Document:

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                                                                     Exhibit 4.5
                      BOTTOMLINE TECHNOLOGIES (de), INC.

                           INVESTOR RIGHTS AGREEMENT

     This INVESTOR RIGHTS AGREEMENT (this "Agreement") is made as of June 9,
2000 by and among Bottomline Technologies (de), Inc., a Delaware corporation
(the "Company"), and Nevada Bond Investment Corp. II, a Nevada corporation (the
"Investor").

     WHEREAS, the Company has agreed to issue and sell to the Investor, and the
Investor has agreed to purchase from the Company, 307,882 shares (the "Initial
Shares") of the Company's common stock, $0.001 par value per share (the "Common
Stock"), and a warrant (the "Warrant") to purchase up to 307,882 shares (the
"Warrant Shares," and together with the Initial Shares, the "Shares") of Common
Stock upon the terms and conditions set forth in that certain Stock Purchase
Agreement (the "Stock Purchase Agreement") and Warrant, each dated of even date
herewith, between the Company and the Investor; and

     WHEREAS, the terms of the Stock Purchase Agreement provide that it shall be
a condition precedent to the closing of the transactions thereunder for the
Company and the Investor to execute and deliver this Agreement.

     NOW THEREFORE, in consideration of the promises and mutual covenants
contained herein, the parties hereto hereby agree as follows:

     1.   Definitions. The following terms shall have the meanings provided
          -----------
therefor below or elsewhere in this Agreement as described below:

          "Closing" shall have the meaning ascribed to such term in the Stock
           -------
Purchase Agreement.

          "Commission" means the Securities and Exchange Commission.
           ----------

          "Exchange Act" means the Securities Exchange Act of 1934, as amended,
           ------------
and all of the rules and regulations promulgated thereunder.

          "Prospectus" means the prospectus included in the Registration
           ----------
Statement, as amended or supplemented by an amendment or prospectus supplement,
including post-effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference in such Prospectus.

          "Registration Statement" means the registration statement on Form S-3
           ----------------------
filed by the Company with the Commission pursuant to Section 2 hereof.

          "Registration Expenses" means the expenses described in Section 2.4.
           ---------------------
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          "Registrable Shares" shall mean the Shares; provided, that those
           ------------------                         --------
shares as to which the following apply shall cease to be Registrable Shares
when: (a) a Registration Statement with respect to the sale of such Registrable
Shares shall have become effective under the Securities Act and such Registrable
Shares have been disposed of under such Registration Statement; (b) such
Registrable Shares shall have been transferred in a transaction in which the
Investor's rights and obligations under this Agreement were not assigned in
accordance with this Agreement; (c) such Registrable Shares shall have ceased to
be outstanding; or (d) such Registrable Shares shall have been sold pursuant to
Rule 144.

          "Securities Act" shall mean the Securities Act of 1933, as amended,
           --------------
and all of the rules and regulations promulgated thereunder.

     2.   Registration Rights.
          -------------------

          2.1  Required Registration of Registrable Shares. The Company shall
               -------------------------------------------
file with the SEC, as promptly as possible, but in any event within 60 days
following the Closing, a Registration Statement on Form S-3 covering the resale
to the public by the Investor of the Registrable Shares. The Company shall use
all commercially reasonable efforts to cause the Registration Statement to be
declared effective by the SEC as soon as practicable. The Company shall cause
the Registration Statement to remain effective until (i) with respect to the
Initial Shares, the date two years and nine months from the date of the Closing,
(ii) with respect to the Warrant Shares, the date two years from date that the
Warrants have been exercised in full, or (iii) such earlier time as all of the
Registrable Shares covered by the Registration Statement have been sold pursuant
thereto or otherwise cease to be Registrable Shares as defined herein.

          2.2  Registration Procedures.
               -----------------------

               (a)  If and whenever the Company is required by the provisions of
this Agreement to use its commercially reasonable efforts to effect the
registration of any Registrable Shares under the Securities Act, the Company
shall:

                    (i)  furnish to the Investor such reasonable numbers of
copies of the Prospectus, including any preliminary Prospectus, in conformity
with the requirements of the Securities Act, and such other documents the
Investor may reasonably request in order to facilitate the public sale or other
disposition of the Registrable Shares owned by the Investor;

                    (ii) use commercially reasonable efforts to register or
qualify the Registrable Shares covered by the Registration Statement under the
securities or Blue Sky laws of such states as the Investor shall reasonably
request, and do any and all other acts and things that may be necessary to
enable the Investor to consummate the public sale or other disposition in such
states of the Registrable Shares owned by the Investor; provided, however, that
                                                        --------  -------
the Company shall not be required in connection with this paragraph (ii) to
qualify as a foreign corporation or execute a general consent to service of
process in any jurisdiction;

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                    (iii)  cause all such Registrable Shares to be listed on
each securities exchange or automated quotation system on which similar
securities issued by the Company are then listed;

                    (iv)   notify the Investor, promptly after it shall receive
notice thereof, of the time when the Registration Statement has become effective
or a supplement to any Prospectus forming a part of the Registration Statement
has been filed; and

                    (v)    notify the Investor of any request by the Commission
for the amending or supplementing of the Registration Statement or Prospectus.

               (b)  If the Company has delivered a Prospectus to the Investor
and after having done so the Prospectus is amended to comply with the
requirements of the Securities Act, the Company shall promptly notify the
Investor and, if requested, the Investor shall immediately cease making offers
of Registrable Shares and return all Prospectuses to the Company. The Company
shall promptly provide the Investor with revised Prospectuses and, following
receipt of the revised Prospectuses, the Investor shall be free to resume making
offers of the Registrable Shares.

               (c)  In the event that, in the judgment of the Company, it is
advisable to suspend use of a Prospectus included in the Registration Statement
due to pending material developments or other events that have not yet been
publicly disclosed and as to which the Company believes public disclosure would
be detrimental to the Company, the Company shall notify the Investor to such
effect, and, upon receipt of such notice, the Investor shall immediately
discontinue any sales of Registrable Shares pursuant to the Registration
Statement until the Investor has received copies of a supplemented or amended
Prospectus or until the Investor is advised in writing by the Company that the
then current Prospectus may be used and has received copies of any additional or
supplemental filings that are incorporated or deemed incorporated by reference
in such Prospectus. In the event that any such black-out occurs during the
period during which the Company is required to cause a Registration Statement to
remain effective under Section 2.1 hereto, such period shall be extended for the
number of days equal to the duration of such black-out. Notwithstanding anything
to the contrary herein, the Company shall not exercise its rights under this
Section 2.2(c) to suspend sales of Registrable Shares for a period in excess of
120 days in any 365-day period.

          2.3  Incidental Registration of Registrable Shares.
               ---------------------------------------------

               (a)  Whenever the Company proposes to file a registration
statement (other than the Registration Statement filed pursuant to Section 2.1)
at any time and from time to time until five years from the date of the Closing,
it will, prior to such filing, give written notice to the Investor of its
intention to do so; provided, that no such notice need be given if no
                    --------
Registrable Shares are to be included therein as a result of a determination of
the managing underwriter pursuant to Section 2.3(b). Upon the

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written request of the Investor given within 20 days after the Company provides
such notice (which request shall state the intended method of disposition of
such Registrable Shares), the Company shall use its best efforts to cause all
Registrable Shares which the Company has been requested by the Investor to
register to be registered under the Securities Act to the extent necessary to
permit their sale or other disposition in accordance with the intended methods
of distribution specified in the request of the Investor; provided that the
Company shall have the right to postpone or withdraw any registration effected
pursuant to this Section 2.3 without obligation to the Investor.

               (b)  If the registration for which the Company gives notice
pursuant to Section 2.3(a) is a registered public offering involving an
underwriting, the Company shall so advise the Investor as a part of the written
notice given pursuant to Section 2.3(a). In such event, the right of the
Investor to include its Registrable Shares in such registration pursuant to
Section 2.3 shall be conditioned upon the Investor's participation in such
underwriting on the terms set forth herein. Should the Investor propose to
distribute the Registrable Shares through such underwriting, it shall enter into
an underwriting agreement in customary form with the underwriter or underwriters
selected for the underwriting by the Company. Notwithstanding any other
provision of this Section 2.3, if the managing underwriter determines that the
inclusion of all shares requested to be registered would adversely affect the
offering, the Company may limit the number of Registrable Shares to be included
in the registration and underwriting. The Company shall so advise all holders of
Registrable Shares requesting registration, and the number of shares that are
entitled to be included in the registration and underwriting shall be allocated
in the following manner. The securities of the Company held by holders other
than the Investor and other holders of securities of the Company who are
entitled, by contract with the Company, to have securities included in such
registration ("Other Holders") shall be excluded from such registration and
underwriting to the extent deemed advisable by the managing underwriter, and, if
a further limitation on the number of shares is required, the number of shares
that may be included in such registration and underwriting shall be allocated
among the Investor and Other Holders requesting registration in proportion, as
nearly as practicable, to the respective number of shares of Common Stock (on
an as-converted basis) which they held at the time the Company gives the notice
specified in Section 2.3(a). If the Investor or any Other Holder would thus be
entitled to include more securities than such holder requested to be registered,
the excess shall be allocated among the Investor and Other Holders pro rata in
the manner described in the preceding sentence. If the Investor disapproves of
the terms of any such underwriting, the Investor may elect to withdraw therefrom
by written notice to the Company, and any Registrable Shares or other securities
excluded or withdrawn from such underwriting shall be withdrawn from such
registration.

          2.4  Allocation of Expenses. The Company will pay all Registration
               ----------------------
Expenses for the Registration Statement. For purposes of this Section 2, the
term "Registration Expenses" shall mean all expenses incurred by the Company in
complying with this Agreement, including, without limitation, all registration
and filing fees, exchange listing fees, printing expenses, fees and expenses of
counsel for the

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Company, reasonable fees and expenses of counsel to the Investor, state Blue Sky
fees and expenses, and the expense of any special audits incident to or required
by any such registration, but excluding underwriting discounts and selling
commissions.

          2.5  Indemnification and Contribution.
               --------------------------------

               (a)  In the event of the registration of the Registrable Shares
under the Securities Act pursuant to this Agreement, the Company will indemnify
and hold harmless the Investor, each underwriter, if any, of Registrable Shares,
and each other person, if any, who controls the Investor or underwriter within
the meaning of the Securities Act or the Exchange Act against any losses,
claims, damages or liabilities, joint or several, to which the Investor, such
underwriter or controlling person may become subject under the Securities Act,
the Exchange Act, state securities or Blue Sky laws or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement under which such
Registrable Shares were registered under the Securities Act, any preliminary
prospectus or final prospectus contained in the Registration Statement, or any
amendment or supplement to such Registration Statement, or arise out of or are
based upon the omission or alleged omission to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
and the Company will reimburse the Investor, such underwriter and each such
controlling person for any legal or any other expenses reasonably incurred by
the Investor, such underwriter or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or omission made in such Registration Statement,
preliminary prospectus or prospectus, or any such amendment or supplement, in
reliance upon and in conformity with information furnished to the Company, in
writing, by or on behalf of the Investor or such underwriter or controlling
person specifically for use in the preparation thereof.

               (b)  In the event of the registration of any of the Registrable
Shares under the Securities Act pursuant to this Agreement, the Investor will
indemnify and hold harmless the Company, each of its directors and officers and
each underwriter (if any) and each person, if any, who controls the Company or
any such underwriter within the meaning of the Securities Act or the Exchange
Act, against any losses, claims, damages or liabilities, joint or several, to
which the Company, such directors and officers, underwriter or controlling
person may become subject under the Securities Act, Exchange Act, state
securities or Blue Sky laws or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement under which such Registrable Shares were
registered under the Securities Act, any preliminary prospectus or final
prospectus contained in the Registration Statement, or any amendment or
supplement to the Registration Statement, or arise out of or are based upon any
omission or alleged omission to state a material

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fact required to be stated therein or necessary to make the statements therein
not misleading, if the statement or omission was made in reliance upon and in
conformity with information relating to the Investor furnished to the Company by
or on behalf of the Investor for use in connection with the preparation of the
Registration Statement, prospectus, amendment or supplement; provided, however,
                                                             --------  -------
that the obligations of the Investor hereunder shall be limited to an amount
equal to the net proceeds to the Investor of Registrable Shares sold in
connection with the registration.

               (c)  Each party entitled to indemnification under this Section
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided, that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld); and, provided, further, that the failure of any Indemnified Party to
                --------  -------
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section except to the extent that the Indemnifying Party
is adversely affected by such failure. The Indemnified Party may participate in
such defense at such party's expense; provided, however, that the Indemnifying
                                      --------  -------
Party shall pay such expense if representation of such Indemnified Party by the
counsel retained by the Indemnifying Party would be inappropriate due to actual
or potential differing interests between the Indemnified Party and any other
party represented by such counsel in such proceeding; provided, further,
                                                      --------  -------
that in no event shall the Indemnifying Party be required to pay the expenses of
more than one law firm as counsel for the Indemnified Party. The Indemnifying
Party also shall be responsible for the expenses of such defense if the
Indemnifying Party does not elect to assume such defense. No Indemnifying Party,
in the defense of any such claim or litigation shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect of such claim or litigation, and no Indemnified Party shall
consent to entry of any judgment or settle such claim or litigation without the
prior written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld.

               (d)  In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 2.5 is
due in accordance with its terms but for any reason is held to be unavailable to
an Indemnified Party in respect to any losses, claims, damages and liabilities
referred to herein, then the Indemnifying Party shall, in lieu of indemnifying
such Indemnified Party, contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages or liabilities to
which such party may be subject in such proportion as is appropriate to reflect
the relative fault of the Company on the one hand and the Investor on the other
in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company and the Investor shall be
determined

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by reference to, among other things, whether the untrue or alleged untrue
statement of material fact related to information supplied by the Company or the
Investor and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Investor agree that it would not be just and equitable if contribution
pursuant to this Section 2.5 were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph of Section 2.5, (a) in no case shall the Investor be liable or
responsible for any amount in excess of the net proceeds received by the
Investor from the offering of Registrable Shares and (b) the Company shall be
liable and responsible for any amount in excess of such proceeds; provided,
                                                                  --------
however, that no person guilty of fraudulent misrepresentation (within the
-------
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be made against another
party or parties under this Section, notify such party or parties from whom
contribution may be sought, but the omission so to notify such party or parties
from whom contribution may be sought shall not relieve such party from any other
obligation it or they may have thereunder or otherwise under this Section. No
party shall be liable for contribution with respect to any action, suit,
proceeding or claim settled without its prior written consent, which consent
shall not be unreasonably withheld.

          2.6  Lock-up. Notwithstanding whether a registration statement filed
               -------
in accordance with this Section 2 has been declared effective by the SEC, for a
period of three months after the date of this Agreement, the Investor may not,
directly or indirectly, sell, offer to sell, contract to sell, grant any option
or warrant for the sale or purchase of, pledge, or otherwise dispose of, any
Shares (other than to Affiliates of the Investor, as such term is defined in the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder). After such three month period and until six months after the date
of this Agreement, 66% of the Shares shall continue to be subject to such lock-
up. Thereafter, until nine months after the date of this Agreement, 33% of the
Shares shall continue to be subject to such lock-up. Nine months after the date
of this Agreement, such lock-up shall no longer apply to any of the Shares. In
addition, with respect to any Shares then subject to lock-up under this Section
2.6, the Investor shall not, during the period in which such shares are subject
to the lock-up, engage in any hedging or other transaction which is designed to
or reasonably expected to lead to or result in a sale or disposition of such
Shares even if such Shares would be disposed of by someone other than the
Investor. Such prohibited hedging or other transactions includes without
limitation any short sale or any purchase, sale or grant of any right (including
without limitation any put or call option) with respect to any of such Shares.

          2.7  Information by Investor. The Investor shall furnish to the
               -----------------------
Company such information regarding it and the distribution proposed by it as the
Company may reasonably request in writing and as shall be required in connection
with any registration, qualification or compliance referred to in this
Agreement.

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     3.   Effectiveness; Termination. This Agreement shall become effective and
          --------------------------
legally binding only if the Closing occurs.

     4.   Entire Agreement. This Agreement constitutes and contains the entire
          ----------------
agreement and understanding of the parties with respect to the subject matter
hereof, and it also supersedes any and all prior negotiations, correspondence,
agreements or understandings with respect to the subject matter hereof.

     5.   Miscellaneous.
          -------------

          5.1  This Agreement may not be amended, modified or terminated, and no
rights or provisions may be waived, except with the written consent of the
Investor and the Company.

          5.2  This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware, and shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, personal
representatives, successors or assigns.  This Agreement shall also be binding
upon and inure to the benefit of any Affiliate of the Investor or any party to
whom the Investor transfers the majority of the Shares.

          5.3  Notices.
               -------

               (a)  Any notices, reports or other correspondence (hereinafter
collectively referred to as "correspondence") required or permitted to be given
hereunder shall be sent by courier (overnight or same day) or fax or delivered
by hand to the party to whom such correspondence is required or permitted to be
given hereunder. The date of giving any notice shall be the date of its actual
receipt.

               (b)  All correspondence to the Company shall be addressed as
follows:

                    Bottomline Technologies (de), Inc.
                    155 Fleet Street
                    Portsmouth, NH  03801
                    Attn: Robert A. Eberle
                    Executive Vice President & CFO

                    With a copy to:

                    Hale and Dorr LLP
                    60 State Street
                    Boston, MA  02109
                    Attn: John A. Burgess, Esq.

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               (c)  All correspondence to the Investor shall be addressed as
follows:

                    Nevada Bond Investment Corp. II
                    c/o United Technologies Corporation
                    United Technologies Building
                    Hartford, CT  06101
                    Attn: Mr. Lawrence V. Mowell
                    Vice President, NBIC

                    With a copy to:

                    Kirkpatrick & Lockhart LLP
                    1500 Oliver Building
                    Pittsburgh, PA 15222
                    Attn: Robert P. Zinn, Esq.

          5.4  Either party may change the address to which correspondence to it
is to be addressed by notification as provided for herein.

          5.5  The parties acknowledge and agree that in the event of any breach
of this Agreement, remedies at law may be inadequate, and both of the parties
hereto shall be entitled to seek specific performance of the obligations of the
other parties hereto and such appropriate injunctive relief as may be granted by
a court of competent jurisdiction.

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     IN WITNESS WHEREOF, the parties hereto have executed this Investor Rights
Agreement as of the date and year first above written.

                                        BOTTOMLINE TECHNOLOGIES (de), INC.

                                        By:  /s/ Robert Eberle
                                           ------------------------------
                                        Name:  Robert Eberle
                                        Title: Exec VP & CFO

                                        NEVADA BOND INVESTMENT CORP. II

                                        By:  /s/ L. V. Mowell
                                           ------------------------------
                                        Name:  L.V. Mowell
                                        Title: Vice President

                                       10<PAGE>

                                                            EXHIBIT 10.6

                                   AGREEMENT

     THIS AGREEMENT dated as of July 19, 2000 is by and between Robert E.
Derecktor, Inc., a New York corporation ("Builder"), and Lighthouse Landings,
Inc., a corporation ("Buyer").

     WHEREAS, the Buyer desires to purchase and the Builder desires to build and
sell the Vessel described herein pursuant to the terms hereof.

     NOW THEREFORE, in consideration of the material covenants set forth herein
and other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the parties hereto agree as follows:

Section 1.  Definitions
            -----------

     The following terms shall have the following respective meanings for all
purposes of this Agreement:

     "Additional Labor Charge" shall mean the amount to be paid by Buyer for
      -----------------------
labor performed in connection with any Change Order, which amount shall be
calculated at a rate of $55 for each Additional Man Hour.

     "Additional Man Hours" shall mean each hour worked by an employee or
      --------------------
subcontractor of Builder in connection with the construction of the Vessel which
would not have been necessary had a Change Order not been made, and has been
authorized by a Changer Order.

     "Additional Materials" shall mean all materials or equipment, other than
      --------------------
the Regular Materials, purchased in connection with the construction of the
Vessel, and have been authorized by a Change Order.

     "Additional Materials Charge" shall mean the amount to be paid by Buyer for
      ---------------------------
all Additional Materials, which amount is equal to the sum of (a) Builder's cost
of such Additional Materials plus (b) fifteen percent (15%).

     "Builder's Shipyard" shall mean the Builder's shipyard in Mamaroneck, New
      ------------------
York.

     "Bill of Sale" shall mean the bill of sale to be delivered by Builder to
      ------------
Buyer upon delivery of the Vessel.

     "Buyer Supplied Items" shall mean all materials and/or equipment other than
      --------------------
Regular Materials and Additional Materials selected by the Buyer for inclusion
in the Vessel.

     "Buyer's Payments" shall mean all amounts to he paid by Buyer to Builder
      ----------------
hereunder.

<PAGE>

     "Change Order" shall mean any request by the Buyer or by the Designer, on
      ------------
behalf of Buyer, to modify or deviate from the Plans or Specifications during
construction of the Vessel.

     "Defects" shall mean any defects in the Vessel, which are guaranteed
      -------
against by Builder pursuant to Section 8(a) herein.

     "Deliver" shall mean the date on which the Vessel is delivered to and
      -------
accepted by the Buyer.

     "Designer" shall mean Nigel Gee and Associates, Ltd.
      --------

     "Estimated Delivery Date" shall mean ten (10) months after contract or such
      -----------------------
later date as may be permitted herein.

     "Events of Default" shall mean each of the events identified in Section
      -----------------
9(a) herein.

     "Guaranty Period" shall mean the period commencing on the Delivery Date and
      ---------------
ending on the date which falls twelve (12) months after the Delivery Date.  The
following items will be covered for twenty four (24) months, hull structure, the
heating and ventilation equipment, raw water system, black water system and main
wiring.

     "Installments" shall mean each installment of the Purchase Price required
      ------------
pursuant to Section 4(b).

     "Invoice" shall mean an invoice to be prepared by Builder and submitted to
      -------
Buyer from time to time during the Term identifying the amount, if any, Buyer
owes for Additional Labor Charges and Additional Materials Charges attributable
to Additional Man Hours worked and Additional Materials ordered.

     "Materials" shall mean all Additional Materials, Regular Materials and any
      ---------
items listed on addendum 2 here to.

     "Plans" shall mean the plans provided by he Designer and incorporated by
      -----
reference herein.

     "Purchase Price" shall be as follows:
      --------------

     If a second boat is ordered within one hundred and twenty days after the
date hereof, the price will be five million, two hundred and fifty thousand
dollars ($5,250,000) for the first vessel and five million and two hundred and
six thousand for the follow on vessel. ($5,206,000).

     If a third boat is ordered with in two hundred and forty days after the
date hereof, the price will be five million, one hundred and eighty eight
thousand dollars ($5,188,000) for the first vessel and five million and fifty
eight thousand for the two follow on vessels ($5,058,000).

                                       2
<PAGE>

     If additional boat(s) are not ordered within 120 days of the date hereof
the price will be five million, four hundred thousand dollars ($5,400,000).

     "Regular Materials" shall mean all materials or equipment purchased in
      -----------------
connection with construction of the Vessel in accordance with the original Plans
and Specifications, and excluding any materials purchased in connection with a
Change Order.

     "Specifications" shall mean the specifications prepared by Builder dated
      --------------
July 19, 2000 for design no. 198-650 provided by the Designer and incorporated
by reference herein.

     "Term" shall mean the period of time commencing on the date of this
      ----
Agreement up to and including the Delivery Date.

     "Vessel" shall mean a passenger catamaran ferry to be built by Builder in
      ------
accordance with the Plans and Specifications as modified by any Change Orders,
which is to have the following general dimensions:

          Overall length              35 meters
          Waterline length            31 meters
          Beam                        10 meters
          Draft                       1.5 meters
          Speed                       42 knots
          Passengers                  312

Section 2.  Construction of the Vessel
            --------------------------

     (a)  The Builder shall build the Vessel at the Builder's Shipyard in
accordance with the Plans and Specifications as modified by any Change Orders
and in a manner which is consistent with the standards, practices and
workmanship of a first-class shipyard.

     (b)  The Builder shall be responsible for (i) purchasing all Materials
(excluding all Buyer Supplied Items) and (ii) providing all labor each as is
necessary for construction of the Vessel.  Builder shall have the right to
subcontract portions of the work (the approval of the Buyer shall be required
for subcontracting major portions of the work, which approval shall not be
unreasonably withheld or delayed), but shall still be responsible far providing
all labor.

Section 3.  Plans and Specifications
            ------------------------

     (a)  Any fees or other costs incurred by the Buyer in connection with the
preparation of the plans and Specifications or any modifications thereto by the
Designer, are the responsibility of the Buyer and are not included in the
Buyer's Payments.  The Buyer represents and warranties that said Plans and
Specifications shall be sufficient for Builder to complete construction of the
Vessel.

                                       3
<PAGE>

     (b)  Change Orders shall be authorized only upon the written and signed
consent of both the Builder and the Buyer.  Any request for a Change Order shall
be made in writing and submitted to the Builder for approval.  The Builder's
approval and signature shall not be unreasonably withheld.  The Builder's
approval of any Change Order shall be conditioned upon any statement endorsed on
the Change Order of:

          (i)   The estimated additional cost or savings in cost, if any, of
                Materials in effecting the Change Order;

          (ii)  The addition to or reduction in man hours of labor, if any, to
                result from compliance with the requested Change Order; and

          (iii) Any adjustment in the Estimated Delivery Date necessitated by
                the Change Order;

     The Change Order shall then be submitted to the Buyer for approval.  If the
Buyer approves the Change Order, he shall sign the Change Order and return it to
the Builder.

     (c)  Once approved as provided herein, a Change Order shall have the effect
of modifying the Plans and Specifications consistent with the Change Order.
Further, an approved Change Order shall act to increase or decrease the man
hours in accordance with the estimate contained in the Change Order and shall
act to adjust the Estimated Delivery Date in any manner set forth in the Change
Order.

     (d)  Builder shall submit Invoices to Buyer for any Additional Labor
Charges or Additional Material Charges and such Invoices shall itemize all
Additional Materials and Additional Man Hours by reference to specific Change
Order.

     (e)  If at any time it becomes apparent that Additional Labor Charges or
Additional Material Charges on account of a Change Order exceed the estimates
approved in the Change Order by more than ten (10%) percent, Builder shall
immediately notify Buyer with an explanation of the discrepancy.  If Builder
fails to give the notice required hereunder, it shall not be entitled to be paid
on account of the Change Order more than the amounts estimated in the Change
Order as approved by the Buyer.

     (f)  Work accomplished not in conformity with the Plans and Specifications
and not authorized by the Buyer may at Buyer's option (i) be deemed an amendment
to the Plans and Specifications, without charge, or (ii) be required to be
brought into conformity at Builder's expense.

Section. 4.  Buyer's Payments
             ----------------

     (a)  The Buyer agrees to pay the following amounts, in accordance with the
provisions of Sections 4(b) and (c) below, to Builder:

                                       4
<PAGE>

          (i)    the Purchase Price (three boat order);

          (ii)   the Additional Materials Charge, if any; and

          (iii)  the Additional Labor Charge, if any.

     (b)  The Buyer shall make Installments towards payment of the Purchase
Price in accordance with the following schedule:

          (i)    Approx. 5% equal to $262,500 - $2.5,000 deposit and $237,500
                 upon signing of this Agreement.

          (ii)   Approx. 5% equal to $256,300 upon placement of order for major
                 equipment [thirty (30) days after initial deposit]

          (iii)  10% equal to $518,800 upon cutting of frames [ten (l0) weeks
                 after contract signing]

          (iv)   15% equal to $778,204 upon frames being set ups [eighteen (18)
                 weeks after contract signing]

          (v)    15% equal to $778,200 upon hull plating [twenty-four (24)
                 weeks after contract signing]

          (vi)   15% equal to $778,200 upon house plating [thirty (30)weeks
                 after contract signing]

          (vii)  15% equal to $778,200 upon delivery of engines [thirty-two
                 (32) weeks after contract signing]

          (viii) 10% equal to $518,800 upon installation of the joinery
                 bulkheads [thirty-six (36) weeks after contract signing]

          (ix)   5% equal to $256,300 upon launching [thirty-nine (39) weeks
                 after contract signing)

          (x)    5% equal to $256,300 upon delivery after satisfactory
                 completion of builder's trials [forty-three (43) weeks after
                 contract signing]

     (c)  The purchase price for the first boat is based on three boats being
ordered. If a follow on vessel is not ordered within one hundred and twenty
days, then a lump sum of two hundred and eleven thousand, five hundred dollars
($211,500) will be paid at progress payment four (iv).  If the additional vessel
is ordered, but the third vessel is not ordered after 240 days, then a lump sum
of one hundred and forty eight thousand ($148,000) dollars will be paid at
progress payment four (iv) of the second vessel.

                                       5
<PAGE>

     (d)  The builder shall have the right to raise the purchase price of the
second or third vessel if he can show that significant material cost increases
have taken place to increase the price of the vessel.  Any such purchase price
increase shall be in direct proportion to such material price increases.

     (e)  The Builder shall periodically submit Invoices to the Buyer, identify
all Additional Materials Charges and Additional Labor Charges owing. (Upon
reasonable request by Buyer, Builder shall make available, during normal
business hours, its records substantiating the amounts contained in the
Invoices).  The amount of Additional Labor Charge and Additional Materials
Charge listed as owing in each Invoice shall be paid at next payment period.

     (f)  In the event that Buyer shall fail to pay any Installment, Additional
Labor Charge or Additional Materials Charge within five (5) days after the date
such Installment is due or of the Invoice relating to such Additional Labor
Charge or Additional Materials Charge (i) interest shall accrue from time to
time on the unpaid portion of such payments at a rate of eighteen percent (18%)
per annum and (ii) the Builder shall be permitted to cease all work on the
Vessel until such tune as (A) Buyer has paid all amounts then owing (including
any accrued interest); it being understood that the Estimated Delivery Date
shall be extended one day for each day that Builder ceases work hereunder.

Section. 5.  Buffer Supplied Items
             ---------------------

     Within sixty (60) days of the execution of this contract, Builder shall
provide Buyer with a delivery schedule for Buyer Supplied Items.  Buyer will
timely deliver all Buyer Supplied Items so as not to delay delivery of the
Vessel.  Buyer agrees to reimburse Builder for all costs and expenses occasioned
solely by the failure of Buyer to timely deliver any Buyer Supplied Items.
Additionally, the Estimated Delivery Date shall be extended by the lesser of any
delay actually caused in the delivery of the Vessel and the number of days of
delay in furnishing Buyer Supplied items.

Section 6.  Delivery
            --------

     (a)  The Vessel shall be delivered free and clear of liens by Builder to
Buyer at the Shipyard (or at such other place as the parties may agree) on or
about the Estimated Delivery Date, provided that all amounts owing hereunder
shall have been paid in full.  Delivery shall be evidenced by Buyer's acceptance
of the Bill of Sale.

     (b)  Title to the Vessel and risk of loss relating to the Vessel shall pass
to Buyer upon delivery of the Vessel.

     (c)  Builder agrees to deliver a Bill of Sale; provided that all amounts
owing hereunder have been paid in full.

                                       6
<PAGE>

     (d)  If Builder is unable to deliver the Vessel within sixty (60) days
after the Estimated Delivery Date, Buyer may give notice by registered mail to
Builder of Buyer's desire to terminate this Agreement. If Builder shall fail to
tender delivery of the Vessel within sixty (60) days after the receipt of such
notice, Buyer may terminate this Agreement upon the giving of fifteen (15) days
notice by registered mail to Builder.

     (e)  If Buyer terminates this Agreement pursuant to Section 6(d), Buyer's
sole remedy shall be to remove from the Shipyard the Vessel and any uninstalled
or unused Materials, provided that Buyer has met all of its obligations under
Section 4 and any Invoices provided to the Buyer by the Builder and other
charges hereunder.

     (f)  The Estimated Delivery Date shall be extended for such time as
permitted herein, including but not limited to Sections 3(c), 4(d), 5 and 10(b)
hereof, and such other time as Builder shall reasonably require if and to the
extent that construction of the Vessel is delayed due to any strikes, lockouts,
civil commotions, warlike operations, invasions, rebellions, hostilities,
military or usurped power, governmental regulations or controls, acts of God,
inability to obtain labor or materials from Builder's usual source of supply or
any other cause beyond the exclusive control of Builder.  If any such delay
(other than delays permitted by Sections 3(c), 4(d), 5 or 10(b) hereof) persists
for a period of one hundred and eighty (180) days or more, or is reasonably
certain to so persist, Buyer may terminate this contract on thirty (30) days
notice in accordance with section 6(e) hereof.

     (g)  Buyer shall take possession of the Vessel immediately upon delivery
and acceptance thereof and shall remove the Vessel from the premises of the
Shipyard (or such other place as Buyer and Seller may agree) on the Delivery
Date.

     (h)  If Buyer fails to take delivery of the Vessel within two weeks of the
tender of delivery by the Builder in accordance with the terms hereof, Buyer
shall be liable for all actual costs incurred by the Builder solely as a result
of such delay exceeding two weeks beyond the Delivery Date.

Section 7.  Buyer's Lien
            ------------

     (a)  Buyer shall at all times prior to delivery and acceptance have a lien
against the Vessel and the Materials yet to be incorporated into the Vessel in
an amount equal to all funds paid to the Builder.  At the request of the Buyer,
Builder shall cooperate with Buyer in executing all documents, including form(s)
UCC-1, and permit all acts necessary to the perfection for such security
interest.  The lien shall terminate upon delivery of the Vessel to the Buyer and
Buyer shall take all necessary steps to accomplish said termination.

Section 8.  Warranty
            --------

     (a)  Except as hereinafter provided, Builder, for the duration of the
Guaranty Period, guarantees the Vessel against all defects (the "Defects")
discovered during the Guaranty Period which are (i) directly caused by poor
workmanship or negligent installation of Materials by the

                                       7
<PAGE>

Builder or its subcontractors during the construction of the Vessel and (ii)
which Buyer gives notice to Builder in writing within fourteen (14) days of
discovery thereof. Builder does not guarantee and is not responsible for defects
in the Vessel, which result from, relate to, or arise out of the Plans,
Specifications, any Change Orders, or any equipment specified in the
Specifications or Plans, which is manufactured by someone other than Builder.

     (b)  Builder shall repair any Defect at the Shipyard or pay for the
necessary repairs to be made at another shipyard selected by Builder, at no cost
to Buyer.  Should Buyer, after giving proper notice hereunder, choose to have a
Defect repaired by a shipyard other than the Shipyard or a shipyard selected by
Builder, Builder shall reimburse Buyer for the cost of such repair, up to an
amount equal to the cost reasonably estimated by Builder for such repair if
performed at the Shipyard or another shipyard selected by Builder.

     (c)  Builder shall be under no obligation with respect to defects not
reported within the time required above or defects discovered after the
expiration of the Guaranty Period. The Builder shall under no circumstance be
liable for defects in the Vessel, or any part or equipment thereof, caused by
perils of the sea or rivers, navigation, fire, normal wear and tear, accidents
at sea or elsewhere, mismanagement, negligence, willful neglect, alteration,
addition or repair on the part of any person at any time, other than the
employees or subcontractors of Builder during the construction of the Vessel.
In no event shall Builder be liable for any consequential loss, damages or
expenses arising from any defect in the Vessel, or for loss of time in operating
the Vessel due to repairs caused by any defect,

     (d)  EXCEPT AS PROVIDED IN THIS SECTION 8, BUILDER HAS NOT AND SHALL NOT BE
DEEMED TO HAVE MADE AND BUILDER HEREBY SPECIFICALLY DISCLAIMS ANY REPRESENTATION
OR WARRANTY, EXPRESS 0R IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

     (e)  To the extent that materials and equipment used in the construction of
the Vessel are covered by warranties, guarantees or representations of the
sellers or manufacturers thereof, the Builder will assign to the Buyer any such
warranties, guarantees and representations and shall cooperate with Buyer in
enforcing any such warranties, guarantees and representations during the term
thereof; however, the Builder Shall have no liability in connection with said
warranties, guarantees and representations.  Specific details of the warranties
from Kamewa and Detroit Diesel are specified in Addendum 1.

Section 9.  Inspection
            ----------

     (a)  The Buyer shall have the right to inspect the Vessel during normal
business hours provided that such inspection shall not interfere with Builder's
work.  The right of the Buyer to inspect the Vessel during construction or any
actual inspection shall not imply or act as an acceptance by the Buyer of any
aspect of the Vessel prior to actual delivery of the Vessel. However, without
being under any obligation to do so, should the Buyer learn at any time that any
aspect of the Vessel does not conform to the Plans and Specifications and this
Agreement,

                                       8
<PAGE>

the Buyer shall immediately notify the Builder and either accept or reject the
non-conformity in writing. Acceptance of a non-conformity in writing shall serve
to amend the Plans and Specifications to the extent of the specific non-
conformity accepted. Buyer shall not be liable for any increase in Labor or
Materials actually incurred in the construction as a result of an accepted non-
conformity and likewise no adjustment of the Delivery Date shall result from the
acceptance of a non-conformity.

Section 10.  Insurance
             ---------

     (a)  During the construction of the Vessel and until delivery of the Vessel
to Buyer hereunder, Builder shall, at its own expense, maintain insurance over
the Vessel and any uninstalled part thereof against all risks customarily
insured against by builders of vessels similar to the Vessel in the United
Status.  The amount of such coverage shall not be less than the aggregate amount
of Buyer's Payments paid to Builder.

     (b)  In the event that, prior to delivery of the Vessel, the Vessel shall
suffer a partial loss covered by the insurance maintained hereunder, all
insurance proceeds received in respect thereof shall be paid to Builder in order
to enable Builder to repair the damage constituting such partial loss; it being
understood that the Estimated Delivery Date shall be extended by the period of
time reasonably necessary for the Builder to repair such partial loss.

     (c)  In the event that, prior to delivery of the Vessel, the Vessel shall
suffer a total loss covered by the insurance maintained hereunder, all insurance
proceeds received in respect thereof shall be paid to Buyer, up to the amount of
Buyer's Payments actually paid to Builder, with any excess being paid to
Builder.

     (d)  Builder shall be under no obligation to insure the Vessel hereunder
after tender of delivery of the Vessel by Builder to Buyer.

Section 11.  Sea Trials
             ----------

     (a)  A test program of the Vessel will be developed by the Buyer and the
Designer, subject to the approval of the Builder, which approval will not be
unreasonably withheld, to be conducted, in accordance with the Plans and
Specifications, by the Builder to the satisfaction of Buyer (hereinafter
referred to as the "Trials").  The Builder shall notify the Buyer of the
schedule of Trials not less than fifteen (15) days prior to the commencement of
Trials.

Section l2.  Taxes
             -----

     (a)  Buyer agrees that all payments made by Buyer in connection with the
transactions contemplated by this Agreement shall be free of all withholdings or
deductions of any nature whatsoever.  In the event any such withholding or
deduction shall be required, Buyer shall pay such additional amounts as is
necessary so that after any such withholding or deduction, Builder receives the
full amount to be paid to it hereunder.

                                       9
<PAGE>

     (b)  Buyer agrees to pay, or to the extent Builder is required to pay, to
indemnify Builder for the payment of, any taxes or similar fees, duties or
charges of any kind (including without limitation sales taxes but excluding
federal and state income taxes imposed on Builder) arising from or in connection
with the transactions contemplated by this Agreement.

Section 13.  Events of Default and Remedies
             ------------------------------

     (a)  Each of the following shall be deemed an Event of Default:

          (i)   Buyer's failure to make any payment required hereunder on the
                date such payment is due;

          (ii)  Buyer's failure to accept the Vessel within fourteen (14) days
                from the date on which the Vessel is tendered for delivery;

          (iii) Buyer's material breach of any of his other obligations under
                this Agreement; or

          (iv)  Buyer shall become insolvent or generally not pay his debts as
                such become due, or shall admit in writing his insolvency or his
                inability to pay his debts generally, or shall make a general
                assignment for the benefit of creditors; or any proceeding shall
                be instituted by or against him seeking to adjudicate hire as
                bankrupt or insolvent.

     (b)  Should an Event of Default occur, Builder shall have, in addition to
the right to charge interest and case work in accordance with the terms of
Section 4 hereof, the right to terminate this Agreement and dispose of the
Vessel in accordance with the terms of Section 13(c) below and all other
remedies permitted by law.

     (c)  In the event that an Event of Default occurs and continues for a
period of fifteen (15) days, Builder may terminate this Agreement by written
notice to Buyer and may, at its sole discretion, either complete the Vessel and
sell the same, or sell the Vessel "as is," free of any right or claim of Buyer.
Such sale of the Vessel by Builder shall be either by public auction or private
contract at Builder's sole discretion at such price and on such other terms and
conditions as Builder shall deem fit.

     In the event of such sale of the Vessel, the amount of the sale proceeds
received by Builder shall be applied firstly to all expenses attending such sale
(including, but not limited to, the cost of preparing, completing and marketing
the Vessel and reasonable attorneys' fees) or otherwise incurred by tape Builder
as a result of Buyer's default, secondly to the payment of all costs and
expenses of construction of the Vessel incurred by Builder less the
installments, Additional Labor Charges and Additional Materials Charges already
paid by Buyer and the compensation to Builder for any reasonable losses due to
rescission of this Contract, plus accrued interest on all such amounts at
eighteen percent (18%) per annum, and finally to the repayment of Buyer without
interest, if any balance remains.

                                       10
<PAGE>

     If the proceeds of sale are insufficient to pay such total costs and any
reasonable losses as aforesaid, Buyer shall promptly pay the deficiency to the
Builder upon request.

     (d)  In addition to the foregoing, Buyer shall be liable for all legal fees
and other costs and expenses incurred by Builder by reason of the occurrence of
any Event of Default or exercise of Builder's remedies with respect thereto.

Section 14.  Additionally Supplied Items
             ---------------------------

     Items and schedule of supply that are to be delivered beyond the
specification and contract are to be listed in Addendum 2.

Section 15.  Miscellaneous
             -------------

     (a)  Notices.  All notices required under the terms and provisions hereof
          -------
shall be in writing, and sent to Builder and Buyer at their respective addresses
set forth below (or such other addresses as the parties may designate from time
to time in writing):

          If to Builder:

          Robert E. Derecktor, Inc.,
          311 East Boston Post Road
          Mamaroneck, NY 10543
          Attention: E. Paul Derecktor
          Telephone: 914-698-5020
          Facsimile: 914-698-4641

          If to Buyer:

          Light House Landings
          195 Fairfield Av.
          West Caldwell, New Jersey 07006
          Telephone: (973) 618-9034

          cc:

          New York Fast Ferry
          52 Shrewsbury Avenue
          Highlands, New Jersey 07732
          Telephone: (732) 291-2210

     (b)  Assignment.  Neither party may assign or transfer any of its
          ----------
respective rights or obligations hereunder without the prior written consent of
the other party.

                                       11
<PAGE>

     (c)  Entire Agreement; Modification or Revision.  This Agreement is
          ------------------------------------------
intended to be a complete and exclusive statement of the terms of the agreement
of the parties hereto, and this Agreement supersedes any prior agreements,
whether oral or in writing. Neither this Agreement nor any term of this
Agreement may be modified, rescinded, changed, waived, discharged or terminated
except by a writing signed by the party to be charged.

     (d)  Article Headings and Captions.  All section headings and captions used
          -----------------------------
in this Agreement are for convenient reference arid shall not affect the
interpretation of this Agreement.

     (e)  Jurisdiction; Governing Law.  The rights and obligations of the
          ---------------------------
parties under this Agreement shall be governed by and construed in accordance
with the laws of the state of New York. The place of determination of any
disputes hereunder shall be New York, New York.

     Each party irrevocably consents to the service of process by the mailing of
copies thereof by registered or certified airmail, postage prepaid, to each
party at its address set forth in Section 14 (a) (or such other address as such
party may designate from time to time in writing).

     (f)  Legality of Provisions.  If any provision of this Agreement shall be
          ----------------------
held to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

     (g)  Rules of Construction.  Singular words shall connote the plural as
          ---------------------
well as the singular, and vice versa, as may be appropriate, and reference to
any person shall include any individual person, corporation, partnership,
company, association, governmental entity or the like, as well as its successors
and permitted assigns or transferees.

     (h)  Discrepancies.  All general language or requirements embodied in the
          -------------
Specifications are intended to amplify, explain and implement the requirements
of this Agreement.  However, in the event that any language or requirements so
embodied permit of an interpretation inconsistent with any provision of this
Agreement, then in each and every such event the applicable provisions of this
Agreement shall govern.  The Specifications and Plans are also intended to
explain each other, and anything shown on the Plans and not stipulated in the
Specifications or stipulated in the Specifications and not shown on the Plans,
shall be deemed and considered as if embodied in both.  In the event of conflict
between the Specifications and Plus, the Specifications shall govern.

                                       12
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.

                                    ROBERT E. DERECKTOR, INC.,

                                    By: /s/ Paul Derecktor
                                        -------------------
                                        Name: Paul Derecktor
                                        Title: President

                                    LIGHTHOUSE LANDINGS, INC.,

                                    By: /s/ Anthony Colasanti
                                        ----------------------
                                        Name: Anthony T. Colasanti
                                        Title: Vice President

                                       13
<PAGE>

Addendum 1 - Warranties from Kamewa and Detroit Diesel
------------------------------------------------------
<PAGE>

Addendum 2 - Items to be supplied beyond the Specification and Contract
-----------------------------------------------------------------------

     Two (2) Kamewa Can-Man control systems as follows.
<PAGE>

ATLANTIC DETROIT DIESEL ALLISON, INC.
33 GREGG STREET
LODI, NEW JERSEY 07644
--------------------------------------------------------------------------------

Date:     07-10-00

To:       DERECKTOR SHIPYARD

Attn:     MR. GALVIN HIGGINS

From:     RICH MCGOVERN           Phone:  201-291-0300
          ADDA SALES DEPT.        Fax:    201-291-1833

SUBJ:     QUOTATION RESPONSE

RE:       N.Y.F.F. - Project

Total Pages: 03
--------------------------------------------------------------------------------

Pursuant to your request, this proposal includes (4) main engines with ZF Marine
gear, and 8 DDEC Engine Display Modules.

DDC Series 12V4000 commercial marine propulsion engines, Rated 2330 BHP @ 2000
RPM.

Basic Engine
------------

 .    Single piece block with cross bolted main bearing caps for increased
     stiffness, longer bearing life, reduced noise and vibration and crankcase
     access ports.
 .    Individual four valve cylinder heads
 .    Forged steel crankshaft with bolt on counterweights
 .    Hydraulically fit high torque capacity, flywheel and damper hubs
 .    Centrifugally cast water-jacketed replaceable liners
 .    Forged steel connecting rod
 .    Pressure lubricated piston pin bushing
 .    Sputtered overlay rod and main bearings for high load capacity

Fuel System
-----------

 .    Electronically controlled unit pump fuel system which allows for optimized
     fuel injection pressure for optimum combustion control
 .    Engine driven fuel transfer pump
 .    Duplex Fuel / Water Separator with electric priming pump

<PAGE>

Lube Oil System
---------------

 .    Oil system with large capacity sump for extended drain intervals
 .    Dual spin on oil filters
 .    Oil dipstick and fill located on inboard side of engine

Air System
----------

 .    24 volt air inlet shutdown solenoid
 .    Dry type air inlet filters (mounted)

Exhaust System
--------------

 .    Triple water-cooled exhaust manifold to reduce cooling system burden and
     engine room heat loads
 .    Horizontal dry bellows with flanges
 .    Thermocouples - Exhaust gas temperature

Cooling System
--------------

 .    Split circuit cooling system allowing warming of charge air when cold, and
     cooling of charge air under full load conditions
 .    Built-in fuel cooler
 .    Self-priming raw water pump/engine driven
 .    Engine driven coolant circulating pump

Electrical System
-----------------

 .    Electronic control module based on Motorola 68332 microprocessor with the
     following sensors: pressure sensors for coolant water, crankcase air, fuel,
     lube oil, oil filter differential, and turbo boost. Temperature sensors for
     charge air, coolant water, fuel ambient air, lube oil and turbine inlet.
     Speed sensors for camshaft, crankshaft, and turbocharger. Level sensor for
     coolant.
 .    Interface connection point for connection of customer supplied throttle
     controls
 .    Self monitoring diagnostics with memory
 .    24 volt 100 amp gear driven isolated ground alternator

Engine Start System
-------------------

 .    24 VDC Electric
 .    Heater-coolant 120V / 2000 Watt

                                       2
<PAGE>

Marine Transmission ZF BU755-1 HWR/HWL
--------------------------------------

 .    Horizontal offset
 .    Electric shift
 .    Mounts for engine and transmission
 .    Reverse option
 .    Centalink shaft

Monitoring
----------

 .    Detroit Diesel DDEC EDM's (electronic display modules). The EDM is a
     display providing monitoring for the engines and transmissions. Constant
     display includes engine oil pressure, engine coolant temperature, engine
     rpm, system voltage, transmission oil pressure, and transmission oil
     temperature. Additional monitoring points may be accessed by scrolling
     through a menu of options. The EDM includes an integral alarm buzzer.
 .    Includes (8) Engine display modules - (4) Wheel house, (4) Engine room
 .    Interconnecting harnesses constructed to customer specified lengths.

Support
-------

 .    2 sets of manuals
 .    Startup and commissioning - included
 .    Torsional analysis of propulsion system (customer is responsible for
     supplying necessary data)
 .    Captains training
 .    Engine lube and anti-freeze
 .    DDC P3 - Three year, eight thousand hour warranty

Total investment per ship set - $1,554,495.00

Society classification - Not specified

DELIVERY: December 2000

FOB: Delivered

TERMS:    25% Deposit upon order.  Balance upon delivery of materials.

If further information is necessary, please don't hesitate to call upon me.

Regards,
/s/ Rich McGovern
Rich McGovern

                                       3
<PAGE>

                                                              DERECKTOR SHIPYARD

Attn:  GAVIN HIGGINS

Dear Sirs,

Kamewa Water Jets for New York Fast Ferries
-------------------------------------------

We are pleased to present our quotation as follows:

One shipset Kamewa Quadruple Water Jet equipment,
Size 4x A50.
______________________________________________________________

The equipment and scope of supply is described in the enclosed
Specification.

Price/ship set    USD 395,000

Interceptor (option pricing) - $10,000 per ship set

Validity of Price with regard to Delivery Time
----------------------------------------------

The price is valid CIF US Port in accordance with INCO-terms 1990
including packing, and is subject to adjustment should there be any
alteration to the specification for delivery time as stated below.  For later
delivery within 2000 the price will be increased by 0.4% per month.

Conditions of Delivery and Payment
----------------------------------

Delivery Time
-------------

Control and Hydraulic systems - 22 weeks
Water jet assemblies          - 26 weeks

Terms of Payment
----------------

10% of the Contract Price in cash against invoice within 30 days from date of
    order/date of invoice

<PAGE>

90% of the Contract Price in cash against invoice within 30 days from
    delivery

If shipment cannot take place due to reasons beyond Kamewa's control, payment
shall be effected against presentation of a Warehouse Receipt or a Declaration
that the goods are ready for shipment.

Interest on late payments will be charged 9%.

Installation Supervision
------------------------

One experienced Kamewa Service Engineer will supervise the installation onboard
during 15 normal working days.  Travelling expenses for max. 3 trips of our
Service Engineer to the shipyard as well as board and lodging charges during the
travelling time and service days are included.

The Services is rendered under our conditions TP 53E.

Service and overtime over and above this scope of supply as well as travelling
time and expenses between hotel and site, waiting time for which Kamewa is not
responsible and consequential board and lodging expenses, stand-by time onboard,
will be charged according to our list of rates valid at the time of the service.

Classification
--------------

The equipment will be built to the classification requirements of U.S. Coast
Guard and ABS in accordance with the rules valid at the date of this tender.

Guarantee
---------

We undertake to correct over a period of 36 months which period shall commence
on the date the vessel is delivered to its first owner, any defect in the
equipment supplied, resulting from faulty material or workmanship. However, the
guarantee period will not exceed (44) months after the equipment has been
declared ready for delivery from our workshop.

In addition, Kamewa will guarantee the aluminum components for wear and
structural integrity for 60 months from beginning of service but not to exceed
66 months from delivery of equipment.  The operator must perform all zinc
replacement, painting and scheduled maintenance per Kamewa's instruction manual.

                                       2
<PAGE>

Kamewa shall not be liable for any consequential loss or damage whatsoever which
arises out of or in connection with the supply of the Equipment or its use
including but not limited to loss of profit, towage, docking, crane rental,
warping, scaffolding, assistance and services by yard personnel, loss of hire,
or loss of contract.

Responsibility for Equipment Selection
--------------------------------------

It is the Buyer's responsibility to inform Kamewa about the maximum full scale
resistance of the hull over the entire ship speed range.  Based on these data it
is Kamewa's responsibility to select suitable equipment.  In case the
information of maximum full scale resistance or equivalent data, received by
Kamewa and used for the selection of the water jet unit(s) specified under this
tender or contract, is incorrect or should change at a later stage, the
consequences on performance, equipment and all costs involved shall later be
born by the Buyer.

General Conditions
------------------

Unless otherwise is expressly stated in this tender the enclosed "General
Conditions for the supply of Plant and Machinery for export, ECE 188" shall
apply.

Limitation of Liability
-----------------------

The total aggregate liability of Kamewa to the buyer pursuant to any claim or
series of claims which arise under the contract shall not exceed 50 percent of
the price paid for the equipment for the relevant ship set.

Validity of Tender
------------------

This tender is valid two months, without obligation, and will be binding only
after acceptance by your and our confirmation thereof.

Yours faithfully,
/s/ Mark Dumais
Mark Dumais
Kamewa America

Encls.:   Specification

                                       3
<PAGE>

023  Hydraulic System
     ----------------

     For each water jet unit:

     1 Main hydraulic pump (PTO-driven, mounted on gearbox or engine)

     1 Valve manifold including 2 counterbalance valves for reversing cylinders

     1 Hydraulic power pack consisting of:

        1 Tank

        2 Electro-hydraulic control valves for control of reversing and steering

     Necessary valves and filters

024  Transmitters for alarm and interlocks
     -------------------------------------

     For each water jet unit:

     1 Oil temperature switches for the hydraulic systems

     1 Pressure switchers for the hydraulic systems

     1 Oil level switches for the hydraulic system

     1 Control system alarm switches (power failure, control error and
     cable brake)

     1 Indication supply failure switches

     1 Back-up supply failure switches

025  Electronic Remote Control System type CanMan with Three control stations
     ------------------------------------------------------------------------

     Each control station includes:

     1 Steering tiller for common control of the four steering nozzles

     1 Control panel with:

       2 land lever units for combined control of reversing bucket position and
       engine speed

     Push buttons and indication lamps for:

     . Clutch control

                                       i
<PAGE>

     .  Alarms
     .  Dimmer and lamp tests

     Buzzer for alarms

     1 Joystick which combines the commands of all four water jet units

     1 Indication panel for analogue indication of the steering nozzle and
       reversing bucket positions.

     On One of the control stations

     Alarm panel

     Back-up controls for:

     .  steering
     .  reversing
     .  engine rpm
     .  clutch IN/OUT

     In the pilot house or in other suitable compartment:
     ----------------------------------------------------

     1  Jet control unit for each water jet unit for follow up control of
        reversing bucket position as well as steering nozzle and generation of
        RPM-setpoint (combinator), back-up control (non follow-up) alarm
        supervision and indication

     1  Bridge unit for communication between the control station on the
        bridge and the jet control units via CAN-bus

        On the control station, I/O units (integrated with the panel)
        connected to the CAN-bus

        Supply voltage, main system: 24 V DC
        Power consumption: abt.. 100 W

        Supply voltage, back-up system: 24 V DC
        Power consumption: abt. 50 W

        Supply voltage, indication system: 24 V DC
        Power consumption: abt. 25 W

     1  Hand held terminal for communication with computer systems, to be used
        for adjustment and fault finding

                                      ii

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