FRIEDE GOLDMAN HALTER INC
AMDMT. NO. 3 TO CREDIT AGRMT.
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>AMDMT. NO. 3 TO CREDIT AGRMT.
<TEXT>

<PAGE>

                                                                    EXHIBIT 10.1

                                AMENDMENT NO. 3

                                       TO

                                CREDIT AGREEMENT

     AMENDMENT NO. 3 ("Amendment No. 3") dated as of June 9, 2000 to the Credit
Agreement dated as of November 3, 1999, as amended (the "Credit Agreement"),
among FRIEDE GOLDMAN HALTER, INC., a corporation organized and existing under
the laws of the State of Mississippi (the "Borrower"), the financial
institutions listed on the signature page hereof (the "Lenders"), WELLS FARGO
BANK (TEXAS), NATIONAL ASSOCIATION, a national banking association, as
Administrative Agent and Co-Arranger (the "Agent"), and BANK ONE CAPITAL
MARKETS, INC., as Co-Arranger and Syndication Agent.

     W I T N E S S E T H:

     WHEREAS, pursuant to the Credit Agreement, the Lenders made available to
the Borrower a loan facility of up to USD 164,218,250, as evidenced by the
promissory notes of the Borrower dated November 3, 1999; and

     WHEREAS, the aggregate principal amount of Advances under the Credit
Agreement is in excess of the Borrowing Base as of the date hereof, in
contravention of the terms of the Credit Agreement; and

     WHEREAS, the Borrower has requested the Lenders to make certain concessions
to the Borrower as a result of such discrepancy; and

     WHEREAS, the Lenders have agreed to amend the Credit Agreement upon the
terms and conditions set forth in this Amendment No. 3.

     NOW THEREFORE, in consideration of the above recitals and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree to amend the Credit Agreement as follows:

1.   DEFINITIONS.

          (a) Amendment No. 3. A definition of "Amendment No. 3" is hereby added
     to the Credit Agreement and reads as follows:

          "Amendment No. 3" means the Amendment No. 3 to Credit Agreement dated
          June 9, 2000 among the Borrower, the Lenders and the Agent.

          (b) Bollinger Sale. A definition of "Bollinger Sale" is hereby added
     to the Credit Agreement and reads as follows:
<PAGE>

          "Bollinger Sale" means the proposed sale of certain assets of the
          Borrower to Bollinger Shipyards, Inc., as set forth in that certain
          asset purchase agreement dated May 31, 2000.

          (c) Borrowing Base.  The following sentence is hereby added to the
     definition of "Borrowing Base":

          "Notwithstanding anything in the Credit Agreement or any Borrowing
          Base Report or other certificate to the contrary, the Borrower and the
          Lenders agree that the Borrowing Base for the Overadvance Period shall
          be deemed to be USD 88,000,000, irrespective of what the actual
          Borrowing Base is for the Overadvance Period."

          (d) Commitment Reduction Fee. The definition of "Commitment Reduction
     Fee" is hereby amended to read as follows:

          "Commitment Reduction Fee" shall mean a fee equal to two and one-half
          percent (2.5%) of the Commitment as of the Amendment Date, payable to
          the Agent for the ratable benefit of the Lenders, subject to a single
          reduction in accordance with the following table:

          Commitment Amount
                                  By 7/31/00           By 8/31/00
     Less than $100,000,000           10%                     5%
     Less than $75,000,000            20%                    15%
     Less than $50,000,000            30%                    25%
     $0                               40%                    35%

                         The Commitment Reduction Fee shall be reduced in
               accordance with the highest percentage corresponding to the level
               of the reduction of the Commitment attained by the Borrower.  As
               an example, if the Borrower reduces the Commitment by July 31,
               2000 to an amount less than $100,000,000 but greater than
               $75,000,000, the Commitment Reduction Fee shall be reduced by
               10%.  If the Borrower then reduces the Commitment to less than
               $75,000,000 but greater than $50,000,000 by August 31, 2000, the
               total aggregate reduction in the Commitment Reduction Fee shall
               be 15%."

          (e) Interest Payment Date.  The definition of "Interest Payment Date"
     is hereby amended to read as follows:

                         "Interest Payment Date" means, with respect to any Base
               Rate Advance, the date of Amendment No. 3 for interest accruing
               through May 31, 2000, and thereafter on the last Business Day of
               each calendar month and, with respect to any LIBOR Advance, the
               last day of the relevant Interest Period except if such Interest
               Period is longer than three (3) months, every three (3) months
               and the last day of such Interest Period.
<PAGE>

          (f) Overadvance Limit.  A definition of "Overadvance Limit" is hereby
     added to the Credit Agreement and reads as follows:

                         "Overadvance Limit" means USD 110,000,000, which may,
               only upon the unanimous written approval of the Lenders, be
               increased to USD 117,480,381.

          (g) Overadvance Period.  A definition of "Overadvance Period" is
     hereby added to the Credit Agreement and reads as follows:

                         "Overadvance Period" means the period from the date of
               Amendment No. 3 to and including June 29, 2000."

2.   OVERADVANCE PERIOD ADVANCES.  The following sentence is hereby
     added to Section 2.2(a) of the Credit Agreement:

     "Notwithstanding the provisions of Section 2.2(b) below, the Lenders agree
     that, during the Overadvance Period only, and subject to the provisions of
     Amendment No. 3 and the other provisions of this Credit Agreement, the
     Lenders shall make available to the Borrower one or more Advances which,
     together with the principal amount of all Advances outstanding under the
     Credit Agreement as of the date of Amendment No. 3, shall not exceed the
     Overadvance Limit, irrespective of the Borrowing Base for the Overadvance
     Period.  On the Business Day immediately following the Overadvance Period,
     the terms of Section 2.2(b) shall be fully applicable to the Loan."

3.   REDUCTION OF REVOLVING COMMITMENT.  Section 2.1(e) of the Credit
     Agreement is hereby amended to read in its entirety as follows:

          "(e)  The Revolving Loan Commitment shall be (i) reduced by seventy-
     five percent (75%) of the Net Proceeds of any Asset Sales, and (ii) repaid
     and reduced by one hundred percent (100%) of the proceeds of all tax
     refunds of the Borrower or any Subsidiary from any source whatsoever,
     federal or state."

4.   TERMINATION OF REVOLVING COMMITMENT.  A new Section 2.1(g) is
     hereby added to the Credit Agreement which reads as follows:

          "(g)  The Revolving Loan Commitment shall terminate immediately and
     without notice to the Borrower upon the occurrence of a material adverse
     change to the Bollinger Sale or the terms thereof.  For purposes of this
     Section 2.1(g), "material adverse change" shall mean (i) a reduction in the
     sales price of USD 4,000,000 or greater, or any other change having
     substantially the same effect, (ii) any agreement by the Borrower to accept
     any of the sales price in any form other than in immediately available
     funds, except for cash paid into escrow pursuant to the terms of the
     Bollinger Sale, (iii) the failure of the Bollinger Sale to close and fund
     before July 31, 2000 or (iv) the cessation of negotiations between the
     parties to the Bollinger Sale prior to the consummation thereof, such
     cessation to be determined by the Lenders in their sole discretion."
<PAGE>

5.   AFFIRMATIVE COVENANTS.  Section 11 of the Credit Agreement is
     amended as follows:

          (a) The following is hereby added to Section 11.1(e) of the Credit
     Agreement:

               "The Borrower shall provide the Borrowing Base Report for the
               period ending May 31, 2000 to the Agent no later than June 27,
               2000.  At the same  time as each of the foregoing reports is
               delivered, the Borrower shall deliver to the Agent a copy of
               monthly consolidated financial statements for the Borrower
               certified by the chief financial officer or chief accounting
               officer or treasurer of the Borrower together with monthly
               consolidating statements of the Borrower."

          (b) A new Section 11.12 is hereby added to the Credit Agreement and
     reads as follows:

                         "11.12  Tax Refunds.  The Borrower shall immediately
               remit and shall insure that each Guarantor immediately remits to
               the Lenders each and every refund from any Governmental Agency,
               including without limitation, each tax refund from any taxing
               authority to an account specified by the Agent for the receipt
               thereof.  The Borrower shall cooperate and shall ensure that each
               Guarantor cooperates with the Agent in executing or providing any
               notices, payment instructions or other forms, documents or
               instruments required by the Agent to effect the payment of any
               such refunds to the Lenders, including, without limitation,
               assignments of any such refunds and tax returns.  The Borrower
               shall provide the Agent with copies of any proposed federal tax
               returns to be filed by the Borrower no less than seven (7)
               Business Days prior to the filing thereof, which returns shall
               contain payment or assignment forms or instructions from the
               Borrower, duly completed and executed by the Borrower and in form
               and substance acceptable to the Agent."

          (c) A new Section 11.13 is hereby added to the Credit Agreement and
     reads as follows:

               "11.13.  Shelf Registration.

               (a) On or prior to June 30, 2000, the Borrower shall file with
               the SEC a "shelf" registration statement for an amount of not
               less than $150,000,000, on Form S-3 (the "Registration
               Statement") and the Borrower shall use its reasonable  best
               efforts to make such Registration Statement effective as soon as
               possible.  In addition, if the Agent or any Lender becomes the
               holder of any common stock or warrants to purchase common stock
               of the Borrower, the Borrower shall provide the Agent or such
               Lender customary registration rights with respect to such common
<PAGE>

               stock or warrants.  The Borrower represents and warrants to the
               Lenders that no shareholder approval is required for the issuance
               by the Borrower of any additional common stock or warrants for
               the purchase thereof, or for the issuance in a single transaction
               of common stock or warrants for the purchase thereof representing
               ten percent (10%) of the issued and outstanding common stock of
               the Borrower.

          (d) A new Section 11.14 is hereby added to the Credit Agreement and
     reads as follows:

               "11.14.  Escrow Account Pledge.  Within five (5) Business Days
               following notice by the Agent to the Borrower, the Borrower shall
               provide the Agent with a pledge, in form and substance
               satisfactory to the Agent, pledging in favor of the Agent for the
               ratable benefit of the Lenders all of the Borrower's right, title
               and interest in and to that certain escrow account with The
               Whitney National Bank in respect of certain tax credits assigned
               to the Borrower by Trinity Industries and all deposits from time
               to time in such account, and the Borrower shall use its best
               efforts to obtain such further documents or notices required to
               perfect such pledge under applicable state law."

6.   CONDITIONS PRECEDENT.

     6.1  Documents Required as Conditions Precedent to Amendment No. 3.  The
effectiveness of the modifications to the Credit Agreement contemplated by this
Amendment No. 3 is subject to the condition precedent that the Agent shall have
received at or prior to the date of this Amendment No. 3 all of the following,
each dated on or before the date of this Amendment No. 3 and each in form and
substance satisfactory to the Agent and its counsel:

          (a) Each of the following documents  (the "Amendment Documents") shall
     have been duly authorized and executed with original counterparts thereof
     delivered to the Agent:

               (i)   This Amendment No. 3;

               (ii)  Amendment No. 3 to the United States First Preferred Fleet
                     Mortgages;

               (iii) Ratification of Guaranty executed by the Guarantors;

               (iv)  A Borrowing Base report for the period ending April 30,
                     2000;

               (v)   Evidence satisfactory to the Agent that the Lenders have a
                     perfected security interest in any inventory and equipment
                     of the Borrower and the Guarantors located in Newfoundland;
<PAGE>

               (vi)   Payment by the Borrower of the Agent's fees and expenses
                      incurred in connection with the Credit Agreement and any
                      amendments thereto through and including the date of this
                      Amendment No. 3;

               (vii)  Evidence satisfactory to the Agent that there has been no
                      material adverse effect as defined in Section 2.1(g) of
                      the Credit Agreement set forth in this Amendment No. 3;
                      and

               (viii) such further documents as the Lenders may reasonably
                      request.

          (b) The representations and warranties contained in Section 10 of the
     Credit Agreement shall be true on the date of this Amendment No. 3 with the
     same effect as though such representations and warranties had been made on
     and as of such date, and no Event of Default specified in Section 13 of the
     Credit Agreement and no event which, with the lapse of time or the giving
     of notice and the lapse of time specified in Section 13 of the Credit
     Agreement, would become such an Event of Default, shall have occurred and
     be continuing.

     6.2  Waiver of Conditions Precedent.  All of the conditions precedent
contained in this Section 7 are for the sole benefit of the Agent and the
Lenders and the Agent may waive any of them in its absolute discretion, and on
such conditions as it deems proper.

7.   REPRESENTATIONS.  The Borrower represents and warrants that:

          (a) The Borrower is a corporation, duly organized and validly existing
     in good standing under the laws of the State of Mississippi, and has the
     requisite power and authority (i) to carry on its business as presently
     conducted; and (ii) to enter into and perform its obligations under the
     Amendment Documents.

          (b) The execution, delivery and performance by Borrower and the
     Guarantors of the Amendment Documents and any other instrument or agreement
     provided for by this Amendment No. 3 to which it is a party, have been duly
     authorized by all necessary corporate action, do not require stockholder
     approval other than such as has been duly obtained or given, do not or will
     not contravene any of the terms of its Certificate of Incorporation or
     Bylaws, or similar such organizational documentation, and will not violate
     any provision of law or of any order of any court or governmental agency or
     constitute (with or without notice or lapse of time or both) a default
     under, or result (except as contemplated by this Amendment No. 3) in the
     creation of any security interests, lien, charge or encumbrance upon any of
     its properties or assets pursuant to, any agreement, indenture or other
     instrument to which it is a party or by which it may be bound other than is
     in favor of the Agent; the Amendment Documents have been duly executed and
     delivered by the Borrower and the Guarantors and constitute the respective
     legal, valid and binding agreements, enforceable in accordance with the
     respective terms thereof as to which each of the Borrower and the
     Guarantors is a party.  The enforceability of this Amendment No. 3,
     however, is subject to all applicable bankruptcy,
<PAGE>

     insolvency, reorganization, moratorium, and other laws affecting the rights
     or creditors and to general equity principles.

          (c) Except as set forth in the Credit Agreement, there are no suits or
     proceedings pending or to its knowledge threatened against or affecting
     Borrower or any Guarantor which if adversely determined would have a
     material adverse effect upon its business, financial condition or
     operations.

          (d) Other than such as have been obtained, no license, consent or
     approval of any Governmental Agency or other regulatory authority is
     required for the execution, delivery or performance of this Amendment No. 3
     or any other Amendment Document or any instrument contemplated herein or
     therein.

8.   EXPENSES. The Borrower agrees to promptly, whether or not the modifications
to the Credit Agreement contemplated by this Amendment No. 3 become effective,
(x) reimburse the Agent for all fees and disbursements of external counsel to
the Agent and all reasonable out of pocket fees and disbursements of the Agent
incurred in connection with the preparation, execution and delivery of this
Amendment No. 3 and all other documents referred to herein, and all amendments
or waivers to or termination of this Amendment No. 3 or any agreement referred
to herein; and (y) reimburse the Agent for all fees and disbursements of
internal and external counsel to the Agent and all reasonable out of pocket
fees, disbursements and travel-related expenses of the Agent incurred in
connection with the protection of the rights of the Agent under this Amendment
No. 3 and all other documents referred to herein, whether by judicial
proceedings or otherwise. The obligations of the Borrowers under this Section 8
shall survive payment of the Loan.

9.   Wherever and in each such place the term "Credit Agreement" is used
throughout the Credit Agreement, such term shall be read to mean the Credit
Agreement as amended by this Amendment No. 3.

10.   Except as specifically amended by this Amendment No. 3, all of the terms
and provisions of the Credit Agreement shall remain in full force and effect.

11.   All capitalized terms used herein but not defined herein shall have the
meanings given to them in the Credit Agreement.

12.   THIS AMENDMENT NO. 3 TO CREDIT AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF TEXAS.

13.   The Lenders hereby agree to waive any default or Event of Default
under Section 2.2(b) of the Credit Agreement through June 9, 2000.  The
foregoing waiver is subject to the Borrower satisfying all conditions precedent
hereunder, and shall not be construed as a waiver of any other provision of the
Credit Agreement or as an agreement by the Agent or the Lenders to waive or
modify Section 2.2(b), or any other provision, of the Credit Agreement in the
future.

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment
No. 3 to Credit Agreement on the date first written above.

                              BORROWER:

                              FRIEDE GOLDMAN HALTER, INC.


                              By:
                                 -----------------------------------------
                                 Name:
                                 Title:


                              LENDERS:

                              WELLS FARGO BANK (TEXAS), NATIONAL ASSOCIATION


                              By:
                                 -----------------------------------------
                                 Name:  Roger Fruendt
                                 Title: Vice President

                              ROYAL BANK OF CANADA


                              By:
                                 -----------------------------------------
                                 Name:
                                 Title:

                              HIBERNIA NATIONAL BANK


                              By:
                                 -----------------------------------------
                                 Name:
                                 Title:
<PAGE>

                              BANK ONE, N.A.


                              By:
                                 -----------------------------------------
                                 Name:
                                 Title:

                              ADMINISTRATIVE AGENT AND CO-ARRANGER:

                              WELLS FARGO BANK (TEXAS), NATIONAL ASSOCIATION


                              By:
                                 -----------------------------------------
                                 Name:  Roger Fruendt
                                 Title: Vice President

                              SYNDICATION AGENT AND CO-ARRANGER:

                              BANC ONE CAPITAL MARKETS, INC.


                              By:
                                 -----------------------------------------
                                 Name:
                                 Title:
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