Document:

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                           WAIVER AND FOURTH AMENDMENT
                               TO CREDIT AGREEMENT

                                     BETWEEN

                 HARKEN EXPLORATION COMPANY, XPLOR ENERGY, INC.
          HARKEN ENERGY WEST TEXAS, INC., SOUTH COAST EXPLORATION CO.,
                            XPLOR ENERGY SPV-1, INC.,
                         HARKEN GULF EXPLORATION COMPANY

                                       AND

                                  BANK ONE, NA,
                               AS AGENT AND LENDER
                        AND THE LENDERS SIGNATORY HERETO

                         Effective as of March 21, 2002

             REDUCING REVOLVING LINE OF CREDIT OF UP TO $100,000,000
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                                TABLE OF CONTENTS

                                                                    PAGE

ARTICLE I         DEFINITIONS.........................................1
   1.01           Terms Defined Above.................................1
   1.02           Terms Defined in Agreement..........................1
   1.03           References..........................................1
   1.04           Articles and Sections...............................2
   1.05           Number and Gender...................................2
ARTICLE II        WAIVERS.............................................2
   2.01           Waivers.............................................2
   2.02           Limitation on Waivers...............................2
ARTICLE III       AMENDMENTS..........................................2
   3.01           Amendment of Section 2.9(a).........................2
   3.02           Addition of Section 6.13............................2
   3.03           Deletion of Section 6.16............................3
   3.04           Amendment of Section 6.19...........................3
   3.05           Amendment of Exhibit I..............................3
ARTICLE IV        CONDITIONS..........................................3
   4.01           Receipt of Documents................................3
   4.02           Accuracy of Representations and Warranties..........3
   4.03           Matters Satisfactory to Lenders.....................3
ARTICLE V         REPRESENTATIONS AND WARRANTIES......................3
ARTICLE VI        RATIFICATION........................................3
ARTICLE VII       MISCELLANEOUS.......................................4
   7.01           Scope of Amendment..................................4
   7.02           Agreement as Amended................................4
   7.03           Parties in Interest.................................4
   7.04           Rights of Third Parties.............................4
   7.05           ENTIRE AGREEMENT....................................4
   7.06           GOVERNING LAW.......................................4
   7.07           JURISDICTION AND VENUE..............................4

                                       i
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                                    EXHIBIT I

                                 [FORM OF NOTE]

                                 PROMISSORY NOTE

$100,000,000                     Houston, Texas                 March 21, 2002

     FOR VALUE RECEIVED and WITHOUT GRACE, the undersigned ("Maker") promises to
pay to the order of BANK ONE, TEXAS, NATIONAL ASSOCIATION ("Payee"), at its
banking quarters in Houston, Harris County, Texas, the sum of ONE HUNDRED
MILLION DOLLARS ($100,000,000), or so much thereof as may be advanced against
this Note pursuant to the Credit Agreement dated of even date herewith by and
between Maker and Payee (as amended, restated, or supplemented from time to
time, the "Credit Agreement"), together with interest at the rates and
calculated as provided in the Credit Agreement.

     Reference is hereby made to the Credit Agreement for matters governed
thereby, including, without limitation, certain events which will entitle the
holder hereof to accelerate the maturity of all amounts due hereunder.
Capitalized terms used but not defined in this Note shall have the meanings
assigned to such terms in the Credit Agreement.

     This Note is issued pursuant to, is one of the "Notes" under, and is
payable as provided in the Credit Agreement. Subject to compliance with
applicable provisions of the Credit Agreement, Maker may at any time pay the
full amount or any part of this Note without the payment of any premium or fee,
but such payment shall not, until this Note is fully paid and satisfied, excuse
the payment as it becomes due of any payment on this Note provided for in the
Credit Agreement.

     Without being limited thereto or thereby, this Note is secured by the
Security Instruments.

     This Note is issued, in whole or in part, in renewal and extension, but not
in novation or discharge, of the remaining principal balance of the Existing
Note.

     THIS NOTE SHALL BE GOVERNED AND CONTROLLED BY THE LAWS OF THE STATE OF
TEXAS WITHOUT GIVING EFFECT TO PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW;
PROVIDED, HOWEVER, THAT CHAPTER 345 OF THE TEXAS FINANCE CODE (WHICH REGULATES
CERTAIN REVOLVING CREDIT LOAN ACCOUNTS AND REVOLVING TRIPARTY ACCOUNTS) SHALL
NOT APPLY TO THIS NOTE.

                           [Page One of Two Page Note]

                                       ii
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                           BORROWER:

                           HARKEN EXPLORATION COMPANY

                           XPLOR ENERGY, INC.

                           HARKEN ENERGY WEST TEXAS, INC.

                           SOUTH COAST EXPLORATION CO.

                           XPLOR ENERGY SPV-1, INC.

                           By:
                              ----------------------------------------------
                              Anna Williams
                              Senior Vice President and Chief
                              Financial Officer

                           [Page Two of Two Page Note]

                                      iii
<PAGE>

                 WAIVER AND FOURTH AMENDMENT TO CREDIT AGREEMENT

     This WAIVER AND FOURTH AMENDMENT TO CREDIT AGREEMENT (this "Fourth
Amendment") is made and entered into effective as of March 21, 2002, between
HARKEN EXPLORATION COMPANY, a Delaware corporation, XPLOR ENERGY, INC., a Texas
corporation, HARKEN ENERGY WEST TEXAS, INC., a Delaware corporation, XPLOR
ENERGY SPV-1, INC., an Oklahoma corporation, and HARKEN GULF EXPLORATION
COMPANY, a Delaware corporation (collectively the "Borrower"), each lender that
is signatory hereto or becomes a signatory hereto as provided in Section 9.1,
(individually, together with its successors and assigns, a "Lender", and
collectively together with their respective successors and assigns, the
"Lenders"), and BANK ONE, NA, a national banking association, as agent for the
Lenders (in such capacity, together with its successors in such capacity
pursuant to the terms hereof, the "Agent") (as successor by merger to Bank One,
Texas, National Association).

                               W I T N E S S E T H

     WHEREAS, the above named parties did execute and exchange counterparts of
that certain Credit Agreement dated August 11, 2000, as amended by First
Amendment to Credit Agreement dated December 21, 2000, as further amended by
Second Amendment to Credit Agreement dated December 31, 2000, and as further
amended by Third Amendment to Credit Agreement dated May 11, 2001 (the
"Agreement"), to which reference is here made for all purposes;

     WHEREAS, McCulloch Energy, Inc. is hereby released from the Agreement;

     WHEREAS, the parties subject to and bound by the Agreement are desirous of
amending the Agreement in the particulars hereinafter set forth;

     NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties to the Agreement, as set forth therein, and the mutual covenants and
agreements of the parties hereto, as set forth in this Fourth Amendment, the
parties hereto agree as follows:

                                   ARTICLE I

                                  DEFINITIONS

     1.01 Terms Defined Above. As used herein, each of the terms "Agent,"
"Agreement," "Borrower," "Fourth Amendment," "Lender," and "Lenders" shall have
the meaning assigned to such term hereinabove.

     1.02 Terms Defined in Agreement. As used herein, each term defined in the
Agreement shall have the meaning assigned thereto in the Agreement, unless
expressly provided herein to the contrary.

     1.03 References. References in this Fourth Amendment to Article or Section
numbers shall be to Articles and Sections of this Fourth Amendment, unless
expressly stated herein to the contrary. References in this Fourth Amendment to
"hereby," "herein," hereinafter," hereinabove," "hereinbelow," "hereof," and
"hereunder" shall be to this Fourth Amendment in its entirety and not only to
the particular Article or Section in which such reference appears.

                                       1
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     1.04 Articles and Sections. This Fourth Amendment, for convenience only,
has been divided into Articles and Sections and it is understood that the
rights, powers, privileges, duties, and other legal relations of the parties
hereto shall be determined from this Fourth Amendment as an entirety and without
regard to such division into Articles and Sections and without regard to
headings prefixed to such Articles and Sections.

     1.05 Number and Gender. Whenever the context requires, reference herein
made to the single number shall be understood to include the plural and likewise
the plural shall be understood to include the singular. Words denoting sex shall
be construed to include the masculine, feminine, and neuter, when such
construction is appropriate, and specific enumeration shall not exclude the
general, but shall be construed as cumulative. Definitions of terms defined in
the singular and plural shall be equally applicable to the plural or singular,
as the case may be.

                                   ARTICLE II
                                     WAIVERS

     2.01 Waivers. In consideration of the Borrower entering into a commodity
hedge agreement, the Lenders hereby waive any Default or Event of Default
arising under the Agreement or any other Loan Document solely as a result of
violations of Section 6.19 for the quarter ending December 31, 2001, and
projected noncompliance for the quarter ending March 31, 2002, and Guarantors
violations of Section 6.16 for the quarter ending December 31, 2001.

     2.02 Limitation on Waivers. The scope of the waivers set forth in Section
2.1 are expressly limited to their terms and do not extend to any other or
future breaches, Defaults, violations or Events of Default under the Agreement
or any other Loan Document.

                                  ARTICLE III
                                   AMENDMENTS

     The Borrower and the Lenders hereby amend the Agreement in the following
particulars:

     3.01 Amendment of Section 2.9(a). Section 2.9(a) of the Agreement is hereby
amended as follows:

     "2.9 Borrowing Base Determinations. (a) The Borrowing Base is acknowledged
     by the Borrower and the Lenders to be $7,937,000. Borrowing Base reductions
     are eliminated until the next Borrowing Base redetermination. In the event
     the Borrowing Base review is not completed by June 1, 2002, the Borrowing
     Base shall be reduced on June 1, 2002, by $300,000 and on the first day of
     each month thereafter until the Borrowing Base and the amount of monthly
     reduction has been redetermined."

     3.02 Addition of Section 6.13. Section 6.13 is hereby added to the
Agreement to read as follows:

     "6.13 Current Ratio. Guarantor shall not permit its ratio of Current Assets
     to Current Liabilities to be less than 1.15 to 1.00 at any time."

                                       2
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     3.03 Deletion of Section 6.16. Section 6.16 is hereby deleted from the
Agreement.

     3.04 Amendment of Section 6.19. Section 6.19 of the Agreement is hereby
amended as follows:

     "6.19 Debt Service Coverage Ratio of the Borrower. Permit, as of the close
     of any fiscal quarter, the ratio of (a) EBITDA for any fiscal quarter to
     (b) Debt Service for such quarter to be less than 1.15 to 1.00."

     3.05 Amendment of Exhibit I. Exhibit I, i.e. the Form of Promissory Note,
is as set forth on Exhibit I to this Fourth Amendment.

                                   ARTICLE IV
                                   CONDITIONS

     The obligation of the Lenders to amend the Agreement as provided herein is
subject to the fulfillment of the following conditions precedent:

     4.01 Receipt of Documents. The Lenders shall have received, reviewed, and
approved the following documents and other items, appropriately executed when
necessary and in form and substance satisfactory to the Agent:

     (a)  multiple counterparts of this Fourth Amendment, as requested by the
          Agent; and

     (b)  such other agreements, documents, items, instruments, opinions,
          certificates, waivers, consents, and evidence as the Agent may
          reasonably request.

     4.02 Accuracy of Representations and Warranties. The representations and
warranties contained in Article IV of the Agreement and this Fourth Amendment
shall be true and correct.

     4.03 Matters Satisfactory to Lenders. All matters incident to the
consummation of the transactions contemplated hereby shall be satisfactory to
the Lenders.

                                   ARTICLE V
                         REPRESENTATIONS AND WARRANTIES

     The Borrower hereby expressly re-makes, in favor of the Lenders, all of the
representations and warranties set forth in Article IV of the Agreement, and
represents and warrants that all such representations and warranties remain true
and unbreached.

                                   ARTICLE VI
                                  RATIFICATION

     Each of the parties hereto does hereby adopt, ratify, and confirm the
Agreement and the other Loan Documents, in all things in accordance with the
terms and provisions thereof, as amended by this Fourth Amendment.

                                       3
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                                  ARTICLE VII
                                  MISCELLANEOUS

     7.01 Scope of Amendment. The scope of this Fourth Amendment is expressly
limited to the matters addressed herein and this Fourth Amendment shall not
operate as a waiver of any past, present, or future breach, Default, or Event of
Default under the Agreement. except to the extent, if any, that any such breach,
Default, or Event of Default is remedied by the effect of this Fourth Amendment.

     7.02 Agreement as Amended. All references to the Agreement in any document
heretofore or hereafter executed in connection with the transactions
contemplated in the Agreement shall be deemed to refer to the Agreement as
amended by this Fourth Amendment.

     7.03 Parties in Interest. All provisions of this Fourth Amendment shall be
binding upon and shall inure to the benefit of the Borrower, the Agent and the
Lenders and their respective successors and assigns.

     7.04 Rights of Third Parties. All provisions herein are imposed solely and
exclusively for the benefit of the Agent, Lenders and the Borrower, and no other
Person shall have standing to require satisfaction of such provisions in
accordance with their terms and any or all of such provisions may be freely
waived in whole or in part by the Lenders at any time if in their sole
discretion it deems it advisable to do so.

     7.05 ENTIRE AGREEMENT. THIS FOURTH AMENDMENT CONSTITUTES THE ENTIRE
AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO THE SUBJECT HEREOF AND
SUPERSEDES ANY PRIOR AGREEMENT, WHETHER WRITTEN OR ORAL, BETWEEN SUCH PARTIES
REGARDING THE SUBJECT HEREOF. FURTHERMORE IN THIS REGARD, THIS FOURTH AMENDMENT,
THE AGREEMENT, THE NOTE, THE SECURITY INSTRUMENTS, AND THE OTHER WRITTEN
DOCUMENTS REFERRED TO IN THE AGREEMENT OR EXECUTED IN CONNECTION WITH OR AS
SECURITY FOR THE NOTE REPRESENT, COLLECTIVELY, THE FINAL AGREEMENT AMONG THE
PARTIES THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

     7.06 GOVERNING LAW. THIS FOURTH AMENDMENT, THE AGREEMENT AND THE NOTE SHALL
BE DEEMED TO BE CONTRACTS MADE UNDER AND SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS. THE PARTIES ACKNOWLEDGE AND
AGREE THAT THIS AGREEMENT AND THE NOTE AND THE TRANSACTIONS CONTEMPLATED HEREBY
BEAR A NORMAL, REASONABLE, AND SUBSTANTIAL RELATIONSHIP TO THE STATE OF TEXAS.

     7.07 JURISDICTION AND VENUE. ALL ACTIONS OR PROCEEDINGS WITH RESPECT TO,
ARISING DIRECTLY OR INDIRECTLY IN CONNECTION WITH, OUT OF, RELATED TO, OR FROM
THIS FOURTH AMENDMENT, THE AGREEMENT OR

                                       4
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ANY OTHER LOAN DOCUMENT MAY BE LITIGATED IN COURTS HAVING SITUS IN HARRIS
COUNTY, TEXAS. EACH OF THE BORROWER AND THE LENDERS HEREBY SUBMITS TO THE
JURISDICTION OF ANY LOCAL, STATE, OR FEDERAL COURT LOCATED IN HARRIS COUNTY,
TEXAS, AND HEREBY WAIVES ANY RIGHTS IT MAY HAVE TO TRANSFER OR CHANGE THE
JURISDICTION OR VENUE OF ANY LITIGATION BROUGHT AGAINST IT BY THE BORROWER OR
THE LENDERS IN ACCORDANCE WITH THIS SECTION.

     IN WITNESS WHEREOF, this Fourth Amendment to Credit Agreement is executed
effective the date first hereinabove written.

                           BORROWER

                           HARKEN EXPLORATION COMPANY

                           XPLOR ENERGY, INC.

                           HARKEN ENERGY WEST TEXAS, INC.

                           SOUTH COAST EXPLORATION CO.

                           XPLOR ENERGY SPV-1, INC.

                           HARKEN GULF EXPLORATION COMPANY

                           By:
                              -----------------------------------------
                              Anna Williams
                              Senior Vice President and Chief Financial
                              Officer

                           GUARANTOR

                           HARKEN ENERGY CORPORATION

                           By:
                              ------------------------------------------
                              Anna Williams
                              Senior Vice President and Chief Financial
                              Officer

                                       5
<PAGE>

                          AGENT AND LENDER

                          BANK ONE, NA (Main Office Chicago)

                          By:
                             ------------------------------------------
                             Jonathan Gregory
                             Vice President

                                       6<PAGE>
                                                                   Exhibit 10.12

THIS AGREEMENT made at the City of St. John's, in the Province of Newfoundland
and Labrador this 22nd day of March, 2002.

BETWEEN:           FRIEDE GOLDMAN NEWFOUNDLAND
                   LIMITED, a body corporate, organized and existing under the
                   laws of the Province of Newfoundland and Labrador,

                   (hereinafter called the "Vendor")

AND:               PETER KIEWIT SONS CO. LTD. a body corporate, organized and
                   existing under the laws of Canada, and duly registered to
                   carry on business in, the Province of Newfoundland and
                   Labrador,

                   (hereinafter called the "Purchaser")

WHEREAS the Vendor owns certain shipbuilding and metal fabrication facilities
located in the Town of Marystown and at Cow Head at Spanish Room, Province of
Newfoundland and Labrador (the "Facilities");

AND WHEREAS the Vendor has agreed to sell to the Purchaser and the Purchaser
has agreed to purchase from the Vendor the real property and certain other
assets owned, used or operated by the Vendor in relation to the Facilities,
upon and subject to the terms of this Agreement;

THIS AGREEMENT WITNESSETH that for and in consideration of the respective
covenants and agreements herein contained, and other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged) it
is agreed by and between the parties hereto as follows:

ARTICLE 1.00 - DEFINITIONS

Where used herein or in any amendment hereto, the following terms shall have
the following meanings:

1.01   "Accounts Payable" means the trade payables of the Vendor which are set
       forth in Schedule "K" hereto.

1.02   "Business" means the business of shipbuilding and metal fabrication
       carried on by the Vendor at the Marystown  Facility and the Cow Head
       Facility.

                                       1

<PAGE>

1.03   "Closing Date" means March 26, 2002, or such earlier or later date as
       the parties may in writing agree upon.

1.04   "Equipment" means the equipment set forth in Schedules "F1" and "F2"
       hereto.

1.05   "Escrow Agreement" means the agreement between Friede Goldman
       Newfoundland Limited, Peter Kiewit Sons Co. Ltd. and White, Ottenheimer
       & Baker as set forth in Schedule "N" hereto.

1.06   "Excluded Assets" means completed Spud Cans, jack-up leg materials,
       free issue steel inventory, the 4600 Manitowoc crane, any moneys on
       deposit in any bank accounts of the Vendor, accounts receivable and the
       proceeds of any claims against third parties including its claim
       against the Government of Canada.

1.07   "Inventories" means all inventories, supplies and tools owned by the
       Vendor and used in connection with the Facilities excluding the free
       issue steel inventory.

1.08   "Purchased Assets" means certain assets of the Vendor located at
       Marystown, Newfoundland and Cow Head, at Spanish Room, Newfoundland and
       Labrador, Canada, and being the interest of the Vendor in:

     (a)  the right, title and interest to all those pieces or parcels of land
          known as the Marystown facility located at Marystown, Newfoundland
          and Labrador and including the shipyard and fabrication facility
          including supports and dock facilities, all equipment and fixtures
          attached thereto, and all of the interest of the Vendor in any water
          rights, realty rights, and personal property rights pertaining to the
          Marystown facility, these assets being more particularly described in
          part in Schedule "A" annexed hereto (the "Marystown Facility");

     (b)  the right, title and interest to all those pieces or parcels of land
          known as the Cow Head facility located at Cow Head, at Spanish Room,
          Newfoundland and Labrador and including the fabrication facility
          including the supports and dock facilities, all equipment and
          fixtures attached thereto and all of the interest of the Vendor in
          any water rights, realty rights, and personal property rights
          pertaining to the Cow Head facility, these assets being more
          particularly described in Schedule "B" annexed hereto (the "Cow Head
          Facility");

     (c)  the right, title and interest of the Vendor to those water lot leases
          which form part of the Marystown Facility and the Cow Head Facility,
          the said leases being described in Schedule "C" annexed hereto;

     (d)  the right, title and interest of the Vendor to any access road
          providing access from the highway to the Marystown Facility;

                                      2

<PAGE>

     (e)  the right, title and interest of the Vendor to any access road
          providing access from the highway to the Cow Head Facility;

     (f)  all fixed assets and equipment in relation to the Facilities
          including all machinery, equipment, office furniture, , furnishings,
          handling equipment, storage equipment, appliances, vehicles and
          accessories in respect of the Purchased Assets or used in relation
          to the Business and all replacements thereto prior to Closing, as
          listed in Schedules "F1" and "F2", it being acknowledged and agreed
          by the Purchaser that the listing in Schedule "F2" has not been
          verified by the Vendor as to its accuracy or completeness, but is
          provided for general guidance only;

     (g)  the inventory, small tools and supplies of the Vendor used by the
          Vendor in respect of the  operation  of the  Marystown Facility and
          the Cow Head Facility;

     (h)  subject to the  limitations  set forth in this Agreement the full
          benefit and advantage of the contracts set forth in Schedule "M" (the
          "Assumed Contracts");

     (i)  originals or copies of all books, manuals, records, files and
          documents relating to the Purchased Assets as well as the books,
          records, files and documents relating to the Inventories, personnel,
          payroll, suppliers and photocopies of welding procedures, provided
          that such books, records, files and documents do not include
          financial information related to the Vendor or engineering/technical
          documents (excluding however the photocopies of welding procedures)
          or records relating to the Vendor's operation of the Facilities.

     (j)  all computer software owned or held under license (to the extent
          transferable) by the Vendor and in use at the Facilities including
          without limitation all related codes, specifications, documentation,
          revisions, enhancements and modifications thereto in whatever form
          and media, and rights to telephone and facsimile numbers, all of
          which are listed in Schedule "U".

     (k)  to the extent that such are transferable by the Vendor, the
          full benefit of all licenses, registrations, permits, certifications,
          consents and approvals which the Vendor holds which are required by
          the Vendor to own the Purchased Assets and/or operate the Business
          including without limitation any governmental permit, and the permits
          and licenses listed in Schedule "D".

     but excluding always the Excluded Assets.

1.09   "Purchase Price" means the amount of Nine million one hundred
       seventy-one thousand three hundred eighty-eight ($9,171,388) US dollars
       and shall include the adjustments thereto referred to in Article 4.01.

                                      3

<PAGE>

1.10   "Purchaser's Solicitor" means the law firm of McInnes Cooper,
       Barristers and Solicitors, 10 Fort William Place, St. John's,
       Newfoundland A1C 5X4.

1.11   "Vendor's Solicitor" means the law firm of White Ottenheimer and Baker,
       P.O. Box 5457, 10 Fort William Place, St. John's, Newfoundland A1C 5W4.

ARTICLE 2.00 - SCHEDULES

2.01   The following are schedules attached to and incorporated in this
       Agreement by reference and deemed to be a part hereof:

       Schedule "A" - description of Marystown Facility and water lots

       Schedule "B" - description of Cow Head Facility

       Schedule "C" - descriptions of water lot leases

       Schedule "D" - permits, licences and certifications

       Schedule "E" - (deleted)

       Schedules "F1" and "F2" - fixed assets and equipment

       Schedule "G" - leased equipment

       Schedule "H" - litigation

       Schedule "I" - (deleted)

       Schedule "J" - environmental issues

       Schedule "K" - list of trade payables

       Schedule "L" - specific indemnities

       Schedule "M" - assumed contracts

       Schedule "N" - escrow agreement

       Schedule "O" - allocation of purchase price

       Schedule "P" - liens, charges and encumbrances

       Schedule "Q" - union agreements

                                      4

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       Schedule "R" - benefit plans

       Schedule "S" - taxes

       Schedule "T" - form of chattel lien

       Schedule "U" - computer software

       Schedule "V" - employee related accruals

       Schedule "W" - annual membership dues and fees

ARTICLE 3.00 - AGREEMENT OF SALE

3.01   Subject to the terms and conditions hereof, the Vendor agrees to sell,
       assign and transfer to the Purchaser, and the Purchaser agrees to
       purchase from the Vendor, the Purchased Assets in consideration of the
       payment of the Purchase Price, on the Closing Date.

ARTICLE 4.00 - PAYMENT OF PURCHASE PRICE AND CLOSING

4.01   Subject to the terms of this Agreement, at the Closing the Purchaser
       shall purchase the Purchased Assets free and clear of all encumbrances
       in consideration of the payment of the Purchase Price, together with
       the following adjustments thereto:

     (a)  prepaid property taxes, annual membership dues or other annual fees
          as set forth in Schedule "W"; and

     (b)  revenues from assumed  contracts for work and materials performed
          and provided but not yet paid for by the other  contracting party.

     The Purchase Price as adjusted shall be distributed on Closing by the
     Vendor's Solicitor in a manner satisfactory to the Purchaser, to ensure
     the payment from the Purchase Price proceeds of the following:

     (1)  the Friede Goldman Halter, Inc. mortgage and related promissory note;

     (2)  full satisfaction of the liens on equipment by the Royal Bank of
          Canada and John Deere Credit, and any other party that to the
          Vendor's knowledge has a claim against the Purchased Assets;

     (3)  full satisfaction of all liabilities, including applicable taxes,
          of the Vendor as set forth in the Statement and Declaration of the
          Vendor pursuant to the Bulk Sales Act (Newfoundland);

                                      5

<PAGE>

     (4)  full satisfaction of obligations arising from the termination of the
          Vendor's two senior executives;

     (5)  full satisfaction of all other trade payables of the Vendor; and

     (6)  closing costs incurred by the Vendor to the Closing Date.

     (7)  full  satisfaction of the outstanding claims by or against Siemens
          Canada Inc. and the Federal  Government of Canada with respect to
          the Quest Project.

     (8)  full satisfaction of any employee bonuses due to employees of the
          Vendor up to the Closing Date.

4.02   The balance of the Purchase Price after satisfaction of the above
       obligations shall be deposited in a trust account in the name of the
       Vendor's solicitors on conditions mutually satisfactory to the Vendor
       and the Purchaser pursuant to the terms of the Escrow Agreement which
       shall include the following conditions:

     (1)  the Purchaser shall have access to the funds to apply to the payment
          of (i) expenses incurred in defending any claims of whatever nature
          brought against the Purchaser, pursuant to this transaction, by a
          creditor or other party in interest in the jointly administered
          bankruptcy case of Friede Goldman Halter, Inc. Case No. 01-52173 SEG,
          pending in the United States Bankruptcy Court for the Southern
          District of Mississippi (the "Bankruptcy Case") and (ii) expenses
          incurred in settling or defending any claim brought by Gordon Mayo
          up to a maximum of $10,000 US;

     (2)  the Vendor shall have access to the funds for payment of any
          demobilization and removal costs, actually incurred, with respect
          to the Excluded Assets;

     (3)  costs incurred by the Vendor arising from this transaction, whether
          arising before or after the Closing, including legal costs,
          accounting costs, taxes, payments required to secure discharges of
          liens, payments required to secure discharges of any of the
          obligations referred to in Article 6.01(d), (h) (provided that in
          the event of a claim under Article 6.01(h) the claim amount does not
          exceed $50,000) or arising under Article 13.01; and

     (4)  the remaining funds shall be released on the 15th day following
          receipt of the final order confirming a plan of reorganization of
          Friede Goldman Halter, Inc. issued by the bankruptcy court in
          Mississippi, United States of America (the "Final Order"), provided
          that if an appeal of the Final Order is lodged, the remaining funds
          may be released only when a final disposition of such appeal is
          arrived at. The remaining  funds shall be distributed in accordance
          with the directions  set out in the Final Order. The Purchaser
          acknowledges  and agrees that at such time it will make no claim, and
          hereby waives and releases any

                                      6

<PAGE>

          claim, against the  remaining  funds and will take no action to
          restrain,  enjoin or interfere with the release of the remaining
          funds, under Article 13.01 or otherwise.

4.03   The Purchase Price shall be allocated among the various assets
       comprising the Purchased Assets, as set forth in Schedule "O" hereto.

4.04   Subject to compliance with the terms and conditions hereof, the
       transfer of possession of the Purchased Assets shall take place on the
       Closing Date.

ARTICLE 5.00 - PURCHASER'S LIEN

5.01   The Vendor agrees to grant the Purchaser a first priority lien on the
       Vendor's 4600 Manitowoc crane presently located on the Marystown
       Facility in the form attached as Schedule "T" hereto until the Final
       Order as security to the Purchaser to apply to the payment of expenses
       incurred in defending any claims of whatever nature brought against the
       Purchaser, pursuant to this transaction, by a creditor or other party
       in interest in the Bankruptcy Case . The Vendor shall be free to sell
       the 4600 Manitowoc crane provided that the net proceeds from the sale
       of the crane are deposited into the trust account created pursuant to
       Article 4.02 herein and disbursed in accordance with the Escrow
       Agreement.

ARTICLE 6.00 - ASSUMED LIABILITIES

6.01   It is agreed that the Purchaser will have no liability for and the
       Vendor shall remain liable for and discharge the following obligations
       and liabilities:

     (a)  liabilities in respect of any indebtedness of the Vendor not assumed
          by the Purchaser herein;

     (b)  any liability relating to any Excluded Assets, provided that the
          Purchaser agrees to use its best efforts to care for and preserve
          the Excluded Assets until their removal by the Vendor and shall be
          liable to the Vendor for the consequences of its gross negligence in
          so doing;

     (c)  negligence or product liability claims and liabilities for warranty
          or claims relating to any product, commodity or service of the
          Business produced, sold, performed or delivered up to and including
          the Closing Date;

     (d)  liabilities for taxes, duties, levies, assessments and other such
          charges, including any penalties, interest and fines with respect
          thereto, payable, collectable or remittable by the Vendor to any
          federal, provincial, municipal or other government or governmental
          agency, authority, board, bureau or commission, domestic or foreign
          in respect of the Business and or the Purchased Assets, including
          without limitation any taxes payable, collectable or remittable in
          respect of or measured by the sale, consumption or

                                      7

<PAGE>

          performance  by the Vendor of any product,  commodity or service and
          any taxes in respect of remuneration payable to persons employed in
          the Business and any employer deductions required by statute to be
          made by the Vendor in respect of remuneration payable to all persons
          employed in the Business up to and including the Closing Date,
          including,  without  limitation,  under any  employee  health tax
          legislation;

     (e)  liabilities for salary or bonuses relating to employment of an
          employee or former employee of the Business up to the Closing Date;

     (f)  any liability including insurance, regulatory, contractual and
          intellectual property infringement, or product or service liabilities
          resulting from or arising out of the conduct of the Business and the
          ownership of the Purchased Assets during the period up to the Closing
          Date (whether asserted before or after the Closing Date); and

     (g)  any liabilities with respect to any present or future litigation,
          proceedings, claims or investigation based on any cause of action
          resulting from or arising out of the conduct of the Business and the
          ownership of the Purchased Assets during the period prior to the
          Closing Date.

     (h)  any liability arising from the Donelad litigation referred to in
          Schedule "H";

     provided that, notwithstanding the foregoing, the Purchaser assumes and
     shall be liable for the following obligations and liabilities of the
     Vendor, in addition to those set forth specifically in this Agreement:

          (i)   all existing and future claims relating to human resources at
                the Facilities, including all collective agreements, employment
                obligations, grievances, arbitration awards, severance or
                termination pay, accruals for vacation pay, clothing allowance,
                tool allowance, sick leave and banked time, and any other
                matters generally considered to be employment compensation or
                benefits, excepting nevertheless the employment liabilities set
                forth in Article 6.01(e) (collectively the "HR Obligations");

          (ii)  all litigation set forth in Schedule "H", with the exception of
                the Donelad litigation; and

          (iii) any loss or damage to the Excluded Assets which occurs as a
                result of any relocation of the Excluded Assets by the
                Purchaser for its own purposes. The Purchaser and Vendor shall
                agree on an acceptable relocation of the Excluded Assets.

                                      8

<PAGE>

ARTICLE 7.00 - REPRESENTATIONS AND WARRANTIES OF THE VENDOR

7.01   The Vendor represents and warrants to the Purchaser (which
       representations and warranties shall survive closing), that as of the
       date of this Agreement and on the Closing Date:

     (a)  the Vendor is a corporation duly incorporated and organized and
          validly subsisting and in good standing under the laws of
          Newfoundland and Labrador.

     (b)  the Vendor has the corporate authority to carry out the transactions
          contemplated by this Agreement and has the corporate authority to own
          its property and carry out the Business at the Facilities, that the
          Agreement and the agreements, contracts and instruments required by
          the Agreement to be delivered to the Purchaser at the closing, have
          been duly authorized by the Vendor and the Agreement has been duly
          executed and delivered by the Vendor and is a valid and binding
          obligation of the Vendor enforceable against the Vendor in accordance
          with its terms.

     (c)  other than as set forth in Schedule "P" the Purchased Assets are
          free and clear from all liens and charges and that there are no
          statutory liens of any kind charging or encumbering the Purchased
          Assets.

     (d)  other than as set forth in Schedule "G" no equipment, chattels or
          goods incorporated into the Purchased Assets or sold with or as part
          of the Purchased Assets are subject to any lease, conditional sales
          agreement, chattel mortgage, or other similar agreement. On or before
          the Closing Date, the Vendor shall ensure that it is current with
          respect to all obligations in respect of any lease, conditional sale
          agreement or chattel mortgage such that any Purchased Asset subject
          to same shall be transferred to the Purchaser with such lease,
          conditional sale agreement or chattel mortgage in good standing.

     (e)  the execution and delivery by the Vendor of this Agreement and the
          performance by it of its obligations thereunder and the completion
          by it of the transactions contemplated thereby does not result in
          the violation of any of the terms and provisions of the constating
          documents or by-laws of the Vendor or of any contract of agreement
          to which it is a party (other than the Assumed Contracts) or, to
          the best of its knowledge, violate any law or regulation of Canada
          or of any province or territory or any municipal by-law or
          ordinance, or any order or decree of any Court or tribunal to
          which the Vendor is subject.

     (f)  except as otherwise provided in this Agreement, the Vendor does not
          have knowledge of any authorization, consent or approval of, or
          filing with or notice to, any governmental agency, regulatory body,
          court or other person, being required in connection with the
          execution, delivery, or performance of this Agreement by the Vendor,
          or for the sale of the Purchased Assets thereunder.

                                      9

<PAGE>

     (g)  there are no written or oral agreements or restrictions which in any
          way limit or restrict the sale of the Purchased  Assets to the
          Purchaser.

     (h)  to the best of the Vendor's knowledge, it has carried out its
          business in relation to the Purchased Assets in compliance in all
          material respects with all applicable laws, regulations, by-laws
          or ordinances.

     (i)  the Vendor is not a non-resident of Canada pursuant to the Income Tax
          Act (Canada).

     (j)  the Vendor is not aware of any material defects in relation to the
          Purchased Assets or any other facts which are relevant to the
          material condition thereof.

     (k)  no person other than the Purchaser now has, or at the Closing Date
          will have, any written or oral agreements, options, undertakings or
          commitments or any rights or privileges capable of becoming an
          agreement for the purchase of the Purchased Assets from the Vendor
          or requiring the Vendor to sell or assign all or any of the
          Purchased Assets.

     (l)  the Vendor does not have any notice of any orders or directives of
          any kind from any municipal, provincial, or federal government, or
          agency thereof, with respect to the Purchased Assets, including from
          the federal or provincial departments of environment or labour in
          relation to environmental occupational, health or safety matters.

     (m)  other than as set forth in Schedule "H" there is, to the knowledge
          of the Vendor, no litigation or other proceedings of a similar nature
          whatsoever  outstanding with respect to the Purchased Assets and
          there is no action or claim or demand or other proceedings threatened
          before any Court or administrative agency which could adversely
          affect the  Purchased Assets. To the knowledge of the Vendor there
          is not presently or anticipated to be outstanding  against the
          Vendor or the Purchased Assets any judgment, decree, injunction,
          rule, order or award of any court, governmental  department,
          commission, ward, bureau, agency or arbitrator binding upon the
          Vendor that has not been satisfied in full. To the knowledge of the
          Vendor there are no open files, notices of violation or outstanding
          work orders relating to any equipment, buildings or realty owned or
          used by the Vendor from or required by any police, fire department,
          sanitation, health, workers, safety authorities, or any federal,
          provincial, municipal authority, or any matters under discussion with
          any such authority or department relating to open files, notice of
          violation of work orders and no material order affecting either the
          Vendor or the Purchased Assets has been issued or is expected to be
          issued by any  governmental, ministry, agency, board or authority.

     (n)  except as set out in Schedule "J" or in any document or report
          referred to therein or otherwise disclosed to the Purchaser in any
          report, review or analysis

                                      10

<PAGE>

          conducted by it or on its behalf prior to the Closing Date, to the
          knowledge of the Vendor:

          (i)   it has been and is in substantial compliance with all
                applicable federal, provincial, municipal and local laws,
                statutes, ordinances, by-laws, regulations and orders,
                directives and decisions rendered by any ministry, department
                or administrative or regulatory agency ("Environmental Laws")
                relating to the protection of the environment, occupational
                health and safety or the manufacture, processing,
                distribution, use, treatment, storage, on and off-site
                disposal, discharge, transport or handling of any pollutants,
                contaminants, chemicals or industrial, toxic or hazardous
                wastes or substances ("Hazardous Substances").

          (ii)  it has obtained all licences, permits, approvals, consents,
                certificates, registrations and other authorizations under
                Environmental Laws (the "Environmental Permits") required for
                the operation of the Facilities and each Environmental Permit
                is valid, subsisting and in good standing and the Vendor is in
                substantial compliance with all Environmental Permits and no
                proceeding is pending or, to the knowledge of the Vendor,
                threatened, to revoke or limit any Environmental Permit.

          (iii) it has not used or permitted to be used except in substantial
                compliance with all Environmental Laws, any of its property,
                whether owned or leased, in connection with the Facilities, to
                generate, manufacture, process, distribute, use, treat, store,
                dispose of, transport or handle any Hazardous Substance.

          (iv)  it has not ever received any notice of, nor been prosecuted
                for, an offence alleging non-compliance with any Environmental
                Laws.

          (v)   it has not received notice of any orders or directions relating
                to environmental matters requiring any work, repairs,
                construction or capital expenditures with respect to the
                Facilities.

          (vi)  it has not caused or permitted the release, in any substantial
                manner, of any Hazardous Substance on or from the Facilities.

          (vii) all Hazardous Substances on or from the Facilities and all
                other wastes and other materials and substances used in whole
                or in part by the Vendor or resulting from the operation of
                the Facilities have been disposed of, treated and stored in
                substantial compliance with all Environmental Laws.

          (viii)it has not received any notice that it is potentially
                responsible for a federal, provincial, municipal or local
                clean-up site or corrective action under any Environmental
                Laws.

                                      11

<PAGE>

          (ix)  it has not received any request for information in connection
                with any federal, provincial, municipal or local inquiries as
                to disposal sites.

          (x)   it is not aware of any environmental audits, evaluations,
                assessments, studies or tests relating to the operations of
                the Facilities.

          (xi)  it has not owned or operated any diesel or other fuel tankage,
                or any equipment or storage facilities  containing any "PCBs",

          on the Facilities, or either of them.

     (o)  other than as set forth in Schedule "P" the Vendor has not executed
          or agreed to create any bonds, debentures or promissory notes in
          relation to or otherwise affecting the Purchased Assets;

     (p)  other than as set forth in Schedule "P" the Vendor is not party to
          any agreements to give any security over the Purchased Assets or for
          the Vendor to acquire any assets in relation to or otherwise
          affecting the Purchased Assets;

     (q)  that any and all equipment leases listed in Schedule "G" are in good
          standing and in full force and effect, and the Vendors are not aware
          of anything which with the passage of time or notice or both would
          result in a default thereunder;

     (r)  that the Vendor is and will remain in compliance until the Closing
          Date and in all material respects with all applicable laws, rules,
          regulations, by-laws, ordinances and standards in relation to or
          otherwise affecting the Purchased Assets, including but not limited
          to environmental, civil rights, occupational safety and health,
          hazardous substances, zoning laws and building codes;

     (s)  policies of insurance are maintained on all the Purchased Assets,
          issued by responsible insurers, as are appropriate, for loss or
          damage by all insurable hazards on a replacement cost basis. All
          such policies of insurance are in full force and effect and will
          continue in full force and effect until the Closing Date. The Vendor
          is not in default, whether as to the payment of premium or otherwise,
          under the terms of any such policy and has not failed to give notice
          of or present in due and timely fashion any claim or claims under
          any such policy;

     (t)  that the Vendor is the owner in fee simple absolute of the Marystown
          Facility including the Marystown water lots and the Cow Head Facility
          and is the beneficial owner of the remainder of the assets comprising
          the Purchased Assets (except for the leased equipment set forth in
          Schedule "G"), with good and marketable title thereto, free and clear
          of any pledge, lien, charge, encumbrance or security interest of any
          kind on any portion or other right thereto except as otherwise
          provided in Schedule "P". The Vendor has the full power and
          unrestricted authority to sell the Purchased Assets in accordance
          with this Agreement. Further, at the Closing Date no person shall
          have any right, option,

                                      12

<PAGE>

          agreement or arrangement capable of becoming an agreement for the
          acquisition of, or the enjoyment of any rights attached to, any of
          the Purchased Assets or any other interest in any of them, other
          than the Purchaser pursuant to this Agreement.

     (u)  that all of the equipment leased and/or financed by John Deere
          Credit and/or leased or financed by the Royal Bank of Canada (the
          "Capital Lease Equipment") is in good working condition, reasonable
          wear and tear only accepted, and in accordance with all applicable
          governmental or legislative standards. All of the Capital Lease
          Equipment (whether owned or leased) used or operated by the Vendor
          in connection with the Marystown Facility and the Cow Head Facility,
          or intended so to be, is in compliance in all material respects with
          all applicable laws, regulations, by-laws, ordinances and orders.

     (v)  the trade payables set forth in Schedule "K" are all of the trade
          payables in respect of the Business of the Vendor carried on, and
          previously carried on, in respect of the Facilities, and each of
          them as at the date noted on Schedule "K".

     (w)  except as stated in Schedule "Q" the Vendor is not a party to any
          collective agreement with any labour union or other association of
          employees. The Vendor is in compliance with in all material respects
          with all applicable federal, provincial and local laws respecting
          employment and employment practices, terms and conditions of
          employment, wages and hours of work and non-discrimination in
          employment, and is not engaged in any unfair labour practices.

     (x)  except as set out in Schedule "R", there are no employee benefit
          plans, pensions, group sharing, group insurance or similar plans
          or other retirement plans, welfare benefit plans, deferred
          compensation plans affecting the Vendor or the Purchased Assets.
          The Vendor has no employees entitled to any pension, retirement,
          welfare profit sharing, deferred compensation, stock option, employee
          stock purchase or other employee benefits plans or arrangements
          except as stated in Schedule "R". Schedule "V" accurately sets forth
          certain employee related accruals as shown on the books of the
          Vendor as at the date set forth in Schedule "V".

     (y)  all tax returns and reports of the Vendor required by law to be filed
          prior to the date hereof have been filed and are true, complete and
          correct. All taxes and other governmental charges have been paid or
          accrued in the Vendor's financial statements for the year ended
          December 31, 2000. Except as set forth in Schedule "S", no property
          taxes are owing by the Vendor with respect to the Facilities.

     (z)  the Vendor has been assessed for federal and provincial income taxes
          for all years to and including the fiscal year ended December 31,
          2000 and, other than as may be reflected on Schedule "S" hereto,
          there are no outstanding liabilities for taxes payable, collectable
          or remittable by the Vendor and no matters are

                                      13

<PAGE>

          presently in dispute with respect to federal and provincial income
          tax returns. There are no outstanding goods and services taxes,
          source deductions or other tax liabilities, due and payable to
          Revenue Canada by the Vendor other than as shown in Schedule "S".

     (aa) the Vendor is a registrant for purposes of HST and its HST
          registration number is 87372 0452 RT0001.

     (bb) the Vendor possesses no information or knowledge of facts relating
          to the Purchased Assets other than as disclosed herein which might
          reasonably be expected to deter the Purchaser from completing the
          transactions herein contemplated for the Purchase Price and on the
          other terms and conditions of this Agreement.

     (cc) Permits and Licences - The Vendor holds all licences, permits,
          certifications and registrations including governmental permits as
          may be required for the ownership of the Purchased Assets. There are
          no proceedings pending or to the knowledge of the Vendor threatened,
          which may result in the revocation, cancellation, suspension or
          adverse modification of any permit, license, certification or
          registration. The Vendor will cooperate with the Purchaser in
          transferring to the Purchaser any transferable licenses, permits,
          certifications and registrations required for the operation of the
          Facilities.

ARTICLE 8.00 - REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

8.01   The Purchaser represents and warrants to the Vendor as follows and
       acknowledges that the Vendor is relying upon such representations and
       warranties in connection with the sale of the Purchased Assets.

     (1)  the Purchaser is a corporation duly incorporated under the Canada
          Business Corporations Act and validly registered to carry on business
          in the Province of Newfoundland and Labrador and has the corporate
          power and authority to purchase the Purchased Assets as contemplated
          by this Agreement.

     (2)  neither the execution or delivery of this Agreement nor the
          fulfillment or the compliance with any of the terms hereof will
          conflict with, or result in a breach of the terms, conditions or
          provision of, or constitute a default under, the constating documents
          of the Purchaser or any material agreement or instrument to which the
          Purchaser is subject, or will require any consent or other action by
          any administrator or governmental body.

     (3)  prior to the Closing Date, the purchase of the Purchased Assets
          shall have been duly authorized and approved by all required
          corporate and legal proceedings of the Purchaser.

                                      14

<PAGE>

     (4)  the Purchaser is not a non-Canadian within the meaning of the
          Investment Canada Act (Canada) and the Purchaser is not a non
          -resident within the meaning of the Income Tax Act (Canada).

     (5)  the Purchaser is a registrant for the HST and its HST registration
          number is 104160718RT0001.

ARTICLE 9.00 - COVENANTS OF VENDOR

The Vendor hereby covenants and agrees with the Purchaser as follows:

9.01   Due Diligence

     The Vendor will provide the Purchaser with access to the Purchased
     Assets, and all books, accounts, records and other data in respect of the
     Purchased Assets including plans, surveys, descriptions, title documents,
     leases, licences, orders and permits in relation to the Purchased Assets
     and other information with respect to the Purchased Assets as the
     Purchaser shall from time to time consider necessary in order to conduct
     due diligence. When requested by the Purchaser, the Vendor shall arrange
     at a reasonable time and on reasonable notice for the Purchaser, and its
     employees, agents and advisors, to have reasonable access to the Purchased
     Assets in order to conduct any required due diligence including but not
     limited to environmental reviews and audits, engineering reviews and
     surveys, and inventory and equipment reviews. The Vendor shall provide the
     Purchaser with all necessary consents and authorizations required by the
     Purchaser to authorize, to the extent within their power, the Purchaser to
     have access to information concerning the Purchased Assets in the
     possession of any third party including any governmental body. The
     exercise of any rights of inspection by or on behalf of the Purchaser
     under this section shall not mitigate or otherwise affect any of the
     representations, warranties, convenants or indemnities of the Vendor under
     this Agreement.

9.02   Fulfillments of Conditions

     The Vendor shall, subject to the terms hereof, take all commercially
     reasonable steps within its power to ensure that all of the conditions in
     favour of the Purchaser set forth in Section 11.01 hereof are fulfilled
     at or prior to the time of closing.

9.03   Executive Releases

     At the Closing the Vendor shall deliver to the Purchaser satisfactory
     releases from its two senior executives, in form and substance
     satisfactory to the Purchaser's solicitors, releasing any claim they may
     have against the Purchaser or the Purchased Assets by virtue of the
     transactions contemplated by this Agreement.

                                      15

<PAGE>

9.04   Bulk Sales

     At or prior to the time of closing, the Vendor shall deliver to the
     Purchaser satisfactory evidence of compliance with all bulk sales or
     comparable legislation in respect of the Purchased Assets.

9.05   HST Election

     The Vendor shall elect jointly with the Purchaser pursuant to the Excise
     Tax Act (Canada) by completing at or prior to the time of closing all
     prescribed forms and related documents in such manner as is prescribed
     such that for the purposes of the Excise Tax Act (Canada), no HST is
     payable in respect of the purchase and sale of the Purchased Assets. The
     Vendor shall deliver to the Purchaser satisfactory evidence that it has
     made such filings as are required in connection with such election in its
     HST return.

9.06   Consents and Approvals

     The Vendor will:

          (a)  apply for as soon as reasonably possible and use commercially
               reasonable efforts to obtain all corporate, regulatory and
               governmental approvals required for the transaction contemplated
               by this Agreement including but not limited to the approval of
               the Government of Newfoundland and Labrador, Foothill Capital
               Corporation and the Unsecured Creditors' Committee in the
               bankruptcy proceedings for Friede Goldman Halter Inc., and its
               related and/or affiliated entities; and

          (b)  provide to the Purchaser such information as it may reasonably
               require, and at the expense of the Purchaser, render such other
               assistance within its power as it, acting reasonably, may
               require by written notice to the Vendor in order to obtain all
               regulatory approvals and other approvals and consents required
               to complete the transactions contemplated hereby.

9.07   Excluded Assets

     The Vendor covenants that the Excluded Assets shall be removed from the
     Facilities, at the Vendor's expense, within six months following the
     Final Order, but in no event later than May 31, 2003.

ARTICLE 10.00 - COVENANTS OF PURCHASER

10.01  Completion of the Transaction - The Purchaser covenants to and agrees
       with the Vendor that it will take all commercially reasonable steps
       within its power necessary

                                      16

<PAGE>

     to complete the transactions contemplated hereby and to ensure that all
     of the conditions in favour of the Vendor in Section 11.02 are fulfilled
     at or prior to the Closing Date.

10.02  Consents and Approvals - The Purchaser covenants to and agrees with the
       Vendor:

     (a)  to apply for as soon as reasonable possible and use commercially
          reasonable efforts to obtain all corporate, regulatory and other
          approvals required to complete the transactions;

     (b)  to provide to the Vendor such information as it may reasonably
          require, and at the expense of the Vendor, render such other
          assistance within its power as it, acting reasonably may require by
          written notice to the Purchaser in order to obtain all regulatory
          approvals and other approvals and consents required to complete the
          transactions contemplated hereby.

10.03  Purchaser to Assume Employment Obligations- The Purchaser assumes all
       obligations and liabilities owed by the Vendor to all employees of the
       Vendor other than Miguel Pazos and Robert Shepherd and is responsible
       for and indemnifies and holds harmless the Vendor from all HR
       Obligations as defined in paragraph 6.01.

10.04  Assumed Contracts - The Purchaser shall assume the contracts in
       Schedule "M" including all obligations and liabilities relating to the
       Contracts. The Purchaser further agrees to indemnify and hold harmless
       the Vendor from all obligations and liabilities arising from the
       Contracts from the Closing Date onward.

10.05  HST Elections - The Purchaser shall elect jointly with the Vendor
       pursuant to the Excise Tax Act (Canada) by completing at or prior to
       the Closing Date all prescribed forms and related documents in such
       manner as is prescribed, so that for the purposes of the Excise Tax Act
       (Canada) the HST will not be payable on closing in respect of the
       purchase and sale of the Purchased Assets.

ARTICLE 11.00 - CONDITIONS OF CLOSING

11.01  Conditions for Purchaser's Benefit

     The Purchaser shall not be obliged to complete the transactions herein
     provided for unless, at or before the Closing Date, each of the following
     conditions shall have been satisfied, it being understood that such
     conditions are included for the exclusive benefit of the Purchaser and may
     be waived , in whole or in part by the Purchaser at any time. The Vendor
     shall use its best efforts to ensure that such conditions are fulfilled on
     or before closing.

     (1)  Representations and Warranties - The representations and warranties
          set forth in Section 7.01 shall be true and correct in all material
          respects as at the Closing Date as if they had been made on and as
          of such time.

                                      17

<PAGE>

     (2)  Approvals - The sale and purchase herein shall have been duly
          authorized and approved by the following: (i) the Board of Directors
          of Friede Goldman Newfoundland Limited, Friede Goldman Canada Inc.
          and Friede Goldman, Halter Inc., and a resolution of the shareholders
          of Friede Goldman Newfoundland Limited, and a copy of the requisite
          corporate proceedings for each of the said companies duly certified
          by the Secretary thereof shall have been delivered to the Purchaser;
          (ii) written approval of the sale of the Purchased Assets to the
          Purchaser by Foothill Capital Corporation and the Unsecured
          Creditors' Committee in the Friede Goldman Halter, Inc.  bankruptcy
          proceedings; and (iii) all other corporate and legal proceedings and
          approvals as are considered necessary by the Purchaser's solicitors
          shall have been taken or obtained to permit the Vendor to complete
          the transactions contemplated herein.

     (3)  Agreements - The Vendor shall have performed and complied with all
          terms, conditions, covenants, obligations, agreements and
          restrictions required by this Agreement to be performed or complied
          with by it prior to Closing and the shareholders, directors and
          officers of the Vendor shall exercise their respective powers so as
          to cause the Vendor to fully perform any and all its obligations
          contemplated or necessary under this Agreement prior to Closing.

     (4)  Regulatory and Government Approvals - Any and all regulatory and
          governmental approvals shall have been obtained.

     (5)  Due Diligence - The Purchaser shall have been provided with full
          disclosure and access to the Purchased Assets and operations of the
          Marystown Facility and the Cow Head Facility, including all
          documentation and records (in any an all forms), relating or
          appertaining directly or indirectly to the use of any of the
          Purchased Assets, for the purposes of its due diligence review and
          the Purchaser being satisfied with the results of the due diligence
          review that it conducts relating to the Purchased Assets, including
          without limitation receipt of acceptable clearances or releases
          from such third parties including but not limited to governmental
          authorities, and statutory tax authorities, as the Purchaser may in
          its absolute discretion determine necessary.

     (6)  Clearances - The Purchaser shall receive acceptable clearances or
          releases from such third parties with whom the Vendor has had
          dealings in respect of the Purchased Assets, as the Purchaser in
          its absolute discretion determines necessary prior to Closing.

     (7)  Material Adverse Change - There shall have been no material adverse
          change to the Purchased Assets from the time of execution of the
          Agreement until Closing.

                                      18

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     (8)  Government of Newfoundland and Labrador - The Purchaser shall be
          in receipt of a waiver and release of the penalties and liquidated
          damages associated with the work commitments from the Government of
          Newfoundland and Labrador including but not limited to those work
          commitments set forth pursuant to Section 4(d) of that Share
          Purchase Agreement dated effective January 1, 1998 and made between
          inter alia Friede Goldman Newfoundland Limited, Marystown Shipyard
          Limited, and Newfoundland Ocean Enterprises Ltd.

     (9)  Bulk Sales Act - The Vendor shall have provided proof of
          satisfactory compliance with the provisions of the Bulk Sales Act,
          (Newfoundland and Labrador).

     (10) Environmental Indemnification - The Purchaser shall be in receipt
          of an assignment of the environmental undertaking and
          indemnification given by the Government of Newfoundland and
          Labrador to the Vendor on terms and conditions satisfactory to the
          Purchaser.

     (11) Environmental Audits - The Purchaser's receipt of a satisfactory
          environmental audit and report of the lands comprising the
          Marystown Facility and the Cow Head Facility.

     (12) Closing Documents - The Purchaser shall have received the following
          documentation or a solicitor's undertaking to provide the same:

          (a)  All instruments of conveyance and other documentation and
               assurances relating to the sale and purchase of the Purchased
               Assets including without limitation all assignments of any
               equipment leases, all bills of sales for the equipment, tools
               and Inventories, assignments and consents for the transfer of
               the water lot leases, deeds of rectification and confirmation
               from the Government of Newfoundland and Labrador for the
               Facilities, elections and all documentation in any way
               required to transfer the Purchased Assets and consummate the
               sale and transfer of the Purchased Assets;

          (b)  A bring-down certificate of the Vendor;

          (c)  An opinion of legal counsel of the Vendor in a form and
               substance satisfactory to the Purchaser's solicitors;

          (d)  All of the releases required by this Agreement including but
               not limited to a release from Siemens Canada Inc. and a
               release by the Federal Government of Canada;

          (e)  Evidence reasonably satisfactory to the Purchaser that all
               required third party consents, releases to the transactions
               contemplated herein,

                                      19

<PAGE>

               including consents under any contracts or agreements, all in
               form and substance satisfactory to the Purchaser, have been
               obtained.

          (f)  Such other documents as the Purchaser may request to
               demonstrate to the Purchasers satisfaction that the conditions
               set out in this Agreement have been satisfied.

     (13) Purchaser Termination - If any of the foregoing conditions in
          favour of the Purchaser shall not have been fulfilled or performed
          at or prior to the time of Closing other than by reason of a
          default by the Purchaser, the Purchaser may terminate this
          Agreement by written notice to the Vendor and, in such event, the
          Purchaser shall be released from all obligations hereunder without
          prejudice to any rights or remedies it may have against the Vendor,
          provided, however, that the Purchaser may waive compliance with any
          of such conditions in whole or in part without prejudice to any of
          its rights of termination in the event of non-performance of any
          other condition, obligation or covenant in whole or in part.

11.02  Conditions for Vendor's Benefit

     The Vendor shall not be obliged to complete the transaction herein
     provided for unless, at Closing, each of the following conditions shall
     have been satisfied, it being understood that such conditions are
     included for the exclusive benefit of the Vendor and may be waived in
     writing in whole or in part by the Vendor at any time. The Purchaser
     shall use its best efforts to ensure that such conditions are fulfilled
     on or before Closing.

     (1)  Representations and Warranties - The representations and
          warranties set forth in Section 8.01 shall be true and correct in
          all material respects as at Closing as if they had been made on and
          as of such time.

     (2)  Agreements - The Purchaser shall have performed and complied with
          all terms, conditions, covenants, obligations, agreements and
          restrictions required by this Agreement, to be performed or
          complied with by it prior to Closing.

     (3)  Closing Documents - The Vendor shall have received:

          (a)  Payment of the Purchase Price in accordance with Section 4.01
               hereof;

          (b)  A bring-down certificate of the Purchaser;

          (c)  An opinion of legal counsel of the Purchaser in form and
               substance satisfactory to the Vendor's solicitor;

                                      20

<PAGE>

               (d)  Such other documents as the Vendor may reasonably request
                    to demonstrate to the Vendor's satisfaction that the
                    conditions to be met by the Purchaser as set out in this
                    Agreement have been satisfied.

          (4)  Approvals - The sale and purchase herein shall have been duly
               authorized and approved by the following: (i) the Board of
               Directors of Friede Goldman Newfoundland Limited, Friede
               Goldman Canada Inc. and Friede Goldman, Halter Inc., and a
               resolution of the shareholders of Friede Goldman Newfoundland
               Limited, and a copy of the requisite corporate proceedings for
               each of the said companies duly certified by the Secretary
               thereof shall have been delivered to the Vendor; (ii) written
               approval of the sale of the Purchased Assets to the Vendor by
               Foothill Capital Corporation and the Unsecured Creditors'
               Committee in the Friede Goldman Halter, Inc. bankruptcy
               proceedings; and (iii) all other corporate and legal
               proceedings and approvals as are considered necessary by the
               Vendor's solicitors shall have been taken or obtained to
               permit the Purchaser to complete the transactions contemplated
               herein.

          (5)  Regulatory and Government Approvals - Any and all regulatory
               and governmental approvals shall have been obtained.

          (6)  Government of Newfoundland and Labrador - The Vendor shall be
               in receipt of a waiver and release of the penalties and
               liquidated damages associated with the work commitments from
               the Government of Newfoundland and Labrador including but not
               limited to those work commitments set forth pursuant to
               Section 4(d) of that Share Purchase Agreement dated effective
               January 1, 1998 and made between inter alia Friede Goldman
               Newfoundland Limited, Marystown Shipyard Limited, and
               Newfoundland Ocean Enterprises Ltd.

ARTICLE 12.00 - SURVIVAL

The representations, warranties, covenants and agreements by the parties
contained in this Agreement, or any certificates or documents delivered
pursuant to the provisions hereof, or in connection with the transactions
contemplated hereby shall be true and correct as of the Closing Date, as though
such representations and warranties were made by the parties as of the Closing
Date. Notwithstanding any investigations or inquiries made by the Purchaser or
its representatives, the representations, warranties, covenants, and agreements
of the parties shall survive the Closing Date and shall continue in full force
and effect for a period of two (2) years beginning on the Closing Date, except
that any claim based on intentional misrepresentation, fraud, the absence of
title, or statutory liens shall survive indefinitely and any claim with respect
to any taxes shall survive to the expiry of any assessment or reassessment
period.

                                      21

<PAGE>

ARTICLE 13.00 - INDEMNIFICATION

13.01  Indemnity by Vendor - The Vendor covenants and agrees to indemnify and
hold harmless the Purchaser and its respective directors, officers, and agents
and its respective successors and assigns from and after the Closing Date
against any and all claims, losses, damages, causes of action, demands,
liabilities, expenses, costs and charges (including but without limitation
reasonable legal fees) made against the Purchaser or affecting the Purchased
Assets or for which the Purchaser may be or become liable in respect of,
arising from or in connection with the following:

          (a)  any misrepresentation or breach of or non-fulfillment of any
               representation, warranty, covenant or term on the part of the
               Vendor pursuant to the terms of this Agreement or any
               misrepresentation in or omission from any schedule, list,
               certificate or other instrument furnished or to be furnished
               to the Purchaser pursuant to the terms of this Agreement,
               regardless of whether, in the case of a breach of
               representation and warranty, the Purchaser relied upon the
               truth of such representation or warranty, or had any knowledge
               of any breach thereof;

          (b)  any claims related to those items set forth in Schedule "L";
               and

          (c)  any taxes, interest and penalties and other statutory liens
               affecting the Purchased Assets.

          (d)  any liabilities which remain unpaid, unsatisfied,
               undischarged, unfulfilled or unperformed on or at the Closing
               together with all losses, claims, demands, costs and expenses
               in respect of the foregoing.

13.02  Indemnity by Purchaser - The Purchaser covenants and agrees to indemnify
and hold harmless the Vendor and its respective directors, officers, and agents
and its respective successors and assigns from and after the Closing Date
against any and all claims, losses, damages, causes of action, demands,
liabilities, expenses, costs and charges (including but without limitation
reasonable legal fees) made against the Vendor or for which the Vendor may be
or become liable in respect of, arising from or in connection with any
misrepresentation or breach of or non-fulfillment of any representation,
warranty, covenant or term on the part of the Purchaser pursuant to the terms
of this Agreement regardless of whether, in the case of a breach of
representation and warranty, the Vendor relied upon the truth of such
representation or warranty, or had any knowledge of any breach thereof.

ARTICLE 14.00 - MISCELLANEOUS AGREEMENTS OF VENDOR AND PURCHASER

(1)       The Purchased Assets shall be and remain at the risk of the Vendor
          and, in the event of loss or damage to any of the Purchased Assets
          for which insurance coverage exists, the Vendor shall maintain and
          preserve the proceeds thereof for the benefit of and payment to the
          Purchaser subject to Closing.

                                      22

<PAGE>

(2)       If the Vendor fails to proceed with the completion of the
          transaction as contemplated by this Agreement for reasons within
          its control, and not arising as a result of any breach or cause by
          the Purchaser, within seven (7) days of having received written
          notice from the Purchaser requiring that such default be remedied,
          the Purchaser may terminate this Agreement by notice in writing to
          the Vendor. In such event, the Purchaser shall be released from all
          of its obligations hereunder.

(3)       The Purchaser agrees that the Vendor shall have, for a reasonable
          time following the Closing, and without payment of any costs in
          relation thereto, continued access to the Facilities and the right
          to use the human resources of the Executive Secretary, HR
          Department, IT Department, and Finance Department, for the
          compilation and removal of its executive records, financial
          records, HR and MIS data and property and for the collection of its
          ongoing accounts receivable.

(4)       Remedies - The Vendor acknowledges that a breach of the provisions
          of this Agreement, including but not limited to Article 11, will
          entitle the Purchaser, without prejudice to any and all rights of
          the Purchaser, to proceed with an action for specific performance.
          The Vendor further acknowledges that any breach by the Vendor may
          cause irreparable harm to the Purchaser for which there may be no
          adequate remedy at law and for which the ascertainment of damages
          may be difficult. Therefore, without prejudice to any and all
          rights of the Purchaser, the Vendor recognizes and consents to the
          Purchaser obtaining an injunction to enforce the terms contained
          herein without having to prove the adequacy of any other remedies
          of law.

(5)       The Purchaser undertakes and agrees to provide the Vendor with all
          necessary support, including the use of the Facilities and its
          human resources, to allow the Vendor to remove the Excluded Assets
          within the reasonable time requirements of the Vendor, to be
          compensated for by the payment only for such human resources as are
          so utilized, at the Vendor' cost of human resources immediately
          prior to closing.

ARTICLE 15.00 - INTERPRETATION

15.01  Schedules - Schedules and other documents attached or referred to in
       this Agreement are an integral part of this Agreement.

15.02  Division and Sections - The division of this Agreement into articles,
       sections, paragraphs and subparagraphs and the insertion of headings
       are for the convenience of reference only and shall not affect the
       construction or interpretation hereof.

15.03  Plurals and Gender - Words importing the singular number include the
       plural and vice-versa and words importing the masculine gender include
       the feminine and neuter genders.

15.04  US Dollar - All dollar amounts referred to in this Agreement are in US
       dollars.

                                      23

<PAGE>

15.05  Severability -In the event that any particular provision or provisions
       or a part of a provision is found to be void, voidable, or
       unenforceable for any reason whatever, then the particular provision or
       provisions or part of the provision shall be deemed severed from the
       remainder of this Agreement and all other provisions shall remain in
       full force and effect.

15.06  Expenses - Each Party shall be responsible for its own legal and other
       charges incurred in connection with the preparation with this
       Agreement, all negotiations between the parties and the consummation of
       the transactions contemplated hereby.

15.07  Further Assurances - Each Party will from time to time at the other
       Party's request and expense and without further consideration, execute
       and deliver such other instruments of transfer, conveyance and
       assignment and take such further action as the other Party may require
       to more effectively complete any matter provided for herein.

15.08  Entire Agreement - This Agreement constitutes the entire agreement
       between the Parties and except as herein stated and in the instruments
       and documents to be executed and delivered pursuant hereto, contains
       all of the representations and warranties of the respective Parties.
       There are no oral representations or warranties among the Parties of
       any kind. This Agreement may not be amended or modified in any respect
       except by written instrument signed by all Parties.

15.09  Non-Merger - Each of the Parties agree that all provisions of this
       Agreement, and all provisions of any al all documents delivered in
       connection herewith, shall forever, except where otherwise expressly
       stipulated herein, survive the Closing of the transactions contemplated
       by this Agreement.

15.10  Applicable Law - This Agreement shall be interpreted in accordance
       with the laws of the Province of Newfoundland and Labrador and the laws
       of Canada applicable therein.

15.11  Time - Time shall be of the essence of this Agreement.

15.12  Notices - Any notice require or permitted to be given hereunder shall
       be in writing and shall be effectively given if:

          (1)  delivered personally,
          (2)  sent by prepaid courier service, or
          (3)  send prepaid by telecopier, telex or other similar means of
               electronic communication,

                                      24

<PAGE>

               addressed, in the case of the Vendor, as follows:

                    Friede Goldman Newfoundland Ltd.
                    Ville Marie Drive
                    67-77 Ville Marie Drive
                    P.O. Box 262
                    Marystown, NF  A0E 2M0

                    Attention:  Miguel Pazos

                    Telephone:  (709) 279-4819
                    Telecopier:  (709) 279-3513

               With a copy to: Friede Goldman Halter Inc.
                               P.O. Box 7007
                               Pascagoula, MS, USA
                               39568-7007

                    Attention: Mr. Robert Shepherd

                    Telephone: (228) 696-0000
                    Telecopier: (228) 897-4803

               With a copy to: White, Ottenheimer & Baker
                               6th Floor, Baine Johnston Centre
                               10 Fort William Place
                               P.O. Box 5457
                               St. John's, NF  A1C 5W4

                    Attention:  Mr. John A. Baker

                    Telephone: (709) 570-7305
                    Telecopier: (709) 722-9210

               With a copy to: Andrews and Kurth, LLP
                               700 Louisanna
                               Suite 1900
                               Houston, TX 77002

                    Attention: Mr. Roy Bertolatus

                    Telephone: (713) 225-7018
                    Telecopier: (713) 225-7047

                                      25

<PAGE>

               and addressed, in the case of  notice to the Purchaser, as
               follows:

                    Peter Kiewit Sons Co. Ltd.
                    Kiewit Plaza
                    Omaha, NE  68131

                    Attention:  Mr. Dan Levert

                    Telephone: (402) 943-1347
                    Telecopier: (402) 271-2830

               with a copy to: McInnes Cooper
                               10 Fort William Place
                               P.O. 5939
                               St. John's, NF  A1C 5X4

                    Attention: Ms. Caroline Watton

                    Telephone: (709) 722-8735
                    Telecopier: (709) 722-1763

Any notice so given shall be deemed conclusively to have been given and
received when so personally delivered or sent by telex, telecopier or other
electronic communication or on the second (2nd) day following the sending
thereof by private courier. Any party hereto or others mentioned above may
change any particulars of its address for notice by notice to the others in the
manner aforesaid.

15.13  Successors and Assigns - This Agreement shall enure to the benefit of
       and be binding upon the Parties hereto and their respective successors
       and assigns.

15.14  Execution in Counterparts - This Agreement may be executed in one or
       more counterparts, each which so executed shall constitute an original
       and all of which together shall constitute one and the same agreement.
       The Parties also agree that delivery of an executed signature page to
       this Agreement by any of the Parties by telecopier transmission shall
       be as effective as delivery of a manually executed copy of this
       Agreement of such party or parties.

15.15  Time and Place of Closing - This transaction of Purchase and Sale for
       the Purchased Assets shall close on the Closing Date at the offices of
       the Purchaser's Solicitor at the hour of a.m. (Newfoundland time).

15.16  Public Announcement - No public announcement concerning the purchase
       and sale of the Purchased Assets shall be made by the Vendor or the
       Purchaser without the consent of both the Purchaser and the Vendor,
       except as may be required by regulatory authority or statute.

                                      26

<PAGE>

IN WITNESS WHEREOF the parties have executed this Agreement as of the date
first herein before written.

                              FRIEDE GOLDMAN NEWFOUNDLAND LTD.

                              By:_________________________

_______________________       Title:______________________
WITNESS

                              PETER KIEWIT SONS CO. LTD.

                              By:_________________________

_______________________       Title:______________________
WITNESS

                                      27

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