
Agreement and the interest of Borrower or Guarantors in the
Collateral may not be sold, assumed, assigned or encumbered by
Borrower or either Guarantor.
                                
                           ARTICLE XI
                                
                 EVENTS OF DEFAULT AND REMEDIES

     Section 11.01.  Events of Default.  The following constitute
"Events of Default" under this Agreement:

          (a)  failure by Borrower to pay to Lender, as assignee
     of Issuer, when due any Loan Payment or to pay any other
     payment required to be paid hereunder and the continuation
     of such failure for a period of 10 days;

          (b)  failure by Borrower to maintain insurance on the
     Collateral in accordance with Section 7.06 hereof;
          
          (c)  occurrence of a default (however defined) in
     either Security Agreement or the Ship Mortgage;

          (d)  failure by Borrower, any Guarantor or Issuer to
     observe and perform any other covenant, condition or
     agreement contained herein, in the Escrow Agreement, in the
     Paying Agent Agreement, in either Guaranty or in any other
     document or agreement executed in connection herewith on its
     part to be observed or performed for a period of 30 days
     after written notice is given to Borrower, any Guarantor or
     Issuer, as the case may be, specifying such failure and
     requesting that it be remedied; provided, however, that, if
     the failure stated in such notice cannot be corrected within
     such 30-day period, Lender will not unreasonably withhold
     its consent to an extension of such time if corrective
     action is instituted by Borrower or Issuer, as the case may
     be, within the applicable period and diligently pursued
     until the default is corrected;

          (e)  initiation by Issuer of a proceeding under any
     federal or state bankruptcy or insolvency law seeking relief
     under such laws concerning the indebtedness of Issuer;

          (f)  Borrower or either Guarantor shall be or become
     insolvent, or admit in 
<PAGE>
     writing its inability to pay its or his debts as they
     mature, or make an assignment for the benefit of creditors;
     or Borrower or either Guarantor shall apply for or consent
     to the appointment of any receiver, trustee or similar
     officer for it or for all or any substantial part of its
     property; or such receiver, trustee or similar officer shall
     be appointed without the application or consent of Borrower
     or either Guarantor, as the case may be; or Borrower or
     either Guarantor shall institute (by petition, application,
     answer, consent or otherwise) any bankruptcy, insolvency,
     reorganization, arrangement, readjustment of debt,
     dissolution, liquidation or similar proceeding relating to
     it under the laws of any jurisdiction; or any such
     proceeding shall be instituted (by petition, application or
     otherwise) against Borrower or either Guarantor; or any
     judgment, writ, warrant of attachment or execution or
     similar process shall be issued or levied against a
     substantial part of the property of Borrower or either
     Guarantor;

          (g)  good faith determination by Lender that any
     representation or warranty made by Borrower, Issuer or
     either Guarantor herein, in the Paying Agent Agreement, in
     either Security Agreement, in the Ship Mortgage or in any
     other document executed in connection herewith was untrue in
     any material respect when made;

          (h)  the occurrence of a default or an event of default
     under any instrument, agreement or other document evidencing
     or relating to any indebtedness or other monetary obligation
     of Borrower or either Guarantor in an amount greater than
     $100,000, and the continuation of such default for a period
     of five (5) days;

          (i)  either Guarantor shall repudiate, purport to
     revoke or fail to perform such Guarantor's obligations under
     such Guaranty, and the continuation of such default for a
     period of five (5) days; or 
    
          (j)  a default or an event of default under any
     agreement between or among HAM Marine, Inc and General
     Electric Capital Corporation or its affiliates, including
     (without limitation) the Promissory Note and First Preferred
     Mortgage dated February 27, 1998.

     Section 11.02.  Remedies on Default.  Whenever any Event of
Default shall have occurred and be continuing, Lender, as
assignee of Issuer, shall have the right, at its sole option
without any further demand or notice, to take any one or any
combination of the following remedial steps insofar as the same
are available to secured parties under Article 9 of the UCC in
effect in the State from time to time and which are otherwise
accorded to Lender, as assignee of Issuer, by applicable law:

          (a)  by notice to Issuer and Borrower, declare the
     entire unpaid principal amount of the Loan and the Bond then
     outstanding, all interest accrued and unpaid thereon and all 
     amounts payable under this Agreement to be forthwith due and
     payable, whereupon the Loan, all such accrued interest and
     all such amounts shall become and be forthwith due and
     payable, without presentment, notice of dishonor, protest or
     further notice of any kind, all of which are hereby
     expressly waived by Borrower;

          (b)  take possession of the Collateral wherever
     situated, without any court order
<PAGE>
     or other process of law and without liability for entering
     the premises, and lease, sublease or make other disposition
     of the Collateral for use over a term in a commercially
     reasonable manner, all for the account of Lender, provided
     that Borrower shall remain directly liable for the
     deficiency, if any, between the rent or other amounts paid
     by a lessee or Borrower of the Collateral pursuant to such
     lease or sublease during the same period of time, after
     deducting all costs and expenses, including reasonable
     attorneys' fees and expenses, incurred with respect to the
     recovery, repair and storage of the Collateral during such
     period of time;

          (c)  take possession of the Collateral wherever
     situated, without any court order or other process of law
     and without liability for entering the premises, and sell
     the Collateral in a commercially reasonable manner.  All
     proceeds from such sale shall be applied in the following
     manner:

               FIRST, to pay all proper and reasonable costs and
          expenses associated with the recovery, repair, storage
          and sale of the Collateral, including reasonable
          attorneys' fees and expenses;

               SECOND, to pay (i) Lender the amount of all unpaid
          Loan Payments or other obligations (whether direct or
          indirect owed by Borrower to Lender), if any, which are
          then due and owing, together with interest and late
          charges thereon, (ii) Lender the then applicable
          Prepayment Amount (taking into account the payment of
          past-due Loan Payments as aforesaid), plus a pro rata
          allocation of interest, at the rate utilized to
          calculate the Loan Payments, from the next preceding
          due date of a Loan Payment until the date of payment by
          the buyer, and (iii) any other amounts due hereunder,
          including indemnity payments, taxes, charges,
          reimbursement of any advances and other amounts payable
          to Lender or Issuer hereunder; and

                THIRD, to pay the remainder of the sale proceeds,
          purchase moneys or other amounts paid by a buyer of the
          Collateral to Borrower;

          (d)  proceed by appropriate court action to enforce
     specific performance by Issuer or Borrower of the applicable
     covenants of this Agreement or to recover for the breach
     thereof, including the payment of all amounts due from
     Borrower.  Borrower shall pay or repay to Lender or Issuer
     all costs of such action or court action, including, without
     limitation, reasonable attorneys' fees; 
     
          (e)  exercise all rights and remedies available under
     the Guaranties, the Security Agreements and the Ship
     Mortgages.

          (f)  take whatever action at law or in equity may
     appear necessary or desirable to enforce its rights with
     respect to the Collateral.  Borrower shall pay or repay to
     Lender or Issuer all costs of such action or court action,
     including, without limitation, reasonable attorneys' fees.

     Notwithstanding any other remedy exercised hereunder,
     Borrower shall remain obligated to
<PAGE>
     pay to Lender any unpaid portion of the Prepayment Amount.

     Section 11.03.  Return of Collateral.  Upon an Event of
Default, Borrower shall and shall cause Guarantors to, within 10
calendar days after notice from Lender, at its own cost and
expense: (a) perform any testing and repairs required to place
the Collateral in the condition required by Article VII; (b) if
deinstallation, disassembly or crating is required, cause the
Collateral to be deinstalled, disassembled and crated by an
authorized manufacturer's representative or such other
service person as is satisfactory to Lender; and (c) deliver the
Collateral to a location specified by Lender, freight and
insurance prepaid by Borrower.  If Borrower or any Guarantor
refuses to deliver the Collateral in the manner designated,
Lender may enter upon Borrower's or Guarantor's premises
where the Collateral is kept and take possession of the
Collateral and charge to Borrower the costs of such taking. 
Borrower hereby expressly waives any damages occasioned by such
taking.

     Section 11.04.  No Remedy Exclusive.  No remedy herein
conferred upon or reserved to Lender or Issuer is intended to be
exclusive and every such remedy shall be cumulative and shall be
in addition to every other remedy given under this Agreement or
now or hereafter existing at law or in equity.  No delay or
omission to exercise any right or power accruing upon any Event
of Default shall impair any such right or power or shall be
construed to be a waiver thereof, but any such right or power may
be exercised from time to time and as often as may be deemed
expedient.  In order to entitle Lender or Issuer to exercise any
remedy reserved to it in this Article, it shall not be necessary
to give any notice other than such notice as may be required by
this Article.  All remedies herein conferred upon or reserved to
Lender or Issuer shall survive the termination of this Agreement.

     Section 11.05.  Late Charge.  Any Loan Payment not paid by
Borrower on the due date thereof shall, to the extent permissible
by law, bear a late charge equal to the lesser of four cents
($.04) per dollar of the delinquent amount or the lawful maximum,
and Borrower shall be obligated to pay the same immediately upon
receipt of Lender's written invoice therefor.

                          ARTICLE XII

                            THE ACT

     The parties hereto acknowledge that Borrower has been
induced to proceed with the acquisition of the Collateral in part
by the benefits conferred by the Act.  Issuer hereby agrees that
Borrower shall be permitted to take advantage of all of the
benefits provided by the Act to the fullest extent therein set
forth subject to the rules and regulations of Issuer.  Issuer
agrees that it will not take any action to limit, curtail or
otherwise make unavailable to Borrower any of such benefits
available under the Act.  This Agreement shall constitute a
"Financing Agreement" under Section 57-10-409 of the Act.

     With respect to benefits conferred by the Act referenced in
this Article XII the following shall apply:

          (a)  the maximum benefits accruing in any calendar year
     with respect to the income tax credit (other than any
     credits which may be carried forward to future years
<PAGE>
     pursuant to the Act) shall not exceed the Loan Payments
     during such year and the fees and expenses of Escrow Agent
     together with the Administration Expenses which are paid
     during such year, provided, however, the tax credit allowed
     under the Act shall not exceed 80% of the amount of taxes
     due the State of Mississippi prior to the application of the
     credit as provided in Section 27-7-22.3 of the Mississippi
     Code of 1972, as amended;

          (b)  any income tax credit benefit claimed or received
     by Borrower in connection with any Acquisition Costs shall
     prevent such cost (or a portion thereof) from generating a
     deduction under the laws of the State in order to determine
     the taxable income of the Borrower in the State; 

          (c)  The Paying Agent shall provide to Issuer not later
     than 90 days after the end of each calendar year, with a
     certificate setting forth the amount of all payments made to
     Lender with respect to the Loan, whether for Loan Payments
     or other sums due hereunder; 

          (d)  the income tax credit benefits accruing to the
     Borrower under this Article XII shall cease in the event:
     (i) a Default should occur under this Agreement; and (ii)
     Borrower should fail to operate the Collateral in connection
     with Borrower's operations at its Jackson County,
     Mississippi facility for a period of nine consecutive months
     following acquisition of the Collateral, except for force
     majeure, strikes, lockouts, damage, destruction, act of God
     or in general, reasons beyond Borrower's reasonable control
     excepting, however, general economic conditions.

          (e)  Borrower agrees to comply with the terms and
     provisions of the Act in all respects with respect to the
     benefits available under the Act; 

          (f)  the income tax benefits or credits available under
     the Act shall cease to accrue on the date the principal and
     interest on the Loan are paid in full whether at maturity or
     by way of prepayment and any benefits for credits carried
     forward as permitted by the Act shall be available to
     Borrower for three years following the date upon which the
     credit was earned as provided in 27-7-22.3 of the
     Mississippi Code of 1972, as amended;

          (g)  the income tax credit benefits accruing to
     Borrower under this Article XII shall be limited to the
     annual Loan Payments and other fees and expenses of Escrow
     Agent paid for such year together with Administration
     Expenses paid during such year and shall be reduced by the
     amount of surplus funds which shall be used to prepay this
     Lease-Purchase as provided for in Section 2.07 of this
     Agreement;

          (h)  Borrower will report to the Mississippi Employment
     Security Commission ("MESC") its employees as required by
     law, and shall annually report to Issuer the average number
     of employees reported for each year the MESC.; and

          (i)  In addition to the income tax credit benefits
     under the Act, all personal property purchased with Loan
     Proceeds (or reimbursed with Loan Proceeds) will be subject
     to the full sales and use tax exemption set forth in
     Sections 57-10-255, 439 of the Act.  This
<PAGE>
     exemption shall not apply to the contractor's tax imposed by
     Section 27-65-21 of the Mississippi Code.

This shall be done for each year after the year in which
acquisition of the Collateral was induced for financing by
Issuer.

          (1)  for purposes of determining the income tax
     benefits to which the Borrower is eligible under the Act,
     the following definitions shall apply:

               (i)  "Base Employment" ("BE") means the average
          number of employees of Borrower in the State during the
          preceding 12-month period preceding the month which the
          Borrower is induced for financing by the Issuer, as
          reported by Borrower to the MESC.

               (ii) "Base Investment" ("BI") means the present
          true value of the capital assets owned or leased by
          Borrower within the State as determined by the Tax
          Assessor of each County in which Borrower owns or
          leases capital assets related to manufacturing,
          processing, distribution, warehousing, facilities or
          corporate or regional offices.

               (iii)"Future Employment" ("FE") means the average
          number of employees of Borrower in the State after the
          Collateral is acquired, which may be an estimate for
          the first 12 months after acquisition, and as reported
          by Borrower to the MESC over each 12-month period
          thereafter.

               (iv) "Future Investment" ("FI") means the sum of
          (A) the Base Investment; (B) the Acquisition Costs paid
          with Loan Proceeds; and (C) funds of Borrower used to
          pay Acquisition Costs.

          (2)  Borrower represents and warrants that as of the
     date of this Agreement that:

               (i)  the Base Employment is ________ employees and
          the Base Investment is $__________; and

               (ii) Borrower reasonably anticipates that the
          Future Employment for the first 12 months after
          acquisition of the Collateral will be employees, which  
          represents increased employment of employees in
          connection with acquisition of the Collateral, and the
          Future Investment will be $________.

          (3)  The percentage of Borrower's total state income
     tax liability in which the Borrower shall be entitled to an
     income tax credit provided by the Act shall be determined
     annually as follows: (i) (FE - BE) DIVIDED BY FE = Employment
     Valuation Percentage ("EVP");(ii) (FI - BI) DIVIDED BY FI =
     Investment Valuation Percentage ("IVP"); and (iii) [(EVP x
     2) + IVP] DIVIDED BY 3 = Percentage of income tax liability of
     Borrower to which Borrower is entitled to an income tax
     credit.
<PAGE>
     Provided, however, the tax credit allowed under the Act
     shall not exceed 80% of the amount of taxes due the State of
     Mississippi prior to the application of the credit as 
     provided in Section 27-7-22.3 of the Mississippi Code of
     1972, as amended.

     With respect to the benefits that may accrue to Borrower
under this Article XII, Borrower acknowledges and agrees that the
Issuer makes no representation, warranty or covenant regarding
the enforceability of the Borrower's rights to receive the
benefits, the extent that such benefits may be received nor the
term under which the Borrower may be entitled to receive the
benefits.

      Benefits under the Act shall be reduced by the amount of
surplus proceeds, if any, remaining after completion of the
Project, which surplus proceeds shall be applied as provided in
this Lease and the Escrow Agreement.

     The income tax credit benefits under the Act shall be
applicable and available to the Borrower and\or its subsidiaries. 
The manner in which the credits are applied to the subsidiaries
shall be approved by the State Tax Commission.



                          ARTICLE XIII
                                
                         MISCELLANEOUS

     Section 13.01.  Costs and Expenses of Lender.  Borrower
shall pay to Lender, in addition to the Loan Payments payable by
Borrower hereunder, such amounts in each year as shall be
required by Lender in payment of any reasonable costs and
expenses incurred by Lender as a result of action necessitated by
requests of the Borrower or the Issuer acting on a request of the
Borrower.  In the event of a default under this Agreement, 
Borrower shall pay to Lender, in addition to the Loan Payments
payable by Borrower hereunder, such amounts as shall be required
by Lender in payment of any reasonable costs and expenses
incurred by Lender in connection with the performance or
enforcement of this Agreement, including but not limited to
payment of all reasonable fees, costs and expenses of Lender in
connection with the Collateral, expenses (including, without
limitation, attorneys' fees and disbursements), fees of auditors
or attorneys, insurance premiums not otherwise paid hereunder and
all other direct and necessary costs of Lender or charges
required to be paid by it in order to comply with the terms of,
or to enforce its rights under, this Agreement.  Such costs and
expenses shall be billed to Borrower by Lender from time to time,
together with a statement certifying that the amount so billed
has been paid by Lender for one or more of the items above
described, or that such amount is then payable by Lender for such
items.  Amounts so billed shall be due and payable by Borrower
within thirty (30) days after receipt of the bill by Borrower. 
Nothing herein shall obligate Borrower to pay administrative or
"overhead" costs incurred by Lender.

     Section 13.02.  Disclaimer of Warranties.  LENDER AND ISSUER
MAKE NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS
TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE
<PAGE>
OR FITNESS FOR USE OF THE COLLATERAL, OR ANY OTHER WARRANTY OR
REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT THERETO.  In no
event shall Lender or Issuer be liable for any loss or damage in
connection with or arising out of the Collateral or the
existence, furnishing, functioning or Borrower's use of any item
or products or services provided for in this Agreement.

     Section 13.03.  Notices.  All notices, certificates,
requests, demands and other communications provided for hereunder
or under the Escrow Agreement or the Paying Agent Agreement shall
be in writing and shall be (a) personally delivered, (b) sent by
first class United States mail, (c) sent by overnight courier of
national reputation, or (d) transmitted by telecopy, in each case
addressed to the party to whom notice is being given at its
address as set forth above and, if telecopied, transmitted to
that party at its telecopier number set forth above or, as to
each party, at such other address or telecopier number as may
hereafter be designated by such party in a written notice to the
other party complying as to delivery with the terms of this
Section.  All such notices, requests, demands and other
communications shall be deemed to have been given on (a) the date
received if personally delivered, (b) when deposited in the mail
if delivered by mail, (c) the date sent if sent by overnight
courier, or (d) the date of transmission if delivered by
telecopy.  If notice to Borrower of any intended disposition of
the Collateral or any other intended action is required by
law in a particular instance, such notice shall be deemed
commercially reasonable if given (in the manner specified in this
Section) at least 10 calendar days prior to the date of intended
disposition or other action.

     Section 13.04.  Further Assurance and Corrective
Instruments.  Issuer and Borrower hereby agree that they will,
from time to time, execute, acknowledge and deliver, or cause to
be executed, acknowledged and delivered, such further acts,
instruments, conveyances, transfers and assurances, as Lender
reasonably deems necessary or advisable for the implementation,
correction, confirmation or perfection of this Agreement, the
Escrow Agreement or the Paying Agent Agreement and any rights of
Lender hereunder or thereunder.

     Section 13.05.  Binding Effect; Time of the Essence.  This
Agreement shall inure to the benefit of and shall be binding upon
Lender, Issuer, Borrower and their respective successors and
assigns.  Time is of the essence. 

     Section 13.06.  Severability.  In the event any provision of
this Agreement shall be held invalid or unenforceable by any
court of competent jurisdiction, such holding shall not
invalidate or render unenforceable any other provision hereof.

     Section 13.07.  Amendments.  To the extent permitted by law,
the terms of this Agreement shall not be waived, altered,
modified, supplemented or amended in any manner whatsoever except
by written instrument signed by the parties hereto, and then such
waiver, consent, modification or change shall be effective only
in the specific instance and for the specific purpose given.

     Borrower and Lender agree to amend Exhibit A to this
Agreement to more specifically identify the Collateral being
financed hereunder at such time as such identification is
possible.  Such amendment shall be effected by written instrument
signed by Borrower and Lender.  Issuer's consent
<PAGE>
to the amendment referred to in this paragraph shall not be
required.  Such amendment may take the form of a Payment Request
Form in the form attached to the Escrow Agreement as Exhibit A
executed by Borrower and Lender. 

     Section 13.08.  Execution in Counterparts.  This Agreement
may be executed in several counterparts, each of which shall be
an original and all of which shall constitute one and the same
instrument, and any of the parties hereto may execute this
Agreement by signing any such counterpart, provided that only the
original marked "Original: 1 of 6" on the execution page thereof
shall constitute chattel paper under the UCC.

     Section 13.09.  Applicable Law.  This Agreement shall be
governed by and construed in accordance with the laws of the
State.

     Section 13.10.  Captions.  The captions or headings in this
Agreement are for convenience only and in no way define, limit or
describe the scope or intent of any provisions or sections of
this Agreement.

     Section 13.11.  Entire Agreement.  This Agreement, the
Paying Agent Agreement, the Escrow Agreement, each Security
Agreement, the Ship Mortgage, each Guaranty and the exhibits
hereto and thereto constitute the entire agreement among Lender,
Issuer, Borrower, Guarantors and Escrow Agent.  There are no
understandings, agreements, representations or warranties,
express or implied, not specified herein or in such documents
regarding this Agreement or the Collateral financed hereby.

     Section 13.12.  Usury.  It is the intention of the parties
hereto to comply with any applicable usury laws; accordingly, it
is agreed that, notwithstanding any provisions to the contrary in
this Agreement, in no event shall this Agreement require the
payment or permit the collection of interest or any amount in the
nature of interest or fees in excess of the maximum permitted by
applicable law.

     Section 13.13.  Waiver of Jury Trial.  LENDER, ISSUER AND
BORROWER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF,
DIRECTLY OR INDIRECTLY, THIS AGREEMENT, ANY OF THE RELATED
DOCUMENTS, ANY DEALINGS AMONG LENDER, ISSUER OR BORROWER RELATING
TO THE SUBJECT MATTER OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT OR ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP
THAT IS BEING ESTABLISHED AMONG LENDER, ISSUER AND BORROWER.  THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY
AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT (INCLUDING,
WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF
DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS).  THIS
WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS AGREEMENT, ANY RELATED DOCUMENTS, OR TO ANY OTHER DOCUMENTS
OR AGREEMENTS RELATING TO THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT OR ANY RELATED TRANSACTIONS.  IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
<PAGE>


 [REMAINDER OF PAGE INTENTIONALLY BLANK; EXECUTION PAGE FOLLOWS.]
PAGE
<PAGE>
     IN WITNESS WHEREOF, the parties hereto have executed this
Agreement in their respective corporate names by their duly
authorized officers, all as of the date first written above.

Lender:                       GE CAPITAL PUBLIC FINANCE, INC.

                              By:
                                   
                              Title: Vice President 


Issuer:                       MISSISSIPPI BUSINESS FINANCE 
                              CORPORATION

                              By: /s/ B. BARRY
                                   
Attest                        Title: Executive Director 

By:/s/ 

Title: Secretary


Borrower:                     FRIEDE GOLDMAN INTERNATIONAL INC.

                              By: /s/ 
                          
                              Title: Chief Financial Officer
                         



Trade Names of Borrower, if any:

HAM Marine, Inc.         
Friede Goldman, Ltd.          
Friede Goldman Offshore, Inc.
<PAGE>
                                        Exhibit A1 to Loan Agreement

              SCHEDULE OF COLLATERAL AND LOAN PAYMENTS

                      Description of Collateral

     The following Collateral is the subject of the Loan Agreement
dated as of December 1, 1998 among GE Capital Public Finance, Inc.
("Lender"), Mississippi Business Finance Corporation ("Issuer"), and
Friede Goldman Intentional Inc. ("Borrower"):

               Description         Manufacturer
Quantity       of Collateral       or Vendor      Serial Number

SEE ATTACHED



The Collateral is located at the following address. Prior to the
relocation of the Collateral or portion thereof, Borrower will provide
30 days' prior written notice to Lender:

Friede Goldman Offshore, Inc.
600 Louise Street
Pascagoula, MS 39581
<PAGE>
<TABLE>
                                        Friede Goldman Offshore Equipment List
                                                 M/E 09/97 thru 09/98

           Item          Acq. Date           Serial Numbers                            Description
             <S>         <C>           <C>                          <C>
              1          25-Feb-98              250111 (A)          Two 300 Ton Cranes - M250 Mantowoc
                         13-Mar-98              250111 (B)
              2          6-Jun-98      1720,1721,1722,1723,1724     Panel Line
              3          5-Mar-98          #1 - 98U152-9564 - 
                                           #2 - V152C - 4305        Burning Machines and Installation of Machines
              4          5-Mar-98                1944               Shot Blast Equipment
              5          27-Feb-98               6165               Gantry Crane (125 Ton Washington Crane)
              6          10-Aug-98               41524              4100 Mantowoc Ringer Barge
              7          20-Jan-98              554-20              8ton Grandall Forklift
              8          19-Feb-98               8506               Used 15 ton Cherry Picker 1002 Model 150A
              9          31 -May-98     003-113928, 003-113927      Sullair Yard Air Compressors
             10          31-Mar-98            AXM 12190-1, 
                                         AXM 120189-1,-2,-3,4       Plate Magnetic Handling System (Pipe Shop)
             11          6-May-98               001392              Plate Handling System Permadur
             12          23-Sep-97               N/A                Clark Propane Forklift
             13          23-Sep-97              741138              Clark Diesel Forklift
             14          23-Sep-97               4-568              Clark Diesel Forklift
             15          23-Sep-97                577               Wallace Hyd Bender
             16          23-Sep-97              047155              Wallace Hyd Pipe Bender
             17          24-Sep-98               56790              50 ton Cherry Picker
             18          18-Aug-98               10424              Used 40' Hobbs Trailer
             19          18-Aug-98             25070FB6S            Used 40' Hobbs Trailer
             20          14-Aug-98         17540HR50E1215402        Used 1988 Spotter Truck
             21          12-Mar-98               3195               Used 1989 Spotter Truck
             22          24-Feb-98              860808              Used 1988 Utility Flatbed Trailer
             23          24-Feb-98              535154              Used 1981 Fontain Flatbed Trailer
             24          24-Feb-98              473702              Fruehauf Flatbed Trailer
             25          24-Apr-98         1FTHF25M9KNA89257        Used 1992 Hyster H80XL Forklift
             26          1-May-98          1FTHF25F3TEA15285        Used 1989 Ford 250 Diesel
             27          1-May-98          1FTDX1726VNB74028        Used 1997 Ford 150
             28          19-May-98         1FEEV15H7LLB11805        Used 1991 Ford Bronco
             29          18-Jun-98         1GCDC14Z4NZ188404        Used 1992 Chevy C-1500
             30          26-Jun-98         1N65D1155MC363429        Used 1991 Nissan P/U
</TABLE>
<PAGE>
                                        Exhibit A2 to Loan Agreement

              SCHEDULE OF COLLATERAL AND LOAN PAYMENTS
                                  
                      Description of Collateral

     The following Collateral is the subject of the Loan Agreement
dated as of December 1, 1998 among GE Capital Public Finance, Inc.
("Lender"), Mississippi Business Finance Corporation ("Issuer"), and
Friede Goldman International Inc. ("Borrower").

               Description         Manufacturer
Quantity       of Collateral       or Vendor      Serial Number

SEE ATTACHED



The Collateral is located at the following address. Prior to the
relocation of the Collateral or portion thereof, Borrower will provide
30 days' prior written notice to Lender:

HAM Marine, Inc.
3400 Litton Road
Pascagoula, MS 39567
<PAGE>
<TABLE>

                                                    HAM MARINE, INC
                                MACHINERY/ EQUIPMENT ACQUIRED SINCE . SEPTEMBER, 1C 197

Date Acq  Serial Number                Description                         Vendor                      Inv #

                                       MACHINERY & EQUIPMENT
<S>       <C>                          <C>                                  <C>                        <C>
10/1/97   1062576                      DUAL DRY DOCK BARGE

9/30/97   41 MUR/2 9827-41 M 7335      COMETTO TRANSPORTER
5/31/98                                CAPITALIZE BALANCE OF 
                                         SCAFFOLDING SYSTEM                 Aluma Systems              2919579

2/28/98   K02H1487 / K02H1488          (2) CHAMPION ELEVATORS               Champion Elevators         21882/ 21776
1/31/98   VARIOUS                      ADVANTA WELDING MACHINES 
3/31/98                                JIB #27AB FOR #63BOOM-4600 
                                         RINGER CRANE                       Lampson International      4437
3/31/98   0300016596                     JLG 120' MANLIFT                   Yeates Equip Sales         1718
1/31/98   VARIOUS                        14 WESCO WELDING MACHINES     
11/30/97                                 SCAFFOLDING                        Aluma Systems              2849843/ 2856876
4/30/98                                  WELDERS/WIRE FEEDERS 
                                           (NORDAN SMITH)                   Nordan Smith               95950/ 805071
8/31/98                                  PLATE MATERIAL HANDLING            O. S. Walker               32756 /32896
2/28/98   29257                          MANITOWOC 2900T TRK CRANE          Yeates Equip Sales         1686
4/30/98                                  SCAFFOLDING SYSTEM 
                                           (ALUMA SYSTEMS)                  Aluma Systems              2919579
11/30/97                                 AUCTION ASSETS-CHARLESTON          Industrial Assets, Inc.    Wire Transfer
11/24/97                                 SCAFFOLDING                        Aluma Systems              2849842 /2850126/
                                                                                                         2856886
2/28/98   9603                           DRESSER 150A 15-T CRANE            Yeates Equip Sales         1687
11/30/97                                 ESAB CNC FLAME CUTTER              Industrial Assets, Inc.    Wire Transfer
3/31/98   0300014756                     JLG 60' MANLIFT                    Escatawpa River Woo        n/a
1/31/98   190174                         MANITOWOC BOOM POINT EXTENSION     Lampson Int'l              4098
1/31/98   2987                           USED 1990 LULL FORKLIFT            Yeates Equip Sales         1679
12/31/97  N/A                            T40 BLAST POT                      Tab Industries             72559
1/31/98                                  2 4100 RINGER DOUBLE HOOK ROLLERS  Coastal Equipment          131174
6/30/98                                  ARONSON WRD 60 TON DRIVE TANK 
                                           TURNING ROLL                     Weldinghouse               241164
9/30/97   N/A                            CLEMCO INDUSTRI ES: 
                                           SANDBLAST SYS                    Clemco Industries          326547
11/30/97                                 (4) FREE STANDING JIB              Industrial Assets, Inc.    Wire Transfer
6/30/98                                  (10) ESAB 652 WELDING MACHINES     Nordan Smith               834174
3/31/98   LOA10582B898                   LOBELL CUSTOM 20' BOAT W/MOTOR     Lobell's Custom Boats      980128
7/31/98                                  WELDERS/WIRE FEEDERS               Nordan Smith               875220
4/30/98   19814                          GROVE MANLIFT AMZ 40 MODEL 7-40    Multi Machine              15689
7/31/98   14P-00806                      XEROX 3050 COPIER                  Southern Blueprint & S     19546
2/28/98                                  WIRE FEEDERS                       Nordan Smith               740114 / 740911
                                                                                                          /740115
7/31/98                                  Hl-PRESSURE WASHERS (2)            Hilco                      12753
1/31/98    AC100 / AC103                 1600CFM AFTERCOOLERS               Mayer Hammant              401364
11/30/97   N/A                           CLEAN AIR SYSTEM                   Tab Industries             72431
11/30/97                                 GANTRY                             Industrial Assets, Inc.    Wire Transfer
3/31/98   6E5L403293                     MOTOR FOR LOBELL CUSTOM BOAT       Lobell's Custom Boats      980128
6/30/98                                  ACCU RITE DIGITAL READ OUT UNIT    Amtoo                      24445
1/31/98                                  IDEALARC DC-1000 W/AMMETER         Nordan Smith               748843
6/30/98                                  MARVEL NO.8 VERTICAL BAND SAW      G & G Machinery            n/a
9/30/97   41 M7334-21 M 7332-7333        COMETTO TRANSPORTER                           

                                         AUTOS & TRUCKS

1/31/98   1HSLRUXN9GHA61784              USED 1986 FUELTRUCK                Yeates Equip Sales         1662
2/28/98   1XT5D29X8KN288134              1989 PETERBILT                     Yeates Equip Sales         1662
4/30/98                                  YARD MULE (SPOTTER TRUCK)          Yeates Equip Sales         1767
6/30/98   62717                          1988 OTTAWA 30 SPOTTER TRUCK       Yeates Equip Sales         1833
2/28/98   2PO482XLW025304                48' FREUHAUF TRAILER               Yeates Equip Sales         2833
</TABLE>
<PAGE>
                                        Exhibit A3 to Loan Agreement

                      Schedule of Loan Payments

Interest Rate: 7.99%

PMT.     PAYMENT       TOTAL     PRINCIPAL     INTEREST     PREPAYMENT
 NO.      DATE        PAYMENT    COMPONENT     COMPONENT      AMOUNT

SEE ATTACHED
<PAGE>
<TABLE>
                                            GE CapitaI pubic Finance, Inc.
                                                   Payment schedule
                                                           
                                                 Friede Goldman, /nc,

Funding Date   December 17,1999
Coupon Rate    7 99%

                Payment    Loan         Principal        Interest       Principal         Prepayment
     Date       Number    Payment       Component       Component        Balance*           Amount*
     <S>           <C>   <C>            <C>             <C>            <C>               <C>
     12/17/98       0            --            --               --     18,00O,000.00     18,36O,000.00
     1/17/99        1    218,294.57      98,444.57      119,850.00     17,901,555.43     18,259,586.54
     2/17/99        2    218,294.57      99,100.05      119,194.52     17,802,455.38     18,158,504.49
     3/17/99        3    218,294.57      99,759.89      118,534.68     17,702,695.49     18,056,749.40
     4/17/99        4    218,294.57     10O,424.12      117,870.45     17,602,271.37     17,954,316.80
     5/17/99        5    218,294.57     101,092.78      117,201.79     17,501,178.59     17,851,202.16
     6/17/99        6    218,294.57     101,765.89      116,528.68     17,399,412.70     17,747,400.95
     7/17/99        7    218,294.57     102,443.48      115,851.09     17,296,969.22     17,642,908.60
     8/17/99        8    218,294.57     103,125.58      115,168.99     17,193,843.64     17,537,720.51
     9/17/99        9    218,294.57     103,812.23      114,482.34     17,09O,031.41     17,431,832.04
     10/17/99      10    218,294.57     104,503.44      113,791.13     16,985,527.97     17,325,238.53
     11/17/99      11    218,294.57     105,199.26      113,095.31     16,88O,328.71     17,217,935.28
     12/17/99      12    218,294.57     105,899.71      112,394.86     16,774,429.00     17,109,917.58
     1/17/00       13    218,294.57     106,604.83      111,689.74     16,667,824.17     17,001,180.65
     2/17/00       14    218,294.57     107,314.64      11O,979.93     16,56O,509.53     16,891,719.72
     3/17/00       15    218,294.57     108,029.18      11O,265.39     16,452,480.35     16,781,529.96
     4/17/00       16    218,294.57     108,748.47      109,546.10     16,343,731.88     16,67O,606.52
     5/17/00       17    218,294.57     109,472.56      108,822.01     16,234,259.32     16,558,944.51
     6/17/00       18    218,294.57     11O,201.46      108,093.11     16,124,057.86     16,446,539.02
     7/17/00       19    218,294.57     11O,935.22      107,359.35     16,013,122.64     16,333,385.09
     8/17/00       20    218,294.57     111,673.86      106,620.71     15,901,448.78     16,219,477.76
     9/17/00       21    218,294.57     112,417.42      105,877.15     15,789,031.36     16,104,811.99
     10/17/00      22    218,294.57     113,165.94      105,128.63     15,675,865.42     15,989,382.73
     11/17/00      23    218,294.57     113,919.43      104,375.14     15,561,945.99     15,873,184.91
     12/17/00      24    218,294.57     114,677.95      103,616.62     15,447,268.04     15,756,213.40
     1/17/01       25    218,294.57     115,441.51      102,853.06     15,331,826.53     15,638,463.06
     2/17/01       26    218,294.57     116,210.16      102,084.41     15,215,616.37     15,519,928.70
     3/17/01       27    218,294.57     116,983.92      101,310.65     15,098,632.45     15,400,605.10
     4/17/01       28    218,294.57     117,762.84      10O,531.73     14,98O,869.61     15,280,487.00
     5/17/01       29    218,294.57     118,546.95       99,747.62     14,862,322.66     15,159,569.11
     6/17/01       30    218,294.57     119,336.27       98,958.30     14,742,986.39     15,O37,846.12
     7/17/01       31    218,294.57     12O,130.85       98,163.72     14,622,855.54     14,915,312.65
     8/17/01       32    218,294.57     12O,930.72       97,363.85     14,501,924.82     14,791,963.32
     9/17/01        33   218,294.57     121,735.92       96,558.65      14,38O,188.90    14,667,792.68
     10/17/01       34   218,294.57     122,546.48       95,748.09      14,257,642.42    14,542,795.27
     11/17/01       35   218,294.57     123,362.43       94,932.14      14,134,279.99    14,416,965.59
     12/17/01       36   218,294.57     124,183.82       94,110.75      14,01O,096.17    14,290,298.09
     1/17/02        37   218,294.57     125,010.68       93,283.89      13,885,085.49    14,162,787.20
     2/17/02        38   218,294.57     125,843.04       92,451.53      13,759,242.45    14,034,427.30
     3/17/02        39   218,294.57     126,680.95       91,613.62      13,632,561.50    13,905,212.73
     4/17/02        40   218,294.57     127,524.43       9O,770.14      13,505,037.07    13,775,137.81
     5/17/02        41   218,294.57     128,373.53       89,921.04      13,376,663.54    13,644,196.81
     6/17/02        42   218,294.57     129,228.29       89,O66.28      13,247,435.25    13,512,383.96
     7/17/02        43   218,294.57     13O,088.73       88,205.84      13,117,346.52    13,379,693.45
     8/17/02        44   218,294.57     13O,954.90       87,339.67      12,986,391.62    13,246,119.45
     9/17/02        45   218,294.57     131,826.85       86,467.72      12,854,564.77    13,111,656.07
     10/17/02       46   218,294.57     132,704.59       85,589.98      12,721,860.18    12,976,297.38
     11/17/02       47   218,294.57     133,588.18       84,706.39      12,588,272.00    12,84O,037.44
     12/17/02       48   218,294.57     134,477.66       83,816.91      12,453,794.34    12,702,870.23
     1/17/03        49   218,294.57     135,373.06       82,921.51      12,318,421.28    12,564,789.71
     2/17/03        50   218,294.57     136,274.41       82,O20.16      12,182,146.87    12,425,789.81
     3/17/03        51   218,294.57     137,181.78       81,112.79      12,044,965.09    12,285,864.39
     4/17/03        52   218,294.57     138,095.18       8O,199.39      11,906,869.91    12,145,007.31
     5/17/03        53   218,294.57     139,014.66       79,279.91      11,767,855.25    12,003,212.36
     6/17/03        54   218,294.57     139,940.27       78,354.30      11,627,914.98    11,86O,473.28
     7/17/03        55   218,294.57     14O,872.04       77,422.53      11,487,O42.94    11,716,783.80
     8/17/03        56   218,294.57     141,810.01       76,484.56      11,345,232.93    11,572,137.59
     9/17/03        57   218,294.57     142,754.23       75,540.34      11,202,478.70    11,426,528.27
     10/17/03       58   218,294.57     143,704.73       74,589.84      11,058,773.97    11,279,949.45
     11/17/03       59   218,294.57     144,661.57       73,633.00      1O,914,112.40    11,132,394.65
     12/17/03       60   218,294.57     145,624.77       72,669.80      10,768,487.63    1O,768,487.63
     1/17/04        61   218,294.57     146,594.39       71,700.18      1O,621,893.24    1O,621,893.24
     2/17/04        62   218,294.57     147,570.46       7O,724.11      1O,474,322.78    1O,474,322.78
     3/17/04        63   218,294.57     148,553.04       69,741.53      1O,325,769.74    1O,325,769.74
     4/17/04        64   218,294.57     149,542.15       68,752.42      1O,176,227.59    1O,176,227.59
     5/17/04        65   218,294.57     15O,537.85       67,756.72      1O,025,689.74    1O,025,689.74
     6/17/04        66   218,294.57     151,540.19       66,754.38       9,874,149.55     9,874,149.55
     7/17/04        67   218,294.57     152,549.19       65,745.38       9,721,600.36     9,721,600.36
     8/17/04        68   218,294.57     153,564.91       64,729.66       9,568,O35.45     9,568,O35.45
     9/17/04        69   218,294.57     154,587.40       63,707.17       9,413,448.05     9,413,448.05
     10/17/04       70   218,294.57     155,616.69       62,677.88       9,257,831.36     9,257,831.36
     11/17/04       71   218,294.57     156,652.84       61,641.73       9,101,178.52     9,101,178.52
     12/17/04       72   218,294.57     157,695.89       6O,598.68       8,943,482.63     8,943,482.63
     1/17/05        73   218,294.57     158,745.88       59,548.69       8,784,736.75     8,784,736.75
     2/17/05        74   218,294.57     159,802.86       58,491.71       8,624,933.89     8,624,933.89
</TABLE>
<PAGE>
<TABLE>
                Payment    Loan         Principal        Interest       Principal         Prepayment
     Date       Number    Payment       Component       Component        Balance*           Amount*
     <S>           <C>   <C>            <C>             <C>            <C>               <C>
     3/17/05        75   218,294.57     16O,866.88       57,427.69       8,464,067.01     8,464,067.01
     4/17/05        76   218,294.57     161,937.99       56,356.58       8,302,129.02     8,302,129.02
     5/17/05        77   218,294.57     163,016.23       55,278.34       8,139,112.79     8,139,112.79
     6/17/05        78   218,294.57     164,101.64       54,192.93       7,975,011.15     7,975,011.15
     7/17/05        79   218,294.57     165,194.29       53,100.28       7,809,816.86     7,809,816.86
     8/17/05        80   218,294.57     166,294.21       52,O00.36       7,643,522.65     7,643,522.65
     9/17/05        81   218,294.57     167,401.45       5O,893.12       7,476,121.20     7,476,121.20
     10/17/05       82   218,294.57     168,516.06       49,778.51       7,307,605.14     7,307,605.14
     11/17/05       83   218,294.57     169,638.10       48,656.47       7,137,967.04     7,137,967.04
     12/17/05       84   218,294.57     17O,767.61       47,526.96       6,967,199.43     6,967,199.43
     1/17/06        85   218,294.57     171,904.63       46,389.94       6,795,294.80     6,795,294.80
     2/17/06        86   218,294.57     173,O49.23       45,245.34       6,622,245.57     6,622,245.57
     3/17/06        87   218,294.57     174,201.45       44,093.12       6,448,O44.12     6,448,O44.12
     4/17/06        88   218,294.57     175,361.34       42,933.23       6,272,682.78     6,272,682.78
     5/17/06        89   218,294.57     176,528.96       41,765.61       6,O96,153.82     6,O96,153.82
     6/17/06        90   218,294.57     177,704.35       4O,590.22       5,918,449.47     5,918,449.47
     7/17/06        91   218,294.57     178,887.56       39,407.01       5,739,561.91     5,739,561.91
     8/17/06        92   218,294.57     18O,078.65       38,215.92       5,559,483.26     5,559,483.26
     9/17/06        93   218,294.57     181,277.68       37,016.89       5,378,205.58     5,378,205.58
     10/17/06       94   218,294.57     182,484.68       35,809.89       5,195,720.90     5,195,720.90
     11/17/06       95   218,294.57     183,699.73       34,594.84       5,012,021.17     5,012,021.17
     12/17/06       96   218,294.57     184,922.86       33,371.71       4,827,098.31     4,827,098.31
     1/17/07        97   218,294.57     186,154.14       32,140.43       4,640,944.17     4,640,944.17
     2/17/07        98   218,294.57     187,393.62       30,900.95       4,453,550.55     4,453,550.55
     3/17/07        99   218,294.57     188,641.35        29,653.22      4,264,909.20     4,264,909.20
     4/17/07       100   218,294.57     189,897.38        28,397.19      4,075,011.82     4,075,011.82
     5/17/07       101   218,294.57     191,161.78        27,132.79      3,883,850.04     3,883,850.04
     6/17/07       102   218,294.57     192,434.60        25,859.97      3,691,415.44     3,691,415.44
     7/17/07       103   218,294.57     193,715.90        24,578.67      3,497,699.54     3,497,699.54
     8/17/07       104   218,294.57     195,005.72        23,288.85      3,302,693.82     3,302,693.82
     9/17/07       105   218,294.57     196,304.13        21,990.44      3,106,389.69     3,106,389.69
     10/17/07      106   218,294.57     197,611.19        20,683.38      2,908,778.50     2,908,778.50
     11/17/07      107   218,294.57     198,926.95        19,367.62      2,709,851.55     2,709,851.55
     12/17/07      108   218,294.57     200,251.47        18,043.10      2,509,600.08     2,509,600.08
     1/17/08       109   218,294.57     201,584.82        16,709.75      2,308,015.26     2,308,015.26
     2/17/08       110   218,294.57     202,927.03        15,367.54      2,105,088.23     2,105,088.23
     3/17/08       111   218,294.57     204,278.19        14,016.38      1,900,810.04     1,900,810.04
     4/17/08       112   218,294.57     205,638.34        12,656.23      1,695,171.70     1,695,171.70
     5/17/08       113   218,294.57     207,007.55        11,287.02      1,488,164.15     1,488,164.15
     6/17/08       114   218,294.57     208,385.88         9,908.69      1,279,778.27     1,279,778.27
     7/17/08       115   218,294.57     209,773.38         8,521.19      1,070,004.89     1,070,004.89
     8/17/08       116   218,294.57     211,170.12         7,124.45        858,834.77       858,834.77
     9/17/08       117   218,294.57     212,576.16         5,718.41        646,258.61       646,258.61
     10/17/08      118   218,294.57     213,991.56         4,303.01        432,267.05       432,267.05
     11/17/08      119   218,294.57     215,416.39         2,878.18        216,850.66       216,850.66
     12/17/08      120   218,294.57     216,850.66         1,443.91             (0.00)           (0.00)
                      -------------  -------------     ------------
     TOTAL            26,195,348.40  18,000,000.00     8,195,348.40
                      =============  =============     ============
</TABLE>

* After payment of loan payment due on such date
<PAGE>

                                         Exhibit B to Loan Agreement

                  FORM OF CERTIFICATE OF ACCEPTANCE

[    I, the undersigned, hereby certify that I am the duly qualified
and acting __________ of Friede Goldman International Inc.
("Borrower") and, with respect to the Loan Agreement dated as of
December 1, 1998 ("Agreement") by and among Borrower, GE Capital
Public Finance, Inc. ("Lender") and Mississippi Business Finance
Corporation ("Issuer"), that:]

OR:

     I, the undersigned, hereby certify that I am the duly qualified
and acting ______________ of _____________________ ("Guarantor") and,
with respect to the Guaranty Agreement dated as of December __, 1998
("Agreement") by and among Guarantor and GE Capital Public Finance,
Inc., that:]

     1.   The Collateral described in Exhibit A to the Agreement (the
"Collateral") has been delivered and installed in accordance with
[Borrower's/Guarantor's] specifications and has been accepted by
[Borrower/Guarantor's].

     2.   [Borrower/Guarantor] has obtained from a reputable insurance
company qualified to do business in the State (as defined in the
Agreement) insurance with respect to all risks required to be covered
thereby pursuant to Section 7.06 of the Agreement.

     3.   Attached to this Certificate of Acceptance are Vendor
invoice(s) and/or bill(s) of sale relating to the Collateral
and, if such invoices have been paid by [Borrower/Guarantor], evidence
of payment thereof.

     4.   Borrower hereby directs Lender, on behalf of Issuer, to pay
the Loan Proceeds (as defined in the Agreement) as follows:

     5.   All of the representations and warranties of Borrower and
each Guarantor contained in the Agreement, the Security Agreements and
the Guaranties are true and correct as of the date hereof and no
Default or Event of Default has occurred thereunder.

     Dated: _____________________, 19_.

                                        By:______________________

                                        Title:___________________

                                        Date:____________________
<PAGE>

                                         Exhibit C to Loan Agreement

        FORM OF OPINION OF COUNSEL TO BORROWER AND GUARANTORS
<PAGE>
                           January 7, 1999

Mississippi Business Finance Corporation
550 High Street
13th Floor, Sillers Building
Jackson, MS 39201

GE Capital Public Finance, Inc.
Suite 470
8400 Normandale Lake Boulevard
Minneapolis, MN 55437

Re:  $18,000,000 Mississippi Business Finance Corporation Taxable
     Industrial Development Revenue Bond, Series 1998 (Friede Goldman
     International Inc. Project)

Ladies and Gentlemen:

     We have acted as counsel to Friede Goldman International Inc.
("Borrower"), a Mississippi corporation; and also as counsel to Friede
Goldman Offshore, Inc., a Delaware corporation, and a subsidiary of
Borrower, and HAM Marine, Inc., a Mississippi corporation, and a
subsidiary of Borrower (each a "Guarantor" and collectively referred
to herein as "Guarantors") for purposes of rendering an opinion to you
as required by Article III of the Loan Agreement dated as of
December 1, 1998, by and among Borrower, GE Capital Public Finance,
Inc. ("Lender") and Mississippi Business Finance Corporation
("Issuer") (the "Loan Agreement"). Terms used herein shall have the
same meaning as the meaning set forth in the Loan Agreement.

     In connection with this opinion, we have examined the following:

     a.   the Loan Agreement (defined above);
<PAGE>

     b.   the Escrow Agreement dated as of December 1, 1998 (the
          "Escrow Agreement") among Lender, Issuer, Borrower and
          National City Bank of Minneapolis, as escrow agent;

     c.   the Paying Agent Agreement dated as of December 1, 1998 (the
          "Paying Agent Agreement") among Lender, Issuer, Borrower and
          National City Bank of Minneapolis, as paying agent 

     d.   the Guaranty Agreement, one executed by each Guarantor, in
          favor of Lender and dated as of December 1,1998 (each a
          "Guaranty" and collectively referred to herein as
          "Guaranties");

     e.   the Security Agreement, one executed by each Guarantor, by
          and among the particular Guarantor end the Lender, dated as
          of December 1,1998 (Bach a "Security Agreement" and
          collectively referred to herein as "Security Agreements");

     f.   the First Preferred Mortgages applicable to the Dual Carrier
          and the-Maggie D (all registered vessels) by and among a
          Guarantor and Lender, dated as of December 1, 1998 (each a
          "Ship Mortgage" and collectively referred to herein as the
          "Ship Mortgages");

     g.   The Uniform Commercial Code Financing Statements (UCC-1) to
          be filed with the Mississippi Secretary of State and the
          Chancery Clerks of Hinds and Jackson County, Mississippi
          (the "Financing Statements");

     h.   Uniform Commercial Code Search Requests (WCC-l l) prepared
          by the Mississippi Secretary of State dated December 10,
          1998, the Chancery Clerks of Hinds County dated December
          7,1998, and Jackson County, Mississippi dated December
          9,1998; and 

     i.   such other documents and items as we have deemed necessary
          to render this opinion.

The Loan Agreement, the Escrow Agreement and the Paying Agent
Agreement are collectively referred to herein as the "Agreements." The
Agreements, the Guaranties, the Security Agreements, the Ship
Mortgages and the Financing Statements are collectively referred to
herein as the "Borrower Documents."

     As to various factual matters set forth herein, we have made
certain assumptions as hereinafter set forth and relied upon the
factual representations of the Borrower and Guarantors 
<PAGE>
made in the Borrower Documents and officer certificates and filings
with the Securities Exchange Commission, and upon certificates of
public officials, which facts we have not independently verified.

     For purposes of the opinions expressed below, we have assumed (i)
the authenticity of all documents submitted to us as originals, (ii)
the conformity to the originals of all documents submitted as
certified or photostatic copies and the authenticity of the originals,
and (iii) the due authorization, execution and delivery of all
documents by all parties and the validity and binding effect thereof
(other than the authorization, execution and delivery of documents by
Borrower and Guarantors and the validity and binding effect thereof
upon Borrower and Guarantors).

     Based on the foregoing and subject to each of the assumptions,
limitations, qualifications and restrictions set forth herein, we are
of the opinion that:

          1. Borrower has been duly organized and is validly existing
     as a corporation in good standing under the laws of the State of
     Mississippi with full power and authority to own its properties
     and conduct its business.

          2. Borrower has full power and authority to execute and
     deliver the Agreements and to carry out the terms thereof. The
     Agreements have been duly and validly authorized, executed and
     delivered, are in full force and effect and are the legal, valid
     and binding contracts of Borrower enforceable in accordance with
     their respective terms.

          3. The consummation of the transactions contemplated by the
     Agreements and the carrying out of the terms thereof will not, in
     any material respect, result in violation of any provisions of
     the articles of incorporation or bylaws of Borrower or, to the
     best of our knowledge based on reasonable inquiry of the
     Borrower, result in the violation of any provision of, or in a
     default under, any indenture, mortgage, deed of trust,
     indebtedness, agreement, judgment, decree, order, statute, rule
     or regulation to which Borrower is a party or by which it or its
     property is bound.

          4. To the best of our knowledge based on reasonable inquiry
     of the Borrower, there are no legal or governmental actions,
     suits, proceedings, inquiries or investigations pending,
     threatened or contemplated, to which Borrower is or may become a
     party or of which any property of Borrower is or may become
     subject, other than ordinary routine litigation incident to the
     kind of business conducted by Borrower which, if determined
     adversely to Borrower, would have a material adverse effect on
     the financial position or results of operations of Borrower.

          5.To the best of our knowledge based on reasonable inquiry
     of the Borrower,
<PAGE>

     there are no legal or governmental proceedings pending,
     threatened or contemplated, wherein an unfavorable decision,
     ruling or finding would adversely affect the validity of or
     security for the Agreements or the transactions contemplated
     thereby.

          6. Each Guarantor has full power and authority to execute
     and deliver each Guaranty, Security Agreement and Ship Mortgage
     executed by such Guarantor and to carry out the terms thereof.
     Each Guaranty, Security Agreement and Ship Mortgage has been duly
     and validly authorized, executed and delivered, is in full force
     and effect and is the legal, valid and binding contract of such
     Guarantor enforceable in accordance with their respective terms.

          7. To the best of our knowledge after reasonable inquiry of
     the Guarantors, the consummation of the transactions contemplated
     by each Guaranty, Security Agreement and Ship Mortgage and the
     carrying out of the terms thereof will not, in any material
     respect, result in the violation of any provision of, or in a
     default under, any indenture, mortgage, deed of trust,
     indebtedness, agreement, judgment, decree, order, statute, rule
     or regulation to which any Guarantor is a party or by which it or
     its property is bound.

          8. To the best of our knowledge based on reasonable inquiry
     of the Guarantors, there are no legal or governmental actions,
     suits, proceedings, inquiries or investigations pending,
     threatened or contemplated to which any Guarantor is or may
     become a party or of which any property of any Guarantor is or
     may become subject, other than ordinary routine litigation
     incident to the kind of business conducted by each Guarantor
     which, if determined adversely to any Guarantor, would have a
     material adverse effect on the financial position or results of
     operations of any Guarantor.

          9. The Financing Statements identified in item (g) above
     have been filed in the noted jurisdictions. These filings are
     sufficient to perfect a security interest in the described
     personal property (other than the vessels described in the Ship
     Mortgages) to the extent that (i) a security interest may be
     perfected by filing a financing statement in the State of
     Mississippi, (ii) the Guarantors own the described personal
     property, and (iii) the described personal property is located in
     the described jurisdictions. Subject to these limitations, such
     security interest has been properly perfected and is subject to
     no prior liens or encumbrances.

          10. The Ship Mortgages are in proper form for execution and
     recording in the official vessel records of the United States
     Coast Guard National Vessel Documentation Center and when so
     recorded will be effective to create in favor of Lender a valid
     and enforceable lien and mortgage on the vessel described
     therein.

          11.  The provisions of the Loan Agreement and the
     Security Agreements are
<PAGE>

     effective to create a security interest in favor of Lender in all
     of Borrower's and Guarantor's right, title and interest in and to
     the Collateral (other than the vessels described in the Ship
     Mortgages) and all proceeds thereof.

          12. Fraudulent Conveyance. Generally, under both the laws of
     the state of Mississippi and the U.S. Bankruptcy Code, a transfer
     may be deemed fraudulent and avoidable when made (i) with actual
     intent to hinder, delay or defraud creditors, or (ii) for less
     than "reasonably equivalent value"' and the transferor is or
     thereby becomes insolvent, was engaged or is about to engage in
     business with unreasonably small capital or assets, or intended
     to incur or believed he would incur debts beyond his ability to
     repay; or (iii) to an insider to repay an antecedent debt. See
     Bankruptcy Code Paragraph 548(a); Miss. Code Ann., Paragraph
     Paragraph 153-3, 5. 

          The term "reasonably equivalent value" is not specifically
     defined in the Bankruptcy Code. The term "consideration deemed
     valuable in law" is not specifically defined in the Mississippi
     Code. With respect to the inter-company transfers by and among
     Borrower and the Guarantors, the grant of security interests from
     the Guarantors to the Lender and the execution and delivery of
     the Guaranties from the Guarantors to the Lender (the "Actions"),
     we have assumed as to factual matters that (i) the Borrower and
     Guarantors acted without any intent to hinder, delay, or defraud
     any current or future creditor of the Borrower; (ii) the Borrower
     and Guarantors were not insolvent or did not become insolvent as
     a result of the Actions; (iii) the Borrower and Guarantors were
     not engaged and were not about to engage in any business or
     transaction for which any property remaining was an unreasonably
     small capital or for which the remaining assets were unreasonably
     small in relation to the business of the Borrower and\or
     Guarantors or the transaction; (iv) the Borrower and Guarantors
     did not intend to incur, and did not believe or reasonably should
     not have believed that they would incur debts beyond their
     ability to pay as they become due; (v) the consideration paid for
     the personal property is equivalent to the fair market value of
     the personal property transferred by and among the Borrower and
     the Guarantors; and (vi) the transfer of the personal property to
     the Guarantors was not made by Borrower to repay an antecedent
     debt owed by Borrower to the Guarantors. With regard to these
     assumptions, we have relied upon an officer's certificate from
     the Borrower and the Guarantors.

          Based upon the foregoing, we believe that, if either
     Guarantor were to become a debtor under the Bankruptcy Code, in a
     properly argued and presented case, a court would not order, at
     the petition of a creditor of or a trustee in bankruptcy for such
     Guarantor, the 
------------
[Superscript]1  The Bankruptcy Code uses the phrase "reasonably
equivalent value." The Mississippi statute uses the phrase
"consideration deemed valuable in law."
<PAGE>

avoidance of such transfers on the basis that such transfers
constituted fraudulent conveyance.
------------
     The opinions rendered herein are subject to the following
additional assumptions and qualifications:

     A.   Except as expressly set forth herein, we have made no
examination of, and express no opinion as to, matters of title
or priority with respect to any personal property covered by the
Borrower Documents or any mortgage, lien, or security interest
therein.

     B.   The opinions expressed herein are expressly subject to: (i)
the effect of any applicable bankruptcy, insolvency, moratorium,
reorganization, or other similar laws now or hereinafter in effect
relating to or limiting the rights of creditors generally, including
but not limited to, those laws involving or applicable to preferences,
fraudulent transfers and obligations or equitable subordination,
whether predicated upon lack of fair value, lack of adequate
consideration or otherwise, (ii) general principles of equity,
commercial reasonableness, conscionability, and public policy, whether
the effect of such principles is considered in a proceeding in equity
or at law, and the discretion of the court before which any such
proceeding therefor may be brought. Except to the extent set forth in
paragraph 12 above, we express no opinion regarding such laws and
principles except to point out that they may adversely affect not
only the enforceability but the validity of the Borrower Documents and
transactions contemplated thereby.

     C.   Certain rights, remedies and waivers contained in the
Borrower Documents may be limited or rendered ineffective by
applicable laws or judicial decisions, however, such laws and judicial
decisions do not make the remedies afforded by the Borrower Documents
inadequate for the practical realization of the material benefits
purported to be provided thereby.

     D.   As represented in the Loan Agreement by Lender, we have
assumed that the Lender is not subject to the Finance Company
Privilege Tax Law as to this Loan or the Small Loan Privilege Tax Law
or the Small Loan Regulatory Law; all of the State of Mississippi. We
express no opinion as to the applicability of such laws. Failure to
comply with the laws may result in a lender being denied access to the
courts of Mississippi for the purposes of collecting and enforcing
indebtedness.

     E.   We express no opinion as to actions necessary to continue
the perfection of a security interest. 

     F.   We have assumed that each party to the Borrower Documents
(other than the Borrower and the Guarantor) are validly existing and
in good standing under the laws of the jurisdiction of its
organization, and, if organized in a state other than Mississippi, is
duly authorized
<PAGE>

to do business in Mississippi, has all requisite power and authority
to enter into the Borrower Documents and other documents and to
perform and observe the terms and conditions of such documents which
are required to be performed or observed by it or them.

     G.   These opinions are based solely on the laws of the State of
Mississippi and we do not express any opinion as to the laws of any
other jurisdiction. We have assumed for the purposes of rendering the
opinions expressed herein that the Borrower Documents are governed by
Mississippi law, notwithstanding that the Borrower Documents may
purport to be governed by the law of another state, as the case may
be. The law covered by our opinions consists of the statutes, the
judicial and administrative decisions, and the rules and regulations
of agencies of the State of Mississippi. The law covered by our
opinions does not include the statutes or ordinances, the
administrative decisions, or the rules or regulations of counties,
towns, municipalities, or political subdivisions (whether created or
enabled at the state or regional level), or judicial decisions to the
extent that they deal with any of the foregoing.

     H.   These opinions are given solely to you in connection with
this transaction and may not be relied upon by any other person other
than your assignees and counsel or in connection with any other
transaction.

     I.   Except for any such opinions expressly stated above, we
express no opinion (and nothing in this letter should be construed as
implying any such opinion) with respect to the effect of any state or
federal securities, margin lending, pension benefit, trade regulation,
antitrust, fiduciary, tax, intellectual property, labor, or banking
laws or regulations which may be applicable to any of the transactions
contemplated by the Borrower Documents.

     J.   We undertake no obligation to revise or supplement these
opinions should any law in effect be changed by legislative action,
judicial decision, or otherwise.

     K.   The opinions expressed herein do not create or establish an
attorney-client relationship between this law firm, or any of its
attorneys and the addressees, and any such relationship is expressly
disavowed. 

                                   Very truly yours,

                                   WATKINS & EAGER PLLC
<PAGE>

                                         Exhibit D to Loan Agreement

                FORM OF OPINION OF COUNSEL TO ISSUER
<PAGE>
[HOLCOMB DUNBAR LETTERHEAD]

                          December 17, 1998

GE Capital Public Finance, Inc.
Suite 470
8400 Normandale Lake Boulevard
Minneapolis, MN 55437

Mississippi Business Finance Corporation
550 High Street
13th Floor, Sillers Building
Jackson, Mississippi 39201

National City Bank of Minneapolis
651 Nicollet Mall
Minneapolis, MN 55402

Watkins & Eager, PLLC
Attorneys and Counselors at Law
400 East Capitol, Suite 300
Jackson, Mississippi 39201

Friede Goldman International, Inc.
Bank of Mississippi Building
525 East Capitol Street, Suite 402
Jackson, Mississippi 39201

RE:  $18,000,000 Maximum Aggregate Principal Amount Mississippi
     Business Finance Corporation Taxable Industrial Development
     Revenue Bond, Series 1998 (Friede Goldman International Inc.
     Project)

Ladies and Gentlemen:

     We have acted as counsel to Mississippi Business Finance
Corporation (the "MBFC" or "Issuer") in connection with the issuance
and sale of $18,00,000 maximum aggregate principal 
<PAGE>
amount of its Taxable Industrial Development Revenue Bond. Series 1998
(Friede Goldman International Inc. Project) to be issued as of
December 1, 199S, (the "Bond"). The Bond is being issued under and
pursuant to a Loan Agreement dated as of December 1, 1998 (the "Loan
Agreement") among MBFC, Friede Goldman International Inc., a
Mississippi corporation ("FGII"), and GE Capital Public Finance, Inc.,
a Delaware corporation ("GE"). as Lender (the "Lender"), and under and
pursuant to resolutions adopted by the Board of Directors of MBFC on
September 25, 1997, March 18, 1998, and November 18, 1998 (the
"Resolutions"). The Bond is being sold to GE under and pursuant to the
Loan Agreement. The Loan Agreement. the Escrow Agreement dated
December 1, 1998 ("Escrow Agreement") among GE, MBFC, FGII and
National City Bank of Minneapolis, a national banking association
("National" ). the Paying Agent Agreement dated December 1. 1998
("Paying Agent Agreement") among GE. MBFC. FGII and National, and the
Promissory Note dated as of today's date (the "Note") from
FGII to the Issuer collectively comprise the "issuer Documents."

     Capitalized terms not defined herein shall have the meaning
ascribed to them in the Loan Agreement.

     We have examined. among other things. the Bonds, the Issuer
Documents, and the proceedings of the Issuer authorizing the
Bonds and the Issuer documents.

     Based on the foregoing, and subject to the exceptions and
limitations set forth below, we are of the opinion that:

     1.   The Issuer is a public corporation of the State.

     2.   The Issuer has lawful authority to undertake the permanent
          financing of the Project, to execute and deliver and to
          perform its respective obligations under the Issuer
          Documents, and to issue, sell and deliver the Bonds.

     3.   All resolutions adopted by the Issuer's Board of Directors
          relating to the Bonds and the Project have been duly and
          validly adopted by the Issuer's Board of Directors and are
          in full force and effect.

     4.   The Issuer Documents and the Bonds have each been duly
          authorized, executed and delivered by the Issuer, and each
          constitutes a legal. valid and binding obligation of the
          Issuer enforceable against the Issuer in accordance with
          their respective terms, except insofar as the enforcement
          thereof may be limited by any applicable bankruptcy,
          moratorium or other similar laws relating to the enforcement
          of the creditors" rights generally. However. we render no
          opinion as to the enforceability
<PAGE>
          of Article XII of the Loan Agreement concerning the benefits
          under the Act. Further, we express no opinion as to the
          enforceability of (a) provisions which purport to confer
          self-help remedies or equitable remedies, such as specific
          performance and injunctive relief, (b) provisions that
          purport to establish evidentiary standards for suits or
          proceedings. (c) provisions for waivers in advance by any
          party, or (d) provisions regarding consent to jurisdiction
          or venue.

     5.   The execution and delivery by the Issuer of the Issuer
          Documents and the Bonds. and the performance by the Issuer
          of its obligations in respect thereof, do not result in any
          violation of the provisions of the Constitution or laws of
          the State. nor to our knowledge do these actions conflict
          with or result in any breach of any of the provisions of. or
          constitute a default under, any agreement or instrument to
          which the Issuer is a party or by which it or any of its
          property is or may be bound.

     6.   There is no action, suit. proceeding or investigation at law
          or in equity before or by any court, public board or body
          pending or, to our knowledge, threatened against or
          affecting the Issuer wherein an unfavorable decision, ruling
          or finding would adversely affect the transactions
          contemplated by' or the validity of, the Issuer Documents,
          the Bonds or any other agreement or instrument to which the
          Issuer is a party and which is used, or contemplated for
          use, in consummation of the transactions contemplated in the
          Indenture or the Agreement. 

     7.   No further authorization, approval, consent or other order
          of any governmental authority or agency is required for the
          valid authorization. execution and delivery of the Issuer
          Documents and the Bonds.

     Whenever our opinion herein with respect to the existence or
absence of facts is indicated to be "to our knowledge", or "known to
us" or similar words. it is intended to signify that during the course
of our representation of the Issuer, no information has come to our
attention which would give us actual knowledge contrary to such
statement. However, except to the extent expressly set forth herein,
we have not undertaken any independent investigation to determine the
existence or absence of such facts, and no inference as to our
knowledge of the existence or absence of such facts should be drawn
from our representation of the Issuer.

     We do not hold ourselves out as expects on, or express any
opinion herein concerning, the laws of any jurisdiction other than the
laws of the State of Mississippi and applicable federal law of the
United States. This opinion is being furnished to the addressees for
their use. No other use or distribution of this opinion or any part
thereof may be made without our prior written consent.
<PAGE>

     This letter expresses our legal opinion as to the foregoing
matters based on our professional judgment at this time; it is not,
however, to be construed as a guaranty, nor is it a warranty that a
court considering such matters would not rule in a manner contrary to
the opinions set forth above.

                                   Sincerely yours.

                                   HOLCOLM DUNBAR
                                   A Professional Association
<PAGE>
                                     Exhibit E to the Loan Agreement

                   FORM OF OPINION OF BOND COUNSEL
<PAGE>
                       As of December 1, 1998

GE Capital Public Finance, Inc.
Suite 470
8400 Normandale Lake Boulevard
Minneapolis, MN 55437

Mississippi Business Finance Corporation
550 High Street
13th Floor, Sillers Building
Jackson, Mississippi 39201

National City Bank of Minneapolis
651 Nicollet Mall
Minneapolis, MN 55402

RE:  $18,000,000 Maximum Aggregate Principal Amount Mississippi
     Business Finance Corporation Taxable Industrial Development
     Revenue Bond, Series 1998 (Friede Goldman International Inc.
     Project)

Ladies and Gentlemen:

     We have examined the record of proceedings relating to the
issuance by Mississippi Business Finance Corporation ("MBFC"), a
public corporation of the State of Mississippi (the "State"), of
$18,000,000 maximum aggregate principal amount of its Taxable
Industrial Development Revenue
<PAGE>

Bond, Series 1998 (Friede Goldman International Inc. Project) to be
issued as of December 1,1998, (the "Bond").

     The Bond is issued under and pursuant to Title 57, Chapter 10,
Articles 7 and 11 of the Mississippi Code of 1972, as amended (the
"Act"), and under and pursuant to a Loan Agreement dated as of
December 1,1998 (the "Loan Agreement") among MBFC, Friede Goldman
International Inc., a Mississippi corporation ("FGII") and GE Capital
Public Finance, Inc., a Delaware corporation ("GE"), as Lender (the
"Lender"), and under and pursuant to resolutions adopted by the Board
of Directors of MBFC on September 25, 1997, March 18, 1998, and
November 18, 1998 (the "Resolutions").

     The Bond is dated December 1,1998, and matures on the date and in
the maximum aggregate principal amount as set forth in the Bond and
the Loan Agreement. The Bond bears interest at the rate as set forth
in the Bond and the Loan Agreement, and such interest is payable on
the dates as set forth in the Bond and the Loan Agreement. The Bond is
subject to redemption prior to maturity in the manner and upon the
terms and conditions as set forth in the Bond and the Loan Agreement.
The Bond is issued without coupons in denominations as set forth in
the Loan Agreement and is not subject to transfer or exchange except
as provided in the Loan Agreement.

     The Bond is being issued to loan the proceeds thereof to FGII to
finance the Acquisition Costs of the Project (as defined in the Loan
Agreement) in order to promote, among other things, employment
opportunities in the State. Pursuant to the Loan Agreement, FGII is
obligated to make loan payments sufficient, among other things, to pay
the principal of, redemption premium, if any, and interest on the Bond
as the same shall become due and, in connection therewith, has
delivered its promissory note (the "Note") to the Issuer. All right,
title and interest of MBFC in and to the Loan Agreement and the Note
have been assigned by MBFC to the Lender pursuant to the Loan
Agreement.

     The Bond is being sold to GE under and pursuant to the Loan
Agreement. The Loan Agreement, the Escrow Agreement dated December 1,
1998 ("Escrow Agreement") among GE, MBFC, FGII and National City Bank
of Minneapolis, a national banking association ("National") and the
Paying Agent Agreement dated December 1,1998 ("Paving Agent
Agreement") among GE, MBFC, FGII and National collectively comprise
the "Issuer Documents."

     We are of the opinion that:

     1.   MBFC is a public corporation of the State.
<PAGE>
     2.   MBFC has the right and power to authorize, execute and
          deliver the Issuer Documents, and the Issuer Documents have
          been duly authorized, executed and delivered by MBFC and
          constitute legal, valid and binding agreements of MBFC
          enforceable in accordance with their terms. 

     3.   MBFC is duly authorized and entitled to issue the Bond, and
          the Bond has been duly and validly authorized and issued in
          accordance with the Constitution and statutes of the State,
          including the Act and the Resolution. The Bond is a legal,
          valid and binding limited obligation of MBFC enforceable in
          accordance with its terms and the terms of the Loan
          Agreement and is entitled to the benefits of the Loan
          Agreement, the Act and the Resolution. The Bond is secured,
          to the extent provided in the Loan Agreement, solely by a
          pledge of MBFC's right, title and interest in, to and under
          the  Loan Agreement and amounts paid pursuant to the Note
          and proceeds of the Bond and the investment earnings
          thereon, if any.

     4.   The Loan Agreement and Escrow Agreement are exempt from the
          qualification requirement of the Trust Indenture Act of
          1939, as amended (the " 1939 Act") and the Bond may
          therefore be sold without qualification of the Indenture
          under the 1939 Act.

     We have examined the executed Bond and, in our opinion, the form
of the Bond and its execution are regular and proper.

     It is to be understood that interest on the Bond should be
treated as includable in gross income of the holder thereof for
federal income tax purposes.

     The opinions contained in Paragraphs 2 and 3 above are qualified
to the extent that the enforceability of the Issuer Documents and the
Bond, respectively, may be limited by bankruptcy, insolvency,
moratorium, reorganization or other laws affecting creditors' rights
generally or as to the availability of any particular remedy.

     In connection with the delivery of this opinion letter, we have
assumed and we are not passing upon the due authorization, execution
and delivery of the Loan Agreement, the Note, the Escrow Agreement, or
the Paying Agent Agreement by, nor the binding effect upon or
enforceability against, FGII and GE, respectively. We understand that
various opinions with respect to such matters are being rendered this
day by other counsel.

     The foregoing opinions are limited to the laws of the State of
Mississippi and the federal laws of the United States of America. We
express no opinion as to matters governed by the laws of any
<PAGE>

other state. Furthermore, no opinion is expressed herein as to the
effect of any future acts of the parties or changes in existing law.
We undertake no responsibility to advise you of any changes after the
date hereof in the law or the facts presently in effect that would
alter the scope or substance of the opinions herein expressed.

     The opinions expressed herein are rendered as of the date hereof,
may be relied upon only by you and shall not be otherwise used,
circulated or quoted.

     This letter expresses our legal opinion as to the foregoing
matters based on our professional judgment at this time; it
is not, however, to be construed as a guaranty nor is it a warranty
that a court or administrative agency considering such matters would
not rule in a manner contrary to the opinions set forth above.

                                        Sincerely yours,
<PAGE>

                                         Exhibit F to Loan Agreement

                            FORM OF BOND
                                  
$18,000,000 Taxable Industrial Development Revenue Bond, Series 1998
             (Friede Goldman International Inc Project)


No.: R-1                                                 $18,000,000

Maturity Date                                          Interest Rate
December 17,2008                                               7.99%

     Mississippi Business Finance Corporation, a public body and
political subdivision duly created and validly existing under the laws
of the State of Mississippi (hereafter referred to as "Issuer"), for
value received, hereby promises to pay GE Capital Public Finance,
Inc., 8400 Normandale Lake Boulevard, Suite 470, Minneapolis,
Minnesota 55437, or to registered assigns, but solely from the Loan
Payments hereinafter described, the principal sum of 

                      EIGHTEEN MILLION DOLLARS

in any coin or currency of the United States of America which on the
date of payment thereof is the legal tender for the payment of public
and private debts, and to pay, solely from such Loan Payments, in like
coin and currency, interest on the principal sum from the date hereof,
such interest to be at the rates, and all such payments of interest,
principal or interest and principal to be payable at the time and
place, in the amounts and in accordance with the terms set forth
in that certain Loan Agreement dated as of December 1, 1998 (the "Loan
Agreement") among Issuer, GE Capital Public Finance, Inc. and Friede
Goldman International Inc. ("Borrower") in accordance with the
attached "Payment Schedule". All terms used herein in capitalized form
and not otherwise defined herein shall have the meanings ascribed
thereto in the Loan Agreement.

     This Bond is payable as to principal and prepayment premium, if
any, solely from Loan Payments to be made by Borrower and is secured
by, among other things, a lien on the Collateral financed pursuant to
the Loan Agreement.

     This Bond shall not represent or constitute a debt or pledge of
the faith and credit of Issuer, and this Bond is payable
solely from the revenues pledged therefor pursuant to the Loan
Agreement, and no moneys of Issuer raised by taxation shall be
obligated or pledged for the payment of Loan Payments or any other
amounts due under this Bond.

     This Bond is subject to prepayment upon the terms and conditions
set forth in the Loan Agreement.
<PAGE>

     It is hereby certified, recited and declared that all acts,
conditions and things required to exist to happen and to be performed
precedent to and in the issuance of this Bond exist, have happened and
have been performed in regular and due form and time as required by
the Constitution and laws of the State of Mississippi applicable
thereto end that the issuance of this Bonds in fully compliance with
all Constitutional and statutory limitations, provisions and
restrictions.

     IN WITNESS WHEREOF, the Issuer has caused this Bond to be signed
in its name and on its behalf by the manual or facsimile signature of
its Executive Director and its seal or a facsimile thereof to be
impressed, imprinted or otherwise reproduced hereon and attested by
the manual or facsimile signature of its Secretary as of the _ day of
December, 1998.

                    MIISSISSIPPI BUSINESS FINANCE CORPORATION

                    By:________________________
                    Executive Director

ATTEST:


_________________________
Secretary