[LETTERHEAD OF AVONDALE INDUSTRIES, INC.]

April 29, 1994



Mr. Philip G. Husby
Senior Vice President &
  Chief Financial Officer
Ogden Corporation
Two Pennsylvania Plaza
New York, New York  10121

Dear Phil:

Regarding your letter of March 18, 1994, I prefer to restate our
understandings as follows:

 A.  Avondale will refund the existing IRB debt on June 1, 1994
     without Ogden as guarantor or provider of credit support of
     any kind.  Ogden's credit support obligations with respect
     to this Avondale indebtedness will end no later than June 1,
     1994.  Ogden and Avondale expect to cooperate with each
     other in connection with this refunding process.  Avondale
     will advise Ogden of its plan of refunding immediately and
     keep Ogden informed throughout the refunding process.

 B.  Avondale and Ogden will resolve all outstanding tax issues
     between them.  As part of this resolution, the Tax Sharing
     Agreement (as amended) (TSA) will be terminated and Avondale
     will pay no later than June 1, 1994, $5.0 million cash to
     Ogden plus a $8.0 million senior unsecured note (subject to
     reasonable terms and conditions acceptable to the Company's
     lenders under its principal credit facilities), payable to
     Ogden in two annual installments of $5.0 million and
     $3.0 million due June 1, 1995 and 1996, respectively, and
     bearing interest on the unpaid balances at the rate of 10%
     per annum.   The total payment of $13.0 million represents
     principally the reimbursement of taxes due pursuant to the
     tax sharing agreement; remaining monies will be considered
     reimbursement, partial or otherwise, of interest due under
     the tax sharing agreement.

 C.  Avondale and Ogden will terminate any litigation support
     currently provided by Ogden pursuant to the Amended and
     Restated Preferred Stock Purchase Agreement (PSPA) on
     June 1, 1994.

 D.  Avondale will use its best efforts to post satisfactory
     collateral with the U. S. Department of Labor as a
     substitute for all of the performance bonds and other
     similar collateral currently provided by Ogden on Avondale's
     behalf.  It is our understanding that such collateral totals
     $16.6 million.  While we may be unable to obtain the release
     of all Ogden-backed collateral we expect to be able to
     reduce the amount for which Ogden is responsible to no more
     than $5 million by September 30, 1994.  We will keep Ogden
     informed regarding the resolution of these matters.

 E.  All payments of $982,219.00 made by Ogden to date in
     connection with Avondale insurance matters will be repaid
     fully.  If Ogden receives a credit or reimbursement for any
     such payment, then a refund of such credit or reimbursement
     shall be made by Ogden to Avondale promptly.
   
All of the foregoing matters must be implemented, resolved or
otherwise settled in the manner as described above, in which case
the Amended and Restated Preferred Stock Purchase Agreement and
the Tax Sharing Agreement as amended will terminate.  In the
event Avondale is able to fully resolve the matters referred to
in A, B, C and E above, but despite its best efforts is unable to
fully resolve the matters referred to in D above by September 30,
1994, then Avondale will issue to Ogden Series B Preferred Stock
for an amount equal to the amount of the unresolved matters noted
in D subject to an overall limit of $7.0 million of Series B
Preferred Stock in which case the PSPA and TSA will terminate,
but Avondale will continue to be responsible for fully resolving
matters in D above and for reimbursing Ogden for any losses,
costs or claims in connection therewith.  Ogden shall return
promptly all of such Preferred Stock to Avondale (subject to the
right of Ogden to retain any dividends paid or accrued thereon by
Avondale prior to such return) if the matters referred to in D
are fully resolved prior to January 1, 1995.  If such matters are
not resolved prior to December 31, 1994 but are resolved by
May 31, 1995 Ogden shall return 66 2/3% of such Preferred Stock
and Avondale will purchase the remaining 33 1/3% of Preferred
Stock for its face amount plus all accrued but unpaid dividends. 
If such matters are not fully resolved by June 1, 1995 Avondale
shall purchase this Preferred Stock on June 1, 1995 for its face
amount plus all accrued but unpaid dividends and will continue to
be responsible for fully resolving matters in D and reimbursing
Ogden for any losses, costs or claims in connection therewith. 
Ogden agrees to not transfer ownership of any Series B Preferred
Stock for a one-year period from date of issuance.
    
In the event Avondale is unable to refund the existing IRB debt
by June 1, 1994, then the relative rights and obligations of the
parties shall continue to be governed by the arrangements and
agreements as they existed prior to the execution of this letter. 


Avondale agrees to provide Ogden with periodic information
concerning certain retrospective insurance polices.

Definitive agreements will be prepared and executed by both
parties promptly following execution of this letter of intent.

If the above is consistent with your understanding of these
matters please sign below in the space provided for you.

Very truly yours,

AVONDALE INDUSTRIES, INC.


\s\ Thomas M. Kitchen
Thomas M. Kitchen
Vice President &
  Chief Financial Officer

TMK/jhw

Agreed to by:

OGDEN CORPORATION



\s\ Philip G. Husby
Philip G. Husby
Senior Vice President &
  Chief Financial Officer