EXHIBIT 10.1
   
   
   
   
   
   
   
                      CREDIT AGREEMENT
                              
                            among
                              
                     GLOBAL MARINE INC.,
                              
                VARIOUS LENDING INSTITUTIONS,
                              
                   BANKERS TRUST COMPANY,
                             as
                    ADMINISTRATIVE AGENT
                              
                             and
                              
                     SOCIETE GENERALE, 
                             as
                          Co-Agent
                              
                Dated as of February 12, 1997
                               
   
   
   
   
   
   
                           TABLE OF CONTENTS
   
                                                       Page
   
   
   SECTION 1. Amount and Terms of Credit                       
     1.01   Commitment
     1.02   Minimum Borrowing Amounts, etc.
     1.03   Notice of Borrowing
     1.04   Disbursement of Funds
     1.05   Notes
     1.06   Conversions
     1.07   PRO RATA Borrowings
     1.08   Interest
     1.09   Interest Periods
     1.10   Increased Costs, Illegality, etc.
     1.11   Compensation
     1.12   Change of Lending Office
     1.13   Replacement of Banks
   
   SECTION 2. Letters of Credit                            
     2.01   Letters of Credit
     2.02   Minimum Stated Amount
     2.03   Letter of Credit Requests; Request for
              Issuance of Letter of Credit
     2.04   Agreement to Repay Letter of Credit
              Payments
     2.05   Letter of Credit Participations
     2.06   Increased Costs
     2.07   Indemnities
   
   SECTION 3. Fees; Commitments
     3.01   Fees
     3.02   Voluntary Reduction of Commitments
     3.03   Mandatory Adjustments of Commitments,
              etc.
   
   SECTION 4. Payments
     4.01   Voluntary Prepayments
     4.02   Mandatory Prepayments
     4.03   Method and Place of Payment
     4.04   Net Payments
   
   SECTION 5. Conditions Precedent
     5.01   Execution of Agreement and Notes
     5.02   No Default; Representations and
              Warranties
     5.03   Officer's Certificate
     5.04   Opinions of Counsel
     5.05   Corporate Proceedings
     5.06   Indebtedness
     5.07   Adverse Change, etc.
     5.08   Litigation
     5.09   Approvals
     5.10   Fees
     5.11   Guaranty
     5.12   Rig Matters
     5.13   Insurance Report
     5.14   Projections
     5.15   Offshore Drilling Contracts
     5.16   Margin Rules
   
   SECTION 6. Representations, Warranties and
              Agreements
     6.01   Status
     6.02   Power and Authority
     6.03   No Violation
     6.04   Litigation
     6.05   Use of Proceeds; Margin Regulations
     6.06   Governmental Approvals
     6.07   Investment Company Act
     6.08   Public Utility Holding Company Act
     6.09   True and Complete Disclosure
     6.10   Financial Condition; Financial Statements
     6.11   Tax Returns and Payments
     6.12   Employee Benefit Plans
     6.13   Subsidiaries
     6.14   Patents, etc.
     6.15   Environmental Matters
     6.16   Properties
     6.17   Labor Relations
     6.18   Existing Indebtedness
     6.19   Rig Classification
     6.20   Insurance
   
   SECTION 7. Affirmative Covenants
     7.01   Information Covenants
     7.02   Books, Records and Inspections
     7.03   Maintenance of Insurance
     7.04   Payment of Taxes
     7.05   Consolidated Corporate Franchises
     7.06   Compliance with Statutes, etc.
     7.07   Good Repair
     7.08   End of Fiscal Years; Fiscal Quarters
     7.09   Use of Proceeds
     7.10   Rig Valuations
     7.11   Additional Guarantors
     7.12   ERISA
     7.13   Performance of Obligations
   
   SECTION 8. Negative Covenants
     8.01   Changes in Business
     8.02   Consolidation, Merger, Sale of Assets,
             etc.
     8.03   Indebtedness
     8.04   Liens
     8.05   Restricted Payments; Designation of
              Unrestricted Subsidiaries
     8.06   Restrictions on Subsidiaries
     8.07   Transactions with Affiliates
     8.08   Vessel Ownership and Management
     8.09   Cash Interest Coverage Ratio
     8.10   Leverage Ratio
     8.11   Fleet Market Value
     8.12   Net Worth
     8.13   Modifications of Certain Documents, Etc. 
   
   SECTION 9. Events of Default
     9.01   Payments
     9.02   Representations, etc.
     9.03   Covenants
     9.04   Default Under Other Agreements
     9.05   Bankruptcy, etc.
     9.06   Guaranty
     9.07   Judgments
     9.08   Change of Control
     9.09   Employee Benefit Plans
   
   SECTION 10.  Definitions
   
   SECTION 11.  The Agents
    11.01   Appointment
    11.02   Nature of Duties
    11.03   Lack of Reliance on the 
              Agents                                       
    11.04   Certain Rights of the Administrative
              Agent
    11.05   Reliance
    11.06   Indemnification
    11.07   The Agents in Their Individual Capacity
    11.08   Holders
    11.09   Resignation by the Administrative Agent
   
   SECTION 12.  Miscellaneous
    12.01   Payment of Expenses, etc.
    12.02   Right of Setoff
    12.03   Notices
    12.04   Benefit of Agreement
    12.05   No Waiver; Remedies Cumulative
    12.06   Payments PRO RATA
    12.07   Calculations; Computations
    12.08   Governing Law; Submission to Jurisdiction;
              Venue; Waiver of Jury Trial
    12.09   Counterparts
    12.10   Effectiveness
    12.11   Headings Descriptive
    12.12   Amendment or Waiver
    12.13   Survival
    12.14   Domicile of Loans
    12.15   Confidentiality
    12.16   Registry
   
   
   ANNEX I       -Commitments
   ANNEX II      -Bank Addresses
   ANNEX III     -Offshore Drilling Contracts
   ANNEX IV      -Subsidiaries
   ANNEX V       -[Intentionally Omitted]
   ANNEX VI      -Rigs and Vessels
   ANNEX VII     -Existing Indebtedness
   ANNEX VIII    -Existing Liens
   ANNEX IX      -Approved Shipbrokers
   ANNEX X       -Unrestricted Subsidiaries as of the Effective Date
   
   EXHIBIT A     -Form of Notice of Borrowing
   EXHIBIT B     -Form of Note
   EXHIBIT C     -Form of Letter of Credit Request
   EXHIBIT D     -Form of Section 4.04(b)(ii) Certificate
   EXHIBIT E-1   -Form of Opinion of Baker & Botts, L.L.P.
   EXHIBIT E-2   -Form of Opinion of James L. McCulloch
   EXHIBIT E-3   -Form of Opinion of Cahill Gordon &
                    Reindel
   EXHIBIT F     -Form of Officers' Certificate
   EXHIBIT G     -Form of Guaranty
   EXHIBIT H     -Form of Compliance Certificate 
   EXHIBIT I     -Form of Assignment and Assumption Agreement



       CREDIT AGREEMENT, dated as of February 12, 1997,
   among GLOBAL MARINE INC. ("BORROWER"), a Delaware
   corporation, the lending institutions listed on ANNEX I
   hereto (each a "BANK" and, collectively, the "BANKS"),
   BANKERS TRUST COMPANY, as Administrative Agent (the
   "ADMINISTRATIVE AGENT"), and SOCIETE GENERALE, as Co-Agent
   (the "CO-AGENT", and, together with the Administrative
   Agent, the "AGENTS").  Unless otherwise defined herein, all
   capitalized terms used herein and defined in Section 10 are
   used herein as so defined.
   
            The parties hereto agree as follows:
   
   
            SECTION I.  AMOUNT AND TERMS OF CREDIT.
   
            1.01 COMMITMENT.  Subject to and upon the terms
   and conditions herein set forth, each Bank severally agrees
   to make a loan or loans (each a "LOAN" and, collectively,
   the "LOANS") under the Facility to Borrower, which Loans
   (i) shall be made at any time and from time to time on and
   after the Initial Borrowing Date and prior to the Maturity
   Date, (ii) except as hereinafter provided, may, at the
   option of Borrower, be incurred and maintained as, and/or
   converted into, Base Rate Loans or Eurodollar Loans;
   PROVIDED, HOWEVER, that all Loans made as part of the same
   Borrowing shall, unless otherwise specifically provided
   herein, consist of Loans of the same Type, (iii) may be
   repaid and reborrowed in accordance with the provisions
   hereof, (iv) shall not exceed in the aggregate for all
   Banks at any time outstanding, the Total Commitment and (v)
   shall not exceed for any Bank at any time outstanding the
   aggregate principal amount which, when combined with the
   aggregate outstanding principal amount of all other Loans
   of such Bank and with such Bank's Adjusted Percentage of
   the Letter of Credit Outstandings (exclusive of Unpaid
   Drawings which are repaid with the proceeds of, and
   simultaneously with the incurrence of, the respective
   incurrence of Loans) at such time, equals (1) if such Bank
   is a Non-Defaulting Bank, the Adjusted Commitment of such
   Bank at such time and (2) if such Bank is a Defaulting
   Bank, the Commitment of such Bank at such time.  
   
            1.02 MINIMUM BORROWING AMOUNTS, ETC.  The
   aggregate principal amount of each Borrowing shall not be
   less than the Minimum Borrowing Amount for the Loans
   constituting such Borrowing.  More than one Borrowing may
   be incurred on any day; PROVIDED, HOWEVER, that at no time
   shall there be outstanding more than ten Borrowings of
   Eurodollar Loans.
            1.03 NOTICE OF BORROWING.  Whenever Borrower
   desires to incur Loans under the Facility, it shall give
   the Administrative Agent at its Notice Office, prior to
   11:00 a.m. (New York time), at least three Business Days'
   prior written notice (or telephonic notice promptly
   confirmed in writing) of each Borrowing of Eurodollar Loans
   and at least one Business Day's prior written notice (or
   telephonic notice promptly confirmed in writing) of each
   Borrowing of Base Rate Loans to be made hereunder.  Each
   such written notice (each a "NOTICE OF BORROWING") shall be
   in the form of EXHIBIT A hereto and shall be irrevocable
   and shall specify (i) the aggregate principal amount of the
   Loans to be made pursuant to such Borrowing, (ii) the date
   of Borrowing (which shall be a Business Day) and (iii)
   whether the respective Borrowing shall consist of Base Rate
   Loans or (to the extent permitted) Eurodollar Loans and, if
   Eurodollar Loans, the Interest Period to be initially
   applicable thereto.  The Administrative Agent shall
   promptly give each Bank written notice (or telephonic
   notice promptly confirmed in writing) of each proposed
   Borrowing, of such Bank's proportionate share thereof and
   of the other matters covered by the Notice of Borrowing.
   
            1.04 DISBURSEMENT OF FUNDS.  (a)  No later than
   1:00 P.M. (New York time) on the date specified in each
   Notice of Borrowing, each Bank will make available its PRO
   RATA share of each Borrowing requested to be made on such
   date in the manner provided below.  All such amounts shall
   be made available to the Administrative Agent in Dollars
   and immediately available funds at the Payment Office and
   the Administrative Agent promptly will make available to
   Borrower by depositing to its account at the Payment Office
   the aggregate of the amounts so made available in Dollars
   and immediately available funds.  Unless the Administrative
   Agent shall have been notified by any Bank prior to the
   date of Borrowing that such Bank does not intend to make
   available to the Administrative Agent its portion of the
   Borrowing or Borrowings to be made on such date, the
   Administrative Agent may assume that such Bank has made
   such amount available to the Administrative Agent on such
   date of Borrowing, and the Administrative Agent, in
   reliance upon such assumption, may (in its sole discretion
   and without any obligation to do so) make available to
   Borrower a corresponding amount.  If such corresponding
   amount is not in fact made available to the Administrative
   Agent by such Bank and the Administrative Agent has made
   available same to Borrower, the Administrative Agent shall
   be entitled to recover such corresponding amount from such
   Bank.  If such Bank does not pay such corresponding amount
   forthwith upon the Administrative Agent's demand therefor,
   the Administrative Agent shall promptly (and in any event
   within three Business Days from the date the Administrative
   Agent made such funds available to Borrower) notify
   Borrower, and Borrower shall (within two Business Days of
   receiving such demand) pay such corresponding amount to the
   Administrative Agent.  The Administrative Agent shall also
   be entitled to recover on demand from such Bank or
   Borrower, as the case may be, interest on such
   corresponding amount in respect of each day from the date
   such corresponding amount was made available by the
   Administrative Agent to Borrower to the date such
   corresponding amount is recovered by the Administrative
   Agent, at a rate PER ANNUM equal to (x) if paid by such
   Bank, the Federal Funds Effective Rate or (y) if paid by
   Borrower, the then applicable rate of interest, calculated
   in accordance with Section 1.08, for the respective Loans.
   
            (b) Nothing herein shall be deemed to relieve any
   Bank from its obligation to fulfill its commitments
   hereunder or to prejudice any rights which Borrower may
   have against any Bank as a result of any default by such
   Bank hereunder.
   
            1.05 NOTES.    Borrower's obligation to pay the
   principal of, and interest on, the Loans made to it by each
   Bank shall be evidenced by a promissory note substantially
   in the form of EXHIBIT B hereto with blanks appropriately
   completed in conformity herewith (each a "NOTE" and,
   collectively, the "NOTES").
   
            (b) The Note issued to each Bank shall (i) be
   executed by Borrower, (ii) be payable to the order of such
   Bank and be dated the Initial Borrowing Date, (iii) be in a
   stated principal amount equal to the Commitment of such
   Bank on such date and be payable in the aggregate unpaid
   principal amount of the Loans evidenced thereby, (iv)
   mature on the Maturity Date, (v) bear interest as provided
   in the appropriate clause of Section 1.08 in respect of the
   Base Rate Loans and Eurodollar Loans, as the case may be,
   evidenced thereby, (vi) be subject to mandatory prepayment
   as provided in Section 4.02 and (vii) be entitled to the
   benefits of this Agreement and the other Credit Documents.
   
            (c) Each Bank will note on its internal records
   the amount of each Loan made by it and each payment in
   respect thereof and will, prior to any transfer of any of
   its Notes, endorse on the reverse side thereof the
   outstanding principal amount of Loans evidenced thereby. 
   Failure to make any such notation shall not affect
   Borrower's obligations in respect of such Loans.

            1.06 CONVERSIONS.  Borrower shall have the option
   to convert on any Business Day all or a portion (which
   portion shall be at least equal to the applicable Minimum
   Borrowing Amount) of the outstanding principal amount of
   the Loans owing pursuant to the Facility into a Borrowing
   or Borrowings pursuant to the Facility of another Type of
   Loan; PROVIDED, HOWEVER, that (i) if any Eurodollar Loan is
   converted into Base Rate Loans other than on the last day
   of an Interest Period applicable thereto Borrower shall pay
   to the Banks all amounts related to such conversion that
   are due pursuant to Section 1.11, (ii) no partial
   conversion of a Borrowing of Eurodollar Loans shall reduce
   the outstanding principal amount of the Eurodollar Loans
   made pursuant to such Borrowing to less than the Minimum
   Borrowing Amount applicable thereto, (iii) no Base Rate
   Loans may be converted into Eurodollar Loans at any time
   when a Default or Event of Default is in existence on the
   date of the conversion if the Administrative Agent or the
   Required Banks have reasonably determined that such a
   conversion would be disadvantageous to the Banks and (iv)
   Borrowings of Eurodollar Loans resulting from this Section
   1.06 shall be limited in number as provided in Section
   1.02.  Each such conversion shall be effected by Borrower
   by giving the Administrative Agent at its Notice Office,
   prior to 12:00 Noon (New York time), at least three
   Business Days' (or one Business Day's, in the case of a
   conversion into Base Rate Loans) prior written notice (or
   telephonic notice promptly confirmed in writing) (each a
   "NOTICE OF CONVERSION") specifying the Loans to be so
   converted, the Type of Loans to be converted into and, if
   to be converted into a Borrowing of Eurodollar Loans, the
   Interest Period to be initially applicable thereto.  The
   Administrative Agent shall give each Bank prompt notice of
   any such proposed conversion affecting any of its Loans.
   
            1.07 PRO RATA BORROWINGS.  All Loans under this
   Agreement shall be made by the Banks PRO RATA on the basis
   of their Commitments.  It is understood that no Bank shall
   be responsible for any default by any other Bank in its
   obligation to make Loans hereunder and that each Bank shall
   be obligated to make the Loans provided to be made by it
   hereunder, regardless of the failure of any other Bank to
   fulfill its commitments hereunder.
   
            1.08 INTEREST.  (a)  The unpaid principal amount
   of each Base Rate Loan shall bear interest at a rate PER
   ANNUM, which shall at all times be equal to the sum of the
   Base Rate in effect from time to time, PLUS the Applicable
   Base Rate Margin.
   
            (b) The unpaid principal amount of each
   Eurodollar Loan shall bear interest at a rate PER ANNUM
   which shall at all times be equal to the sum of the
   relevant Eurodollar Rate, PLUS the Applicable Eurodollar
   Margin.
   
            (c) All overdue principal and, to the extent
   permitted by law, overdue interest in respect of each Loan
   and any other overdue amount payable hereunder shall bear
   interest at a rate PER ANNUM equal to the greater of (x) 2%
   PER ANNUM in excess of the rate otherwise applicable to
   Base Rate Loans from time to time and (y) the rate which is
   2% in excess of the rate (including any applicable margin)
   then borne by such Loans, in each case with such interest
   payable on demand; PROVIDED, HOWEVER, that no Loan shall
   bear interest after maturity (whether by acceleration or
   otherwise) at a rate PER ANNUM less than 2% plus the rate
   of interest applicable thereto at maturity; PROVIDED,
   FURTHER, HOWEVER, that in no event shall any amount payable
   hereunder bear interest in excess of the maximum amount
   permitted by applicable law.
   
            (d) Interest shall accrue from and including the
   date of any Borrowing to but excluding the date of any
   repayment thereof (whether by acceleration or otherwise)
   and shall be payable (i) in respect of each Base Rate Loan,
   quarterly in arrears on the first Business Day of each
   March, June, September and December, (ii) in respect of
   each Eurodollar Loan, in arrears on the last day of each
   Interest Period applicable thereto and, in the case of an
   Interest Period of six months, on the date occurring three
   months after the first day of such Interest Period and
   (iii) in respect of each Loan, on any prepayment or
   conversion (other than the prepayment and conversion of
   Base Rate Loans) (on the amount prepaid or converted), at
   maturity (whether by acceleration or otherwise) and, after
   such maturity, on demand.
   
            (e) All computations of interest hereunder shall
   be made in accordance with Section 12.07(b).
   
            (f) The Administrative Agent, upon determining
   the interest rate for any Borrowing of Eurodollar Loans for
   any Interest Period, shall promptly notify Borrower and the
   Banks thereof.
   
            1.09 INTEREST PERIODS.  (a)  At the time Borrower
   gives a Notice of Borrowing or Notice of Conversion in
   respect of the making of, or conversion into, a Borrowing
   of Eurodollar Loans, in the case of the initial Interest
   Period applicable thereto, or prior to 12:00 Noon (New York
   time) on the third Business Day prior to the expiration of
   an Interest Period applicable to a Borrowing of Eurodollar
   Loans, Borrower shall have the right to elect by giving the
   Administrative Agent written notice (or telephonic notice
   promptly confirmed in writing) of the Interest Period
   applicable to such Borrowing, which Interest Period shall,
   at the option of Borrower, be a one, two, three or six
   month period.  Notwithstanding anything to the contrary
   contained above:
   
     (i) the initial Interest Period for any Borrowing of
        Eurodollar Loans shall commence on the date of such
        Borrowing (including the date of any conversion from a
        Borrowing of Base Rate Loans) and each Interest Period
        occurring thereafter in respect of such Borrowing
        shall commence on the day on which the next preceding
        Interest Period expires;
   
     (ii)if any Interest Period begins on a day for which
        there is no numerically corresponding day in the
        calendar month in which such Interest Period ends,
        such Interest Period shall end on the last Business
        Day of such calendar month;
   
     (iii) if any Interest Period would otherwise expire on
        a day which is not a Business Day, such Interest
        Period shall expire on the next succeeding Business
        Day; PROVIDED, HOWEVER, that if any Interest Period
        would otherwise expire on a day which is not a
        Business Day but is a day of the month after which no
        further Business Day occurs in such month, such
        Interest Period shall expire on the next preceding
        Business Day;
   
     (iv) no Interest Period shall extend beyond the
        Maturity Date; and
   
     (v) no Interest Period may be elected at any time when
        a Default or Event of Default is then in existence if
        the Administrative Agent or the Required Banks have
        reasonably determined that such an election at such
        time would be disadvantageous to the Banks.
   
     (b) If upon the third Business Day prior to the
   expiration of any Interest Period, Borrower has failed to
   (or may not) elect a new Interest Period to be applicable
   to the respective Borrowing of Eurodollar Loans as provided
   above, Borrower shall be deemed to have elected to convert
   such Borrowing into a Borrowing of Base Rate Loans
   effective as of the expiration date of such current
   Interest Period.
   
          1.10 INCREASED COSTS, ILLEGALITY, ETC.  (a)  In
   the event that (x) in the case of clause (i) below, the
   Administrative Agent or (y) in the case of clauses (ii) and
   (iii) below, any Bank shall have reasonably determined
   (which determination shall, absent manifest error, be final
   and conclusive and binding upon all parties hereto):
   
          (i) on any date for determining the Eurodollar
   Rate for any Interest Period that, by reason of any changes
   arising after the date of this Agreement affecting the
   interbank Eurodollar market, adequate and fair means do not
   exist for ascertaining the applicable interest rate on the
   basis provided for in the definition of Eurodollar Rate; or
   
          (ii) at any time, that such Bank shall incur
   increased costs or reductions in the amounts received or
   receivable hereunder with respect to any Eurodollar Loans
   (other than any increased cost or reduction in the amount
   received or receivable resulting from the imposition of or
   a change in the rate or basis of net income taxes,
   franchise taxes, or similar charges) because of (x) any
   change since the date of this Agreement in any applicable
   law, governmental rule, regulation, guideline or order (or
   in the interpretation or administration thereof and
   including the adoption of any new law or governmental rule,
   regulation, guideline or order) (such as, for example, but
   not limited to, a change in official reserve requirements,
   but, in all events, excluding reserves required under
   Regulation D to the extent included in the computation of
   the Eurodollar Rate) and/or (y) other circumstances
   occurring after the date of this Agreement and affecting
   the interbank Eurodollar market; or
   
          (iii) at any time, that the making or continuance
   of any Eurodollar Loan has become unlawful by compliance by
   such Bank in good faith with any law, governmental rule,
   regulation, guideline (or would conflict with any such
   governmental rule, regulation, guideline or order not
   having the force of law but with which such Bank
   customarily complies even though the failure to comply
   therewith would not be unlawful);
   
   then, and in any such event, such Bank (or the
   Administrative Agent in the case of clause (i) above) shall
   (x) on such date and (y) within ten Business Days of the
   date on which such event no longer exists, give notice (by
   telephone confirmed in writing) to Borrower and, in the
   case of clauses (ii) and (iii) above, to the Administrative
   Agent of such determination (which notice the
   Administrative Agent shall promptly transmit to each of the
   other Banks).  Thereafter (x) in the case of clause (i)
   above, Eurodollar Loans shall no longer be available until
   such time as the Administrative Agent notifies Borrower and
   the Banks that the circumstances giving rise to such notice
   by the Administrative Agent no longer exist, which notice
   the Administrative Agent agrees to promptly deliver to
   Borrower as soon as practicable after becoming aware of the
   absence of such circumstances, and any Notice of Borrowing
   or Notice of Conversion given by Borrower with respect to
   Eurodollar Loans which have not yet been incurred shall be
   deemed rescinded by Borrower, (y) in the case of clause
   (ii) above, Borrower shall, subject to Section 1.12(b) (to
   the extent applicable), pay to such Bank, upon written
   demand therefor, such additional amounts (in the form of an
   increased rate of, or a different method of calculating,
   interest or otherwise as such Bank in its reasonable
   discretion shall determine) as shall be required to
   compensate such Bank for such increased costs or reductions
   in amounts receivable hereunder (a written notice as to the
   additional amounts owed to such Bank, showing the basis for
   the calculation thereof, submitted to Borrower by such Bank
   shall, absent manifest error, be final and conclusive and
   binding upon all parties hereto) and (z) in the case of
   clause (iii) above, Borrower shall take one of the actions
   specified in Section 1.10(b) as promptly as possible and,
   in any event, within the time period required by law.
   
          (b) At any time that any Eurodollar Loan is
   affected by the circumstances described in Section
   1.10(a)(ii) or (iii), Borrower may (and in the case of a
   Eurodollar Loan affected pursuant to Section 1.10(a)(iii),
   Borrower shall) either (i) if the affected Eurodollar Loan
   is then being made pursuant to a Borrowing, cancel said
   Borrowing by giving the Administrative Agent telephonic
   notice (confirmed promptly in writing) thereof on the same
   date that Borrower was notified by a Bank pursuant to
   Section 1.10(a)(ii) or (iii), or (ii) if the affected
   Eurodollar Loan is then outstanding, upon at least three
   Business Days' notice to the Administrative Agent, require
   the affected Bank to convert each such Eurodollar Loan into
   a Base Rate Loan; PROVIDED, HOWEVER, that if more than one
   Bank is affected at any time, then all affected Banks must
   be treated the same pursuant to this Section 1.10(b).
   
          (c) If any Bank shall have reasonably determined
   that after the date of this Agreement, the adoption or
   effectiveness of any applicable law, rule or regulation
   regarding capital adequacy, or any change therein, or any
   change in the interpretation or administration thereof by
   any governmental authority, central bank or comparable
   agency charged with the interpretation or administration
   thereof, or compliance by such Bank with any request or
   directive regarding capital adequacy (whether or not having
   the force of law but with which such Bank customarily
   complies even though the failure to comply therewith would
   not be unlawful) of any such authority, central bank or
   comparable agency, has or would have the effect of reducing
   the rate of return on such Bank's capital or assets as a
   consequence of its commitments or obligations hereunder to
   a level below that which such Bank could have achieved but
   for such adoption, effectiveness, change or compliance
   (taking into consideration such Bank's policies with
   respect to capital adequacy), then from time to time,
   within 15 days after demand by such Bank (with a copy to
   the Administrative Agent), Borrower shall, subject to
   Section 1.12(b) (to the extent applicable), pay to such
   Bank such additional amount or amounts as will compensate
   such Bank for such reduction.  Each Bank, upon determining
   in good faith that any additional amounts will be payable
   pursuant to this Section 1.10(c), will give prompt written
   notice thereof to Borrower, which notice shall set forth
   the basis of the calculation of such additional amounts,
   although, subject to Section 1.12(b), the failure to give
   any such notice shall not release or diminish any of
   Borrower's obligations to pay additional amounts pursuant
   to this Section 1.10(c) upon the subsequent receipt of such
   notice.
   
          1.11 COMPENSATION.  Borrower shall compensate
   each Bank, upon its written request (which request shall
   set forth the basis for requesting such compensation), for
   all reasonable losses, expenses and liabilities (including,
   without limitation, any loss, expense or liability incurred
   by reason of the liquidation or reemployment of deposits or
   other funds required by such Bank to fund its Eurodollar
   Loans but excluding in any event the loss of anticipated
   profits or other consequential damages) which such Bank may
   sustain:  (i) if for any reason (other than a default by
   such Bank or the Administrative Agent) a Borrowing of
   Eurodollar Loans does not occur on a date specified
   therefor in a Notice of Borrowing or Notice of Conversion
   (whether or not withdrawn by Borrower or deemed withdrawn
   pursuant to Section 1.10(a)); (ii) if any prepayment,
   repayment or conversion of any of its Eurodollar Loans
   occurs on a date which is not the last day of an Interest
   Period applicable thereto; (iii) if any prepayment of any
   of its Eurodollar Loans is not made on any date specified
   in a notice of prepayment given by Borrower; or (iv) as a
   consequence of (x) any other default by Borrower to repay
   its Eurodollar Loans when required by the terms of this
   Agreement or (y) an election made pursuant to Section
   1.10(b).
   
          1.12 CHANGE OF LENDING OFFICE.  (a)  Each Bank
   agrees that, upon the occurrence of any event giving rise
   to the operation of Section 1.10(a)(ii) or (iii), 1.10(c),
   2.06 or 4.04 with respect to such Bank, it will, if
   requested by Borrower, use reasonable efforts (subject to
   overall policy considerations of such Bank) to designate
   another lending office for any Loan, Letters of Credit or
   Commitments affected by such event; PROVIDED, HOWEVER, that
   such designation is made on such terms that such Bank and
   its lending office suffer no economic, legal or regulatory
   disadvantage, with the object of avoiding the consequence
   of the event giving rise to the operation of any such
   Section.  Nothing in this Section 1.12 shall affect or
   postpone any of the obligations of Borrower or the right of
   any Bank provided in Section 1.10, 2.06 or 4.04.
   
          (b) Notwithstanding anything in this Agreement to
   the contrary, to the extent any notice required by Section
   1.10, 1.11, 2.06 or 4.04 is given by any Bank more than 180
   days after the occurrence of the event giving rise to the
   additional costs of the type described in such Section,
   such Bank shall not be entitled to compensation under
   Section 1.10, 1.11, 2.06 or 4.04 for any amounts incurred
   or accruing prior to 180 days prior to the giving of such
   notice to Borrower.
   
          1.13 REPLACEMENT OF BANKS.  (x)  Upon the
   occurrence of any event giving rise to the operation of
   Section 1.10(a)(ii) or (iii), Section 1.10(c), Section 2.06
   or Section 4.04 with respect to any Bank which results in
   such Bank charging to Borrower increased costs in excess of
   those being generally charged by the other Banks or
   becoming incapable of making Eurodollar Loans, (y) if a
   Bank becomes a Defaulting Bank and/or (z) as provided in
   Section 12.12(b), in the case of a refusal by a Bank to
   consent to a proposed change, waiver, discharge or
   termination with respect to this Agreement which has been
   approved by the Required Banks, Borrower shall have the
   right, if no Default or Event of Default then exists, to
   replace such Bank (the "REPLACED BANK") with one or more
   other Eligible Transferee or Eligible Transferees
   reasonably acceptable to the Administrative Agent, none of
   which Eligible Transferees shall constitute a Defaulting
   Bank at the time of such replacement (collectively, the
   "REPLACEMENT BANK"); PROVIDED, HOWEVER, that (i) at the
   time of any replacement pursuant to this Section 1.13, the
   Replacement Bank shall enter into one or more Assignment
   and Assumption Agreements pursuant to Section 12.04(b) (and
   with all fees payable pursuant to said Section 12.04(b) to
   be paid by the Replacement Bank) pursuant to which the
   Replacement Bank shall acquire all of the Commitments and
   outstanding Loans of, and in each case participations in
   Letters of Credit by, the Replaced Bank and, in connection
   therewith, shall pay to (x) the Replaced Bank in respect
   thereof an amount equal to the sum of (A) an amount equal
   to the principal of, and all accrued interest on, all
   outstanding Loans of the Replaced Bank, (B) an amount equal
   to all Unpaid Drawings that have been funded by (and not
   reimbursed to) such Replaced Bank, together with all then
   unpaid interest with respect thereto at such time and (C)
   an amount equal to all accrued, but theretofore unpaid,
   Fees owing to the Replaced Bank pursuant to Section 3.01,
   and (y) the Letter of Credit Issuer an amount equal to such
   Replaced Bank's Percentage of any Unpaid Drawing (which at
   such time remains an Unpaid Drawing) to the extent such
   amount was not theretofore funded by such Replaced Bank,
   and (ii) all obligations of Borrower owing to the Replaced
   Bank (other than those specifically described in clause (i)
   above in respect of which the assignment purchase price has
   been, or is concurrently being, paid) shall be paid in full
   to such Replaced Bank concurrently with such replacement. 
   Upon the execution of the respective Assignment and
   Assumption Agreements, the payment of amounts referred to
   in clauses (i) and (ii) above and, if so requested by the
   Replacement Bank, delivery to the Replacement Bank of a
   Note executed by Borrower, the Replacement Bank shall
   become a Bank hereunder and the Replaced Bank shall cease
   to constitute a Bank hereunder, except with respect to
   indemnification provisions applicable to the Replaced Bank
   under this Agreement, which shall survive as to such
   Replaced Bank. 
   
          SECTION 2.     LETTERS OF CREDIT.
   
          2.01 LETTERS OF CREDIT.  (a) Subject to and upon
   the terms and conditions herein set forth, Borrower may
   request a Letter of Credit Issuer to issue, at any time and
   from time to time on and after the Initial Borrowing Date
   and prior to the Maturity Date, and subject to and upon the
   terms and conditions herein set forth, such Letter of
   Credit Issuer agrees to issue from time to time, (x) for
   the account of Borrower and for the benefit of any holder
   (or any trustee, agent or other similar representative for
   any such holders) of L/C Supportable Obligations of
   Borrower or any Subsidiary, an irrevocable sight standby
   letter of credit, in a form customarily used by such Letter
   of Credit Issuer or in such other form as has been approved
   by such Letter of Credit Issuer (each such standby letter
   of credit, a "STANDBY LETTER OF CREDIT") in support of such
   L/C Supportable Obligations and/or (y) for the account of
   Borrower and for the benefit of sellers of goods or
   materials to Borrower or any Subsidiary, an irrevocable
   sight letter of credit in a form customarily used by such
   Letter of Credit Issuer or in such other form as has been
   approved by such Letter of Credit Issuer (each such letter
   of credit, a "TRADE LETTER OF CREDIT", and each such Trade
   Letter of Credit and each Standby Letter of Credit, a
   "LETTER OF CREDIT") in support of commercial transactions
   of Borrower or any Subsidiary.
   
          (b) Notwithstanding the foregoing, (i) no Letter
   of Credit shall be issued, the Stated Amount of which, when
   added to the Letter of Credit Outstandings (exclusive of
   Unpaid Drawings which are repaid on the date of, and prior
   to the issuance of, the respective Letter of Credit) at
   such time, would exceed either (x) $25,000,000 or (y) when
   added to the aggregate principal amount of all Loans made
   by Non-Defaulting Banks then outstanding, the Adjusted
   Total Commitment at such time; (ii) each Standby Letter of
   Credit shall have an expiry date occurring not later than
   one year after such Standby Letter of Credit's date of
   issuance although any Standby Letter of Credit may be
   extendable for successive periods of up to 12 months, but
   not beyond the Business Day next preceding the Maturity
   Date, on terms reasonably acceptable to the respective
   Letter of Credit Issuer and in no event shall any Standby
   Letter of Credit have an expiry date occurring later than
   the Business Day immediately preceding the Maturity Date;
   and (iii) each Letter of Credit shall be denominated in
   Dollars; and (iv) each Trade Letter of Credit shall have an
   expiry date occurring not later than the earlier of (x) the
   30th day prior to the Maturity Date and (y) the date which
   is 180 days from the date of issuance of such Trade Letter
   of Credit, on terms acceptable to the respective Letter of
   Credit Issuer.
   
          (c) To the extent that any provision of any
   application for any Letter of Credit is inconsistent with
   or in addition to the terms of this Agreement, the terms of
   this Agreement shall control.
   
          2.02 MINIMUM STATED AMOUNT.  The initial Stated
   Amount of each Letter of Credit shall be not less than
   $10,000 or such lesser amount reasonably acceptable to the
   respective Letter of Credit Issuer.
   
          2.03 LETTER OF CREDIT REQUESTS; REQUEST FOR
   ISSUANCE OF LETTER OF CREDIT.  (a)  Whenever it desires
   that a Letter of Credit be issued, Borrower shall give the
   Administrative Agent and the respective Letter of Credit
   Issuer written notice (including by way of telecopier) in
   the form of EXHIBIT C hereto prior to 1:00 P.M. (New York
   time) at least one Business Day (or such shorter period as
   may be acceptable to such Letter of Credit Issuer) prior to
   the proposed date of issuance (which shall be a Business
   Day) (each a "LETTER OF CREDIT REQUEST"), which Letter of
   Credit Request shall include any documents that such Letter
   of Credit Issuer customarily requires in connection
   therewith.  
   
          (b) In the case of Standby Letters of Credit, the
   Letter of Credit Issuer shall, without cost to Borrower,
   promptly after the issuance of or amendment to any such
   Standby Letter of Credit, give the Administrative Agent,
   each Bank and Borrower written notice of such issuance or
   amendment accompanied by a copy of such issuance or
   amendment.  In the case of Trade Letters of Credit, the
   Letter of Credit Issuer will furnish the Administrative
   Agent, by facsimile transmission, promptly on the first
   Business Day of each week a report of its daily aggregate
   Letter of Credit Outstandings with respect to Trade Letters
   of Credit for the previous week.  The Administrative Agent
   shall furnish each Bank, on the first day of each calendar
   month and on each Letter of Credit Fee payment date, with a
   report detailing the daily aggregate Letter of Credit
   Outstandings with respect to Trade Letters of Credit during
   such period.  
   
          2.04 AGREEMENT TO REPAY LETTER OF CREDIT
   PAYMENTS.  (a)  Borrower hereby agrees to reimburse each
   Letter of Credit Issuer, by making payment to the
   Administrative Agent at the Payment Office, for any payment
   or disbursement made by such Letter of Credit Issuer under
   any Letter of Credit (each such amount so paid or disbursed
   until reimbursed, an "UNPAID DRAWING") within one Business
   Day of the date on which Borrower is notified by such
   Letter of Credit Issuer of such payment or disbursement
   with interest on the amount so paid or disbursed by such
   Letter of Credit Issuer, to the extent not reimbursed prior
   to 1:00 P.M. (New York time) on the date of such payment or
   disbursement, from and including the date paid or disbursed
   to but not including the date such Letter of Credit Issuer
   is reimbursed therefor at a rate PER ANNUM which shall be
   equal to the sum of the Base Rate as in effect from time to
   time plus the Applicable Base Rate Margin (plus an
   additional 2% PER ANNUM if not reimbursed by the fourth
   Business Day after the date of such notice of payment or
   disbursement), such interest also to be payable on demand.
   
          (b) Borrower's obligation under this Section 2.04
   to reimburse the respective Letter of Credit Issuer with
   respect to Unpaid Drawings (including, in each case,
   interest thereon) shall be absolute and unconditional under
   any and all circumstances and irrespective of any setoff,
   counterclaim or defense to payment which Borrower may have
   or have had against such Letter of Credit Issuer, the
   Administrative Agent or any Bank, including, without
   limitation, any defense based upon the failure of any
   drawing under a Letter of Credit to conform to the terms of
   the Letter of Credit (other than the failure of the
   respective Letter of Credit Issuer to determine that any
   documents required to be delivered under such Letter of
   Credit have been delivered and that they substantially
   comply on their face with the requirements of such Letter
   of Credit) or any non-application or misapplication by the
   beneficiary of the proceeds of such drawing; PROVIDED,
   HOWEVER, that Borrower shall not be obligated to reimburse
   any Letter of Credit Issuer for any wrongful payment made
   by such Letter of Credit Issuer under a Letter of Credit as
   a result of acts or omissions constituting willful
   misconduct or gross negligence on the part of such Letter
   of Credit Issuer as determined by a court of competent
   jurisdiction.
   
       2.05 LETTER OF CREDIT PARTICIPATIONS.
   (a)  Immediately upon the issuance by any Letter of Credit
   Issuer of any Letter of Credit, such Letter of Credit
   Issuer shall be deemed to have sold and transferred to each
   other Bank, and each such Bank (each a "PARTICIPANT") shall
   be deemed irrevocably and unconditionally to have purchased
   and received from such Letter of Credit Issuer, without
   recourse or warranty, an undivided interest and
   participation, to the extent of such Bank's Adjusted
   Percentage, in such Letter of Credit, each substitute
   letter of credit, each drawing made thereunder and the
   obligations of Borrower under this Agreement with respect
   thereto (although the Letter of Credit Fee shall be payable
   directly to the Administrative Agent for the account of the
   Banks as provided in Section 3.01(b) and the Participants
   shall have no right to receive any portion of any Facing
   Fees) and any security therefor or guaranty pertaining
   thereto.  Upon any change in the Commitments or Adjusted
   Percentages of the Banks pursuant to Section 12.04(b) or
   upon a Bank Default, it is hereby agreed that, with respect
   to all outstanding Letters of Credit and Unpaid Drawings,
   there shall be an automatic adjustment to the
   participations pursuant to this Section 2.05 to reflect the
   new Adjusted Percentages of the assigning and assignee Bank
   or of all Banks, as the case may be. 
   
            (b) In determining whether to pay under any
   Letter of Credit, the respective Letter of Credit Issuer
   shall not have any obligation relative to the Participants
   other than to determine that any documents required to be
   delivered under such Letter of Credit have been delivered
   and that they substantially comply on their face with the
   requirements of such Letter of Credit.  Any action taken or
   omitted to be taken by any Letter of Credit Issuer under or
   in connection with any Letter of Credit, if taken or
   omitted in the absence of gross negligence or willful
   misconduct as determined by a court of competent
   jurisdiction, shall not create for such Letter of Credit
   Issuer any resulting liability to the Participants.
   
            (c) In the event that the respective Letter of
   Credit Issuer makes any payment under any Letter of Credit
   and Borrower shall not have reimbursed such amount in full
   to such Letter of Credit Issuer pursuant to Section
   2.04(a), such Letter of Credit Issuer shall promptly notify
   the Administrative Agent, and the Administrative Agent
   shall promptly notify each Participant of such failure, and
   each Participant shall promptly and unconditionally pay to
   the Administrative Agent for the account of such Letter of
   Credit Issuer, the amount of such Participant's Adjusted
   Percentage of such payment in Dollars and in same day
   funds; PROVIDED, HOWEVER, that no Participant shall be
   obligated to pay to the Administrative Agent its Adjusted
   Percentage of such unreimbursed amount for any wrongful
   payment made by such Letter of Credit Issuer under a Letter
   of Credit as a result of acts or omissions constituting
   willful misconduct or gross negligence on the part of such
   Letter of Credit Issuer.  If the Administrative Agent so
   notifies any Participant required to fund an Unpaid Drawing
   under a Letter of Credit prior to 12:00 Noon (New York
   time) on any Business Day, such Participant shall make
   available to the Administrative Agent for the account of
   the respective Letter of Credit Issuer such Participant's
   Adjusted Percentage of the amount of such payment on such
   Business Day in same day funds.  If and to the extent such
   Participant shall not have so made its Adjusted Percentage
   of the amount of such Unpaid Drawing available to the
   Administrative Agent for the account of such Letter of
   Credit Issuer, such Participant agrees to pay to the
   Administrative Agent for the account of such Letter of
   Credit Issuer, forthwith on demand such amount, together
   with interest thereon, for each day from such date until
   the date such amount is paid to the Administrative Agent
   for the account of such Letter of Credit Issuer at the
   overnight Federal Funds Effective Rate.  The failure of any
   Participant to make available to the Administrative Agent
   for the account of the respective Letter of Credit Issuer
   its Adjusted Percentage of any Unpaid Drawing under any
   Letter of Credit shall not relieve any other Participant of
   its obligation hereunder to make available to the
   Administrative Agent for the account of such respective
   Letter of Credit Issuer its Adjusted Percentage of any
   payment under any Letter of Credit on the date required, as
   specified above, but no Participant shall be responsible
   for the failure of any other Participant to make available
   to the Administrative Agent for the account of such Letter
   of Credit Issuer such other Participant's Adjusted
   Percentage of any such payment.
   
            (d) Whenever the respective Letter of Credit
   Issuer receives a payment of a reimbursement obligation as
   to which the Administrative Agent has received for the
   account of such Letter of Credit Issuer any payments from
   the Participants pursuant to clause (c) above, such Letter
   of Credit Issuer shall pay to the Administrative Agent and
   the Administrative Agent shall promptly pay to each
   Participant which has paid its Adjusted Percentage thereof,
   in Dollars and in same day funds, an amount equal to such
   Participant's Adjusted Percentage of the principal amount
   thereof and interest thereon accruing at the overnight
   Federal Funds Effective Rate after the purchase of the
   respective participations. 
   
            (e) The obligations of the Participants to make
   payments to the Administrative Agent for the account of the
   respective Letter of Credit Issuer with respect to Letters
   of Credit shall be irrevocable and not subject to
   counterclaim, set-off or other defense or any other
   qualification or exception whatsoever (PROVIDED, HOWEVER,
   that no Participant shall be required to make payments
   resulting from such Letter of Credit Issuer's gross
   negligence or willful misconduct) and shall be made in
   accordance with the terms and conditions of this Agreement
   under all circumstances, including, without limitation, any
   of the following circumstances:
   
            (i) any lack of validity or enforceability of
   this Agreement or any of the other Credit Documents;
   
            (ii) the existence of any claim, set-off,
   defense or other right which Borrower may have at any time
   against a beneficiary named in a Letter of Credit, any
   transferee of any Letter of Credit (or any Person for whom
   any such transferee may be acting), the Administrative
   Agent, the respective Letter of Credit Issuer, any Bank or
   other Person, whether in connection with this Agreement,
   any Letter of Credit, the transactions contemplated herein
   or any unrelated transactions (including any underlying
   transaction between Borrower and the beneficiary named in
   any such Letter of Credit);
   
            (iii) any draft, certificate or other document
   presented under the Letter of Credit proving to be forged,
   fraudulent, or invalid in any respect or any statement
   therein being untrue or inaccurate in any respect;
   
            (iv) the surrender or impairment of any
   security for the performance or observance of any of the
   terms of any of the Credit Documents; or
   
            (v) the occurrence of any Default or Event of
   Default.
   
            2.06 INCREASED COSTS.  If at any time after the
   date of the Agreement, the adoption or effectiveness of any
   new applicable law, rule or regulation, or any change
   therein, or any change in the interpretation or
   administration thereof or any existing law, rule or
   regulation by any governmental authority, central bank or
   comparable agency charged with the interpretation or
   administration thereof, or compliance by the respective
   Letter of Credit Issuer or any Bank with any request or
   directive (whether or not having the force of law but with
   which such Bank customarily complies even though the
   failure to comply therewith would not be unlawful) by any
   such authority, central bank or comparable agency shall
   either (i) impose, modify or make applicable any reserve,
   deposit, capital adequacy or similar requirement against
   Letters of Credit issued by such Letter of Credit Issuer or
   such Bank's participation therein, or (ii) shall impose on
   such Letter of Credit Issuer or any Bank any other
   conditions affecting this Agreement, any Letter of Credit
   or such Bank's participation therein; and the result of any
   of the foregoing is to increase the cost to such Letter of
   Credit Issuer or such Bank of issuing, maintaining or
   participating in any Letter of Credit, or to reduce the
   amount of any sum received or receivable by such Letter of
   Credit Issuer or such Bank hereunder (other than any
   increased cost or reduction in the amount received or
   receivable resulting from the imposition of or a change in
   the rate or basis of net income taxes, franchise taxes or
   similar charges), then, upon demand to Borrower by such
   Letter of Credit Issuer or such Bank (a copy of which
   notice shall be sent by such Letter of Credit Issuer or
   such Bank to the Administrative Agent), Borrower shall,
   subject to Section 1.12(b) (to the extent applicable), pay
   to such Letter of Credit Issuer or such Bank such
   additional amount or amounts as will compensate such Letter
   of Credit Issuer or such Bank for such increased cost or
   reduction.  A certificate submitted to Borrower by the
   respective Letter of Credit Issuer or such Bank, as the
   case may be (a copy of which certificate shall be sent by
   such Letter of Credit Issuer or such Bank to the
   Administrative Agent), setting forth the basis for the
   determination of such additional amount or amounts
   necessary to compensate such Letter of Credit Issuer or
   such Bank as aforesaid shall be conclusive and binding on
   Borrower absent manifest error, although the failure to
   deliver any such certificate shall not, subject to Section
   1.12(b), release or diminish any of Borrower's obligations
   to pay additional amounts pursuant to this Section 2.06
   upon the subsequent receipt thereof.
   
            2.07 INDEMNITIES.  Borrower hereby agrees to
   reimburse and indemnify the respective Letter of Credit
   Issuer for and against any and all liabilities,
   obligations, losses, damages, penalties, claims, actions,
   judgments, suits, costs, expenses or disbursements of
   whatsoever kind or nature which may be imposed on, asserted
   against or incurred by such Letter of Credit Issuer in
   performing its respective duties in any way relating to or
   arising out of its issuance of Letters of Credit; PROVIDED,
   HOWEVER, that Borrower shall not be liable for any portion
   of such liabilities, obligations, losses, damages,
   penalties, actions, judgments, suits, costs, expenses or
   disbursements resulting from such Letter of Credit Issuer's
   gross negligence or willful misconduct or the failure of
   the respective Letter of Credit Issuer to determine that
   any documents required to be delivered under such Letter of
   Credit have been delivered and that they substantially
   comply on their face with the requirements of such Letter
   of Credit.  To the extent the respective Letter of Credit
   Issuer is not indemnified by Borrower, the Participants
   will reimburse and indemnify such Letter of Credit Issuer,
   in proportion to their respective Percentages, for and
   against any and all liabilities, obligations, losses,
   damages, penalties, claims, actions, judgments, suits,
   costs, expenses or disbursements of whatsoever kind or
   nature which may be imposed on, asserted against or
   incurred by such Letter of Credit Issuer in performing its
   respective duties in any way relating to or arising out of
   its issuance of Letters of Credit; PROVIDED, HOWEVER, that
   no Participants shall be liable for any portion of such
   liabilities, obligations, losses, damages, penalties,
   actions, judgments, suits, costs, expenses or disbursements
   resulting from such Letter of Credit Issuer's gross
   negligence or willful misconduct.
   
            SECTION 3.     FEES; COMMITMENTS.
   
            3.01 FEES.  (a)  Borrower agrees to pay to the
   Administrative Agent a commitment commission ("COMMITMENT
   COMMISSION") PRO RATA for the account of each Non-Defaulting Bank
   for the period from and including the date hereof to, but not including,
   the date the Total Commitment has been terminated, which Commitment
   Commission shall be equal to the Applicable Commitment Commission
   Percentage, computed at such rate for each day, on the daily amount of
   such Bank's Available Unutilized Commitment.  Such Commitment Commission
   shall be due and payable in arrears on the first Business Day of each
   March, June, September and December and on the date upon which the Total
   Commitment is terminated.
   
            (b) Borrower agrees to pay to the Administrative Agent for
   the account of each Non-Defaulting Bank PRO RATA on the basis of
   their respective Adjusted Percentages, a fee in respect of each
   Letter of Credit (the "LETTER OF CREDIT FEE") computed at a rate PER
   ANNUM equal to the Applicable Eurodollar Margin then in effect on the
   daily Stated Amount of such Letter of Credit.  Accrued Letter of Credit
   Fees shall be due and payable quarterly in arrears on the first Business
   Day of each March, June, September and December of each year and on the
   date after the Total Commitment is terminated and no Letters of Credit
   remain outstanding.
   
            (c) Borrower agrees to pay to the
   Administrative Agent for the account of each Letter of
   Credit Issuer a fee in respect of each Letter of Credit
   issued by it (the "FACING FEE") computed at the rate of 1/8
   of 1.00% PER ANNUM on the daily Stated Amount of such
   Letter of Credit; PROVIDED, HOWEVER, that in no event shall
   the annual Facing Fee to any Letter of Credit Issuer be
   less than $500 per Letter of Credit.  Accrued Facing Fees
   shall be due and payable quarterly in arrears on the first
   Business Day of each March, June, September and December of
   each year and on the date after the Total Commitment is
   terminated and no Letters of Credit remain outstanding.
            (d) Borrower agrees to pay directly to the
   respective Letter of Credit Issuer upon each issuance of,
   payment under, and/or amendment of, a Letter of Credit
   issued by it such amount as shall at the time of such
   issuance, payment or amendment be the administrative charge
   and expenses which such Letter of Credit Issuer is
   customarily charging for issuances of, payments under, or
   amendments of, letters of credit issued by it.
   
            (e) Borrower shall pay to the Administrative
   Agent (x) on the Initial Borrowing Date for its own account
   and/or for distribution to the Banks such Fees as
   heretofore agreed in writing by Borrower and the
   Administrative Agent and (y) for its own account such other
   Fees as agreed to in writing between Borrower and the
   Administrative Agent, when and as due.
   
            (f) All computations of Fees shall be made in
   accordance with Section 12.07(b).
   
            3.02 VOLUNTARY REDUCTION OF COMMITMENTS.  Upon
   at least three Business Days' prior written notice (or
   telephonic notice confirmed in writing) to the
   Administrative Agent at its Notice Office (which notice the
   Administrative Agent shall promptly transmit to each of the
   Banks), Borrower shall have the right, without premium or
   penalty, to terminate or partially reduce the Total
   Unutilized Commitment; PROVIDED, HOWEVER, that (w) any such
   termination shall apply to proportionately and permanently
   reduce the Commitment of each Bank, (x) no such reduction
   shall reduce any Non-Defaulting Bank's Commitment to an
   amount that is less than the sum of (A) the outstanding
   Loans of such Bank plus (B) such Bank's Adjusted Percentage
   of Letter of Credit Outstandings and (y) any partial
   reduction pursuant to this Section 3.02 shall be in the
   amount of at least $500,000 and in integral multiples of
   $100,000 in excess thereof. 
   
            3.03 MANDATORY ADJUSTMENTS OF COMMITMENTS,
   ETC.   (a) The Total Commitment shall terminate on the
   Maturity Date.
   
            (b) In addition to any other mandatory
   commitment reductions pursuant to this Section 3.03, on the
   Business Day immediately after (1) with respect to clauses
   (i) and (iii) of this Section 3.03(b), the date on which
   the Section 3.03(b)(i) Remainder or the Section
   3.03(b)(iii) Remainder, as the case may be, is finally
   determined or (2) with respect to clause (ii) of this
   Section 3.03(b), the date of receipt thereof by Borrower
   and/or any Subsidiary, the Total Commitment shall be
   permanently reduced by an amount equal to 100% of:
   
            (i) the remainder of (x) the Net Cash Proceeds
          arising from any Asset Disposition, LESS (y) the
          aggregate dollar amount of such Net Cash Proceeds
          utilized to (1) so long as the Indenture is in
          effect, acquire one or more Replacement Assets (as
          defined in the Indenture as in effect on the date
          hereof) within 270 days of the related Asset
          Disposition or date of the receipt of such Net Cash
          Proceeds, (2) acquire capital assets related to the
          core business of Borrower within 270 days of the
          related Asset Disposition or date of the receipt of
          such Net Cash Proceeds or (3) so long as the
          Indenture is in effect, purchase outstanding Senior
          Secured Notes pursuant to an offer to purchase
          (effected in accordance with the Indenture as in
          effect on the date hereof) such outstanding Senior
          Secured Notes permitted or required by the Indenture
          as in effect on the date hereof to be made as a
          result of such Asset Disposition (the remainder of
          (x) less (y), the "SECTION 3.03(b)(i) REMAINDER");
   
            (ii) the Net Financing Proceeds arising from
          any Debt Issuance; and
   
            (iii) the remainder of (x) the aggregate amount
          of cash payments received by Borrower or any
          Subsidiary from any Recovery Event arising as a
          result of a Total Loss (net of any applicable taxes
          and expenses incurred as a result thereof), LESS (y)
          the aggregate dollar amount of such cash payments
          utilized to (1) so long as the Indenture is in
          effect, acquire one or more Replacement Assets (as
          defined in the Indenture as in effect on the date
          hereof) within 270 days of the related Total Loss or
          date of the receipt of such cash payments, (2)
          repair or replace the damaged property which is the
          subject of such Total Loss or acquire capital assets
          related to the core business of Borrower within 270
          days of the date of the related Total Loss or
          receipt of such cash payments or (3) so long as the
          Indenture is in effect, purchase outstanding Senior
          Secured Notes pursuant to an offer to purchase
          (effected in accordance with the Indenture as in
          effect on the date hereof) such outstanding Senior
          Secured Notes permitted or required by the Indenture
          as in effect on the date hereof to be made as a
          result of such Total Loss (the remainder of (x) less
          (y), the "SECTION 3.03(b)(iii) REMAINDER").
   
            Notwithstanding anything in this Section
   3.03(b) to the contrary, so long as the Indenture and the
   Security Documents are in effect, to the extent that the
   provisions of this Section 3.03(b) conflict with any action
   required to be taken (or prohibited to be taken) by
   Borrower or any Subsidiary pursuant to the Indenture or the
   Security Documents (in each case as in effect on the date
   hereof), Borrower and the Subsidiaries may comply with the
   Indenture and the Security Documents to such extent as is
   necessary to avoid any breach or default thereunder and
   such compliance, if resulting in non-compliance with the
   terms hereof, shall not be a breach or default by Borrower
   or any Subsidiary of the provisions of this Section
   3.03(b).
   
            (c) Each reduction of the Total Commitment
   pursuant to this Section 3.03 shall apply proportionately
   to the Commitment of each Bank.
   
            SECTION 4.     PAYMENTS.
   
            4.01 VOLUNTARY PREPAYMENTS.  Borrower shall
   have the right to prepay Loans in whole or in part, without
   premium or penalty, from time to time on the following
   terms and conditions: (i) Borrower shall give the
   Administrative Agent at the Payment Office written notice
   (or telephonic notice promptly confirmed in writing) of its
   intent to prepay the Loans, the amount of such prepayment
   and, in the case of Eurodollar Loans, the specific
   Borrowing or Borrowings pursuant to which made, which
   notice shall be given by Borrower at least one Business Day
   prior to the date of such prepayment with respect to Base
   Rate Loans and two Business Days prior to the date of such
   prepayment with respect to Eurodollar Loans, which notice
   shall promptly be transmitted by the Administrative Agent
   to each of the Banks; (ii) each partial prepayment of any
   Borrowing shall be in an aggregate principal amount of at
   least $500,000 and, if greater, in an integral multiple of
   $100,000; PROVIDED, HOWEVER, that no partial prepayment of
   Eurodollar Loans made pursuant to a Borrowing shall reduce
   the aggregate principal amount of the Loans outstanding
   pursuant to such Borrowing to an amount less than the
   Minimum Borrowing Amount applicable thereto; (iii) if any
   Eurodollar Loan is prepaid pursuant to this Section 4.01
   other than on the last day of the Interest Period
   applicable thereto Borrower shall pay to the Banks all
   amounts due under Section 1.11 with respect to such
   prepayment; and (iv) each prepayment in respect of any
   Loans made pursuant to a Borrowing shall be applied PRO
   RATA among the Banks which made such Loans; PROVIDED,
   HOWEVER, that at Borrower's election in connection with any
   prepayment of Loans pursuant to this Section 4.01, such
   prepayment shall not be applied to any Loans of a
   Defaulting Bank. 
   
            4.02 MANDATORY PREPAYMENTS.
   
            (A)  REQUIREMENTS: 
   
            (a) (i) If on any date the sum of the aggregate
   outstanding principal amount of Loans made by Non-Defaulting
   Banks and the Letter of Credit Outstandings exceeds the Adjusted
   Total Commitment as then in effect, Borrower shall repay on
   such date the principal of Loans of Non-Defaulting Banks,
   in an aggregate amount equal to such excess.  If, after
   giving effect to the repayment of all outstanding Loans of
   Non-Defaulting Banks, the aggregate amount of Letter of
   Credit Outstandings exceeds the Adjusted Total Commitment
   then in effect, Borrower shall pay to the Administrative Agent
   an amount in cash and/or Cash Equivalents equal to such excess
   (up to the aggregate amount of the Letter of Credit Outstandings
   at such time) and the Administrative Agent shall hold such payment as
   security for the obligations of Borrower hereunder pursuant
   to a cash collateral agreement to be entered into in form
   and substance reasonably satisfactory to the Administrative
   Agent (which shall permit certain investments in Cash
   Equivalents satisfactory to the Administrative Agent, until
   the proceeds are applied to the secured obligations).
   
            (ii)  If on any date the aggregate outstanding
   principal amount of the Loans made by a Defaulting Bank
   exceeds the Commitment of such Defaulting Bank, Borrower
   shall repay the principal of Loans of such Defaulting Bank
   in an amount equal to such excess.
   
            (b) Notwithstanding anything to the contrary
   contained elsewhere in this Agreement, all then outstanding
   Loans shall be repaid in full on the Maturity Date.
   
            (B)  APPLICATION:
   
            With respect to each prepayment of Loans
   required by Section 4.02, Borrower may designate the Types
   of Loans which are to be prepaid and the specific Borrowing
   or Borrowings under the Facility pursuant to which made;
   PROVIDED, HOWEVER, that (i) Eurodollar Loans may only be
   repaid if no Base Rate Loans of Non-Defaulting Banks remain
   outstanding; (ii) if any prepayment of Eurodollar Loans
   made pursuant to a single Borrowing shall reduce the
   outstanding Loans made pursuant to such Borrowing to an
   amount less than the Minimum Borrowing Amount for such
   Borrowing, such Borrowing shall be immediately converted
   into Base Rate Loans; and (iii) each prepayment of any
   Loans made by Non-Defaulting Banks pursuant to a Borrowing
   shall be applied PRO RATA among the Non-Defaulting Banks
   which made such Loans.  In the absence of a designation by
   Borrower as described in the preceding sentence, the
   Administrative Agent shall, subject to the above, make such
   designation in its sole discretion with a view, but no
   obligation, to minimize breakage costs owing under Section
   1.11.  Notwithstanding the foregoing provisions of this
   Section 4.02(B), if at any time the mandatory prepayment of
   Loans pursuant to Section 4.02(A) above would result, after
   giving effect to the procedures set forth above, in
   Borrower incurring breakage costs under Section 1.11 as a
   result of Eurodollar Loans being prepaid other than on the
   last day of an Interest Period applicable thereto (the
   "AFFECTED EURODOLLAR LOANS"), then Borrower may in its sole
   discretion initially deposit a portion (up to 100%) of the
   amounts that otherwise would have been paid in respect of
   the Affected Eurodollar Loans with the Administrative Agent
   (which deposit must be equal in amount to the amount of the
   Affected Eurodollar Loans not immediately prepaid) to be
   held as security for the obligations of Borrower hereunder
   pursuant to a cash collateral agreement to be entered into
   in form and substance reasonably satisfactory to the
   Administrative Agent and shall provide for investments
   satisfactory to the Administrative Agent and Borrower, with
   such cash collateral to be directly applied upon the first
   occurrence (or occurrences) thereafter of the last day of
   an Interest Period applicable to the relevant Loans that
   are Eurodollar Loans (or such earlier date or dates as
   shall be requested by Borrower) to repay an aggregate
   principal amount of such Loans equal to the Affected
   Eurodollar Loans not initially prepaid pursuant to this
   sentence.  Notwithstanding anything to the contrary
   contained in the immediately preceding sentence, all
   amounts deposited as cash collateral pursuant to the
   immediately preceding sentence shall be held for the sole
   benefit of the Banks whose Loans would otherwise have been
   immediately prepaid with the amounts deposited and upon the
   taking of any action by the Administrative Agent or the
   Banks pursuant to the remedial provisions of Section 9, any
   amounts held as cash collateral pursuant to this Section
   4.02(B) shall, subject to the requirements of applicable
   law, be immediately applied to the Loans.
   
            4.03 METHOD AND PLACE OF PAYMENT.  Except as
   otherwise specifically provided herein, all payments under
   this Agreement shall be made to the Administrative Agent
   for the ratable (based on its PRO RATA share) account of
   the Banks entitled thereto, not later than 1:00 P.M. (New
   York time) on the date when due and shall be made in
   immediately available funds and in lawful money of the
   United States of America at the Payment Office, it being
   understood that written notice by Borrower to the
   Administrative Agent to make a payment from the funds in
   Borrower's account at the Payment Office shall constitute
   the making of such payment to the extent of such funds held
   in such account.  Solely for purposes of calculating
   interest due on any amount owing hereunder, any payments
   under this Agreement which are made later than 1:00 P.M.
   (New York time) shall be deemed to have been made on the
   next succeeding Business Day.  Whenever any payment to be
   made hereunder shall be stated to be due on a day which is
   not a Business Day, the due date thereof shall be extended
   to the next succeeding Business Day and, with respect to
   payments of principal, interest shall be payable during
   such extension at the applicable rate in effect immediately
   prior to such extension.
   
            4.04 NET PAYMENTS.  (a)  All payments made by
   Borrower hereunder or under any Note will be made without
   setoff, counterclaim or other defense.  Except as provided
   in Section 4.04(b), all such payments will be made free and
   clear of, and without deduction or withholding for, any
   present or future taxes, levies, imposts, duties, fees,
   assessments or other charges of whatever nature now or
   hereafter imposed by any jurisdiction or by any political
   subdivision or taxing authority thereof or therein with
   respect to such payments (but excluding, except as provided
   in the second succeeding sentence, any franchise or similar
   tax imposed on or measured by the net income or net profits
   of a Bank pursuant to the laws of the jurisdiction in which
   it is organized or managed and controlled or the
   jurisdiction in which the principal office or applicable
   lending office of such Bank is located or any subdivision
   thereof or therein) and all interest, penalties or similar
   liabilities with respect thereto (other than interest,
   penalties, levies, imposts, duties, fees, assessments or
   other charges imposed or payable as a result of any action
   or inaction of such Bank not timely or properly taken by
   such Bank or non-compliance by such Bank with applicable
   law) (all such non-excluded taxes, levies, imposts, duties,
   fees, assessments or other charges being referred to
   collectively as "TAXES").  If any Taxes are so levied or
   imposed, Borrower agrees to pay the full amount of such
   Taxes, and such additional amounts, if any, as may be
   necessary so that every payment of all amounts due under
   this Agreement or under any Note, after withholding or
   deduction for or on account of any Taxes, will not be less
   than the amount provided for herein or in such Note.  If
   any amounts are payable in respect of Taxes pursuant to the
   preceding sentence, Borrower agrees to reimburse each Bank,
   upon the written request of such Bank, for taxes imposed on
   or measured by the net income or net profits of such Bank
   pursuant to the laws of the jurisdiction in which the
   principal office or applicable lending office of such Bank
   is located or under the laws of any political subdivision
   or taxing authority of any such jurisdiction in which the
   principal office or applicable lending office of such Bank
   is located and for any withholding of taxes as such Bank
   shall determine are payable by, or withheld from, such Bank
   in respect of such amounts so paid to or on behalf of such
   Bank pursuant to the preceding sentence and in respect of
   any amounts paid to or on behalf of such Bank pursuant to
   this sentence.  Borrower will furnish to the Administrative
   Agent within 45 days after the date the payment of any
   Taxes is due pursuant to applicable law certified copies of
   tax receipts evidencing such payment by Borrower.  Borrower
   agrees to indemnify and hold harmless each Bank, and
   reimburse such Bank upon its written request, for the
   amount of any Taxes so levied or imposed and paid by such
   Bank.
   
            (b) Each Bank that is not a United States
   person (as such term is defined in Section 7701(a)(30) of
   the Code) agrees to deliver to Borrower and the
   Administrative Agent on or prior to the date of this
   Agreement, or in the case of a Bank that is an assignee or
   transferee of an interest under this Agreement pursuant to
   Section 1.13 or 12.04 (unless the respective Bank was
   already a Bank hereunder immediately prior to such
   assignment or transfer), on the date of such assignment or
   transfer to such Bank, (i) two accurate and complete
   original signed copies of Internal Revenue Service Form
   4224 or 1001 (or successor forms) certifying to such Bank's
   entitlement to a complete exemption from United States
   withholding tax with respect to payments to be made under
   this Agreement and under any Note, or (ii) if the Bank is
   not a "bank" within the meaning of Section 881(c)(3)(A) of
   the Code and cannot deliver either Internal Revenue Service
   Form 1001 or 4224 pursuant to clause (i) above, (x) a
   certificate substantially in the form of EXHIBIT D hereto
   (any such certificate, a "SECTION 4.04(b)(ii) CERTIFICATE")
   and (y) two accurate and complete original signed copies of
   Internal Revenue Service Form W-8 (or successor form)
   certifying to such Bank's entitlement to a complete
   exemption from United States withholding tax with respect
   to payments of interest to be made under this Agreement and
   under any Note.  In addition, each Bank agrees that from
   time to time after the date of this Agreement, when a lapse
   in time or change in circumstances renders the previous
   certification obsolete or inaccurate in any material
   respect, it will deliver to Borrower and the Administrative
   Agent two new accurate and complete original signed copies
   of Internal Revenue Service Form 4224 or 1001, or Form W-8
   and a Section 4.04(b)(ii) Certificate, as the case may be,
   and such other forms as may be required in order to confirm
   or establish the entitlement of such Bank to a continued
   exemption from or reduction in United States withholding
   tax with respect to payments under this Agreement and any
   Note, or it shall immediately notify Borrower and the
   Administrative Agent of its inability to deliver any such
   Form or Certificate.  Notwithstanding anything to the
   contrary contained in Section 1.10, 2.06 or 4.04(a), but
   subject to Section 12.04(b) and the immediately succeeding
   sentence, (x) Borrower shall be entitled, to the extent it
   is required to do so by law, to deduct or withhold income
   or similar taxes imposed by the United States (or any
   political subdivision or taxing authority thereof or
   therein) from interest, fees or other amounts payable
   hereunder for the account of any Bank which is not a United
   States person (as such term is defined in Section
   7701(a)(30) of the Code) for U.S. Federal income tax
   purposes to the extent that such Bank has not provided to
   Borrower U.S. Internal Revenue Service Forms that establish
   a complete exemption from such deduction or withholding and
   (y) Borrower shall not be obligated pursuant to Section
   1.10, 2.06 or 4.04(a) hereof to gross-up payments to be
   made to a Bank in respect of income or similar taxes
   imposed by the United States (I) if such Bank has not
   provided to Borrower the Internal Revenue Service Forms
   required to be provided to Borrower pursuant to this
   Section 4.04(b) or (II) in the case of a payment, other
   than interest, to a Bank described in clause (ii) above, to
   the extent that such Forms do not establish a complete
   exemption from withholding of such taxes.  Notwithstanding
   anything to the contrary contained in the preceding
   sentence or elsewhere in this Section 4.04 and except as
   set forth in Section 12.04(b), Borrower agrees to pay
   additional amounts and to indemnify each Bank in the manner
   set forth in Section 1.10, 2.06 or 4.04(a) (without regard
   to the identity of the jurisdiction requiring the deduction
   or withholding) in respect of any amounts deducted or
   withheld by it as described in the immediately preceding
   sentence as a result of any changes after the date of this
   Agreement in any applicable law, treaty, governmental rule,
   regulation, guideline or order, or in the interpretation
   thereof, relating to the deducting or withholding of income
   or similar Taxes; PROVIDED, HOWEVER, such Bank shall
   provide to Borrower and the Administrative Agent any
   reasonably available applicable Internal Revenue Service
   tax form (reasonably similar in its simplicity and lack of
   detail to Internal Revenue Service Form 1001) necessary or
   appropriate for the exemption or reduction in the rate of
   such U.S. federal withholding tax.
    
            (c) The provisions of this Section 4.04 shall
   be subject to Section 1.12(b) (to the extent applicable).
   
            SECTION 5.     CONDITIONS PRECEDENT.  The
   obligation of the Banks to make each Loan hereunder, and
   the obligation of the Letter of Credit Issuers to issue
   Letters of Credit hereunder, is subject, at the time of
   each such Credit Event (except as otherwise hereinafter
   indicated), to the satisfaction of each of the following
   conditions:
   
            5.01 EXECUTION OF AGREEMENT AND NOTES.  On or
   prior to the Effectiveness Date, (i) this Agreement shall
   have been duly authorized, executed and delivered by each
   of the parties thereto and (ii) there shall have been
   delivered to the Administrative Agent for the account of
   each Bank the appropriate Note executed by Borrower, and in
   the amount, maturity and as otherwise provided herein.
   
            5.02 NO DEFAULT; REPRESENTATIONS AND
   WARRANTIES.  As of the Effectiveness Date and at the time
   of each Credit Event and also after giving effect thereto,
   (i) there shall exist no Default or Event of Default and
   (ii) all representations and warranties contained herein or
   in each of the other Credit Documents in effect at such
   time shall be true and correct in all material respects
   with the same effect as though such representations and
   warranties had been made on and as of the date of such
   Credit Event (except to the extent that such
   representations and warranties expressly relate to an
   earlier date, in which case they shall be true and correct
   in all material respects as of such earlier date, and
   except to the extent that such representations and
   warranties are no longer true and correct due to any action
   or inaction permitted or required to be taken under the
   Credit Documents by Borrower or any Subsidiary).
   
            5.03 OFFICER'S CERTIFICATE.  On the
   Effectiveness Date, the Administrative Agent shall have
   received a certificate dated such date signed by the
   President, any Vice President or the Treasurer of Borrower
   stating that all of the applicable conditions set forth in
   Sections 5.02, 5.08(a) and 5.15 have been satisfied as of
   such date.
   
            5.04 OPINIONS OF COUNSEL.  On the Effectiveness
   Date, the Administrative Agent shall have received
   opinions, addressed to the Administrative Agent and each of
   the Banks and dated the Initial Borrowing Date, from (i)
   Baker & Botts, L.L.P., counsel to Borrower, which opinion
   shall cover the matters contained in EXHIBIT E-1 hereto,
   (ii) James L. McCulloch, Vice President and General Counsel
   of Borrower, which opinion shall cover the matters
   contained in EXHIBIT E-2 hereto, and (iii) Cahill Gordon &
   Reindel, special counsel to the Administrative Agent, which
   opinion shall cover the matters contained in EXHIBIT E-3
   hereto.
   
            5.05 CORPORATE PROCEEDINGS.  (a)  On the
   Effectiveness Date, the Administrative Agent shall have
   received from each Credit Party a certificate, dated the
   Initial Borrowing Date, signed by the President, any Vice
   President or the Treasurer or other appropriate
   representative of such Credit Party in the form of
   EXHIBIT F hereto with appropriate insertions and deletions,
   together with copies of the certificate of formation or
   organization, the by-laws, or other organizational
   documents of such Credit Party, and the resolutions, or
   such other administrative approval, of such Credit Party
   referred to in such certificate.
   
            (b)  On the Effectiveness Date, all corporate
   and legal proceedings and all instruments and agreements in
   connection with the execution and delivery of the Credit
   Documents shall be reasonably satisfactory in form and
   substance to the Administrative Agent, and the
   Administrative Agent shall have received all information
   and copies of all certificates, documents and papers,
   including good standing certificates and any other records
   of corporate proceedings and governmental approvals, if
   any, which the Administrative Agent may have reasonably
   requested in connection therewith.
   
            5.06 INDEBTEDNESS.  On the Effectiveness Date,
   (a) Borrower and the Subsidiaries shall not have any
   Indebtedness outstanding with a principal amount in excess
   of $10,000 except for (i) Loans and Letters of Credit,
   (ii) Indebtedness in an aggregate principal amount not
   exceeding $225.0 million represented by the Senior Secured
   Notes, (iii) Existing Indebtedness and (iv) Existing L\C
   Facility Indebtedness and (b) the credit agreement dated
   June 24, 1993 among Borrower and certain Subsidiaries and
   Societe Generale, New York Branch shall have been
   terminated and all amounts owing thereunder shall have been
   repaid and the Administrative Agent shall have received
   written evidence reasonably satisfactory to it of the same. 
   On or prior to the Initial Borrowing Date, there shall have
   been delivered to the Banks copies, certified as true and
   correct by an appropriate officer of Borrower, of all
   agreements evidencing or relating to Existing Indebtedness
   (the "EXISTING INDEBTEDNESS AGREEMENTS"), all of which
   Existing Indebtedness Agreements shall be in form and
   substance reasonably satisfactory to the Administrative
   Agent.
   
            5.07 ADVERSE CHANGE, ETC.  As of the date of
   each Credit Event, nothing shall have occurred (and neither
   the Banks nor the Administrative Agent shall have become
   aware of any facts or conditions not previously known)
   which the Administrative Agent shall reasonably determine
   (a) is reasonably likely to have a material adverse effect
   on the rights and remedies of the Banks or the
   Administrative Agent under the Credit Documents, taken as a
   whole, or on the ability of the Credit Parties, taken as a
   whole, to perform their obligations to the Banks and the
   Administrative Agent under the Credit Documents, or (b) is
   reasonably likely to have a Material Adverse Effect.
   
            5.08 LITIGATION.  On the Effectiveness Date,
   there shall be no actions, suits or proceedings by any
   administrative, governmental or other public authority or
   other Person pending or threatened (a) with respect to this
   Agreement or any other Credit Document or the transactions
   contemplated hereby or thereby or (b) which the
   Administrative Agent or the Required Banks shall reasonably
   determine is reasonably likely to, individually or in the
   aggregate, (i) have a Material Adverse Effect or (ii) have
   a material adverse effect on the rights or remedies of the
   Banks or the Administrative Agent under the Credit
   Documents, taken as a whole, or on the ability of the
   Credit Parties, taken as a whole, to perform their
   obligations to the Banks and the Administrative Agent under
   the Credit Documents.
   
            5.09 APPROVALS.  On the Effectiveness Date, all
   material necessary governmental and third party approvals
   and consents in connection with the transactions
   contemplated by the Credit Documents and otherwise referred
   to therein shall have been obtained and remain in effect,
   and all applicable waiting periods shall have expired
   without any action being taken by any competent authority
   which restrains or prevents such transactions or imposes,
   in the reasonable judgment of the Required Banks or the
   Administrative Agent, materially adverse conditions upon
   the consummation of such transactions.
   
            5.10  FEES.  On the Effectiveness Date,
   Borrower shall have paid to the Administrative Agent and
   the Banks all Fees and expenses agreed upon by such parties
   to be paid on or prior to such date.
   
            5.11  GUARANTY.  On or prior to the
   Effectiveness Date, each Wholly-Owned Domestic Subsidiary
   which owns or has chartered from a Person (other than
   Borrower or any Subsidiary) any Fleet Rig as of the
   Effectiveness Date and each Wholly-Owned Domestic
   Subsidiary whose assets as of the Effectiveness Date
   constitute more than 5% of the combined book value of the
   assets of Borrower and the Subsidiaries (other than
   Unrestricted Subsidiaries) as of the Effectiveness Date
   shall have duly authorized, executed and delivered a
   Guaranty in the form of EXHIBIT G hereto (as modified,
   amended or supplemented from time to time in accordance
   with the terms hereof and thereof, the "GUARANTY"), and the
   Guaranty shall be in full force and effect; PROVIDED,
   HOWEVER, that no Unrestricted Subsidiary need be a
   Guarantor unless it is a guarantor of any Indebtedness of
   Borrower or of any Subsidiary (other than of an
   Unrestricted Subsidiary).
   
            5.12 RIG MATTERS.  (a)On or prior to the
   Effectiveness Date, the Administrative Agent shall have
   received:  
   
                  (i)    evidence reasonably satisfactory to the
        Administrative Agent that as of the Effectiveness Date
        (A) Borrower and the Subsidiaries (other than
        Unrestricted Subsidiaries) own and operate not less
        than 25 Fleet Rigs which have a Market Value,
        determined in a manner reasonably satisfactory to the
        Administrative Agent by one of the Approved
        Shipbrokers, of at least $1.0 billion and (B) each
        Fleet Rig is classified in the highest class available
        for rigs of its age and type with the American Bureau
        of Shipping, Inc. or another internationally
        recognized classification society acceptable to the
        Administrative Agent, free of any requirements or
        recommendations, other than such requirements or
        recommendations which if not cured by the owner
        thereof would not materially diminish such Fleet Rig's
        value; and
   
                 (ii)    reports from one of the Approved Shipbrokers
        setting forth the Market Value as of the Effectiveness
        Date of each Fleet Rig.
   
          (b)  On the date of each Credit Event, none of
   the Glomar Adriatic IX (Official No. 11490-81-D), Glomar
   Adriatic X (Official No. 10767-PEXT5), Glomar Adriatic XI
   (Official No. 21899-95), Glomar Baltic I (Official No.
   663783), Glomar Celtic Sea (Official No. 25598-PEXT) Fleet
   Rigs and Borrower's leasehold interest in and other rights
   with respect to the Glomar Explorer (Official No. 547527)
   Fleet Rig shall be subject to any Lien, other than Liens
   permitted by Section 8.04 (except Liens securing
   Indebtedness for borrowed money) and such Fleet Rigs and
   leasehold interest and other rights shall have a Market
   Value at the Effectiveness Date, determined in a manner
   reasonably satisfactory to the Administrative Agent by one
   of the Approved Shipbrokers, of at least $150.0 million.
   
          5.13 INSURANCE REPORT.  On or prior to the
   Effectiveness Date, the Administrative Agent shall have
   received a detailed report from a firm of independent
   marine insurance brokers acceptable to the Administrative
   Agent and the Required Banks, with respect to the insurance
   maintained by Borrower and the Subsidiaries in connection
   with the Fleet Rigs, together with a certificate from such
   broker certifying that such insurances are placed with such
   insurance companies and/or underwriters and/or clubs, in
   such amounts, against such risks, and in such form, as are
   normally insured against by similarly situated insureds.
   
          5.14 PROJECTIONS.  On or prior to the
   Effectiveness Date, the Banks shall have received detailed
   consolidated financial projections (including, but not
   limited to, forecasted statements of net income, cash flow
   and balance sheets and compliance with all financial
   covenants) (the "PROJECTIONS"), for Borrower and the
   Subsidiaries for the fiscal year ending December 31, 1997,
   accompanied by a certificate of the Chief Financial Officer
   of Borrower to the effect that such Projections are based
   on supporting assumptions and explanations believed by
   Borrower in good faith to be reasonable as to the future
   financial performance of Borrower and the Subsidiaries for
   the period covered, which Projections, the supporting
   assumptions and explanations thereto, and certificate shall
   be reasonably satisfactory in form and substance to the
   Administrative Agent and the Required Banks.
   
          5.15  OFFSHORE DRILLING CONTRACTS.  On the
   Effectiveness Date, all of the offshore drilling contracts
   described on ANNEX III hereto shall be in full force and
   effect.
   
          5.16  MARGIN RULES.  On the date of each Credit
   Event, neither the making of a Loan hereunder nor the use
   of the proceeds thereof will violate or be inconsistent
   with the provisions of Regulations G, T, U or X of the
   Board of Governors of the Federal Reserve System.
   
          The acceptance of the benefits of each Credit
   Event shall constitute a representation and warranty by
   Borrower to the Administrative Agent and each of the Banks
   that all of the applicable conditions specified above exist
   as of that time.  All of the certificates, legal opinions
   and other documents and papers referred to in this Section
   5, unless otherwise specified, shall be delivered to the
   Administrative Agent at its Notice Office for the account
   of each of the Banks and, except for the Notes, in
   sufficient counterparts or copies for each of the Banks and
   shall be satisfactory in form and substance to the
   Administrative Agent.
   
          SECTION 6. REPRESENTATIONS, WARRANTIES AND
   AGREEMENTS.  In order to induce the Banks to enter into
   this Agreement and to make the Loans and issue and/or
   participate in Letters of Credit provided for herein,
   Borrower makes the following representations and warranties
   to, and agreements with, the Banks, all of which shall
   survive the execution and delivery of this Agreement and
   the making of the Loans (with the making of each Credit
   Event thereafter being deemed to constitute a
   representation and warranty that the matters specified in
   this Section 6 are true and correct in all material
   respects on and as of the date of each such Credit Event,
   unless such representation and warranty expressly indicates
   that it is being made as of any specific date, in which
   case such representations and warranties shall be true and
   correct in all material respects as of such date, and
   except to the extent that such representations and
   warranties are no longer true and correct due to any action
   or inaction permitted or required to be taken under the
   Credit Documents by Borrower or any Subsidiary):
   
          6.01 STATUS.  Borrower and each Subsidiary (i) is
   a duly organized and validly existing corporation,
   partnership, association, limited liability company or
   other business entity in good standing under the laws of
   the jurisdiction of its organization, (ii) has the power
   and authority and has obtained all requisite governmental
   licenses, authorizations, consents and approvals (a) to own
   its property and assets and (b) to transact the business in
   which it is engaged, except in such case where the failure
   to have such power and authority or to obtain such
   governmental licenses, authorizations, consents and
   approvals, individually and in the aggregate, (x) is not
   reasonably likely to have a Material Adverse Effect and (y)
   is not reasonably likely to have a material adverse effect
   on the rights and remedies of the Banks or the
   Administrative Agent under the Credit Documents, taken as a
   whole, or on the ability of the Credit Parties, taken as a
   whole, to perform their obligations to the Banks and the
   Administrative Agent under the Credit Documents, and (iii)
   is duly qualified and is authorized to do business and is
   in good standing in all jurisdictions where it is required
   to be so qualified and where the failure to be so
   qualified, individually and in the aggregate, is not
   reasonably likely to have a Material Adverse Effect.
   
          6.02 POWER AND AUTHORITY.  Each Credit Party has
   the power and authority to execute, deliver and carry out
   the terms and provisions of each Credit Document to which
   it is a party and has taken all necessary action to
   authorize the execution, delivery and performance of each
   Credit Document to which it is a party. Each Credit Party
   has duly executed and delivered each Credit Document to
   which it is a party and each such Credit Document
   constitutes the legal, valid and binding obligation of each
   such Credit Party, enforceable against such Person in
   accordance with its terms, except to the extent that the
   enforceability thereof may be limited by applicable
   bankruptcy, insolvency, reorganization, moratorium or
   similar laws generally affecting creditors' rights and by
   equitable principles (regardless of whether enforcement is
   sought in equity or at law).
   
          6.03 NO VIOLATION.  (a)  Neither the execution,
   delivery or performance by any Credit Party of the Credit
   Documents to which it is a party nor compliance with the
   terms and provisions thereof (i) will contravene any
   applicable provision of any law, statute, rule, regulation,
   order, writ, injunction or decree of any court or
   governmental instrumentality of the United States or any
   State thereof, (ii) will result in any breach of any of the
   terms, covenants, conditions or provisions of, or
   constitute a default under (or with notice or lapse of time
   or both would constitute a default under), or result in the
   creation or imposition of (or the obligation to create or
   impose) any Lien upon any of the property or assets of
   Borrower or any Subsidiary pursuant to the terms of, any
   indenture, mortgage, deed of trust, agreement or other
   instrument to which Borrower or any Subsidiary is a party
   or by which it or any of its properties or assets are bound
   or to which it is subject or (iii) will violate any
   provision of the Certificate of Incorporation or By-Laws of
   Borrower or any Subsidiary (except for, in the case of
   clauses (i) and (ii) above only, contraventions, breaches,
   defaults, creations or impositions which, individually and
   in the aggregate, (x) are not reasonably likely to have a
   Material Adverse Effect and (y) are not reasonably likely
   to have a material adverse effect on the rights or remedies
   of the Banks or the Administrative Agent under the Credit
   Documents, taken as a whole, or on the ability of the
   Credit Parties, taken as a whole, to perform their
   obligations to the Banks and the Administrative Agent under
   the Credit Documents). 
   
          (b)  Neither Borrower nor any Subsidiary is
   (i) in contravention of any applicable provision of any
   law, statute, rule, regulation, order, writ, injunction or
   decree of any court or governmental instrumentality of the
   United States or any State thereof, (ii) in breach of any
   of the terms, covenants, conditions or provisions of, or in
   default under (or with notice or lapse of time or both
   would be in default under), any indenture, mortgage, deed
   of trust, agreement or other instrument to which Borrower
   or any Subsidiary is a party or by which it or any of its
   properties or assets are bound or to which it is subject or
   (iii) in violation of any provision of the Certificate of
   Incorporation or By-Laws of Borrower or any Subsidiary
   (except for, in the case of clauses (i) and (ii) above
   only, contraventions, breaches or defaults which,
   individually and in the aggregate, (x) are not reasonably
   likely to have a Material Adverse Effect and (y) are not
   reasonably likely to have a material adverse effect on the
   rights or remedies of the Banks or the Administrative Agent
   under the Credit Documents, taken as a whole, or on the
   ability of the Credit Parties, taken as a whole, to perform
   their obligations to the Banks and the Administrative Agent
   under the Credit Documents).
   
          6.04 LITIGATION.  There are no actions, suits or
   proceedings by an administrative, governmental or other
   public authority or other Person pending or, to the best of
   Borrower's knowledge, threatened against or with respect to
   Borrower or any Subsidiary or any of their respective
   properties or assets which, individually or in the
   aggregate, (i) are reasonably likely to have a Material
   Adverse Effect or (ii) are reasonably likely to have a
   material adverse effect on the rights or remedies of the
   Banks or the Administrative Agent under the Credit
   Documents, taken as a whole, or on the ability of the
   Credit Parties, taken as a whole, to perform their
   obligations to the Banks and the Administrative Agent under
   the Credit Documents.
   
          6.05 USE OF PROCEEDS; MARGIN REGULATIONS. (a) The
   proceeds of all Loans shall be utilized to support
   Borrower's ongoing working capital needs or to provide for
   the general corporate purposes of Borrower.
   
          (b) Neither the making of any Loan hereunder, nor
   the use of the proceeds thereof, will violate or be
   inconsistent with the provisions of Regulation G, T, U or X
   of the Board of Governors of the Federal Reserve System and
   no part of the proceeds of any Loan will be used to
   purchase or carry any Margin Stock in violation of
   Regulation U or to extend credit for the purpose of
   purchasing or carrying any Margin Stock.
   
          6.06 GOVERNMENTAL APPROVALS.  Except for the
   orders, consents, approvals, licenses, authorizations,
   validations, recordings, registrations and exemptions that
   have already been duly made or obtained and remain in full
   force and effect, no order, consent, approval, license,
   authorization, or validation of, or filing, recording or
   registration with, or exemption by, any foreign or domestic
   governmental or public body or authority, or any
   subdivision thereof, is necessary or is required to
   authorize or is required in connection with (i) the
   execution, delivery and performance of any Credit Document
   or (ii) the legality, validity, binding effect or
   enforceability of any Credit Document.
   
          6.07 INVESTMENT COMPANY ACT.  Neither Borrower
   nor any Subsidiary is an "investment company" or a company
   "controlled" by an "investment company," within the meaning
   of the Investment Company Act of 1940, as amended.
   
          6.08 PUBLIC UTILITY HOLDING COMPANY ACT.  Neither
   Borrower nor any Subsidiary is a "holding company," or a
   "subsidiary company" of a "holding company," or an
   "affiliate" of a "holding company" or of a "subsidiary
   company" of a "holding company," within the meaning of the
   Public Utility Holding Company Act of 1935, as amended.
   
          6.09 TRUE AND COMPLETE DISCLOSURE.  All factual
   information (taken as a whole) heretofore or
   contemporaneously furnished for purposes of or in
   connection with this Agreement or any transaction
   contemplated herein by or, to Borrower's knowledge, on
   behalf of Borrower or any Subsidiary in writing to (i) the
   Administrative Agent or any Bank or (ii) any Person
   providing information to the Administrative Agent or any
   Bank on behalf of Borrower or any Subsidiary is, and all
   other such factual information (taken as a whole) hereafter
   furnished by or, to Borrower's knowledge, on behalf of
   Borrower or any Subsidiary in writing to (i) the
   Administrative Agent or any Bank or (ii) any Person
   providing information to the Administrative Agent or any
   Bank on behalf of Borrower or any Subsidiary will be, true
   and accurate in all material respects on the date as of
   which such information is dated or certified and not
   incomplete by omitting to state any material fact necessary
   to make such information (taken as a whole) not misleading
   at such time in light of the circumstances under which such
   information was provided.  The Projections contained in
   such materials are based on supporting estimates and
   assumptions believed by such Persons in good faith to be
   reasonable at the time made as to the future financial
   performance of Borrower and the Subsidiaries for the period
   covered, it being recognized by the Administrative Agent
   and the Banks that such Projections as to future events are
   not to be viewed as facts and that actual results during
   the period or periods covered by any such Projections may
   differ from the projected results.  There is no fact known
   to Borrower or any Subsidiary which is reasonably likely to
   have a Material Adverse Effect or which has not been
   disclosed herein or in such other documents, certificates
   and statements furnished to the Banks for use in connection
   with the transactions contemplated hereby.
   
          6.10 FINANCIAL CONDITION; FINANCIAL STATEMENTS. 
   (a)  On and as of the date of each Credit Event, on a PRO
   FORMA basis after giving effect to all Indebtedness
   incurred, and to be incurred, by Borrower and the
   Subsidiaries in connection therewith, (x) the sum of the
   assets, at a fair valuation, of Borrower and the
   Subsidiaries taken as a whole will exceed their debts, (y)
   Borrower and the Subsidiaries taken as a whole will not
   have incurred or intended to, or believe that they will,
   incur debts beyond their ability to pay such debts as such
   debts mature and (z) Borrower and the Subsidiaries taken as
   a whole will not have unreasonably small capital with which
   to conduct their business.
   
          (b) (i)  The consolidated balance sheet of
   Borrower and the Subsidiaries at December 31, 1995 and the
   related consolidated statements of operations and cash
   flows of Borrower and the Subsidiaries for the fiscal year
   ended as of such date, which have been examined by Coopers
   & Lybrand L.L.P., independent certified public accountants,
   who delivered an unqualified opinion in respect thereof,
   and (ii) the consolidated balance sheet of Borrower and the
   Subsidiaries as of September 30, 1996 and the related
   consolidated statements of operations and cash flows for
   Borrower and the Subsidiaries for the nine-month period
   then ended, copies of which have heretofore been furnished
   to each Bank, present fairly in all material respects the
   financial position of such entities at the dates of said
   statements and the results for the period covered thereby
   in accordance with GAAP, except to the extent provided in
   the notes to said financial statements and, in the case of
   the September 30, 1996 statements, subject to normal and
   recurring year-end audit adjustments and the exclusion of
   detailed footnotes.  All such financial statements have
   been prepared in accordance with generally accepted
   accounting principles consistently applied except to the
   extent provided in the notes to said financial statements. 
   Nothing has occurred since December 31, 1995 that has had
   or is reasonably likely to have a Material Adverse Effect.
   
          (c) Except as reflected in the financial
   statements and the notes thereto described in Section
   6.10(b) or in ANNEX VII hereto, there were as of the
   Effectiveness Date no liabilities or obligations with
   respect to Borrower or any Subsidiary of a nature (whether
   absolute, accrued, contingent or otherwise and whether or
   not due) which, either individually or in aggregate, is
   reasonably likely to have a Material Adverse Effect.
   
          6.11 TAX RETURNS AND PAYMENTS.  Borrower and each
   Subsidiary has filed all federal income tax returns and all
   other material tax returns, domestic and foreign, required
   to be filed by it and has paid all material taxes and
   assessments payable by it which have become due, other than
   those not yet delinquent and except for those contested in
   good faith and for which adequate reserves have been
   established as is required by GAAP or which if unfiled or
   unpaid would not reasonably be likely to have a Material
   Adverse Effect.  Borrower and each Subsidiary has paid, or
   has provided adequate reserves (in accordance with GAAP)
   for the payment of, all federal, state and foreign income
   taxes applicable for all prior fiscal years and for the
   current fiscal year to the date hereof.  Neither Borrower
   nor any Subsidiary knows of any proposed tax assessment
   against any such Person that is reasonably likely to have a
   Material Adverse Effect and which is not being actively
   contested in good faith by such Person to the extent
   affected thereby by appropriate proceedings; PROVIDED,
   HOWEVER, that such reserves or other appropriate
   provisions, if any, as shall be required in conformity with
   GAAP shall have been made or provided therefor.
   
          6.12 EMPLOYEE BENEFIT PLANS.  (a) Each member of
   the ERISA Group (x) has fulfilled its obligations under the
   minimum funding standards of ERISA and the Code with
   respect to each Plan and (y) is in compliance in all
   material respects with the presently applicable provisions
   of ERISA and the Code with respect to each Plan other than
   any failure to so comply that is not reasonably likely to
   have a Material Adverse Effect.  No member of the ERISA
   Group has (i) sought a waiver of the minimum funding
   standard under Section 412 of the Code in respect of any
   Plan within the preceding six years, (ii) failed to make
   any contribution or payment to any Plan or Multiemployer
   Plan or in respect of any Benefit Arrangement, or made any
   amendment to any Plan or Benefit Arrangement, which has
   resulted or is reasonably likely to result in the
   imposition of a Lien or the posting of a bond or other
   security under ERISA or the Code or (iii) incurred any
   liability under Title IV of ERISA within the preceeding six
   years other than a liability to the PBGC for premiums under
   Section 4007 of ERISA.  The amount of Unfunded Liabilities
   in the aggregate for all Plans (excluding for purposes of
   such computation any Plans which have a negative amount of
   Unfunded Liabilities) does not exceed $10.0 million.
   
          (b)  Each Foreign Pension Plan has been
   maintained in compliance with its terms and with the
   requirements of any and all applicable laws, statutes,
   rules, regulations and orders and has been maintained,
   where required, in good standing with applicable regulatory
   authorities other than any failure to so comply that could
   not reasonably be expected to have a Material Adverse
   Effect.  Neither Borrower nor any Subsidiary has incurred
   any material obligation in connection with the termination
   of or withdrawal from any Foreign Pension Plan.  The
   present value of the accrued benefit liabilities (whether
   or not vested) under each Foreign Pension Plan, determined
   as of the end of Borrower's most recently ended fiscal year
   on the basis of actuarial assumptions, each of which is
   reasonable, did not exceed the current value of the assets
   of such Foreign Pension Plan allocable to such benefit
   liabilities by an amount that could reasonably be expected
   to have a Material Adverse Effect. 
   
          6.13 SUBSIDIARIES.  ANNEX IV hereto lists each
   Subsidiary (and the direct and indirect ownership interest
   of Borrower therein), in each case existing on the date
   hereof.  All the outstanding shares of Capital Stock of
   each Subsidiary have been duly authorized and validly
   issued, are fully paid and non-assessable and (except for
   any directors' qualifying shares) are owned by Borrower
   free and clear of all Liens, other than, so long as the
   Indenture is in effect, Liens created by the Security
   Documents.
   
          6.14 PATENTS, ETC.  Borrower and each Subsidiary
   has obtained all patents, trademarks, service marks, trade
   names, copyrights, licenses and other rights (collectively,
   the "INTELLECTUAL PROPERTY"), free from burdensome
   restrictions, that are necessary for the operation of their
   respective businesses as presently conducted and the
   failure to obtain which is reasonably likely to have,
   individually or in the aggregate, a Material Adverse
   Effect.  No claim is pending or, to the best of Borrower's
   knowledge, threatened to the effect that the actions of
   Borrower or any Subsidiary infringe upon or conflict with
   the asserted rights of any other Person under any
   Intellectual Property, except for such claims which are
   not, individually or in the aggregate, reasonably likely to
   have a Material Adverse Effect, and, to the best of
   Borrower's knowledge, there is no basis for any such claim
   (whether or not pending or threatened).  No claim is
   pending or, to the best of Borrower's knowledge, threatened
   to the effect that any such Intellectual Property owned or
   licensed by Borrower or any Subsidiary or which Borrower or
   any Subsidiary otherwise has the right to use is invalid or
   unenforceable by Borrower or such Subsidiary, except for
   such claims which are not, individually or in the
   aggregate, reasonably likely to have a Material Adverse
   Effect, and, to the best of Borrower's knowledge, there is
   no basis for any such claim (whether or not pending or
   threatened).
   
          6.15 ENVIRONMENTAL MATTERS.  (a)  Borrower and
   each Subsidiary is in compliance with all Environmental
   Laws and is not subject to any liability under any
   Environmental Law except as would not, individually or in
   the aggregate, reasonably be likely to have a Material
   Adverse Effect.  All licenses, permits, registrations, or
   approvals required for the business conducted and for the
   operations and facilities owned, leased or operated by
   Borrower and each Subsidiary under any Environmental Law
   have been obtained and Borrower and each Subsidiary is in
   compliance therewith, except such licenses, permits,
   registrations or approvals the failure to obtain or to
   comply therewith is not, individually or in the aggregate,
   reasonably likely to have a Material Adverse Effect. 
   Neither Borrower nor any Subsidiary is in any respect in
   noncompliance with, breach of or default under any
   applicable writ, order, judgment, injunction, or decree to
   which Borrower or such Subsidiary is a party or which would
   affect the ability of Borrower or such Subsidiary to
   operate any Real Property, offshore drilling rig or other
   facility and no event has occurred and is continuing which,
   with the passage of time or the giving of notice or both,
   would constitute noncompliance, breach of or default
   thereunder, except in each such case, such noncompliance,
   breaches or defaults which are not, individually or in the
   aggregate, reasonably likely to have a Material Adverse
   Effect.  There are no Environmental Claims pending or, to
   the best knowledge of Borrower, threatened, against
   Borrower or any Subsidiary wherein an unfavorable decision,
   ruling or finding is, individually or in the aggregate,
   reasonably likely to have a Material Adverse Effect. 
   Neither Borrower nor any Subsidiary has received notice
   that it has been identified as a potentially responsible
   party under CERCLA or any comparable foreign or state law,
   nor has Borrower or any Subsidiary received any written
   notification that any Hazardous Materials that it or any of
   their respective predecessors in interest has used,
   generated, stored, treated, handled, transported or
   disposed of, or arranged for disposal or treatment of, have
   been found at any location at which any Person is
   conducting or plans to conduct any action pursuant to any
   Environmental Law except as would not, individually or in
   the aggregate, reasonably be likely to have a Material
   Adverse Effect.  No properties now or formerly owned,
   leased or operated by Borrower or any Subsidiary or, to the
   knowledge of Borrower or any Subsidiary, any of their
   respective predecessors in interest, are (x) listed or
   proposed for listing on the National Priorities List under
   CERCLA or (y) listed on the Comprehensive Environmental
   Response, Compensation and Liability Information System
   List promulgated pursuant to CERCLA or (z) included on any
   comparable lists maintained by any Governmental Authority
   except as would not, individually or in the aggregate,
   reasonably be likely to have a Material Adverse Effect. 
   There are no past or present events, conditions,
   activities, practices or actions, or any agreements,
   judgments, decrees or orders by which Borrower or any
   Subsidiary is bound, which would reasonably be expected to
   prevent Borrower's or any Subsidiary's compliance with any
   Environmental Law, or which would reasonably be expected to
   give rise to any liability of Borrower or any Subsidiary
   under any Environmental Law, or to cause any Real Property,
   offshore drilling rig or other facility owned, leased or
   operated by Borrower or any Subsidiary to be subject to any
   restriction on its ownership, occupancy, use or
   transferability under any Environmental Law, except in each
   such case, such noncompliance, liability or restriction
   which is, individually or in the aggregate, not reasonably
   likely to have a Material Adverse Effect.
   
          (b) Hazardous Materials have not at any time been
   (i) generated, used, processed, treated, stored or disposed
   of on, at or under or transported to or from, any Real
   Property, offshore drilling rig or other facility at any
   time owned, leased or operated by Borrower or any
   Subsidiary or (ii) Released on, at, under or from any such
   Real Property, offshore drilling rig or other such
   facility, in each case where such occurrence, or event is,
   individually or in the aggregate, reasonably likely to have
   a Material Adverse Effect.
   
          6.16 PROPERTIES.    (a) Borrower and each
   Subsidiary has title to all material properties owned by
   them including all property reflected in the consolidated
   balance sheets of Borrower and the Subsidiaries as referred
   to in Section 6.10(b), free and clear of all Liens, other
   than (i) as referred to in the consolidated balance sheet
   or in the notes thereto or (ii) Permitted Liens.
   
          (b) ANNEX VI hereto sets forth all the offshore
   drilling rigs owned or leased for more than two years by
   Borrower or any Subsidiary on the date hereof, and
   identifies the registered owner, flag, official or patent
   number, as the case may be, and the home port, class,
   location and operating status thereof on the date hereof.
   
          6.17 LABOR RELATIONS.  Neither Borrower nor any
   Subsidiary is engaged in any unfair labor practice that is,
   individually or in the aggregate, reasonably likely to have
   a Material Adverse Effect.  There is (i) no unfair labor
   practice complaint pending against Borrower or any
   Subsidiary or threatened against any of them, before the
   National Labor Relations Board, and no grievance or
   arbitration proceeding arising out of or under any
   collective bargaining agreement is so pending against any
   of them or, to the best of Borrower's knowledge, threatened
   against any of them, (ii) no strike, labor dispute,
   slowdown or stoppage pending against Borrower or any
   Subsidiary or, to the best of Borrower's knowledge,
   threatened against Borrower or any Subsidiary and (iii) no
   union representation petition existing with respect to the
   employees of and of them and no union organizing activities
   are taking place, except with respect to any matter
   specified in clause (i), (ii) or (iii) above, either
   individually or in the aggregate, such as is not reasonably
   likely to have a Material Adverse Effect.
   
          6.18 EXISITNG INDEBTEDNESS.  ANNEX VII hereto
   sets forth a true and complete list of all Indebtedness of
   Borrower and each Subsidiary with a principal amount in
   excess of $10,000 on the date hereof and which is to remain
   outstanding thereafter, excluding (i) the Loans and the
   Letters of Credit, (ii) Indebtedness represented by the
   Senior Secured Notes, (iii) Existing L/C Facility
   Indebtedness and (iv) Indebtedness permitted under
   Sections 8.3(d) and (e) (the "EXISTING INDEBTEDNESS"), in
   each case showing the aggregate principal amount thereof
   and the name of the respective borrower (or issuer) and any
   other entity which directly or indirectly guaranteed such
   debt.
   
          6.19 RIG CLASSIFICATION.  Each offshore drilling
   rig owned or leased by Borrower or any Subsidiary (other
   than any offshore drilling rig which is under construction
   or is in the process of being upgraded) is classified in
   the highest class available for rigs of its age and type
   with the American Bureau of Shipping, Inc. or another
   internationally recognized classification society
   acceptable to the Administrative Agent ("IN CLASS"), free
   of any requirements or recommendations, other than such
   requirements or recommendations which if not cured by the
   owner thereof would not reasonably be likely to have,
   individually or in the aggregate, a Material Adverse
   Effect.
   
          6.20 INSURANCE.  Borrower and each Subsidiary has
   insured its properties and assets against such risks and in
   such amounts as are customary for companies engaged in
   similar businesses.
   
          SECTION 7.  AFFIRMATIVE COVENANTS.  Borrower
   covenants and agrees that on the date hereof and thereafter
   for so long as this Agreement is in effect and until the
   Commitments have terminated, no Letters of Credit or Notes
   are outstanding and the Loans and Unpaid Drawings, together
   with interest, Fees and all other Obligations incurred
   hereunder or under any other Credit Document, are paid in
   full:
   
          7.01 INFORMATION COVENANTS.  Borrower will
   furnish to each Bank:
   
          (a)  ANNUAL FINANCIAL STATEMENTS.  Within 95 days
        after the close of fiscal year 1996 and each other
        fiscal year of Borrower occurring after the date
        hereof, the consolidated balance sheet of Borrower and
        the Subsidiaries as at the end of such fiscal year,
        and the related consolidated statements of operations
        and stockholders' equity and cash flows for such
        fiscal year, in each case setting forth comparative
        consolidated figures for the preceding fiscal year,
        and examined by independent certified public
        accountants of recognized national standing whose
        opinion shall not be qualified as to the scope of
        audit and as to the status of Borrower and the
        Subsidiaries as a going concern.
   
          (b) QUARTERLY FINANCIAL STATEMENTS.  As soon as
        available and in any event within 60 days after the
        close of each of the first three quarterly accounting
        periods in fiscal 1997 and each fiscal year occurring
        after the date hereof, the consolidated balance sheet
        of Borrower and the Subsidiaries as at the end of such
        quarterly period, and the related consolidated
        statements of operations and, if included in
        Borrower's reports filed with the SEC pursuant to the
        Exchange Act, stockholders' equity for such quarterly
        period and for the elapsed portion of the fiscal year
        ended with the last day of such quarterly period, and
        the consolidated statement of cash flows for the
        elapsed portion of the fiscal year ended with the last
        day of such quarterly period, and in each case setting
        forth comparative consolidated figures for the related
        period in the prior fiscal year, except with respect
        to the consolidated balance sheet, which shall be as
        of the end of the prior fiscal year, all of which
        shall be certified by the chief financial officer or
        controller of Borrower as fairly presenting in all
        material respects the financial conditions and results
        of operations of Borrower and the Subsidiaries in
        accordance with GAAP, subject to changes resulting
        from audit and normal year-end audit adjustments and
        the exclusion of detailed footnotes.
   
          (c)  RIG STATUS REPORT.  As soon as available and
        in any event within 60 days after the close of each
        quarterly accounting period occurring after the date
        hereof, a report detailing (i) as of such quarter end
        (A) location of each Fleet Rig owned or leased by
        Borrower or any Subsidiary, and (B) term of, and
        parties to, any contract pertaining to any such Fleet
        Rig and (ii) the average day rates and utilization (on
        a class and geographic region basis) for each Fleet
        Rig for such quarter on the date of such report. 
   
          (d)  INSURANCE SUMMARY.  At the Effectiveness
        Date and within 105 days after the close of each
        fiscal year of Borrower occurring after the date
        hereof, a summary of insurance carried by Borrower and
        each Subsidiary together with certificates of
        insurance and other evidence of such insurance. 
   
          (e)  COMPLIANCE CERTIFICATE.  At the time of the
        delivery of the financial statements provided for in
        Sections 7.01(a) and (b), a certificate of Borrower
        signed by its chief financial officer, controller or
        other Authorized Officer in the form of EXHIBIT H
        hereto to the effect that no Default or Event of
        Default exists or, if any Default or Event of Default
        does exist, specifying the nature and extent thereof,
        which certificate shall set forth the calculations
        required to establish whether Borrower and the
        Subsidiaries were in compliance with the provisions of
        Section 8 as at the end of such fiscal period or year,
        as the case may be.
   
          (f)  NOTICE OF DEFAULT OR LITIGATION.  Promptly,
        and in any event within (x) five Business Days after
        an executive officer of Borrower obtains knowledge
        thereof, notice of the occurrence of any event which
        constitutes a Default or Event of Default which notice
        shall specify the nature thereof, the period of
        existence thereof and what action Borrower proposes to
        take with respect thereto and (y) ten Business Days
        after an executive officer of Borrower obtains
        knowledge thereof, notice of the commencement of or
        any significant development in any litigation or
        governmental proceeding pending against Borrower or
        any Subsidiary (other than to the extent that
        disclosure of the details thereof would, in the
        opinion of counsel to Borrower, compromise attorney-client
        privilege) (i) which is reasonably likely to
        have a Material Adverse Effect or (ii) which is
        reasonably likely to have a material adverse effect on
        the ability of the Credit Parties, taken as a whole,
        to perform their obligations under the Credit
        Documents.
   
          (G)  AUDITORS' REPORTS.  Promptly upon receipt
        thereof, a copy of each formal report or "management
        letter" submitted to Borrower by its independent
        accountants in connection with any annual, interim or
        special audit made by it of the books of Borrower.
   
          (h)  SEC REPORTS.  Promptly upon transmission
        thereof, copies of any material filings and
        registrations with, and reports to, the SEC by
        Borrower or any Subsidiary (other than registrations
        on Form S-8 under the Securities Act, registrations of
        equity securities pursuant to Rule 415 under the
        Securities Act which do not involve an underwritten
        public offering and reports on Form 11-K or pursuant
        to Section 16(a) under the Exchange Act) and copies of
        all financial statements, proxy statements, notices
        and reports as Borrower or any Subsidiary shall
        generally send to analysts or all holders of their
        Capital Stock in their capacity as such holders (in
        each case to the extent not theretofore delivered to
        the Banks pursuant to this Agreement).
   
          (i)  OTHER INFORMATION.  From time to time, such
        other information or documents (financial or
        otherwise) as the Administrative Agent or any Bank may
        reasonably request.
   
          7.02 BOOKS, RECORDS AND INSPECTIONS.  Borrower
   will, and will cause each Subsidiary to, keep books of
   records and accounts in which entries will be made of all
   its business transactions to enable Borrower to prepare
   financial statements in accordance with GAAP, and will
   reflect in its financial statements adequate accruals and
   appropriations to reserves, all in accordance with GAAP. 
   Borrower will, and will cause each Subsidiary to, permit,
   upon reasonable notice to the chief financial officer,
   controller or any other Authorized Officer of Borrower,
   officers and designated representatives of the
   Administrative Agent or any Bank (at the expense of
   Borrower if after an Event of Default) to visit and inspect
   any of the properties or assets of Borrower or any
   Subsidiary, and to examine the books of account of Borrower
   or any Subsidiary and discuss the affairs, finances and
   accounts of Borrower or of any Subsidiary with, and be
   advised as to the same by, its and their officers and
   independent accountants, all at such reasonable times and
   intervals as the Administrative Agent or any Bank may
   desire.
   
          7.03 MAINTENANCE OF INSURANCE.  Borrower will,
   and will cause each Subsidiary to, at all times maintain in
   full force and effect insurance in such amounts and of such
   types with such financially sound and reputable insurers
   covering such risks and liabilities and with such
   deductibles or self-insured retentions as are in accordance
   with normal industry practice for similarly situated
   insureds and which are reasonably satisfactory to the
   Administrative Agent.
   
          7.04 PAYMENT OF TAXES.  Borrower will pay and
   discharge, and will cause each Subsidiary to pay and
   discharge, all taxes, assessments and governmental charges
   or levies imposed upon it or upon its income or profits, or
   upon any properties belonging to it, prior to the date on
   which penalties attach thereto, and all lawful claims
   which, if unpaid, might become a Lien or charge upon any
   properties of Borrower or any Subsidiary; PROVIDED,
   HOWEVER, that neither Borrower nor any Subsidiary shall be
   required to pay any such tax, assessment, charge, levy or
   claim which is being contested in good faith and by proper
   proceedings if it has maintained adequate reserves with
   respect thereto in accordance with GAAP or which if unpaid
   would not reasonably be likely to have a Material Adverse
   Effect.
   
          7.05 CONSOLIDATED CORPORATE FRANCHISES.  Borrower
   will do, and will cause each Subsidiary to do, or cause to
   be done, all things necessary to preserve and keep in full
   force and effect its existence, material rights and
   authority, unless the failure to do so would not have a
   Material Adverse Effect; PROVIDED, HOWEVER, that any
   transaction permitted by Section 8.02 will not constitute a
   breach of this Section 7.05.
   
          7.06 COMPLIANCE WITH STATUTES, ETC.  Borrower
   will, and will cause each Subsidiary to, comply with all
   applicable statutes, regulations and orders of, and all
   applicable restrictions imposed by, all governmental
   bodies, domestic or foreign, including without limitation
   all Environmental Laws and ERISA and the rules and
   regulations thereunder, other than those the non-compliance
   with which is not, individually or in the aggregate,
   reasonably likely to have a Material Adverse Effect or is
   not, individually or in the aggregate, reasonably likely to
   have a material adverse effect on the ability of the Credit
   Parties, taken as a whole, to perform their obligations
   under the Credit Documents.
   
          7.07 GOOD REPAIR.  Borrower will, and will cause
   each Subsidiary to, keep its properties and equipment used
   or useful in its business, in whomsoever's possession they
   may be, in good repair, working order and condition, normal
   wear and tear excepted, and, subject to Section 8.02 and
   the occurrence of a force majeure, see that from time to
   time there are made in such properties and equipment all
   needful and proper repairs, renewals, replacements,
   extensions, additions, betterments and improvements
   thereto, (i) to the extent and in the manner useful or
   customary for companies in similar businesses and (ii) to
   the extent where the failure to do so is, individually or
   in the aggregate, reasonably likely to have a Material
   Adverse Effect.  For purposes of this Section 7.07, any
   Fleet Rig shall be deemed to be in good repair, working
   order and condition if such Fleet Rig is In Class.
   
          7.08 END OF FISCAL YEARS; FISCAL
   QUARTERS.  Borrower will, and will cause each Subsidiary
   to, for financial reporting purposes, have (i) each of its
   fiscal years to end on December 31 of each year and (ii)
   each of its fiscal quarters to end on March 31, June 30,
   September 30 and December 31 of each year.
   
          7.09 USE OF PROCEEDS.  All proceeds of the Loans
   shall be used as provided in Section 6.05.
   
          7.10 RIG VALUATIONS.  From and after January 1,
   1998, at any time, but no more frequently than twice during
   any twelve month period, Borrower, at the request of the
   Administrative Agent or the Required Banks, will obtain an
   updated appraisal of the Fleet Rigs from an Approved
   Shipbroker, substantially in the form of the reports
   delivered pursuant to Section 5.12, confirming compliance
   with Section 8.11.
   
          7.11 ADDITIONAL GUARANTORS.  In the event that
   (a) at any date (the "APPLICABLE DATE") the book value of
   the assets of any Wholly-Owned Domestic Subsidiary (other
   than an Unrestricted Subsidiary), whether formed or
   acquired before or after the date hereof and whether or not
   existing on the date hereof, constitutes more than 5% of
   the combined book value at such date of the assets of
   Borrower and the Subsidiaries (other than Unrestricted
   Subsidiaries), (b) on any date any Subsidiary (other than
   an Unrestricted Subsidiary) shall guarantee any
   Indebtedness of Borrower or any Subsidiary or (c) any
   Wholly-Owned Domestic Subsidiary acquires any Fleet Rig
   owned or leased by Borrower or any Subsidiary on the
   Effectiveness Date, Borrower shall cause each such
   Subsidiary (unless already a Guarantor) (i) in the case of
   (a) above, within 50 days after the end of the fiscal
   quarter in which such Applicable Date occurs; PROVIDED,
   HOWEVER, that if on any Applicable Date the book value of
   the assets of any Wholly-Owned Domestic Subsidiary
   (excluding Investments in Borrower or any Subsidiary other
   than an Unrestricted Subsidiary) constitutes more than 20%
   of the combined book value at such date of the assets of
   Borrower and the Subsidiaries (other than any Unrestricted
   Subsidiary) then within 10 days of the first date on which
   such 20% threshold is met, (ii) in the case of (b) above,
   within five Business Days and (iii) in the case of (c)
   above, within five Business Days of the first date on which
   any such Wholly-Owned Subsidiary acquires any such Fleet
   Rig, to execute and deliver to the Administrative Agent a
   counterpart of the Guaranty; PROVIDED, HOWEVER, that no
   Unrestricted Subsidiary shall be required to be a Guarantor
   unless it is a guarantor of any Indebtedness of Borrower or
   of any Subsidiary (other than of an Unrestricted
   Subsidiary); PROVIDED, FURTHER, HOWEVER, that (i) in the
   event that all of the Capital Stock of any Guarantor owned
   by Borrower or any Subsidiary is sold or otherwise disposed
   of or liquidated in compliance with the requirements of
   Section 8.02 hereof (whether in a single transaction or in
   a series of related transactions and whether by merger,
   consolidation or otherwise) (or such sale or other
   disposition has been approved in writing by the Required
   Banks (or all Banks if required by Section 12.12)), other
   than any such sale, disposition or liquidation to Borrower
   or any Subsidiary, such Guarantor shall be released from
   the Guaranty and the Guaranty shall, as to such Guarantor,
   terminate, and have no further force or effect (it being
   understood and agreed that the sale of any Person that
   owns, directly or indirectly, the Capital Stock of any
   Guarantor shall be deemed to be a sale of such Guarantor)
   and (ii) in the event that any Guarantor shall be
   designated an Unrestricted Subsidiary pursuant to and in
   accordance with Section 8.05(b) hereof, then such Guarantor
   (unless it is a guarantor of any Indebtedness of Borrower
   or of any Subsidiary (other than of an Unrestricted
   Subsidiary)) shall be released from the Guaranty and the
   Guaranty shall, as to such Guarantor, terminate, and have
   no further force or effect.  The Administrative Agent and
   each Bank agree that Borrower may, on behalf of any
   Subsidiary released from the Guaranty, require the
   Administrative Agent, at the expense of Borrower, to
   execute and deliver to Borrower, for the benefit of any
   Person, a written release, disclaimer, termination or
   quitclaim, and such other release documents as Borrower may
   reasonably request to evidence such termination, and each
   Bank authorizes the Administrative Agent to execute and
   deliver such release, disclaimer, termination and other
   documents on behalf of such Bank without any further action
   by any Bank.  For avoidance of doubt, the Subsidiaries'
   undertakings under the Indenture or the Security Documents,
   each as in effect on the date hereof, shall not for
   purposes of this Section 7.11 constitute a guarantee of
   Indebtedness of Borrower or any Subsidiary.
   
          7.12  ERISA.  As soon as possible and, in any
   event, within 10 days after Borrower, any Subsidiary or any
   member of the ERISA Group knows or has reason to know that
   any member of the ERISA Group (i) gives or is required to
   give notice to the PBGC of any "reportable event" (as
   defined in Section 4043 of ERISA) with respect to any Plan
   which might constitute grounds for a termination of such
   Plan under Title IV of ERISA, or knows that the plan
   administrator of any Plan has given or is required to give
   notice of any such reportable event, a copy of the notice
   of such reportable event given or required to be given to
   the PBGC; (ii) receives notice of complete or partial
   withdrawal liability under Title IV of ERISA or notice that
   any Multiemployer Plan is in reorganization, is insolvent
   or has been terminated, a copy of such notice; (iii)
   receives notice from the PBGC under Title IV of ERISA of an
   intent to terminate, impose liability (other than for
   premiums under Section 4007 of ERISA) in respect of, or
   appoint a trustee to administer any Plan, a copy of such
   notice; (iv) applies for a waiver of the minimum funding
   standard under Section 412 of the Code, a copy of such
   application; (v) gives notice of intent to terminate any
   Plan under Section 4041(c) of ERISA, a copy of such notice
   and other information filed with the PBGC; (vi) gives
   notice of withdrawal from any Plan pursuant to Section 4063
   of ERISA, a copy of such notice; or (vii) fails to make any
   payment or contribution to any Plan or Multiemployer Plan
   or in respect of any Benefit Arrangement or makes any
   amendment to any Plan or Benefit Arrangement which has
   resulted or could reasonably be expected to result in the
   imposition of a Lien or the posting of a bond or other
   security under ERISA or the Code, Borrower will deliver to
   each of the Banks a certificate of the chief financial
   officer of Borrower setting forth details as to such
   occurrence and the action, if any, that Borrower, such
   Subsidiary or such member of the ERISA Group is required or
   proposes to take, together with any notices required or
   proposed to be given to or filed with or by Borrower, such
   Subsidiary, the member of the ERISA Group, a plan
   participant or the plan administrator.  Upon written
   request Borrower will deliver to each of the Banks a
   complete copy of the annual report (Form 5500) of each Plan
   (as defined in Section 3(2) of ERISA) (including, to the
   extent required, the related financial statements and
   opinions and other supporting statements, certifications,
   schedules and information) required to be filed with the
   Internal Revenue Service, if any.
   
          7.13  PERFORMANCE OF OBLIGATIONS.  Borrower will,
   and will cause each Subsidiary (other than an Unrestricted
   Subsidiary) to, perform in all material respects all of its
   obligations under the terms of each mortgage, indenture,
   security agreement, other debt instrument and material
   contract by which it is bound or to which it is a party
   (including, without limitation, the Indenture and the
   Security Documents), except where such nonperformance is
   not, individually or in the aggregate, reasonably likely to
   have a Material Adverse Effect.
   
          SECTION 8.  NEGATIVE COVENANTS.  Borrower
   covenants and agrees that as of the date hereof and
   thereafter for so long as this Agreement is in effect and
   until the Commitments have terminated, no Letters of Credit
   or Notes are outstanding and the Loans and Unpaid Drawings,
   together with interest, Fees and all other Obligations
   incurred hereunder or under any other Credit Document, are
   paid in full:
   
          8.01 CHANGES IN BUSINESS.  Borrower shall not,
   and shall not permit any Subsidiary (other than an
   Unrestricted Subsidiary) to, materially alter the character
   of the business of Borrower and the Subsidiaries taken as a
   whole from that conducted at the Effectiveness Date
   (including any material expansion outside of the offshore
   contract drilling and production services, drilling
   management services and oil and gas exploration and
   production businesses); PROVIDED, HOWEVER, that this
   Section 8.01 shall not restrict the making of any
   Investment expressly permitted by Section 8.05.
   
          8.02 CONSOLIDATION, MERGER, SALE OF ASSETS, ETC. 
   Borrower shall not, and shall not permit any Subsidiary
   (other than an Unrestricted Subsidiary) to, directly or
   indirectly, wind up, liquidate or dissolve its affairs, or
   enter into any transaction of merger or consolidation, sell
   or otherwise dispose of all or any part of its property or
   assets (other than inventory or worn-out or obsolete
   equipment in the ordinary course of business) or agree
   (unless such agreement is conditioned upon a waiver of this
   provision by the Banks hereunder) to do any of the
   foregoing at any future time, except that each of the
   following shall be permitted:
   
          (a)  (i) any Subsidiary may be merged or
        consolidated with or into, or be liquidated or
        dissolved into, Borrower (so long as Borrower is the
        surviving corporation) or any other Person (other than
        an Unrestricted Subsidiary) so long as a Subsidiary
        (other than an Unrestricted Subsidiary) is the
        surviving Person and (ii) all or any part of the
        business, properties and assets of any Subsidiary may
        be conveyed, leased, sold or transferred to Borrower
        or any Subsidiary (other than an Unrestricted
        Subsidiary); PROVIDED, HOWEVER, that if any such
        transaction involves a Guarantor and any other
        Subsidiary and the surviving or transferee Person is
        not a Guarantor (unless such surviving or transferee
        Person is Borrower) then immediately after such
        transaction Borrower shall cause such surviving or
        transferee Person to execute and deliver a counterpart
        to the Guaranty;
   
          (b)  Restricted Payments permitted pursuant to
        Section 8.05 and any bare boat charter permitted by
        Section 8.08; and
   
          (c)  any sale or disposition of assets; PROVIDED,
        HOWEVER, that (x) (A) the Total Commitment shall be
        reduced to the extent and when required by Section
        3.03(b) and (B) all proceeds thereof shall be used
        without violating the provisions of Section 8.01 and
        (y) each such sale or disposition shall be in an
        amount at least equal to the fair market value thereof
        (as determined by the Board of Directors of Borrower
        in the case of sales or dispositions in excess of
        $10.0 million).
    
          8.03 INDEBTEDNESS.  Borrower shall not, and shall
   not permit any Subsidiary to, directly or indirectly,
   contract, create, incur, assume or suffer to exist any
   Indebtedness, except:
   
          (a)  Indebtedness incurred pursuant to the Credit
        Documents; 
   
          (b)  Indebtedness in an aggregate principal
        amount not exceeding $225.0 million represented by the
        Senior Secured Notes, and any refinancing, extension,
        renewal, rearrangement or replacement of all, but not
        less than all, of such Indebtedness pursuant to an
        offering of debt securities of Borrower (which may be
        guaranteed by the Guarantors on terms no more
        favorable to the holders of such debt securities than
        the Guaranty) which (i) are not in an aggregate
        principal amount in excess of the sum of the aggregate
        principal amount of the Senior Secured Notes then
        outstanding, PLUS any premium required by the terms of
        the Senior Secured Notes or reasonably incurred to
        refinance the Senior Secured Notes, PLUS expenses,
        discounts and commissions related to such offering;
        (ii) are unsecured; (iii) do not have a maturity or
        any mandatory sinking fund or retirement requirements
        prior to the Maturity Date; and (iv) do not have
        covenants or events of default less favorable to
        Borrower or any Subsidiary than the Senior Secured
        Notes as in effect on the date hereof;
   
          (c)  Existing Indebtedness and other Indebtedness
        existing on the Effectiveness Date with a principal
        amount not exceeding $10,000;
   
          (d)  intercompany Indebtedness between Borrower
        and any Subsidiary (other than any Unrestricted
        Subsidiary) or between Subsidiaries (other than
        Indebtedness owing from any Subsidiary which is not an
        Unrestricted Subsidiary to any Unrestricted
        Subsidiary) so long as such Indebtedness is held by
        Borrower or any Subsidiary (other than an Unrestricted
        Subsidiary); 
   
          (e)  Non-Recourse Indebtedness of any
        Unrestricted Subsidiary; and 
   
          (f)  Existing L/C Facility Indebtedness and other
        Indebtedness in an aggregate principal amount not to
        exceed, when aggregated with the Existing L/C Facility
        Indebtedness, $10.0 million at any time outstanding.
   
          8.04 LIENS.  Borrower shall not, and shall not
   permit any Subsidiary to, directly or indirectly, create,
   incur, assume or suffer to exist any Lien upon or with
   respect to any property or assets (real or personal,
   tangible or intangible) of Borrower or any Subsidiary,
   whether now owned or hereafter acquired, or sell any such
   property or assets subject to an understanding or
   agreement, contingent or otherwise, to repurchase such
   property or assets (including sales of accounts receivable
   or notes with recourse to Borrower or any Subsidiary) or
   assign any right to receive income, or file or permit the
   filing of any financing statement under the UCC or any
   other similar notice of Lien under any similar recording or
   notice statute, except:
   
          (a)  Liens for taxes not yet due or Liens for
        taxes being contested in good faith and by appropriate
        proceedings for which adequate reserves (as may be
        required by GAAP) have been established;
   
          (b)  Liens imposed by law which were incurred in
        the ordinary course of business, such as carriers',
        warehousemen's and mechanics' Liens, statutory
        landlord's Liens, maritime Liens, drilling contracts
        and other similar Liens arising in the ordinary course
        of business, and (x) which do not in the aggregate
        materially detract from the value of Borrower's or any
        Subsidiary's property or assets or materially impair
        the use thereof in the operation of the business of
        Borrower or any Subsidiary or (y) which are being
        contested in good faith by appropriate proceedings
        (including the providing of bail), which proceedings
        have the effect of preventing the forfeiture or sale
        of the property or assets subject to such Lien or
        procuring the release of the property or assets
        subject to such Lien from arrest or detention;
   
          (c)  Liens created in favor of the Banks or the
        Administrative Agent on behalf of the Banks;
   
          (d)  Liens existing on the date hereof and listed
        on ANNEX VIII hereto;
   
          (e)  Liens arising from judgments, decrees or
        attachments (or securing of appeal bonds with respect
        thereto) to the extent not covered by insurance, the
        obligations in connection therewith do not exceed
        $10.0 million and otherwise in circumstances not
        constituting an Event of Default under Section 9.07;
   
          (f)  Liens existing on property or assets
        acquired by Borrower or any Subsidiary or on property
        or assets of any Person which becomes a Subsidiary
        upon such acquisition or such Person becoming a
        Subsidiary, as the case may be; PROVIDED, HOWEVER,
        that such Lien shall not extend to or cover any other
        property or assets of Borrower or any Subsidiary and
        such Liens were not incurred in connection with or in
        anticipation of such acquisition;
   
          (g)  any interest or title of a lessor or
        charterer under any lease permitted by this Agreement;
   
          (h)  Liens only on assets of Unrestricted
        Subsidiaries securing Non-Recourse Indebtedness
        permitted to be incurred under Section 8.03(e);
        PROVIDED, HOWEVER, that such Liens do not extend to or
        cover any other property or assets of Borrower or any
        Subsidiary which is not an Unrestricted Subsidiary;
   
          (i)  zoning restrictions, easements, licenses,
        covenants, reservations or restrictions on the use of
        real property or minor irregularities of title
        incident thereto;
   
          (j)  Liens for crews' wages (including wages of
        the muster and the seamen to the extent provided by 46
        U.S.C. Section 10317, as amended) or salvage
        (including contract salvage) and general average, or
        wages of stevedores when employed directly by a person
        listed in 46 U.S.C. Section 31341, as amended, or
        similar claims arising under laws of other
        jurisdictions;
   
          (k)  Liens to secure any extensions, renewals or
        refinancings (or successive extensions, renewals or
        refinancings), in whole or in part, of any
        Indebtedness secured by Liens referred to in the
        foregoing clauses (a) through (j) so long as such Lien
        does not extend to or cover any other property or
        assets of Borrower or any Subsidiary;
   
          (l)  Liens securing the Senior Secured Notes
        pursuant to the Indenture and the Security Documents,
        each as in effect on the date hereof;
   
          (m)  Liens permitted to be in existence pursuant
        to Article I, Section 5 of the Rig Mortgages (as
        defined in the Indenture as in effect on the date
        hereof) and any Lien arising as a result of any bare
        boat charter permitted under Section 8.08;
   
          (n)  negative pledges; and
   
          (o)  Liens securing Indebtedness in an aggregate
        amount not to exceed $10.0 million at any time
        outstanding.
   
          8.05 RESTRICTED PAYMENTS; DESIGNATION OF
   UNRESTRICTED SUBSIDIARIES.  (a)  Borrower shall not, and
   shall not permit any Subsidiary (other than an Unrestricted
   Subsidiary) to, make any Restricted Payment, except:  
   
          (i) so long as no Default or Event of Default
   exists or would result therefrom, Borrower and the
   Subsidiaries may make Restricted Payments after the date
   hereof in an amount not to exceed in the aggregate the sum
   of (v) $100.0 million, PLUS (w) 50% of the excess, if any
   of (1) the aggregate Consolidated Net Income for the period
   beginning January 1, 1997 and ending on the last day of the
   fiscal quarter immediately preceding the date of such
   proposed Restricted Payment over (2) $200.0 million (or, if
   such Consolidated Net Income shall be a deficit, MINUS 100%
   of such deficit), PLUS (x) the aggregate net cash proceeds
   received by Borrower (i) either as capital contributions to
   Borrower after the date hereof or (ii) from the issue and
   sale (other than to any Subsidiary) of its Qualified
   Capital Stock after the date hereof (excluding the net
   proceeds from any issuance and sale of Qualified Capital
   Stock financed, directly or indirectly, using funds
   borrowed from Borrower or any Subsidiary until and to the
   extent such borrowing is repaid), PLUS (y) (to the extent
   not included in the computation of Consolidated Net Income)
   the amount of cash dividends or cash contributions (other
   than to pay taxes) received by Borrower from any
   Unrestricted Subsidiary after the date hereof, MINUS (z)
   the greater of (i) $0 and (ii) the Designation Amount
   (measured as of the date of Designation) with respect to
   any Subsidiary which has been designated as an Unrestricted
   Subsidiary pursuant to and in accordance with subparagraph
   (b) of this Section 8.05; PROVIDED, HOWEVER that (a)
   Borrower shall not be permitted to make any Restricted
   Payments which are Dividends on Borrower's Capital Stock
   pursuant to this clause (i) unless the Senior Secured Notes
   shall have been repaid in full and (b) Borrower shall not
   be permitted to make any Restricted Payment which is a
   Dividend on Borrower's Capital Stock pursuant to this
   clause (i) unless Excess Cash Flow for the four consecutive
   complete fiscal quarters then last ended after the date
   hereof immediately prior to the payment of such Dividend
   exceeds the sum of (I) all Dividends paid during the four
   consecutive complete fiscal quarters then last ended after
   the date hereof immediately prior to the payment of such
   Dividend, PLUS (II) the amount of such Dividend proposed to
   be paid;
   
          (ii) any Subsidiary may pay Dividends on its
        Capital Stock; 
   
          (iii) Borrower may redeem or repurchase Capital
        Stock of Borrower (or options to purchase such Capital
        Stock) from present or former officers, employees or
        directors of Borrower or any Subsidiary (or their
        estates) upon the death, permanent disability,
        retirement or termination of employment of any such
        Person or otherwise in accordance with any stock
        option plan or any employee stock ownership plan of
        Borrower or any Subsidiary; PROVIDED, HOWEVER, that in
        all such cases (x) no Default or Event of Default is
        then in existence or would arise therefrom and (y) the
        aggregate amount of all cash paid in respect of all
        such shares so redeemed or repurchased in any calendar
        year shall not exceed $5.0 million; and
   
          (iv) Borrower may pay any Dividend within 60 days
        after the declaration thereof so long as Borrower
        would have been permitted to pay such Dividend on the
        date of the declaration thereof; PROVIDED, HOWEVER,
        that amounts paid pursuant to this subparagraph (iv)
        shall be included as Restricted Payments for purposes
        of subparagraph (i) of this Section 8.05(a).
   
          (b)  Borrower may designate, pursuant to written
   notification to the Administrative Agent, any Subsidiary as
   an Unrestricted Subsidiary (a "DESIGNATION") only if:
   
          (i)  no Default or Event of Default shall have
   occurred and be continuing at the time of and after giving
   effect to such Designation;
   
          (ii) such Subsidiary does not own or have any
   right or interest in, or the right to receive income or
   profits from, any of the Fleet Rigs owned by Borrower or
   any Subsidiary as of the date hereof;
   
          (iii) so long as the Indenture shall be in
   effect, such Subsidiary is an unrestricted subsidiary under
   and pursuant to the terms of the Indenture (as in effect on
   the date hereof); and
   
          (iv) Borrower would be permitted to make an
   Investment (other than a Permitted Investment) at the time
   of Designation (assuming the effectiveness of such
   Designation) pursuant to subparagraph (a)(i) of this
   Section 8.05 in an amount (the "DESIGNATION AMOUNT") equal
   to Borrower's proportionate interest in the net worth of
   such Subsidiary calculated in accordance with GAAP on such
   date.
   
          Neither Borrower nor any Subsidiary (other than
   an Unrestricted Subsidiary) shall at any time subject any
   of its properties or assets to any Lien to secure, or
   otherwise guarantee or incur any Contingent Obligation in
   respect of, any Indebtedness of any Unrestricted Subsidiary
   (including any undertaking, agreement or instrument
   evidencing such Indebtedness).
   
          Borrower shall, and shall cause each Subsidiary
   to, take all action necessary so that so long as the
   Indenture is in effect any Subsidiary which has incurred
   Indebtedness under Section 8.03(e) hereof shall meet the
   qualifications of, and be designated as, an unrestricted
   subsidiary pursuant to the terms of the Indenture. 
   Borrower shall not, and shall not permit any Subsidiary to,
   amend, modify, change or waive any provisions of the
   Indenture which would result in the restrictions and
   limitations in this Agreement with respect to the
   Unrestricted Subsidiaries being in conflict with, or
   resulting in a breach of default under the Indenture.
   
          8.06 RESTRICTIONS ON SUBSIDIARIES.  Borrower
   shall not, and shall not permit any Subsidiary (other than
   an Unrestricted Subsidiary) to, create or otherwise cause
   or suffer to exist any encumbrance or restriction which,
   directly or indirectly, prohibits or otherwise restricts
   the ability of any Subsidiary (other than an Unrestricted
   Subsidiary) to (a) pay dividends or make other
   distributions or pay any Indebtedness owed to Borrower or
   any Subsidiary, (b) make loans or advances to Borrower or
   any Subsidiary or (c) transfer any of its properties or
   assets to Borrower or any Subsidiary, other than
   encumbrances or restrictions existing under or by reason
   of:
   
          (a)  the Credit Documents;
   
          (b)  applicable law;
   
          (c)  customary non-assignment provisions entered
        into in the ordinary course of business and consistent
        with past practices;
   
          (d)  any restriction or encumbrance with respect
        to a Subsidiary imposed pursuant to (i) an agreement
        which has been entered into for the sale or
        disposition of all or substantially all of the Capital
        Stock or assets of such Subsidiary, so long as such
        sale or disposition is permitted under this Agreement
        or (ii) any bare boat charter permitted by Section
        8.08;
   
          (e)  the Indenture and the Security Documents or
        any other encumbrance or restriction in effect on the
        Effectiveness Date, each as in effect on the
        Effectiveness Date, and any refinancing, extension or
        renewal thereof so long as such refinancing, extension
        or renewal is no more restrictive than (x) with
        respect to the Indenture and the Security Documents,
        this Agreement or (y) with respect to any other
        encumbrance or restriction, that existing on the date
        hereof;
   
          (f)  Permitted Liens and any documents or
        instruments governing the terms of any Indebtedness or
        other obligations secured by any such Liens; PROVIDED,
        HOWEVER, that such prohibitions or restrictions apply
        only to the assets subject to such Liens;
   
          (g)  encumbrances or restrictions on property of
        any Subsidiary which do not restrict the ability of
        such Subsidiary to transfer the property subject to
        such encumbrances or restrictions; and
   
          (h)  any encumbrances or restrictions pursuant to
        an agreement in effect on the date on which such
        Subsidiary was acquired by Borrower or any Subsidiary
        (provided that such encumbrance or restriction was not
        incurred in connection with or in contemplation of
        such acquisition).
   
          8.07 TRANSACTIONS WITH AFFILIATES.  Borrower
   shall not, and shall not permit any Subsidiary (other than
   an Unrestricted Subsidiary) to, directly or indirectly,
   enter into any transaction or series of transactions after
   the date hereof whether or not in the ordinary course of
   business, with any Affiliate other than on terms and
   conditions substantially as favorable to Borrower or such
   Subsidiary as would be obtainable by Borrower or such
   Subsidiary at the time in a comparable arm's-length
   transaction with a Person other than an Affiliate;
   PROVIDED, HOWEVER, that the foregoing restrictions shall
   not apply to (i) employment arrangements entered into in
   the ordinary course of business with officers of Borrower
   or any Subsidiary, (ii) customary fees paid to members of
   the Board of Directors of Borrower and of any Subsidiary
   and (iii) all transactions between or among the Credit
   Parties.
   
          8.08 VESSEL OWNERSHIP AND MANAGEMENT.  
   
          (a) Borrower shall not permit there to be less
        than 22 Fleet Rigs which are owned by Borrower or any
        Guarantor.
   
          (b)  Borrower shall not, and shall not permit any
        Subsidiary (other than an Unrestricted Subsidiary) to,
        contract out the management of any Fleet Rig owned or
        leased by Borrower or any Subsidiary (other than an
        Unrestricted Subsidiary) on the Effectiveness Date
        other than to Borrower or any Subsidiary which is not
        an Unrestricted Subsidiary, other than the bare boat
        charter of up to three of such Fleet Rigs at any time
        in effect.
   
          8.09 CASH INTEREST COVERAGE RATIO.  Borrower
   shall not permit the ratio of (i) Consolidated EBITDA for
   any four consecutive complete fiscal quarters then last
   ended after the date hereof to (ii) Consolidated Cash
   Interest Expense of Borrower for such period to be less
   than 3.00:1.00.  In connection with any Credit Event, such
   ratio shall be calculated to give PRO FORMA effect to the
   Loans or Letters of Credit to be made and the application
   of the proceeds therefrom as if made and applied on the
   first day of the period for which such ratio is being
   calculated.
   
          8.10 LEVERAGE RATIO.  Borrower shall not permit
   the Leverage Ratio at any time to be more than 2.00:1.00. 
   In connection with any Credit Event, such ratio shall be
   calculated to give PRO FORMA effect to the Loans or Letters
   of Credit to be made and the application of the proceeds
   therefrom as if made and applied on the first day of the
   period for which such ratio is being calculated.
   
          8.11 FLEET MARKET VALUE.  Borrower shall not
   permit the aggregate Market Value of the Fleet at any time
   to be less than (i) 2.5 times the sum of (x) Consolidated
   Indebtedness, PLUS (y) the Available Unutilized Total
   Commitment.
   
          8.12 NET WORTH.  Borrower shall not permit
   Consolidated Net Worth at any time to be less than the sum
   of (i) $300.0 million, PLUS (ii) an amount (added at the
   end of each fiscal quarter after the date hereof) equal to
   the greater of (x) $0 and (y) 50% of Consolidated Net
   Income (without giving effect to the proviso thereto) for
   each fiscal quarter after September 30, 1996 (adjusted to
   exclude the effect of deferred taxes related to the
   existing net operating loss of Borrower and its
   Subsidiaries).
   
          8.13 MODIFICATIONS OF CERTAIN DOCUMENTS, ETC. 
   Borrower shall not, and shall not permit any Subsidiary to,
   directly or indirectly, consent to any modification,
   supplement or waiver of any of the provisions of the Senior
   Secured Notes, the Indenture or the Security Documents
   where the effect of such modification, supplement or waiver
   would be material and adverse to the interests of the Banks
   without the prior written approval of the Required Banks.
   
          SECTION 9.  EVENTS OF DEFAULT.  Upon the
   occurrence of any of the following specified events (each
   an "EVENT OF DEFAULT"):
   
          9.01 PAYMENTS.  Borrower shall (i) default in the
   payment when due of any principal of the Loans or (ii)
   default, and such default shall continue for three or more
   Business Days, in the payment when due of any Unpaid
   Drawing, any interest on the Loans or any Fees or any other
   amounts owing under any Credit Document; or
   
          9.02 REPRESENTATIONS, ETC.  Any material
   representation, warranty or statement made by any Credit
   Party in any Credit Document or in any statement or
   certificate delivered or required to be delivered pursuant
   thereto shall prove to be untrue in any material respect on
   the date as of which made or deemed made; or
   
          9.03 COVENANTS.  (a) Borrower or any Subsidiary
   shall default in the due performance or observance by it of
   any term, covenant or agreement contained in Section 7.09,
   Section 7.11 or Section 8 or (b) any Credit Party shall
   default in the due performance or observance by it of any
   term, covenant or agreement (other than those referred to
   in Section 9.01, 9.02 or clause (a) of this Section 9.03)
   contained in any Credit Document and such default shall
   continue unremedied for a period of at least 30 days after
   notice to Borrower by the Administrative Agent or the
   Required Banks; or
   
          9.04 DEFAULT UNDER OTHER AGREEMENTS.  (a)
   Borrower or any Subsidiary shall (i) default in any payment
   with respect to any Indebtedness (other than the
   Obligations and any Non-Recourse Indebtedness permitted to
   be incurred hereunder) beyond the period of grace, if any,
   applicable thereto or (ii) default in the observance or
   performance of any agreement or condition relating to any
   such Indebtedness or contained in any instrument or
   agreement evidencing, securing or relating thereto, or any
   other event shall occur or condition exist, the effect of
   which default or other event or condition is to cause, or
   to permit the holder or holders of such Indebtedness (or a
   trustee or agent on behalf of such holder or holders) to
   cause, any such Indebtedness to become due prior to its
   stated maturity; or (b) any Indebtedness of Borrower or any
   Subsidiary (other than the Obligations and any Non-Recourse
   Indebtedness permitted to be incurred hereunder) shall be
   declared to be due and payable, or required to be prepaid
   other than by a regularly scheduled required prepayment,
   prior to the stated maturity thereof; PROVIDED, HOWEVER,
   that it shall not constitute an Event of Default pursuant
   to this Section 9.04 unless any such event referred to in
   clause (a) or (b) occurs with respect to one or more issues
   of Indebtedness aggregating at least $10.0 million or more;
   or
   
          9.05 BANKRUPTCY, ETC.  Borrower or any Subsidiary
   (other than an Unrestricted Subsidiary) shall commence a
   voluntary case concerning itself under Title 11 of the
   United States Code entitled "Bankruptcy", as now or
   hereafter in effect, or any successor thereto (the
   "BANKRUPTCY CODE"); or an involuntary case is commenced
   against Borrower or any Subsidiary (other than an
   Unrestricted Subsidiary) and the petition is not dismissed
   within 60 days, after commencement of the case; or a
   custodian (as defined in the Bankruptcy Code) is appointed
   for, or takes charge of, all or substantially all of the
   property of Borrower or any Subsidiary (other than an
   Unrestricted Subsidiary); or Borrower or any Subsidiary
   (other than an Unrestricted Subsidiary) commences any other
   proceeding under any reorganization, arrangement,
   adjustment of debt, relief of debtors, dissolution,
   insolvency or liquidation or similar law of any
   jurisdiction whether now or hereafter in effect relating to
   Borrower or any Subsidiary (other than an Unrestricted
   Subsidiary); or there is commenced against Borrower or any
   Subsidiary (other than an Unrestricted Subsidiary) any such
   case or proceeding which remains undismissed for a period
   of 60 days; or Borrower or any Subsidiary (other than an
   Unrestricted Subsidiary) is adjudicated insolvent or
   bankrupt; or any order of relief or other order approving
   any such case or proceeding is entered; or Borrower or any
   Subsidiary (other than an Unrestricted Subsidiary) suffers
   any appointment of any custodian or the like for it or any
   substantial part of its property to continue undischarged
   or unstayed for a period of 60 days; or Borrower or any
   Subsidiary (other than an Unrestricted Subsidiary) makes a
   general assignment for the benefit of creditors; or any
   corporate action is taken by Borrower or any Subsidiary
   (other than an Unrestricted Subsidiary) for the purpose of
   effecting any of the foregoing; or
   
          9.06 GUARANTY.  The Guaranty or any provision
   thereof shall cease to be in full force and effect
   (otherwise than in accordance with the Credit Documents),
   or any Guarantor or any Person acting by or on behalf of
   such Guarantor shall deny or disaffirm all or any portion
   of such Guarantor's obligation thereunder (other than by
   reason of a release of such Guarantor from the Guaranty in
   accordance with the terms of the Credit Documents), or any
   Guarantor shall default in the observance of any term,
   covenant or agreement on its part to be performed or
   observed pursuant thereto and such default (other than any
   default arising from a failure to make any payment
   thereunder) shall continue unremedied for a period of at
   least 30 days after notice to Borrower by the
   Administrative Agent or the Required Banks; or
   
          9.07 JUDGMENTS.  One or more judgments or decrees
   shall be entered against Borrower or any Subsidiary
   involving a liability of $10.0 million or more in the
   aggregate (not paid or to the extent not covered by
   insurance) and any such judgments or decrees shall not have
   been vacated, discharged or stayed or bonded pending appeal
   within 60 days from the entry thereof; or
   
          9.08 CHANGE OF CONTROL.  There shall have
   occurred a Change of Control; or
   
          9.09 EMPLOYEE BENEFIT PLANS.  Any member of the
   ERISA Group shall fail to pay when due an amount or amounts
   aggregating in excess of $10.0 million which it shall have
   become liable to pay under Title IV of ERISA; or notice of
   intent to terminate a Plan shall be filed under
   Section 4041(c) of ERISA by an member of the ERISA Group,
   any plan administrator or any combination of the foregoing;
   or the PBGC shall institute proceedings under Title IV of
   ERISA to terminate, to impose liability (other than for
   premiums under Section 4007 of ERISA) in respect of, or to
   cause a trustee to be appointed to administer any Plan; or
   a condition shall exist by reason of which the PBGC would
   be entitled to obtain a decree adjudicating that any Plan
   must be terminated; or there shall occur a complete or
   partial withdrawal from, or a default, within the meaning
   of Section 4219(c)(5) of ERISA, with respect to, one or
   more Multiemployer Plans which could reasonably be expected
   to cause one or more members of the ERISA Group to incur a
   payment obligation in excess of $10.0 million; 
   
   then, and in any such event, and at any time thereafter, if
   any Event of Default shall then be continuing, the
   Administrative Agent shall, upon the written request of the
   Required Banks, by written notice to Borrower, take any or
   all of the following actions, without prejudice to the
   rights of the Administrative Agent or any Bank to enforce
   its claims against Borrower, except as otherwise
   specifically provided for in this Agreement (PROVIDED,
   HOWEVER, that, if an Event of Default specified in Section
   9.05 shall occur with respect to Borrower, the result which
   would occur upon the giving of written notice by the
   Administrative Agent as specified in clauses (i) and (ii)
   below shall occur automatically without the giving of any
   such notice):  (i) declare the Total Commitment terminated,
   whereupon the Commitment of each Bank shall forthwith
   terminate immediately and any Commitment Commission shall
   forthwith become due and payable without any other notice
   of any kind; (ii) declare the principal of and any accrued
   interest in respect of all Loans and all obligations owing
   hereunder (including Unpaid Drawings) and thereunder to be,
   whereupon the same shall become, forthwith due and payable
   without presentment, demand, protest or other notice of any
   kind, all of which are hereby waived by Borrower; (iii)
   terminate any Letter of Credit which may be terminated in
   accordance with its terms; (iv) direct Borrower to pay (and
   Borrower hereby agrees upon receipt of such notice, or upon
   the occurrence of any Event of Default specified in Section
   9.05 in respect of Borrower, it will pay) to the
   Administrative Agent at the Payment Office such additional
   amounts of cash, to be held as security for Borrower's
   reimbursement obligations in respect of Letters of Credit
   then outstanding equal to the aggregate Stated Amount of
   all Letters of Credit then outstanding; and (v) apply any
   amounts held as cash collateral pursuant to Section 4.02 or
   this Section 9 to repay Obligations.
   
          SECTION 10.    DEFINITIONS.  As used herein, the
   following terms shall have the meanings herein specified
   unless the context otherwise requires.  Defined terms in
   this Agreement shall include in the singular number the
   plural and in the plural the singular:
   
          "ADJUSTED COMMITMENT" for each Non-Defaulting
   Bank shall mean at any time the product of such Bank's
   Adjusted Percentage and the Adjusted Total Commitment.
   
          "ADJUSTED PERCENTAGE" shall mean (x) at a time
   when no Bank Default exists, for each Bank such Bank's
   Percentage and (y) at a time when a Bank Default exists (i)
   for each Bank that is a Defaulting Bank, zero and (ii) for
   each Bank that is a Non-Defaulting Bank, the percentage
   determined by dividing such Bank's Commitment at such time
   by the Adjusted Total Commitment at such time, it being
   understood that all references herein to Commitments and
   the Adjusted Total Commitment at a time when the Total
   Commitment or Adjusted Total Commitment, as the case may
   be, has been terminated shall be references to the
   Commitments or Adjusted Total Commitment, as the case may
   be, in effect immediately prior to such termination;
   PROVIDED, HOWEVER, that (A) no Bank's Adjusted Percentage
   shall change upon the occurrence of a Bank Default from
   that in effect immediately prior to such Bank Default if,
   after giving effect to such Bank Default and any repayment
   of Loans at such time pursuant to Section 4.02(A)(a) or
   otherwise, the sum of (i) the aggregate outstanding
   principal amount of Loans of all Non-Defaulting Banks plus
   (ii) the Letter of Credit Outstandings, exceeds the
   Adjusted Total Commitment; (B) the changes to the Adjusted
   Percentage that would have become effective upon the
   occurrence of a Bank Default but that did not become
   effective as a result of the preceding clause (A) shall
   become effective on the first date after the occurrence of
   the relevant Bank Default on which the sum of (i) the
   aggregate outstanding principal amount of the Loans of all
   Non-Defaulting Banks plus (ii) the Letter of Credit
   Outstandings is equal to or less than the Adjusted Total
   Commitment; and (C) if (i) a Non-Defaulting Bank's Adjusted
   Percentage is changed pursuant to the preceding clause (B)
   and (ii) any repayment of such Bank's Loans, or of Unpaid
   Drawings with respect to Letters of Credit, that were made
   during the period commencing after the date of the relevant
   Bank Default and ending on the date of such change to its
   Adjusted Percentage must be returned to Borrower as a
   preferential or similar payment in any bankruptcy or
   similar proceeding of Borrower, then the change to such
   Non-Defaulting Bank's Adjusted Percentage effected pursuant
   to said clause (B) shall be reduced to that positive
   change, if any, as would have been made to its Adjusted
   Percentage if (x) such repayments had not been made and (y)
   the maximum change to its Adjusted Percentage would have
   resulted in the sum of the outstanding principal of Loans
   made by such Bank plus such Bank's new Adjusted Percentage
   of the outstanding principal amount of Letter of Credit
   Outstandings equalling such Bank's Commitment at such time. 
   
          "ADJUSTED TOTAL COMMITMENT" shall mean at any
   time the Total Commitment less the aggregate Commitments of
   all Defaulting Banks.
   
          "ADMINISTRATIVE AGENT" see the first paragraph of
   this Agreement and shall include any successor to the
   Administrative Agent appointed pursuant to Section 11.09.
   
          "AFFECTED EURODOLLAR LOAN" see Section 4.02(B).
   
          "AFFILIATE" shall mean, with respect to any
   Person, any other Person directly or indirectly
   controlling, controlled by, or under direct or indirect
   common control with such Person.  A Person shall be deemed
   to control a corporation if such Person possesses, directly
   or indirectly, the power (i) to vote 10% or more of the
   securities having ordinary voting power for the election of
   directors of such corporation or (ii) to direct or cause
   the direction of the management and policies of such
   corporation, whether through the ownership of voting
   securities, by contract or otherwise.
   
          "AGREEMENT" shall mean this Credit Agreement, as
   the same may be from time to time further modified, amended
   and/or supplemented.
   
          "AGENTS" see the first paragraph of this
   Agreement.
   
          "APPLICABLE BASE RATE MARGIN" shall be equal to
   the percentage PER ANNUM set forth below opposite
   Borrower's applicable Leverage Ratio, as calculated for the
   last day of the fiscal quarter last ended; PROVIDED,
   HOWEVER, that, in the event a change in the Applicable Base
   Rate Margin is to be made, such change shall not become
   effective until the date on which the Administrative Agent
   receives written notice from Borrower indicating that such
   change is warranted:
   
                                                        APPLICABLE BASE
               LEVERAGE RATIO                             RATE MARGIN  
   
          Less than or equal to
          1.40:1.00                                          0.00%
   
          Greater than 1.40:1.00                             0.25%
   
          "APPLICABLE COMMITMENT COMMISSION PERCENTAGE"
   shall be 1/4 of 1.00% PER ANNUM.
   
          "APPLICABLE DATE" see Section 7.11.
   
          "APPLICABLE EURODOLLAR MARGIN" shall be equal to
   the percentage PER ANNUM set forth below opposite
   Borrower's applicable Leverage Ratio, as calculated for the
   last day of the fiscal quarter last ended; PROVIDED,
   HOWEVER, that, in the event a change in the Applicable
   Eurodollar Margin is to be made, such change shall not
   become effective until the date on which the Administrative
   Agent receives written notice from Borrower indicating that
   such change is warranted:
      <PAGE>
                                           APPLICABLE
            LEVERAGE RATIO             EURODOLLAR MARGIN
   
         Less than 0.90:1.00                 0.75%
   
         Greater than or equal to
         0.90:1.00 and less than or 
         equal to 1.40:1.00                  1.00%
   
         Greater than 1.40:1.00              1.25%
   
          "APPROVED BANK" see the definition of "Cash
   Equivalents."
   
          "APPROVED COMPANY" see the definition of "Cash
   Equivalents."
   
          "APPROVED SHIPBROKER" shall mean each of the
   international, independent, sale-and-purchase Shipbrokers
   listed on ANNEX IX hereto, as such Annex may be revised
   from time to time at the request of the Required Banks with
   the consent of Borrower, which consent shall not be
   unreasonably withheld or delayed.
   
          "ASSET DISPOSITION" shall mean the sale, transfer
   or other disposition (including by merger or consolidation
   or sale-leaseback) occurring after the date hereof by
   Borrower or any Subsidiary to any Person other than
   Borrower or any Wholly-Owned Subsidiary of any asset
   (including the Capital Stock of any Subsidiary) of Borrower
   or such Subsidiary, except sales, transfers or other
   dispositions in the ordinary course of business of
   inventory and/or obsolete or worn-out equipment or Cash
   Equivalents; PROVIDED, HOWEVER, that for purposes of
   Section 3.03(b)(i), (i) no sale, transfer or other
   disposition of assets of Borrower or any Subsidiary shall
   be deemed an Asset Disposition to the extent (but only to
   the extent) that the Cash Proceeds therefrom when added to
   the Cash Proceeds from all other sales, transfer or other
   dispositions of assets since the date hereof that would
   otherwise constitute an Asset Disposition are not in excess
   of $50.0 million and (ii) any bare boat charter permitted
   by Section 8.08 shall not be considered an Asset
   Disposition.
   
          "ASSIGNMENT AND ASSUMPTION AGREEMENT" shall mean
   the Assignment and Assumption Agreement substantially in
   the form of EXHIBIT I hereto (appropriately completed).
   
          "AUTHORIZED OFFICER" shall mean any senior
   officer of Borrower designated as such in writing to the
   Administrative Agent by Borrower.
   
          "AVAILABLE UNUTILIZED COMMITMENT" for each Bank,
   shall mean the excess of (i) the Commitment of such Bank
   over (ii) the sum of (x) the aggregate outstanding
   principal amount of Loans made by such Bank plus (y) an
   amount equal to such Bank's Adjusted Percentage of the
   Letter of Credit Outstandings at such time.
   
          "AVAILABLE UNUTILIZED TOTAL COMMITMENT" shall
   mean the excess of (i) the Total Commitment over (ii) the
   sum of (x) the aggregate outstanding principal amount of
   Loans plus (y) the Letter of Credit Outstandings at such
   time.
   
          "BANK" see the first paragraph of this Agreement.
   
          "BANK DEFAULT" shall mean (i) the refusal (which
   has not been retracted) of a Bank to make available its
   portion of any incurrence of Loans or to fund its portion
   of any unreimbursed payment under Section 2.05(c) or (ii) a
   Bank having notified the Administrative Agent and/or
   Borrower that it does not intend to comply with the
   obligations under Section 1.01 or under Section 2.05(c), in
   the case of either (i) or (ii) as a result of the
   appointment of a receiver or conservator with respect to
   such Bank at the direction or request of any regulatory
   agency or authority.
   
          "BANKRUPTCY CODE" see Section 9.05.
   
          "BASE RATE" at any time shall mean the higher of
   (i) the rate which is 1/2 of 1% in excess of the Federal
   Funds Effective Rate and (ii) the Prime Lending Rate.
   
          "BASE RATE LOAN" shall mean each Loan bearing
   interest at the rates provided in Section 1.08(a). 
   
          "BENEFIT ARRANGEMENT" shall mean at any time an
   employee benefit plan with the meaning of Section 3(3) of
   ERISA which is not a Plan or a Multiemployer Plan and which
   is maintained or otherwise contributed to by any member of
   the ERISA Group.
   
          "BORROWER" see the first paragraph of this
   Agreement.
   
          "BORROWING" shall mean the incurrence of one Type
   of Loan pursuant to the Facility by Borrower from all of
   the Banks with respect to such Facility on a PRO RATA basis
   on a given date (or resulting from conversions on a given
   date), having in the case of Eurodollar Loans the same
   Interest Period; PROVIDED, HOWEVER, that Base Rate Loans
   incurred pursuant to Section 1.10(b) shall be considered
   part of any related Borrowing of Eurodollar Loans.
   
          "BTCO" shall mean Bankers Trust Company.
   
          "BUSINESS DAY" shall mean (i) for all purposes
   other than as covered by clause (ii) below, any day
   excluding Saturday, Sunday and any day which shall be in
   the City of New York a legal holiday or a day on which
   banking institutions are authorized by law or other
   governmental actions to close and (ii) with respect to all
   notices and determinations in connection with, and payments
   of principal and interest on, Eurodollar Loans, any day
   which is a Business Day described in clause (i) and which
   is also a day for trading by and between banks in U.S.
   dollar deposits in the interbank Eurodollar market in
   London.
   
          "CAPITAL EXPENDITURES" shall mean, with respect
   to any Person, without duplication, all expenditures by
   such Person which should be capitalized in accordance with
   GAAP, including, without duplication, all such expenditures
   with respect to fixed or capital assets (including, without
   limitation, expenditures for maintenance and repairs which
   should be capitalized in accordance with GAAP) and the
   amount of all Capitalized Lease Obligations incurred by
   such Person.
   
          "CAPITAL LEASE" as applied to any Person shall
   mean any lease of any property (whether real, personal or
   mixed) by that Person as lessee which, in conformity with
   GAAP, is accounted for as a capital lease on the balance
   sheet of that Person.
   
          "CAPITAL STOCK" shall mean any and all shares,
   interests, rights to purchase, warrants, options,
   participants or other equivalents of or interests in
   (however designated) corporate stock or other equity
   participations, including partnership interests, whether
   general or limited, including any Preferred Stock.
   
          "CAPITALIZED LEASE OBLIGATIONS" shall mean all
   obligations under Capital Leases of Borrower or any
   Subsidiary (other than an Unrestricted Subsidiary) in each
   case taken at the amount thereof accounted for as
   liabilities in accordance with GAAP.
   
          "CASH EQUIVALENTS" shall mean (i) securities
   issued or directly and fully guaranteed or insured by the
   United States of America or any agency or instrumentality
   thereof (PROVIDED that the full faith and credit of the
   United States of America is pledged in support thereof)
   having maturities of not more than one year from the date
   of acquisition, (ii) U.S. dollar denominated time deposits,
   certificates of deposit and bankers' acceptances of (x) any
   Bank, (y) any domestic commercial bank of recognized
   standing having capital and surplus in excess of $500.0
   million or (z) any Bank or bank (or the parent company of
   such bank) whose short-term commercial paper rating from
   S&P is at least A-1 or the equivalent thereof or from
   Moody's is at least P-1 or the equivalent thereof (any such
   bank, an "APPROVED BANK"), in each case with maturities of
   not more than one year from the date of acquisition, (iii)
   repurchase obligations with a term of not more than seven
   days for underlying securities of the types described in
   clause (i) above entered into with any bank meeting the
   qualifications specified in clause (ii) above, (iv)
   commercial paper issued by any Bank or Approved Bank or by
   the parent company of any Bank or Approved Bank and
   commercial paper issued by, or guaranteed by, any
   industrial or financial company with a short-term
   commercial paper rating of at least A-1 or the equivalent
   thereof by S&P or at least P-1 or the equivalent thereof by
   Moody's (any such company, an "APPROVED COMPANY"), or
   guaranteed by any industrial company with a long term
   unsecured debt rating of at least A or A2, or the
   equivalent of each thereof, from S&P or Moody's, as the
   case may be, and in each case maturing within one year
   after the date of acquisition and (v) investments in money
   market funds substantially all of whose assets are
   comprised of securities of the type described in clauses
   (i) through (iv) above.
   
          "CASH PROCEEDS" shall mean, with respect to any
   Asset Disposition, the aggregate cash payments (including
   any cash received by way of deferred payment pursuant to a
   note receivable issued in connection with such Asset
   Disposition, other than the portion of such deferred
   payment constituting interest, but only as and when so
   received) received by Borrower and/or any Subsidiary from
   such Asset Disposition.
   
          "CERCLA" shall mean the Comprehensive
   Environmental Response, Compensation, and Liability Act of
   1980, as amended, 42 U.S.C. Section 9601 ET SEQ.
   
          "CHANGE OF CONTROL" shall mean an event or series
   of events by which (i) any person (as defined in Section
   13(d)(3) of the Exchange Act) is or becomes the beneficial
   owner (as defined in Rule 13d-3 of the Exchange Act),
   directly or indirectly, of more than 35% of the voting
   power of the then outstanding Voting Stock of Borrower; or
   (ii) during any period of two consecutive years,
   individuals who at the beginning of such period constituted
   the Board of Directors of Borrower (together with any new
   or replacement directors whose election by the Board of
   Directors of Borrower or whose nomination for election by
   Borrower's stockholders, was approved by a vote of at least
   66-2/3% of the directors then still in office who were
   either directors at the beginning of such period or whose
   election or nomination for election was previously so
   approved) cease for any reason to constitute a majority of
   the Board of Directors of Borrower then in office; or (iii)
   any "Change of Control" as defined in the Indenture (so
   long as the Indenture shall be in effect) shall occur.
   
          "CLAIMS" see the definition of "Environmental
   Claims."
   
          "CO-AGENT" see the first paragraph of this
   Agreement.
   
          "CODE" shall mean the Internal Revenue Code of
   1986, as amended from time to time and the regulations
   promulgated and the rulings issued thereunder.  Section
   references to the Code are to the Code, as in effect at the
   Effectiveness Date and any subsequent provisions of the
   Code, amendatory thereof, supplemental thereto or
   substituted therefor.
   
          "COMMITMENT" shall mean, with respect to each
   Bank, the amount set forth opposite such Bank's name in
   ANNEX I hereto directly below the column entitled
   "Commitment," as the same may be (x) reduced from time to
   time pursuant to Sections 3.02, 3.03 and/or 9 or (y)
   adjusted from time to time as a result of assignments to or
   from such Bank pursuant to Section 12.04.
    
          "COMMITMENT COMMISSION" see Section 3.01(a).
   
          "CONSOLIDATED CASH INTEREST EXPENSE" shall mean,
   for any period, total cash interest expense (including that
   attributable to Capital Leases, whether or not the
   Capitalized Lease Obligations under such Capitalized Leases
   is included in Indebtedness) of Borrower and the
   Subsidiaries (other than Unrestricted Subsidiaries) on a
   consolidated basis during such period, including, without
   limitation, (i) all commissions, discounts and other fees
   and charges owed with respect to letters of credit and
   bankers' acceptance financing during such period and (ii)
   all capitalized cash interest during such period.
   
          "CONSOLIDATED EBIT" shall mean, for any period,
   (A) the sum of the amounts for such period of (i)
   Consolidated Net Income, (ii) provisions for taxes based on
   income, (iii) Consolidated Interest Expense, (iv)
   amortization or write-off of deferred financing costs to
   the extent deducted in determining Consolidated Net Income
   and (v) losses on sales of assets (excluding sales in the
   ordinary course of business) and other extraordinary
   losses, LESS (B) the amount for such period of gains on
   sales of assets (excluding sales in the ordinary course of
   business) and other extraordinary gains, all as determined
   on a consolidated basis in accordance with GAAP.
   
          "CONSOLIDATED EBITDA" shall mean, for any period,
   the sum of the amounts for such period of (i) Consolidated
   EBIT, (ii) depreciation expense of Borrower and the
   Subsidiaries (other than Unrestricted Subsidiaries) and
   (iii) amortization expense of Borrower and the Subsidiaries
   (other than Unrestricted Subsidiaries), all as determined
   on a consolidated basis in accordance with GAAP.
   
          "CONSOLIDATED INDEBTEDNESS" shall mean, as at any
   date of determination, the aggregate stated balance sheet
   amount of all Indebtedness (including the Loans) of
   Borrower and the Subsidiaries (other than Unrestricted
   Subsidiaries) on a consolidated basis as determined in
   accordance with GAAP, excluding (i) all Contingent
   Obligations relating to the Indebtedness of any Person
   which such Indebtedness is included in the calculation of
   Consolidated Indebtedness of Borrower and the Subsidiaries
   (other than Unrestricted Subsidiaries) and (ii) all
   Capitalized Lease Obligations under the Capitalized Lease
   (as in effect on the date hereof) of the Glomar Explorer
   Fleet Rig (Official No. 547257).
   
          "CONSOLIDATED INTEREST EXPENSE" shall mean, for
   any period, total interest expense (including that
   attributable to Capital Leases, whether or not the
   Capitalized Lease Obligations under such Capitalized Lease
   is included in Indebtedness) of Borrower and the
   Subsidiaries (other than Unrestricted Subsidiaries) in
   accordance with GAAP on a consolidated basis with respect
   to all outstanding Indebtedness of Borrower and the
   Subsidiaries (other than Unrestricted Subsidiaries),
   including, without limitation, all commissions, discounts
   and other fees and charges owed with respect to letters of
   credit and bankers' acceptance financing.
   
          "CONSOLIDATED NET INCOME" shall mean for any
   period, the net income (or loss) of Borrower and the
   Subsidiaries (other than Unrestricted Subsidiaries) on a
   consolidated basis for such period taken as a single
   accounting period determined in conformity with GAAP;
   PROVIDED, HOWEVER, that there shall be excluded therefrom
   (i) the effect of deferred taxes, (ii) except to the extent
   of the amount of cash dividends or other cash distributions
   in respect of Capital Stock paid to Borrower or a
   Subsidiary (other than an Unrestricted Subsidiary) by any
   other Person during such period out of funds legally
   available therefor, the net income (or loss) of such other
   Person other than a Subsidiary, (iii) except to the extent
   includible pursuant to clause (ii) hereof, the net income
   (or loss) of any other Person accrued or attributable to
   any period prior to the date it becomes a Subsidiary or is
   merged into or consolidated with Borrower or any Subsidiary
   or such other Person's property or Capital Stock (or a
   portion thereof) is acquired by Borrower or any Subsidiary,
   and (iv) the net income of any Subsidiary which is not a
   Guarantor to the extent that the transfer to Borrower or a
   Guarantor of that income is not at the time permitted,
   directly or indirectly, by any means (including by
   dividend, distribution, advance or loan or otherwise), by
   operation of the terms of its charter or any agreement with
   a Person other than with Borrower or any Affiliate thereof,
   instrument held by a Person other than by Borrower or any
   Affiliate thereof, judgment, decree, order, statute, law,
   rule or governmental regulations applicable to such
   Subsidiary or its stockholders;  PROVIDED, HOWEVER, that if
   at any time during the period for which Consolidated Net
   Income is measured such restriction or transfer to Borrower
   of such income of a Subsidiary is lifted, Consolidated Net
   Income shall include the net income of such Subsidiary
   previously excluded.
   
          "CONSOLIDATED NET WORTH" shall mean, at any time,
   the net worth of Borrower and the Subsidiaries (other than
   Unrestricted Subsidiaries) on a consolidated basis
   determined in accordance with GAAP.
   
          "CONTINGENT OBLIGATIONS" shall mean as to any
   Person any obligation of such Person guaranteeing or
   intending to guarantee any Indebtedness, leases, dividends
   or other obligations ("PRIMARY OBLIGATIONS") of any other
   Person (the "primary obligor") in any manner, whether
   directly or indirectly, including, without limitation, any
   obligation of such Person, whether or not contingent, (a)
   to purchase any such primary obligation or any property
   constituting direct or indirect security therefor, (b) to
   advance or supply funds (i) for the purchase or payment of
   any such primary obligation or (ii) to maintain working
   capital or equity capital of the primary obligor or
   otherwise to maintain the net worth or solvency of the
   primary obligor, (c) to purchase property, securities or
   services primarily for the purpose of assuring the owner of
   any such primary obligation of the ability of the primary
   obligor to make payment of such primary obligation or (d)
   otherwise to assure or hold harmless the owner of such
   primary obligation against loss in respect thereof;
   PROVIDED, HOWEVER, that the term Contingent Obligation
   shall not include endorsements of instruments for deposit
   or collection in the ordinary course of business.  The
   amount of any Contingent Obligation shall be deemed to be
   an amount equal to the stated or determinable amount of the
   primary obligation in respect of which such Contingent
   Obligation is made or, if not stated or determinable, the
   maximum reasonably anticipated liability in respect thereof
   (assuming such Person is required to perform thereunder) as
   determined by such Person in good faith.
   
          "CREDIT DOCUMENTS" shall mean this Agreement, the
   Notes and each Guaranty and any documents executed in
   connection therewith.
   
          "CREDIT EVENT" shall mean and include the making
   of a Loan or the issuance of a Letter of Credit.
   
          "CREDIT PARTY" shall mean Borrower and each
   Guarantor.
   
          "DEBT INSUANCE" shall mean the issuance or sale
   by Borrower or any Subsidiary of any securities evidencing
   Indebtedness of Borrower or any Subsidiary, other than any
   refinancing of the Senior Secured Notes as permitted by
   Section 8.03(b).
   
          "DEFAULT" shall mean any event, act or condition
   which with notice or lapse of time, or both, would
   constitute an Event of Default.
   
          "DEFAULTING BANK" shall mean any Bank with
   respect to which a Bank Default is in effect.
   
          "DESIGNATION" see Section 8.05(b).
   
          "DESIGNATION AMOUNT" see Section 8.05(b).
   
          "DISQUALIFIED CAPITAL STOCK" means any Capital
   Stock which, by its terms (or by the terms of any security
   into which it is convertible or for which it is
   exchangeable at the option of the holder thereof), or upon
   the happening of any event, matures or is mandatorily
   redeemable, pursuant to a sinking fund obligation or
   otherwise, or redeemable, at the option of the holder
   thereof, in whole or in part, or exchangeable into
   Indebtedness on or prior to the Maturity Date.
   
          "DIVIDENDS" shall mean to declare or pay on the
   part of Borrower or any Subsidiary any dividends (other
   than dividends payable solely in Qualified Capital Stock of
   such Person (including pursuant to a shareholders' rights
   plan)) or return any capital to, its stockholders or
   authorize or make any other distribution, payment or
   delivery of property or cash to its stockholders as such,
   or redeem, retire, purchase or otherwise acquire, directly
   or indirectly, for a consideration, any shares of any class
   of its Capital Stock now or hereafter outstanding (or any
   warrants for or options or stock appreciation rights in
   respect of any of such shares), or set aside any funds for
   any of the foregoing purposes, or permit any Subsidiary to
   purchase or otherwise acquire for consideration any shares
   of any class of the Capital Stock of Borrower or any other
   Subsidiary, as the case may be, now or hereafter
   outstanding; PROVIDED, HOWEVER, that Dividends shall not
   include the redemption of rights issued pursuant to a
   shareholders' rights agreement in an amount per right not
   to exceed a DE MINIMIS amount.
   
          "DOLLARS" shall mean freely transferable lawful
   money of the United States.
   
          "DOMESTIC SUBSIDIARY" shall mean, as to any
   Person, any Subsidiary that is incorporated under the laws
   of the United States of America, any State thereof or any
   territory thereof.
   
          "EFFECTIVENESS DATE" see Section 12.10.
   
          "ELIGIBLE TRANSFEREE" shall mean a commercial
   bank, financial institution or other "accredited investor"
   (as defined by Regulation D of the Securities Act).
   
          "ENVIRONMENTAL CLAIMS" shall mean any and all
   administrative, regulatory or judicial actions, suits,
   demands, demand letters, claims, liens, notices of
   noncompliance or violation, investigations of Governmental
   Authorities or third parties or proceedings relating in any
   way to any Environmental Law or any permit issued, or any
   approval given, under any such Environmental Law
   (hereafter, "CLAIMS"), including, without limitation,
   (a) any and all Claims by governmental or regulatory
   authorities for enforcement, cleanup, removal, response,
   remedial or other actions or damages pursuant to any
   applicable Environmental Law, and (b) any and all Claims by
   any third party seeking damages, contribution,
   indemnification, cost recovery, compensation or injunctive
   relief resulting from Hazardous Materials arising from
   alleged damage or injury or threat of injury or damage to
   health, safety or the environment.
   
          "ENVIRONMENTAL LAW" shall mean any applicable
   Federal, state, foreign or local statute, law, rule,
   regulation, ordinance, code, guide, policy, treaty or
   convention and rule of common law now or hereafter in
   effect and in each case as amended and having legally
   binding effect on, and enforceable against, private
   parties, and any judicial or administrative interpretation
   thereof, including, without limitation, any judicial or
   administrative order, consent decree or judgment, relating
   to pollution or protection of the environment or health or
   safety or Release or threat of Release or treatment,
   storage, transport, generation, handling or disposal of any
   Hazardous Materials, including, without limitation, CERCLA;
   RCRA; the Deepwater Port Act, as amended, 33 U.S.C.
   SectionSection 1501 ET SEQ.; the Federal Water Pollution
   Control Act, as amended, 33 U.S.C. Section 1251 ET SEQ.;
   the Toxic Substances Control Act, 15 U.S.C. Section 7401 ET
   SEQ.; the Clean Air Act, as amended, 42 U.S.C. Section 7401
   ET SEQ.; the Safe Drinking Water Act, 42 U.S.C.
   Section 3808 ET SEQ.; the Oil Pollution Act of 1990, 33
   U.S.C. Section 2701 ET SEQ. and any state and local or
   foreign counterparts or equivalents.
   
          "ERISA" shall mean the Employee Retirement Income
   Security Act of 1974, as amended from time to time, and the
   regulations promulgated and rulings issued thereunder.
   
          "ERISA GROUP" shall mean Borrower, any Subsidiary
   and all members of a controlled group of corporations and
   all trades or businesses (whether or not incorporated)
   under common control which, together with Borrower or any
   Subsidiary, are treated as a single employer under
   Section 414 of the Code.
   
          "EURODOLLAR LOANS" shall mean each Loan bearing
   interest at the rates provided in Section 1.08(b).
   
          "EURODOLLAR RATE" shall mean with respect to each
   Interest Period for a Eurodollar Loan, (i) the offered
   quotation to first-class banks in the interbank Eurodollar
   market by the Administrative Agent for dollar deposits of
   amounts in same day funds comparable to the outstanding
   principal amount of the Eurodollar Loan of the
   Administrative Agent for which an interest rate is then
   being determined with maturities comparable to the Interest
   Period to be applicable to such Eurodollar Loan, determined
   as of 10:00 A.M. (New York time) on the date which is two
   Business Days prior to the commencement of such Interest
   Period divided (and rounded upward to the next whole
   multiple of 1/16 of 1%) by (ii) a percentage equal to 100%
   minus the then stated maximum rate of all reserve
   requirements (including, without limitation, any marginal,
   emergency, supplemental, special or other reserves)
   applicable to any member bank of the Federal Reserve System
   in respect of Eurocurrency liabilities as defined in
   Regulation D (or any successor category of liabilities
   under Regulation D).
   
          "EVENT OF DEFAULT" see Section 9.
   
          "EXCESS CASH FLOW" shall mean, for any period,
   the difference, if any, of (a) the sum of the following
   items for Borrower and the Subsidiaries (other than
   Unrestricted Subsidiaries) on a consolidated basis for such
   period determined in accordance with GAAP:  (i)
   consolidated net income, adjusted by (1) adding back the
   non-cash portion of all extraordinary or non-recurring
   items of expense and (2) deducting the non-cash portion of
   all extraordinary or non-recurring items of income, in each
   case to the extent taken into account in the calculation of
   such net income, (ii) the non-cash portion of any other
   item of expense to the extent deducted in determining such
   net income, other than to the extent requiring an accrual
   or reserve for future cash expenses, (iii) depreciation and
   amortization allowances to the extent deducted in
   determining such net income and (iv) net decreases in
   Working Capital, MINUS (b) the sum of the following items
   for Borrower and the Subsidiaries (other than Unrestricted
   Subsidiaries) on a consolidated basis for such period:  (i)
   Capital Expenditures for such period, (ii) scheduled
   principal payments in respect of Indebtedness (excluding
   (I) any principal payment effected in connection with the
   refinancing of any Indebtedness and (II) any prepayment in
   respect of any revolving credit facility (including the
   Loans) to the extent not accompanied by a permanent
   reduction in commitments thereunder), (iii) non-cash
   credits to the extent added in determining such net income
   and (iv) net increases in Working Capital.
   
          "EXCHANGE ACT" shall mean the Securities Exchange
   Act of 1934, as amended from time to time, and the
   regulations promulgated and the rulings issued thereunder.
   
          "EXISTING INDEBTEDNESS" see Section 6.18.
   
          "EXISTING INDEBTEDNESS AGREEMENTS" see Section
   5.06(i).
   
          "EXISTING L/C FACILITY INDEBTEDNESS" shall mean
   Indebtedness under (i) the Reimbursement and Security
   Agreement between the Company and the Bank of Nova Scotia
   dated as of May 1, 1993 and (ii) the Reimbursement and
   Security Agreement between the Company and First Union Bank
   of North Carolina dated as of August 1, 1993, not exceeding
   $2.0 million in the aggregate at any time outstanding.
   
          "FACILITY" shall mean the credit facility
   established under this Agreement, evidenced by the Total
   Commitment.
   
          "FACING FEE" see Section 3.01(c).
   
          "FEDERAL FUNDS EFFECTIVE RATE" shall mean for any
   period, a fluctuating interest rate equal for each day
   during such period to the weighted average of the rates on
   overnight Federal Funds transactions with members of the
   Federal Reserve System arranged by Federal Funds brokers,
   as published for such day (or, if such day is not a
   Business Day, for the next preceding Business Day) by the
   Federal Reserve Bank of New York, or, if such rate is not
   so published for any day which is a Business Day, the
   average of the quotations for such day on such transactions
   received by the Administrative Agent from three Federal
   Funds brokers of recognized standing selected by the
   Administrative Agent.
   
          "FEES" shall mean all amounts payable pursuant
   to, or referred to in, Section 3.01.
   
          "FINANCING PROCEEDS" shall mean the cash received
   by Borrower or any Subsidiary from a Debt Issuance.
   
          "FLEET" shall mean all Fleet Rigs taken as a
   whole.
   
          "FLEET RIGS" shall mean the Glomar Explorer
   (Official No. 547527) and any offshore drilling rig or
   drilling vessel owned from time to time by Borrower or any
   Subsidiary (other than an Unrestricted Subsidiary).
   
          "FOREIGN PENSION PLAN" shall mean any plan, fund
   (including, without limitation, any superannuation fund) or
   other similar program established or maintained outside the
   United States of America by Borrower or any one or more of
   its Subsidiaries primarily for the benefit of employees of
   Borrower or such Subsidiaries residing outside the United
   States of America, which plan, fund or other similar
   program provides, or results in, retirement income, a
   deferral of income in contemplation of retirement or
   payments to be made upon termination of employment, and
   which plan is not subject to ERISA.
   
          "GAAP" shall mean generally accepted accounting
   principles in the United States of America as in effect on
   the date of this Agreement; it being understood and agreed
   that determinations in accordance with GAAP for purposes of
   Section 8, including defined terms as used therein, are
   subject (to the extent provided therein) to Section
   12.07(a).
   
          "GOVERNMENTAL AUTHORITY" shall mean any
   government or political subdivision or any agency,
   authority, board, bureau, central bank, commission,
   department or instrumentality of either, or any court,
   tribunal, grand jury or arbitrator, in each case whether
   foreign or domestic, or any exercising executive,
   legislative, judicial, regulatory or administrative
   functions of or pertaining to government.
   
          "GUARANTOR" shall mean each Subsidiary which is a
   party to the Guaranty and which has not been released
   therefrom in accordance with the Credit Documents.
   
          "GUARANTY" see Section 5.11.
   
          "HAZARDOUS MATERIALS" shall mean any pollutant,
   contaminant, toxic, hazardous, extremely hazardous or
   radioactive substance, constituent or waste, or any other
   constituent, waste, chemical material, compound or
   substance including, without limitation, petroleum
   including without limitation crude oil or any fraction
   thereof, or any petroleum product, subject to regulation
   under any Environmental Law.
   
          "IN CLASS" see Section 6.19.
   
          "INDEBTEDNESS" of any Person shall mean without
   duplication (i) all indebtedness of such Person for
   borrowed money, (ii) the deferred purchase price of assets
   or services which in accordance with GAAP would be shown on
   the liability side of the balance sheet of such Person,
   (iii) the face amount of all letters of credit issued for
   the account of such Person and, without duplication, all
   drafts drawn thereunder, (iv) all Indebtedness of a second
   Person secured by any Lien on any property owned by such
   first Person, whether or not such indebtedness has been
   assumed, (v) all Capitalized Lease Obligations of such
   Person, (vi) all obligations of such Person to pay a
   specified purchase price for goods or services whether or
   not delivered or accepted, I.E., take-or-pay and similar
   obligations, (vii) all net obligations of such Person under
   Interest Rate Agreements and (viii) all Contingent
   Obligations of such Person (other than Contingent
   Obligations arising from the guaranty by Borrower or any
   Subsidiary of the obligations of Borrower and/or any
   Subsidiary (other than any Unrestricted Subsidiary) of a
   character described in the foregoing clauses (i) through
   (vii) to the extent such guaranteed obligations are
   permitted under this Agreement); PROVIDED, HOWEVER, that
   Indebtedness (a) shall not include obligations of any
   Person (x) arising from the honoring by a bank or other
   financial institution of a check, draft or similar
   instrument inadvertently drawn against insufficient funds
   in the ordinary course of business, provided that such
   obligations are extinguished within two Business Days of
   their incurrence and (y) resulting from the endorsement of
   negotiable instruments for collection in the ordinary
   course of business and consistent with past business
   practices; (b) shall include the liquidation preference and
   any mandatory redemption payment obligation obligations in
   respect of any Disqualified Capital Stock of Borrower or
   any Subsidiary; (c) shall not include obligations under
   performance bonds, performance guarantees, surety bonds,
   appeal bonds or similar obligations, incurred in the
   ordinary course of business and on ordinary business terms;
   (d) shall not include Capitalized Lease Obligations
   incurred in the ordinary course of business and on ordinary
   business terms (other than under Capitalized Leases of
   offshore drilling rigs and vessels) not exceeding $10.0
   million in the aggregate at any time outstanding; (e) shall
   not include trade payables and accrued expenses, in each
   case arising in the ordinary course of business.
   
          "INDENTURE" shall mean the Indenture dated as of
   December 23, 1992 among Borrower and Wilmington Trust
   Company, as trustee, as the same may be amended, modified
   or supplemented from time to time.
   
          "INITIAL BORROWING DATE" shall mean the date upon
   which the initial Borrowing of Loans occurs.
   
          "INTELLECTUAL PROPERTY" see Section 6.14.
   
          "INTEREST PERIOD" with respect to any Loan shall
   mean the interest period applicable thereto, as determined
   pursuant to Section 1.09.
   
          "INTEREST RATE AGREEMENT" shall mean any interest
   rate swap agreement, any interest rate cap agreement, any
   interest rate collar agreement or other similar agreement
   or arrangement designed to protect Borrower or any
   Subsidiary against interest rate risk.
   
          "INVESTMENT" shall mean any direct or indirect
   loan, advance, guarantee or other extension of credit or
   capital contribution to (by means of transfers of cash or
   other property or assets to others or payments for property
   or services for the account or use of others, or
   otherwise), or purchase or acquisition of Capital Stock,
   bonds, notes, debentures or other securities or evidences
   of Indebtedness issued by, any other Person.  The amount of
   any Investment shall be the original cost of such
   Investment, PLUS the cost of all additions thereto, and
   MINUS the amount of any portion of such Investment repaid
   to such Person in cash as a repayment of principal or a
   return of capital, as the case may be, but without any
   other adjustments for increases or decreases in value, or
   write-ups, write-downs or write-offs with respect to such
   Investment.  In determining the amount of any investment
   involving a transfer of any property or asset other than
   cash, such property shall be valued at its fair market
   value at the time of such transfer, as determined in good
   faith by the board of directors (or comparable body) of the
   Person making such transfer.
   
          "LEASEHOLD" of any Person shall mean all of the
   right, title and interest of such Person as lessee or
   licensee in, to and under leases or licenses of land,
   improvements and/or fixtures.
   
          "L/C SUPPORTABLE OBLIGATIONS" shall mean such
   obligations of Borrower or any Subsidiary as are not
   inconsistent with the policies of the Letter of Credit
   Issuer determined reasonably and in good faith.
   
          "LETTER OF CREDIT" see Section 2.01(a).
   
          "LETTER OF CREDIT FEE" see Section 3.01(b).
   
          "LETTER OF CREDIT ISSUER" shall mean BTCo.  
   
          "LETTER OF Credit Outstandings" shall mean, at
   any time, the sum of, without duplication, (i) the
   aggregate Stated Amount of all outstanding Letters of
   Credit and (ii) the aggregate amount of all Unpaid Drawings
   in respect of all Letters of Credit.
   
          "LETTER OF CREDIT REQUEST" see Section 2.03(a).
   
          "LEVERAGE RATIO" shall mean, at any date of
   determination, the ratio of Consolidated Indebtedness of
   Borrower at such date to Consolidated EBITDA of Borrower
   for the four consecutive complete fiscal quarters then last
   ended.
   
          "LIEN" shall mean any mortgage, pledge, security
   interest, security title, encumbrance, lien or charge of
   any kind (including any agreement to give any of the
   foregoing, any conditional sale or other title retention
   agreement or any lease in the nature thereof), in each case
   for the purpose, or having the effect, of protecting a
   creditor against loss or securing the payment or
   performance of an obligation to a creditor.
   
          "LOAN" see Section 1.01.
   
             "MARGIN STOCK" shall have the meaning provided in
   Regulation U.
   
          "MARKET VALUE" shall mean as of any date of
   calculation the value as of such date of any Fleet Rig or
   other vessel provided in the most recent valuation report
   delivered in connection with Section 5.12(a)(ii) and
   Section 7.10.
   
          "MATERIAL ADVERSE EFFECT" shall mean a material
   adverse effect on the performance, business, properties,
   assets, operations, nature of assets, liabilities,
   condition (financial or otherwise) or prospects of Borrower
   and the Subsidiaries taken as a whole.
   
          "MATURITY DATE" shall mean February 15, 1999.
   
          "MINIMUM BORROWING AMOUNT" shall mean (i) for
   Loans maintained as Base Rate Loans, $1.0 million and
   increments of $500,000 over such amount, and (ii) for Loans
   maintained as Eurodollar Loans, $5.0 million and increments
   of $1.0 million over such amount.
   
          "MOODY'S" shall mean Moody's Investors Service,
   Inc. and its successors.
   
          "MULTIEMPLOYER PLAN" shall mean at any time an
   employee pension benefit plan within the meaning of
   Section 4001(a)(3) of ERISA to which any member of the
   ERISA Group is then making or accruing an obligation to
   make contributions or has within the preceding five plan
   years made contributions, including for these purposes any
   Person which ceased to be a member of the ERISA Group
   during such five year period.
   
          "NET CASH PROCEEDS" shall mean, with respect to
   any Asset Disposition, the Cash Proceeds therefrom, MINUS,
   without duplication, the sum of (i) reasonable legal, title
   and recording tax expenses, commissions and other
   reasonable fees and expenses incurred, and all federal,
   state, provincial, foreign and local taxes payable as a
   consequence of such Asset Disposition, and (ii) all payment
   made to any Person other than Borrower or any Subsidiary on
   any Indebtedness of Borrower or its Subsidiary which is
   secured by such assets, in accordance with the terms of any
   Lien upon or with respect to such assets, or which must by
   its terms, or in order to obtain a necessary consent to
   such Asset Disposition, or by applicable law, be repaid out
   of the proceeds from such Asset Disposition.
   
          "NET FINANCING PROCEEDS" shall mean the Financing
   Proceeds net of underwriting discounts and commissions and
   direct expenses.
   
          "NON-DEFAULTING BANK" shall mean each Bank other
   than a Defaulting Bank.
   
          "NON-RECOURSE INDEBTEDNESS" means any
   Indebtedness of any Subsidiary (the "RELEVANT SUBSIDIARY")
   (a) in respect of which neither Borrower nor any Subsidiary
   (other than an Unrestricted Subsidiary or the Relevant
   Subsidiary) is liable or obligated in any manner including,
   without limitation, liabilities or obligations constituting
   Indebtedness of Borrower or any Subsidiary (other than an
   Unrestricted Subsidiary or the Relevant Subsidiary), and
   (b) the occurrence of any event or the existence of any
   condition under any agreement or instrument relating to
   which shall not at any time have the effect of
   accelerating, or permitting the acceleration of, the
   maturity of any Indebtedness of Borrower or of any
   Subsidiary (other than an Unrestricted Subsidiary or the
   Relevant Subsidiary) or otherwise permitting any such
   Indebtedness to be declared to be due and payable, or to be
   required to be prepaid, purchased or redeemed, prior to the
   stated maturity thereof.
   
          "NOTE" see Section 1.05(a).
   
          "NOTICE OF BORROWING" see Section 1.03.
   
          "NOTICE OF CONVERSION" see Section 1.06.
   
          "NOTICE OFFICE" shall mean the office of the
   Administrative Agent at 130 Liberty Street, New York, New
   York or such other office as the Administrative Agent may
   designate to Borrower from time to time.
   
          "OBLIGATIONS" shall mean all amounts, direct or
   indirect, contingent or absolute, of every type or
   description, and at any time existing, owing to the
   Administrative Agent or any Bank pursuant to the terms of
   any Credit Document.
   
          "PARTICIPANT" see Section 2.05(a). 
   
          "PAYMENT OFFICE" shall mean the office of the
   Administrative Agent at 130 Liberty Street, New York, New
   York or such other office as the Administrative Agent may
   designate to Borrower from time to time.
   
          "PBGC" shall mean the Pension Benefit Guaranty
   Corporation or any successor thereto.
   
          "PERCENTAGE" shall mean for each Bank the
   percentage obtained by dividing such Bank's Commitment by
   the Total Commitment; PROVIDED, HOWEVER, that if the Total
   Commitment has been terminated, the Percentage of each Bank
   shall be determined by dividing such Bank's Commitment
   immediately prior to such termination by the Total
   Commitment immediately prior to such termination.
   
          "PERMITTED INVESTMENTS" shall mean and include
   the following:
   
          (a)  Borrower or any Subsidiary may make
        Investments in cash and Cash Equivalents;
   
          (b)  Borrower and any Subsidiary may acquire and
        hold receivables owing to them, if created or acquired
        in the ordinary course of business and payable or
        dischargeable in accordance with customary trade
        terms;
   
          (c)  Borrower or any Subsidiary may make loans
        and advances (i) to employees in the ordinary course
        of business or in connection with employee relocation
        in an aggregate principal amount not to exceed $1.0
        million at any time outstanding (without giving effect
        to any write-down or write-off thereof) and (ii) to
        management employees to finance their purchases of
        Qualified Capital Stock of Borrower in an aggregate
        amount not to exceed $1.0 million at any time
        outstanding (without giving effect to any write-down
        or write-off thereof);
   
          (d)  Borrower or any Subsidiary may acquire and
        own investments (including debt obligations) received
        in connection with the bankruptcy or reorganization of
        suppliers and customers or in settlement of delinquent
        obligations of, or other disputes with, customers and
        suppliers arising in the ordinary course of business;
   
          (e)  Borrower may hold treasury stock received by
        it in connection with the repurchase of stock from
        employees pursuant to Section 8.05(c);
   
          (f)  Borrower may make contributions to an
        employee stock ownership plan provided such
        contributions are in Borrower's common stock; 
   
          (g)  Borrower or any Subsidiary may make
        Investments in any Subsidiary (other than any
        Unrestricted Subsidiary) and any Person which, after
        giving effect to such investments, becomes a
        Subsidiary (other than an Unrestricted Subsidiary);
        PROVIDED, HOWEVER, that any such Investments which are
        loans and advances are unsecured and subordinated to
        the Obligations of such Credit Party owing to the
        Banks; 
   
          (h)  Borrower or any Subsidiary may acquire
        Senior Secured Notes pursuant to any offer required to
        be made therefor pursuant to the Indenture as in
        effect on the date hereof; 
   
          (i)  Borrower or any Subsidiary may make
        investments in Persons to the extent that the
        consideration provided by Borrower or any Subsidiary
        for such investments shall be solely the Qualified
        Capital Stock of Borrower; and
   
          (j)  Investments required to be made pursuant to
        the Purchase and Sale Agreement dated August 24, 1993
        between Borrower and Transocean Drilling AS, as in
        effect on the Effectiveness Date.
   
          "PERMITTED LIENS" shall mean Liens described in
   Section 8.04(a) through (o).
   
          "PERSON" shall mean any individual, partnership,
   joint venture, limited liability company, firm,
   corporation, association, trust or other enterprise or any
   government or political subdivision or any agency,
   department or instrumentality thereof.
   
          "PLAN" shall mean at any time an employee pension
   benefit plan (other than a Multiemployer Plan) which is
   covered by Title IV of ERISA or subject to the minimum
   funding standards under Section 412 of the Code and either
   (i) is maintained, or contributed to, by any member of the
   ERISA Group for employees of any member of the ERISA Group
   or (ii) has at any time within the preceding five years
   been maintained, or contributed to, by any Person which was
   at such time a member of the ERISA Group for employees of
   any Person which was at such time a member of the ERISA
   Group.
   
          "PREFERRED STOCK" in any Person, means Capital
   Stock of any class or classes (however designated) which is
   preferred as to the payment of dividends or distributions,
   or as to the distribution of assets upon any voluntary or
   involuntary liquidation or dissolution of such Person, over
   Capital Stock of any other class in such Person.
   
          "PRIME LENDING RATE" shall mean the rate which
   Bankers Trust Company announces from time to time as its
   prime lending rate, the Prime Lending Rate to change when
   and as such prime lending rate changes.  The Prime Lending
   Rate is a reference rate and does not necessarily represent
   the lowest or best rate actually charged to any customer. 
   Bankers Trust Company may make commercial loans or other
   loans at rates of interest at, above or below the Prime
   Lending Rate.
   
          "PROJECTIONS" see Section 5.14.
   
          "QUALIFIED CAPITAL STOCK" in any Person means any
   Capital Stock in such Person other than any Disqualified
   Capital Stock.
   
          "RATING AGENCIES" shall mean each of Moody's and
   S&P.
   
          "RCRA" shall mean the Resource Conservation and
   Recovery Act, as amended, 42 U.S.C. Section 6901 ET SEQ.
   
          "REAL PROPERTY" of any Person shall mean all of
   the right, title and interest of such Person in and to
   land, improvements and fixtures, including Leaseholds.
   
          "RECOVERY EVENT" shall mean the receipt by
   Borrower or any Subsidiary of any cash insurance proceeds
   or cash condemnation award (excluding the proceeds of any
   business interruption insurance) payable (i) by reason of
   theft, loss, physical destruction or damage or any other
   similar event with respect to any property or asset of
   Borrower or any Subsidiary or (ii) by reason of any
   condemnation, taking, seizing or similar event with respect
   to any property or asset of Borrower or any Subsidiary.
   
          "REGISTER" see Section 12.16.
   
          "REGULATION D" shall mean Regulation D of the
   Board of Governors of the Federal Reserve System as from
   time to time in effect and any successor to all or a
   portion thereof establishing reserve requirements.
   
          "REGULATION U" shall mean Regulation U of the
   Board of Governors of the Federal Reserve System as from
   time to time in effect and any successor to all or a
   portion thereof establishing margin requirements.
   
          "RELEASE" shall mean any release, spill,
   emission, leaking, pumping, injection, deposit, disposal,
   discharge, leaching or migration into the environment or
   into, out of or through any structure, property, pipeline,
   air, soil, subsurface strata, surface water, or groundwater
   or wetlands.
   
          "REPLACED BANK" see Section 1.13.
   
          "REPLACEMENT BANK" see Section 1.13.
   
          "REQUIRED BANKS" shall mean Non-Defaulting Banks
   whose outstanding Commitments (or, if after the Total
   Commitment has been terminated, outstanding Loans and
   Adjusted Percentage of Letter of Credit Outstandings)
   constitute greater than 50% of the sum of the Adjusted
   Total Commitment (or, if after the Total Commitment has
   been terminated, the total outstanding Loans of Non-Defaulting
   Banks and the aggregate Adjusted Percentages of
   all Non-Defaulting Banks of the total Letter of Credit
   Outstandings at such time).
   
          "RESTRICTED PAYMENTS" shall mean any Dividend or
   Investment, other than any Permitted Investment.
   
          "S&P" shall mean Standard & Poor's Ratings Group
   and its successors.
   
          "S&P CREDIT RATING" shall mean the rating level
   (it being understood that a rating level shall include
   numerical modifiers and (+) and (-) modifiers) assigned by
   S&P to the senior unsecured long-term debt of Borrower.
   
          "SEC" shall mean the Securities and Exchange
   Commission or any successor thereto.
   
          "SECTION 3.03(b)(i) REMAINDER" see Section
   3.03(b)(i).
   
          "SECTION 3.03(b)(iii) REMAINDER" see Section
   3.03(b)(iii).
   
          "SECTION 4.04(b)(ii) CERTIFICATE" see Section
   4.04(b)(ii).
   
          "SECURITIES ACT" shall mean the Securities Act of
   1933, as amended from time to time, and the regulations
   promulgated and the rulings issued thereunder.
   
          "SECURITY DOCUMENTS" shall have the meaning
   assigned to that term in the Indenture as in effect on the
   date hereof.
   
          "SENIOR SECURED NOTES" shall mean the 12-3/4%
   Senior Secured Notes Due 1999 issued pursuant to the
   Indenture.
   
          "STANDBY LETTER OF CREDIT" see Section 2.01(a).
   
          "STATED AMOUNT" of each Letter of Credit shall
   mean the maximum available to be drawn thereunder
   (regardless of whether any conditions for drawing could
   then be met).
   
          "SUBSIDIARY" of any Person shall mean and include
   (i) any corporation more than 50% of whose stock of any
   class or classes having by the terms thereof ordinary
   voting power to elect a majority of the directors of such
   corporation (irrespective of whether or not at the time
   stock of any class or classes of such corporation shall
   have or might have voting power by reason of the happening
   of any contingency) is at the time owned by such Person
   directly or indirectly through Subsidiaries and (ii) any
   partnership, association, joint venture or other entity in
   which such Person directly or indirectly through
   Subsidiaries, has more than a 50% equity interest at the
   time.  Unless otherwise expressly provided, all references
   herein to "Subsidiary" shall mean a Subsidiary of Borrower.
   
          "TAXES" see Section 4.04(a).
   
          "TOTAL COMMITMENT" shall mean, at any time, the
   sum of the Commitments of each of the Banks.
   
          "TOTAL LOSS" shall mean (i) the actual,
   constructive, arranged, agreed, or compromised total loss
   of any Fleet Rig; (ii) the requisition for title or other
   compulsory acquisition or forfeiture of any Fleet Rig
   otherwise than by requisition for hire; or (iii) the
   capture, seizure, arrest, detention or confiscation of any
   Fleet Rig by any government or by persons acting or
   purporting to act on behalf of any government unless such
   Fleet Rig is released from such capture, seizure, arrest or
   detention within 180 days after the occurrence thereof.
   
          "TOTAL UNUTILIZED COMMITMENT" shall mean, at any
   time, (i) the Total Commitment at such time less (ii) the
   sum of the aggregate principal amount of all Loans at such
   time, PLUS the Letter of Credit Outstandings at such time.
   
          "TRADE LETTER OF CREDIT" see Section 2.01(a).
   
          "TYPE" shall mean any type of Loan determined
   with respect to the interest option applicable thereto,
   I.E., a Base Rate Loan or Eurodollar Loan.
   
          "UCC" shall mean the Uniform Commercial Code as
   in effect in the State of New York.
   
          "UNFUNDED LIABILITIES" shall mean, with respect
   to any Plan at any time, the amount (if any) by which
   (i) the value of all benefit liabilities under such Plan,
   determined on a current liability basis under Section
   412(l)(7) of the Code, exceeds (ii) the fair market value
   of all Plan assets allocable to such liabilities under
   Title I of ERISA (excluding any accrued but unpaid
   contributions), all determined as of the then most recent
   valuation date for such Plan.
   
          "UNPAID DRAWING" see Section 2.04(a).
   
          "UNRESTRICTED SUBSIDIARY" shall mean (i) the
   Subsidiaries treated as unrestricted under Indenture as of
   the date hereof, each of which is set forth in ANNEX X
   hereto and (ii) any Subsidiaries treated as Unrestricted
   Subsidiaries pursuant to and in accordance with Section
   8.05(b) hereof.
   
          "VOTING STOCK" shall mean, with respect to any
   corporation, the outstanding stock of all classes (or
   equivalent interests) which ordinarily, in the absence of
   contingencies, entitles holders thereof to vote for the
   election of directors (or Persons performing similar
   functions) of such corporation, even though the right so to
   vote has been suspended by the happening of such a
   contingency.
   
          "WHOLLY-OWNED DOMESTIC SUBSIDIARY" shall mean, as
   to any Person, any wholly-owned Subsidiary of such Person
   which is a Domestic Subsidiary.
   
          "WHOLLY-OWNED SUBSIDIARY" of any Person shall
   mean any Subsidiary of such Person to the extent all of the
   Capital Stock or other ownership interests in such
   Subsidiary, other than directors' qualifying shares, is
   owned directly or indirectly by such Person.  Unless
   otherwise expressly provided, all references herein to
   "Wholly-Owned Subsidiary" shall mean a Wholly-Owned
   Subsidiary of Borrower.
   
          "WORKING CAPITAL" shall mean an amount determined
   on a consolidated basis in accordance with GAAP) determined
   for Borrower and the Subsidiaries (other than Unrestricted
   Subsidiaries) equal to the sum of all current assets (other
   than cash) less the sum of all current liabilities (other
   than the current portion of any Indebtedness that was
   long-term Indebtedness when incurred).
   
          "WRITTEN or "IN WRITING" shall mean any form of
   written communication or a communication by means of telex
   or facsimile transmission.
   
          SECTION 11.    THE AGENTS.
   
          11.01  APPOINTMENT.  The Banks hereby designate
   Bankers Trust Company as Administrative Agent to act as
   specified herein and in the other Credit Documents.  Each
   Bank hereby irrevocably authorizes, and each holder of any
   Note by the acceptance of such Note shall be deemed
   irrevocably to authorize, the Administrative Agent to take
   such action on its behalf under the provisions of this
   Agreement, the other Credit Documents and any other
   instruments and agreements referred to herein or therein
   and to exercise such powers and to perform such duties
   hereunder and thereunder as are specifically delegated to
   or required of the Administrative Agent by the terms hereof
   and thereof and such other powers as are reasonably
   incidental thereto.  The Administrative Agent may perform
   any of its duties hereunder by or through its respective
   officers, directors, agents, employees or Affiliates. 
   
          11.02  NATURE OF DUTIES.  The Administrative
   Agent shall not have any duties or responsibilities except
   those expressly set forth in this Agreement and the other
   Credit Documents.  Neither the Administrative Agent nor any
   of its respective officers, directors, agents, employees or
   Affiliates shall be liable for any action taken or omitted
   by it or them hereunder or under any other Credit Document
   or in connection herewith or therewith, unless caused by
   its or their gross negligence or willful misconduct.  The
   duties of the Administrative Agent shall be mechanical and
   administrative in nature; the Administrative Agent shall
   not have by reason of this Agreement or any other Credit
   Document a fiduciary relationship in respect of any Bank or
   the holder of any Note; and nothing in this Agreement or
   any other Credit Document, expressed or implied, is
   intended to or shall be so construed as to impose upon the
   Administrative Agent any obligations in respect of this
   Agreement or any other Credit Document except as expressly
   set forth herein or therein.
   
          11.03  LACK OF RELIANCE ON THE AGENTS. 
   Independently and without reliance upon the Agents, each
   Bank and the holder of each Note, to the extent it deems
   appropriate, has made and shall continue to make (i) its
   own independent investigation of the financial condition
   and affairs of Borrower and the Subsidiaries in connection
   with the making and the continuance of the Loans and
   issuance and/or participation in Letters of Credit and the
   taking or not taking of any action in connection herewith
   and (ii) its own appraisal of the creditworthiness of
   Borrower and the Subsidiaries and, except as expressly
   provided in this Agreement, the Agents shall not have any
   duty or responsibility, either initially or on a continuing
   basis, to provide any Bank or the holder of any Note with
   any credit or other information with respect thereto,
   whether coming into its possession before the making of the
   Loans or at any time or times thereafter.  The Agents shall
   not be responsible to any Bank or the holder of any Note
   for any recitals, statements, information, representations
   or warranties herein or in any document, certificate or
   other writing delivered in connection herewith or for the
   execution, effectiveness, genuineness, validity,
   enforceability, perfection, collectibility, priority or
   sufficiency of this Agreement or any other Credit Document
   or the financial condition of Borrower and the Subsidiaries
   or be required to make any inquiry concerning either the
   performance or observance of any of the terms, provisions
   or conditions of this Agreement or any other Credit
   Document, or the financial condition of Borrower and the
   Subsidiaries or the existence or possible existence of any
   Default or Event of Default.
   
          11.04  CERTAIN RIGHTS OF THE ADMINISTRATIVE
   AGENT.  If the Administrative Agent shall request
   instructions from the Required Banks with respect to any
   act or action (including failure to act) in connection with
   this Agreement or any other Credit Document, the
   Administrative Agent shall be entitled to refrain from such
   act or taking such action unless and until the
   Administrative Agent shall have received instructions from
   the Required Banks; and the Administrative Agent shall not
   incur liability to any Person by reason of so refraining. 
   Without limiting the foregoing, neither any Bank nor the
   holder of any Note shall have any right of action
   whatsoever against the Administrative Agent as a result of
   the Administrative Agent acting or refraining from acting
   hereunder or under any other Credit Document in accordance
   with the instructions of the Required Banks.
   
          11.05  RELIANCE.  The Administrative Agent shall
   be entitled to rely, and shall be fully protected in
   relying, upon any note, writing, resolution, notice,
   statement, certificate, telex, teletype or telecopier
   message, cablegram, radiogram, order or other document or
   telephone message signed, sent or made by any Person that
   the Administrative Agent believed to be the proper Person,
   and, with respect to all legal matters pertaining to this
   Agreement and any other Credit Document and its duties
   hereunder and thereunder, upon advice of counsel selected
   by the Administrative Agent (which may be counsel for
   Borrower).
   
          11.06  INDEMNIFICATION.  To the extent the Agents
   are not reimbursed and indemnified by Borrower, the Banks
   will reimburse and indemnify the Agents, in proportion to
   their respective "percentages" as used in determining the
   Required Banks, for and against any and all liabilities,
   obligations, losses, damages, penalties, claims, actions,
   judgments, costs, expenses or disbursements of whatsoever
   kind or nature which may be imposed on, asserted against or
   incurred by the Agents in performing their respective
   duties hereunder or under any other Credit Document, in any
   way relating to or arising out of this Agreement or any
   other Credit Document; PROVIDED, HOWEVER, that no Bank
   shall be liable for any portion of such liabilities,
   obligations, losses, damages, penalties, actions,
   judgments, suits, costs, expenses or disbursements
   resulting from either of the Agents' gross negligence or
   willful misconduct.
   
          11.07 THE AGENTS IN THEIR INDIVIDUAL CAPACITY. 
   With respect to its obligation to make Loans under this
   Agreement, the Agents shall have the rights and powers
   specified herein for a "Bank" and may exercise the same
   rights and powers as though it were not performing the
   duties specified herein; and the term "Banks," "Required
   Banks," "holders of Notes" or any similar terms shall,
   unless the context clearly otherwise indicates, include the
   Agents in their individual capacity.  The Agents may accept
   deposits from, lend money to, and generally engage in any
   kind of banking, trust or other business with Borrower or
   its Subsidiaries or any Affiliate thereof as if it were not
   performing the duties specified herein, and may accept fees
   and other consideration from Borrower or any Subsidiary for
   services in connection with this Agreement and otherwise
   without having to account for the same to the Banks.
   
          11.08 HOLDERS.  The Administrative Agent may deem
   and treat the payee of any Note as the owner thereof for
   all purposes hereof unless and until a written notice of
   the assignment, transfer or endorsement thereof, as the
   case may be, shall have been filed with the Administrative
   Agent.  Any request, authority or consent of any Person
   who, at the time of making such request or giving such
   authority or consent, is the holder of any Note shall be
   conclusive and binding on any subsequent holder,
   transferee, assignee or indorsee, as the case may be, of
   such Note or of any Note or Notes issued in exchange
   therefor.
   
          11.09  RESIGNATION BY THE ADMINISTRATIVE AGENT. 
   (a)  The Administrative Agent may resign from the
   performance of all its functions and duties hereunder
   and/or under the other Credit Documents at any time by
   giving 15 Business Days' prior written notice to Borrower
   and the Banks.  Such resignation shall take effect upon the
   appointment of a successor Administrative Agent pursuant to
   clauses (b) and (c) below or as otherwise provided below.
   
          (b) Upon any such notice of resignation, the
   Required Banks shall appoint a successor Administrative
   Agent hereunder or thereunder who shall be a commercial
   bank or trust company reasonably acceptable to Borrower.
   
          (c) If a successor Administrative Agent shall not
   have been so appointed within such 15 Business Day period,
   the Administrative Agent, with the consent of Borrower,
   shall then appoint a successor Administrative Agent who
   shall serve as Administrative Agent hereunder or thereunder
   until such time, if any, as the Required Banks appoint a
   successor Administrative Agent as provided above.
   
          (d) If no successor Administrative Agent has been
   appointed pursuant to clause (b) or (c) above by the 20th
   Business Day after the date such notice of resignation was
   given by the Administrative Agent, the Administrative
   Agent's resignation shall become effective and the Required
   Banks shall thereafter perform all the duties of the
   Administrative Agent hereunder and/or under any other
   Credit Document until such time, if any, as the Required
   Banks appoint a successor Administrative Agent as provided
   above.
   
          SECTION 12.    MISCELLANEOUS.
   
          12.01 PAYMENT OF EXPENSES, ETC.  Borrower agrees
   to (and to cause each other Credit Party, in respect of the
   Credit Document to which it is a party, to):  (i) whether
   or not the transactions herein contemplated are
   consummated, pay all reasonable out-of-pocket costs and
   expenses of the Administrative Agent in connection with the
   negotiation, preparation, execution and delivery of the
   Credit Documents and the documents and instruments referred
   to therein and any amendment, waiver or consent relating
   thereto (including, without limitation, the reasonable fees
   and disbursements of Cahill Gordon & Reindel and any local
   counsel) and of the Administrative Agent and, after the
   occurrence and during the continuance of an Event of
   Default, each of the Banks in connection with the
   enforcement of the Credit Documents and the documents and
   instruments referred to therein (including, without
   limitation, the actual reasonable fees and disbursements of
   counsel for the Administrative Agent and, after the
   occurrence and during the continuance of an Event of
   Default for each of the Banks); (ii) pay and hold each of
   the Banks harmless from and against any and all present and
   future stamp and other similar taxes with respect to the
   foregoing matters and save each of the Banks harmless from
   and against any and all liabilities with respect to or
   resulting from any delay or omission (other than to the
   extent attributable to the Administrative Agent or such
   Bank) to pay such taxes; and (iii) indemnify each Bank
   (including in its capacity as the Administrative Agent or a
   Letter of Credit Issuer), its officers, directors,
   employees, representatives and agents from and hold each of
   them harmless against any and all losses, liabilities,
   claims, damages, expenses, fines or penalties incurred by
   any of them as a result of, or arising out of, or in any
   way related to, or by reason of, (a) any investigation,
   litigation or other proceeding (whether or not any Bank is
   a party thereto) related to the entering into and/or
   performance of any Credit Document or the use of the
   proceeds of any Loans hereunder or the consummation of any
   transactions contemplated in any Credit Document, whether
   initiated by Borrower or any other Person (other than the
   Office of the Comptroller of Currency, the FDIC or other
   regulatory authority having jurisdiction over any Bank if
   not related to any action or inaction by Borrower or any
   Subsidiary or any other event or occurrence relating to
   Borrower or any Subsidiary), including, without limitation,
   the actual reasonable fees and disbursements of counsel
   incurred in connection with any such investigation,
   litigation or other proceeding (but excluding any such
   losses, liabilities, claims, damages or expenses to the
   extent incurred by reason of the gross negligence or
   willful misconduct of the Person to be indemnified) or (b)
   the actual or alleged presence of Hazardous Materials in
   the air, surface water, groundwater, surface or subsurface
   of any Real Property, offshore drilling rig, facility or
   location at any time owned or operated by Borrower or any
   Subsidiary, the generation, storage, transportation,
   treatment, release or disposal of Hazardous Materials at
   on, under or from any Real Property, offshore drilling rig,
   facility or location at any time owned or operated by
   Borrower or any Subsidiary, the non-compliance of Borrower
   or any Subsidiary, or of any Real Property, offshore
   drilling rig, facility or location at any time owned or
   operated by Borrower or any Subsidiary with any
   Environmental Law or any Environmental Claim asserted
   against Borrower or any Subsidiary with any Environmental
   Law or any Real Property, offshore drilling rig, facility
   or location at any time owned or operated by Borrower or
   any Subsidiary, including, in each case, without
   limitation, the actual reasonable fees and disbursements of
   counsel and other consultants incurred in connection with
   any such investigation, litigation or other proceeding (but
   excluding any losses, liabilities, claims, damages or
   expenses to the extent incurred by reason of the gross
   negligence or willful misconduct of the Person to be
   indemnified).  To the extent that the undertaking to
   indemnify, pay or hold harmless the Administrative Agent or
   any Bank set forth in the preceding sentence may be
   unenforceable because it is violative of any law or public
   policy, Borrower shall make the maximum contribution to the
   payment and satisfaction of each of the indemnified
   liabilities which is permissible under applicable law.
   
          12.02 RIGHT OF SETOFF.  In addition to any rights
   now or hereafter granted under applicable law or otherwise,
   and not by way of limitation of any such rights, if an
   Event of Default then exists, each Bank is hereby
   authorized at any time or from time to time, without
   presentment, demand, protest or other notice of any kind to
   Borrower or to any other Person, any such notice being
   hereby expressly waived, to the extent permitted by
   applicable law, to set off and to appropriate and apply any
   and all deposits (general or special) and any other
   Indebtedness at any time held or owing by such Bank
   (including without limitation by branches and agencies of
   such Bank wherever located) to or for the credit or the
   account of Borrower against and on account of the
   Obligations and liabilities of Borrower to such Bank under
   any Credit Document, including, without limitation, all
   interests in Obligations of Borrower purchased by such Bank
   pursuant to Section 12.06(b), and all other claims of any
   nature or description arising out of or connected with any
   Credit Document, irrespective of whether or not such Bank
   shall have made any demand hereunder and although said
   Obligations, liabilities or claims, or any of them, shall
   be contingent or unmatured.
   
          12.03 NOTICES.  (a)  Except as otherwise
   expressly provided herein, all notices and other
   communications provided for hereunder shall be in writing
   (including telex or telecopier communication) and mailed,
   telexed, telecopied or delivered, if to Borrower or any
   Subsidiary, at the address specified opposite its signature
   below or in the other relevant Credit Documents, as the
   case may be; if to any Bank, at its address specified for
   such Bank on ANNEX II hereto; or, at such other address as
   shall be designated by any party in a written notice to the
   other parties hereto.  All such notices and communications
   shall be effective when received and, in the case of notice
   by telecopier, after confirmation of such receipt has been
   given by the recipient, excluding by way of automatic
   receipt produced by telecopier.
   
          (b) Without in any way limiting the obligation of
   Borrower to confirm in writing any telephonic notice
   permitted to be given hereunder, the Administrative Agent
   or any Letter of Credit Issuer, as the case may be, may
   prior to receipt of written confirmation act without
   liability upon the basis of such telephonic notice,
   believed by the Administrative Agent or such Letter of
   Credit Issuer in good faith to be from an Authorized
   Officer of Borrower.  In each such case, Borrower hereby
   waives the right to dispute the Administrative Agent's or
   such Letter of Credit Issuer's record of the terms of such
   telephonic notice.
   
          12.04 BENEFIT OF AGREEMENT.  (k)  This Agreement
   shall be binding upon and inure to the benefit of and be
   enforceable by the respective successors and assigns of the
   parties hereto; PROVIDED, HOWEVER, that Borrower may not
   assign or transfer any of its rights or obligations
   hereunder without the prior written consent of the Banks. 
   Each Bank may at any time grant participations in any of
   its rights hereunder or under any of the Notes to another
   financial institution; PROVIDED, HOWEVER, that in the case
   of any such participation, the participant shall not have
   any rights under this Agreement or any of the other Credit
   Documents (the participant's rights against such Bank in
   respect of such participation to be those set forth in the
   agreement executed by such Bank in favor of the participant
   relating thereto) and all amounts payable by Borrower
   hereunder shall be determined as if such Bank had not sold
   such participation, except that the participant shall be
   entitled to the benefits of Sections 1.10 and 4.04 of this
   Agreement to the extent that such Bank would be entitled to
   such benefits if the participation had not been entered
   into or sold; PROVIDED, FURTHER, HOWEVER, that no Bank
   shall transfer, grant or assign any participation under
   which the participant shall have rights to approve any
   amendment to or waiver of this Agreement or any other
   Credit Document except to the extent such amendment or
   waiver would (i) extend the final scheduled maturity of any
   Loan or Note in which such participant is participating or
   reduce the rate or extend the time of payment of interest
   or Fees thereon (except in connection with a waiver of the
   applicability of any post-default increase in interest
   rates), or reduce the principal amount thereof, or increase
   such participant's participating interest in any Commitment
   over the amount thereof then in effect (it being understood
   that a waiver of any Default or Event of Default or of a
   mandatory reduction in the Total Commitment, or a mandatory
   prepayment, shall not constitute a change in the terms of
   any Commitment) or (ii) consent to the assignment or
   transfer by Borrower of any of its rights and obligations
   under this Agreement.
   
          (b) Notwithstanding the foregoing, (x) any Bank
   may assign all or a portion of its outstanding Commitment
   and its rights and obligations hereunder to its Affiliate
   or to another Bank, and (y) with the consent of the
   Administrative Agent, each Letter of Credit Issuer and
   Borrower (which consent shall not be unreasonably withheld
   or delayed and which consent of Borrower need not be
   obtained at any time that a Default or Event of Default
   shall have occurred and be continuing), any Bank may assign
   all or a portion of its outstanding Commitment and its
   rights and obligations hereunder to one or more Eligible
   Transferees.  Unless otherwise agreed to by Borrower, no
   assignment pursuant to the immediately preceding sentence
   shall to the extent such assignment represents an
   assignment to an institution other than one or more Banks
   hereunder, be in an aggregate amount less than $5.0 million
   unless the entire Commitment of the assigning Bank is so
   assigned.  If any Bank so sells or assigns all or a part of
   its rights hereunder or under the Notes, any reference in
   this Agreement or the Notes to such assigning Bank shall
   thereafter refer to such Bank and to the respective
   assignee to the extent of their respective interests and
   the respective assignee shall have, to the extent of such
   assignment (unless otherwise provided therein), the same
   rights and benefits as it would if it were such assigning
   Bank.  Each assignment pursuant to this Section 12.04(b)
   shall be effected by the assigning Bank and the assignee
   Bank executing an Assignment and Assumption Agreement.  In
   the event of any such assignment (x) to a commercial bank
   or other financial institution not previously a Bank
   hereunder, either the assigning or the assignee Bank shall
   pay to the Administrative Agent a nonrefundable assignment
   fee of $3,500 and (y) to a Bank, either the assigning or
   assignee Bank shall pay to Administrative Agent a
   nonrefundable assignment fee of $1,500, and at the time of
   any assignment pursuant to this Section 12.04(b), (i) ANNEX
   I hereto shall be deemed to be amended to reflect the
   Commitment of the respective assignee (which shall result
   in a direct reduction to the Commitment of the assigning
   Bank) and of the other Banks, and (ii) if any such
   assignment occurs after the Initial Borrowing Date, if
   requested by the assigning Bank and the assignee Bank,
   Borrower will issue new Notes to the respective assignee
   and to the assigning Bank in conformity with the
   requirements of Section 1.05.  Each Bank and Borrower agree
   to execute such documents (including, without limitation,
   amendments to this Agreement and the other Credit
   Documents) as shall be necessary to effect the foregoing. 
   Nothing in this clause (b) shall prevent or prohibit any
   Bank from pledging its Notes or Loans to a Federal Reserve
   Bank in support of borrowings made by such Bank from such
   Federal Reserve Bank.
   
          (c) Notwithstanding any other provisions of this
   Section 12.04, no transfer or assignment of the interests
   or obligations of any Bank hereunder or any grant of
   participation therein shall be permitted if such transfer,
   assignment or grant would require Borrower to file a
   registration statement with the SEC or to qualify the Loans
   under the "Blue Sky" laws of any State.
   
          (d) Each Bank initially party to this Agreement
   hereby represents, and each Person that became a Bank
   pursuant to an assignment permitted by this Section 12
   will, upon its becoming party to this Agreement, represent
   that it is a commercial lender, other financial institution
   or other "accredited" investor (as defined in SEC
   Regulation D) which makes loans in the ordinary course of
   its business and that it will make or acquire Loans for its
   own account in the ordinary course of such business;
   PROVIDED, HOWEVER, that subject to the preceding clauses
   (a) and (b), the disposition of any promissory notes or
   other evidences of or interests in Indebtedness held by
   such Bank shall at all times be within its exclusive
   control.
   
          12.05 NO WAIVER; REMEDIES CUMULATIVE.  No failure
   or delay on the part of the Administrative Agent or any
   Bank in exercising any right, power or privilege under any
   Credit Document and no course of dealing between Borrower
   or any Subsidiary and the Administrative Agent or any Bank
   shall operate as a waiver thereof; nor shall any single or
   partial exercise of any right, power or privilege under any
   Credit Document preclude any other or further exercise
   thereof or the exercise of any other right, power or
   privilege hereunder or thereunder.  The rights and remedies
   herein expressly provided are cumulative and not exclusive
   of any rights or remedies which the Administrative Agent or
   any Bank would otherwise have.  No notice to or demand on
   Borrower or any Subsidiary in any case shall entitle
   Borrower or any Subsidiary to any other or further notice
   or demand in similar or other circumstances or constitute a
   waiver of the rights of the Administrative Agent or the
   Banks to any other or further action in any circumstances
   without notice or demand.
   
          12.06 PAYMENTS PRO RATA.  (a) The Administrative
   Agent agrees that promptly after its receipt of each
   payment from or on behalf of Borrower or any Subsidiary in
   respect of any Obligations of Borrower or any Subsidiary
   hereunder, it shall distribute such payment to the Banks
   (other than any Bank that has expressly waived its right to
   receive its PRO RATA share thereof) PRO RATA based upon
   their respective shares, if any, of the Obligations with
   respect to which such payment was received.
   
          (b) Each of the Banks agrees that, if it should
   receive any amount hereunder (whether by voluntary payment,
   by realization upon security, by the exercise of the right
   of setoff or banker's lien, by counterclaim or cross
   action, by the enforcement of any right under the Credit
   Documents, or otherwise) which is applicable to the payment
   of the principal of, or interest on, the Loans, Unpaid
   Drawings or Fees, of a sum which with respect to the
   related sum or sums received by other Banks is in a greater
   proportion than the total of such Obligation then owed and
   due to such Bank bears to the total of such Obligation then
   owed and due to all of the Banks immediately prior to such
   receipt, then such Bank receiving such excess payment shall
   purchase for cash without recourse or warranty from the
   other Banks an interest in the Obligations of Borrower or
   any Subsidiary, respectively, to such Banks in such amount
   as shall result in a proportional participation by all of
   the Banks in such amount; PROVIDED, HOWEVER, that if all or
   any portion of such excess amount is thereafter recovered
   from such Bank, such purchase shall be rescinded and the
   purchase price restored to the extent of such recovery, but
   without interest.
   
          (c)  Notwithstanding anything to the contrary
   contained herein, the provisions of the preceding Sections
   12.06(a) and (b) shall be subject to the express provisions
   of this Agreement which require, or permit, differing
   payments to be made to Non-Defaulting Banks as opposed to
   Defaulting Banks.
   
          12.07 CALCULATIONS; COMPUTATIONS.  (a) The
   financial statements to be furnished to the Banks pursuant
   hereto shall be made and prepared in accordance with GAAP
   consistently applied throughout the periods involved
   (except as set forth in the notes thereto or as otherwise
   disclosed in writing by Borrower to the Banks); PROVIDED,
   HOWEVER, that (x) except as otherwise specifically provided
   herein, all computations determining compliance with
   Section 8, including definitions used therein, shall
   utilize accounting principles and policies in effect at the
   time of the preparation of, and in conformity with those
   used to prepare, the September 30, 1996 historical
   financial statements of Borrower delivered to the Banks
   pursuant to Section 6.10(b) and (y) that if at any time the
   computations determining compliance with Section 8 utilize
   accounting principles different from those utilized in the
   financial statements furnished to the Banks, such financial
   statements shall be accompanied by reconciliation work-sheets. 
   
          (b) All computations of interest and Fees
   hereunder shall be made on the actual number of days
   elapsed over a year of 360 days.
   
          12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION;
   VENUE; WAIVER OF JURY TRIAL.  (a) This Agreement and the
   other Credit Documents and the rights and obligations of
   the parties hereunder and thereunder shall be construed in
   accordance with and be governed by the law of the state of
   New York.  Any legal action or proceeding with respect to
   this Agreement or any other Credit Document may be brought
   in the courts of the state of New York or of the United
   States for the Southern District of New York, and, by
   execution and delivery of this Agreement, Borrower hereby
   irrevocably accepts for itself and in respect of its
   property, generally and unconditionally, the jurisdiction
   of the aforesaid courts.  To the extent permitted by
   applicable law, Borrower further irrevocably consents to
   the service of process out of any of the aforementioned
   courts in any such action or proceeding by the mailing of
   copies thereof by registered or certified mail, postage
   prepaid, to Borrower located outside New York City and by
   hand delivery to Borrower located within New York City, at
   its address for notices pursuant to Section 12.03, such
   service to become effective 30 days after such mailing. 
   Nothing herein shall affect the right of the Administrative
   Agent, any Bank to serve process in any other manner
   permitted by law or to commence legal proceedings or
   otherwise proceed against Borrower in any other
   jurisdiction.
   
          (b) To the extent permitted by applicable law,
   Borrower hereby irrevocably waives any objection which it
   may now or hereafter have to the laying of venue of any of
   the aforesaid actions or proceedings arising out of or in
   connection with this Agreement or any other Credit Document
   brought in the courts referred to in clause (a) above and
   hereby further irrevocably waives and agrees not to plead
   or claim in any such court that any such action or
   proceeding brought in any such court has been brought in an
   inconvenient forum.
   
          (c) Each of the parties to this agreement hereby
   irrevocably waives all right to a trial by jury in any
   action, proceeding or counterclaim arising out of or
   relating to this agreement, the other credit documents or
   the transactions contemplated hereby or thereby.
   
          12.09 COUNTERPARTS.  This Agreement may be
   executed in any number of counterparts and by the different
   parties hereto on separate counterparts, each of which when
   so executed and delivered shall be an original, but all of
   which shall together constitute one and the same
   instrument.  A set of counterparts executed by all the
   parties hereto shall be lodged with Borrower and the
   Administrative Agent.
   
          12.10 EFFECTIVENESS.  This Agreement shall become
   effective on the date (the "EFFECTIVENESS DATE") on which
   Borrower and each of the Banks shall have signed a copy
   hereof (whether the same or different copies) and shall
   have delivered the same to the Administrative Agent at the
   Payment Office of the Administrative Agent or, in the case
   of the Banks, shall have given to the Administrative Agent
   telephonic (confirmed in writing), written telex or
   facsimile transmission notice (actually received) at such
   office that the same has been signed and mailed to it.
   
          12.11 HEADINGS DESCRIPTIVE.  The headings of the
   several sections and subsections of this Agreement are
   inserted for convenience only and shall not in any way
   affect the meaning or construction of any provision of this
   Agreement.
   
          12.12 AMENDMENT OR WAIVER.  (a)  Neither this
   Agreement nor any other Credit Document nor any terms
   hereof or thereof may be changed, waived, discharged or
   terminated unless such change, waiver, discharge or
   termination is in writing signed by Borrower and the
   Required Banks; PROVIDED, HOWEVER, that no such change,
   waiver, discharge or termination shall, without the consent
   of each Bank (other than a Defaulting Bank) affected
   thereby, (i) extend the Maturity Date, or reduce the rate
   or extend the time of payment of interest (other than as a
   result of waiving the applicability of any post-default
   increase in interest rates) or Fees thereon, or reduce the
   principal amount thereof, (ii) increase the Commitment of
   any Bank over the amount thereof then in effect (it being
   understood that a waiver of any Default or Event of Default
   or of a mandatory reduction in the Total Commitment shall
   not constitute a change in the terms of any Commitment of
   any Bank), (iii) amend, modify or waive any provision of
   this Section, (iv) reduce the percentage specified in the
   definition of Required Banks or (v) consent to the
   assignment or transfer by Borrower of any of its rights and
   obligations under this Agreement.  No provision of Sections
   2 or 11, or any other provisions relating to any Letter of
   Credit Issuer or the Administrative Agent may be modified
   without the consent of such Letter of Credit Issuer or the
   Administrative Agent, respectively.
   
          (b)  If, in connection with any proposed change,
   waiver, discharge or termination to any of the provisions
   of this Agreement as contemplated by clauses (i), (iii),
   (iv) or (v) of the proviso to Section 12.12(a), the consent
   of the Required Banks is obtained but the consent of one or
   more of such other Banks whose consent is required is not
   obtained, then Borrower shall have the right to replace
   each such non-consenting Bank or Banks (so long as all
   non-consenting Banks are so replaced) with one or more
   Replacement Banks pursuant to Section 1.13 so long as at
   the time of such replacement, each such Replacement Bank
   consents to the proposed change, waiver, discharge or
   termination; PROVIDED, HOWEVER, that Borrower shall not
   have the right to replace a Bank solely as a result of the
   exercise of such Bank's rights (and the withholding of any
   required consent by such Bank) pursuant to clause (ii) of
   the proviso to Section 12.12(a).
   
          12.13 SURVIVAL.  All indemnities set forth herein
   including, without limitation, in Section 1.10, 1.11, 4.04,
   11.07 or 12.01 shall survive the execution and delivery of
   this Agreement and the making and repayment of the Loans.
   
          12.14 DOMICILE OF LOANS.  Each Bank may transfer
   and carry its Loans at, to or for the account of any branch
   office, subsidiary or Affiliate of such Bank; PROVIDED,
   HOWEVER, that Borrower shall not be responsible for costs
   arising under Section 1.10 or 4.04 resulting from any such
   transfer (other than a transfer pursuant to Section
   1.12(a)) to the extent not otherwise applicable to such
   Bank prior to such transfer.
   
          12.15 CONFIDENTIALITY.  The Banks shall hold all
   non-public information obtained pursuant to the
   requirements of this Agreement confidential and in any
   event may make disclosure reasonably required by any BONA
   FIDE transferee or participant in connection with the
   contemplated transfer of any Loans or participation therein
   (so long as such transferee or participant agrees to be
   bound by the provisions of this Section 12.15) or as
   required or requested by any governmental agency or
   representative thereof or pursuant to legal process;
   PROVIDED, HOWEVER, that, unless specifically prohibited by
   applicable law or court order, each Bank shall notify
   Borrower of any request by any governmental agency or
   representative thereof (other than any such request in
   connection with an examination of the financial condition
   of such Bank by such governmental agency) for disclosure of
   any such non-public information prior to disclosure of such
   information; PROVIDED, FURTHER, HOWEVER, that in no event
   shall any Bank be obligated or required to return any
   materials furnished by Borrower or any Subsidiary.
   
          12.16  REGISTRY.  Borrower hereby designates the
   Administrative Agent to serve as Borrower's agent, solely
   for purposes of this Section 12.16, to maintain a register
   (the "REGISTER") on which it will record the Commitments
   from time to time of each of the Banks, the Loans made by
   each of the Banks and each repayment in respect of the
   principal amount of the Loans of each Bank.  Failure to
   make any such recordation, or any error in such recordation
   shall not affect Borrower's obligations in respect of such
   Loans.  With respect to any Bank, the transfer of the
   Commitments of such Bank and the rights to the principal
   of, and interest on, any Loan made pursuant to such
   Commitments shall not be effective until such transfer is
   recorded on the Register maintained by the Administrative
   Agent with respect to ownership of such Commitments and
   Loans and prior to such recordation all amounts owing to
   the transferor with respect to such Commitments and Loans
   shall remain owing to the transferor.  The registration of
   assignment or transfer of all or part of any Commitments
   and Loans shall be recorded by the Administrative Agent on
   the Register only upon the acceptance by the Administrative
   Agent of a properly executed and delivered Assignment and
   Assumption Agreement pursuant to Section 12.04(b). 
   Coincident with the delivery of such an Assignment and
   Assumption Agreement to the Administrative Agent for
   acceptance and registration of assignment or transfer of
   all or part of a Loan, or as soon thereafter as
   practicable, the assigning or transferor Bank shall
   surrender the Note evidencing such Loan, and thereupon one
   or more new Notes in the same aggregate principal amount
   shall be issued to the assigning or transferor Bank and/or
   the new Bank.
   
   
                     [Signature Pages Follow]



          IN WITNESS WHEREOF, each of the parties hereto
   has caused a counterpart of this Agreement to be duly
   executed and delivered as of the date first above written.
   
   
   
   ADDRESS:                      GLOBAL MARINE INC.
   
   
   777 N. Eldridge Road
   Houston, Texas 77079-4416     By: /s/ James L. McCulloch
                                 Name: James L. McCulloch 
                                 Title: Vice President
   
   
                                 BANKERS TRUST COMPANY,
                                 Individually and as
                                 Administrative Agent
   
   
   
                                 By:  /s/Patricia Hogan          
                                 Name:  Patricia Hogan
                                 Title: Vice President
   
   
                                 SOCIETE GENERALE,
                                 Individually and as Co-Agent
                           
   
   
                                 By:  /s/John J. Wagner
                                 Name:  John J. Wagner
                                 Title: Vice President
   
   
                                 CHRISTIANIA BANK og
                                 KREDITKASSE, NEW YORK BRANCH  
   
   
   
                                 By:  /s/ Martin Lunder
                                 Name:  Martin Lunder
                                 Title: First Vice President
   
   
                                 By:  /s/ Hans Chr. Kjelsrud
                                 Name:  Hans Chr. Kjelsrud
                                 Title: Vice President
   
   

                                 CREDIT LYONNAIS NEW YORK
                                 BRANCH
   
   
   
                                 By:  /S/ Pascal Poupelle
                                 Name:  Pascal Poupelle
                                 Title: Sr. Vice President
   
   
                                 FIRST UNION NATIONAL BANK OF
                                 NORTH CAROLINA
   
   
   
                                 By:/s/ Michael J. Kolosowsky
                                 Name:  Michael J. Kolosowsky
                                 Title: Vice President
   
   
                                 THE FUJI BANK, LIMITED
   
   
   
                                 By:  /s/ David Kelley
                                 Name:  David Kelley
                                 Title: Sr. Vice President
   
   
                                 THE SANWA BANK, LIMITED,
                                 DALLAS AGENCY
   
   
   
                                 By:  /s/ Blake Wright
                                 Name:  Blake Wright
                                 Title: Vice President 
   
   
                                 THE BANK OF NOVA SCOTIA
   
   
   
                                 By:  /s/ A. S. Norsworthy
                                 Name: A. S. Norsworthy
                                 Title: Sr. Team Leader -
                                        Loan Operations
   
   
                                 SKANDINAVISKA ENSKILDA
                                 BANKEN AB (publ.)
   
   
   
                                 By: /s/ Per K. Frolick/Lars Bjerrek
                                 Name:  Per K. Frolick/Lars Bjerrek
                                 Title:
   
   
                                 THE SUMITOMO BANK, LIMITED
   
   
   
                                 By: /s/ Harumitsu Seki
                                 Name:  Harumitsu Seki
                                 Title: General Manager
      
   
   
   
   
                          GUARANTY
   
   
            GUARANTY, dated as of February 12, 1997, made by
   the undersigned (each a "GUARANTOR" and collectively, the
   "GUARANTORS").  Except as otherwise defined herein, terms
   used herein and defined in the Credit Agreement (as herein-
   after defined) shall be used herein as therein defined.
   
   
                   W I T N E S S E T H :
   
   
            WHEREAS, Global Marine Inc. ("BORROWER"), various
   financial institutions from time to time party thereto (the
   "BANKS"), Bankers Trust Company, as Administrative Agent
   (the "ADMINISTRATIVE AGENT"), and Societe Generale, as Co-Agent
   (the "CO-AGENT", have entered into a CREDIT AGREEMENT, dated
   as of February 12, 1997, (as amended, modified or supplemented
   from time to time, the "CREDIT AGREEMENT"), providing for the
   making of Loans and the issuance of, and participation in,
   Letters of Credit as contemplated therein (the Banks, the
   Administrative Agent, the Co-Agent and each Letter of Credit
   Issuer, are herein collectively called the "CREDITORS");
   
            WHEREAS, it is a condition to the making of Loans
   and the issuance of, and participation in, Letters of
   Credit under the Credit Agreement that each Guarantor shall
   have executed and delivered this Guaranty; and
   
            WHEREAS, each Guarantor will obtain benefits from
   the incurrence of Loans by Borrower and the issuance of
   Letters of Credit under the Credit Agreement and,
   accordingly, desires to execute this Guaranty in order to
   satisfy the conditions described in the preceding paragraph
   and to induce the Banks to make Loans to Borrower and the
   Letter of Credit Issuers to issue Letters of Credit; 
   
            NOW, THEREFORE, in consideration of the foregoing
   and other benefits accruing to each Guarantor, the receipt
   and sufficiency of which are hereby acknowledged, each
   Guarantor hereby makes the following representations and
   warranties to the Creditors and hereby covenants and agrees
   with each Creditor as follows:
   
       1.   (a)  Each Guarantor (i) is a duly organized and
   validly existing corporation, partnership, association,
   limited liability company or other business entity in good
   standing under the laws of the jurisdiction of its
   organization, (ii) has the power and authority and has
   obtained all requisite governmental licenses,
   authorizations, consents and approvals (a) to own its
   property and assets and (b) to transact the business in
   which it is engaged, except in such case where the failure
   to have such power and authority or to obtain such
   governmental licenses, authorizations, consents and
   approvals, individually and in the aggregate, (x) is not
   reasonably likely to have a Material Adverse Effect and (y)
   is not reasonably likely to have a material adverse effect
   on the rights and remedies of the Banks or the
   Administrative Agent under the Credit Documents, taken as a
   whole, or on the ability of the Credit Parties, taken as a
   whole, to perform their obligations to the Banks and the
   Administrative Agent under the Credit Documents, and (iii)
   is duly qualified and is authorized to do business and is
   in good standing in all jurisdictions where it is required
   to be so qualified and where the failure to be so qualified
   could have a Material Adverse Effect.
   
            (b)  Each Guarantor has the power and authority
   to execute, deliver and carry out the terms and provisions
   of this Guaranty and each other Credit Document to which it
   is a party and has taken all necessary corporate action to
   authorize the execution, delivery and performance of this
   Guaranty and each such other Credit Document.  Each
   Guarantor has duly executed and delivered this Guaranty and
   each other Credit Document to which it is a party and this
   Guaranty and each such other Credit Document constitutes
   the legal, valid and binding obligation of each such
   Guarantor, enforceable against such Person in accordance
   with its terms, except to the extent that the
   enforceability thereof may be limited by applicable
   bankruptcy, insolvency, reorganization, moratorium or
   similar laws generally affecting creditors' rights and by
   equitable principles (regardless of whether enforcement is
   sought in equity or at law).
   
            (c)  Neither the execution, delivery or
   performance by each Guarantor of this Guaranty or any other
   Credit Document to which it is a party nor compliance with
   the terms and provisions thereof (i) will contravene any
   applicable provision of any law, statute, rule, regulation,
   order, writ, injunction or decree of any court or
   governmental instrumentality of the United States or any
   State thereof, (ii) will result in any breach of any of the
   terms, covenants, conditions or provisions of, or
   constitute a default under (or with notice or lapse of time
   or both would constitute a default under), or result in the
   creation or imposition of (or the obligation to create or
   impose) any Lien upon any of the property or assets of such
   Guarantor or any of its Subsidiaries pursuant to the terms
   of, any indenture, mortgage, deed of trust, agreement or
   other instrument to which such Guarantor or any of its
   Subsidiaries is a party or by which it or any of its
   properties or assets are bound or to which it is subject or
   (iii) will violate any provision of the Certificate or
   Articles of Incorporation, By-Laws or other organizational
   documents of such Guarantor or any of its Subsidiaries
   (except for, in the case of clauses (i) and (ii) above
   only, contraventions, breaches, defaults, creations or
   impositions which, individually and in the aggregate, (x)
   are not reasonably likely to have a Material Adverse Effect
   and (y) are not reasonably likely to have a material
   adverse effect on the rights or remedies of the Banks or
   the Administrative Agent under the Credit Documents, taken
   as a whole, or on the ability of the Credit Parties, taken
   as a whole, to perform their obligations to the Banks and
   the Administrative Agent under the Credit Documents).
   
            (d)  No Guarantor nor any of its Subsidiaries is
   (i) in contravention of any applicable provision of any
   law, statute, rule, regulation, order, writ, injunction or
   decree of any court or governmental instrumentality of the
   United States or any State thereof, (ii) in breach of any
   of the terms, covenants, conditions or provisions of, or in
   default under (or with notice or lapse of time or both
   would be in default under), any indenture, mortgage, deed
   of trust, agreement or other instrument to which such
   Guarantor or any of its Subsidiaries is a party or by which
   it or any of its properties or assets are bound or to which
   it is subject or (iii) in violation of any provision of the
   Certificate or Articles of Incorporation, By-Laws or other
   organizational documents of such Guarantor or any of its
   Subsidiaries (except for, in the case of clauses (i) and
   (ii) above only, contraventions, breaches or defaults
   which, individually and in the aggregate, (x) are not
   reasonably likely to have a Material Adverse Effect and (y)
   are not reasonably likely to have a material adverse effect
   on the rights or remedies of the Banks or the
   Administrative Agent under the Credit Documents, taken as a
   whole, or on the ability of the Credit Parties, taken as a
   whole, to perform their obligations to the Banks and the
   Administrative Agent under the Credit Documents).
   
            (e)  Except for the orders, consents, approvals,
   licenses, authorizations, validations, recordings,
   registrations and exemptions that have already been duly
   made or obtained and remain in full force and effect, no
   order, consent, approval, license, authorization, or
   validation of, or filing, recording or registration with,
   or exemption by, any foreign or domestic governmental or
   public body or authority, or any subdivision thereof, is
   necessary or is required to authorize or is required in
   connection with (i) the execution, delivery and performance
   of this Guaranty or any other Credit Document to which such
   Guarantor is a party or (ii) the legality, validity,
   binding effect or enforceability of this Guaranty or any
   such other Credit Document.
   
            (f)  There are no actions, suits or proceedings
   by an administrative, governmental or other public
   authority or other Person pending or, to the best of each
   Guarantor's knowledge, threatened against or with respect
   to such Guarantor or any of its Subsidiaries or any of
   their respective properties or assets (i) that are likely
   to have a Material Adverse Effect or (ii) that are
   reasonably likely to have a material adverse effect on the
   rights or remedies of the Banks or the Administrative Agent
   under the Credit Documents, taken as a whole, or on the
   ability of the Credit Parties, taken as a whole, to perform
   their obligations to the Banks and the Administrative Agent
   under the Credit Documents.
   
       2.   (a)  Each Guarantor, jointly and severally,
   irrevocably and unconditionally, guarantees to the
   Creditors the full and prompt payment when due (whether at
   the stated maturity, by acceleration or otherwise) of (x)
   the principal of and interest on the Notes issued by, and
   the Loans made to, Borrower under the Credit Agreement, and
   all reimbursement obligations and Unpaid Drawings under the
   Letters of Credit issued under the Credit Agreement and (y)
   all other obligations (including obligations which, but for
   the automatic stay under Section 362(a) of the Bankruptcy
   Code, would become due) and liabilities owing by Borrower
   to the Creditors under the Credit Agreement (including,
   without limitation, indemnities, Fees and interest thereon)
   now existing or hereafter incurred under, or in connection
   with, the Credit Agreement or any other Credit Document and
   the due performance and compliance with the terms of the
   Credit Documents by Borrower (all such principal, interest,
   liabilities and obligations being herein collectively
   called the "GUARANTEED OBLIGATIONS").  Each Guarantor
   understands, agrees and confirms that the Creditors may
   enforce this Guaranty up to the full amount of the
   Guaranteed Obligations against each Guarantor without pro-
   ceeding against any other Guarantor or Borrower, against
   any security for the Guaranteed Obligations, or under any
   other guaranty covering all or a portion of the Guaranteed
   Obligations.  All payments by each Guarantor under this
   Guaranty shall be made on the same basis as payments by
   Borrower under Sections 4.03 and 4.04 of the Credit Agree-
   ment.
   
            (b)  Notwithstanding any other provision of this
   Guaranty to the contrary, the maximum aggregate amount of
   Guaranteed Obligations which each Guarantor agrees to
   guarantee pursuant to this Guaranty shall in no event
   exceed the maximum amount of Guaranteed Obligations which
   can be guaranteed by such Guarantor under applicable
   federal and state laws relating to the insolvency of the
   debtors.
   
            (c)  Notwithstanding any other provision of this
   Guaranty to the contrary,
   
                 (i) as of the date hereof, the maximum
   aggregate amount of Guaranteed Obligations each Guarantor
   executing and delivering this Guaranty on the date hereof
   agrees to guaranty pursuant to this Guaranty shall in no
   event exceed the maximum amount of Guaranteed Obligations
   which can be guaranteed by each Guarantor pursuant to the
   Indenture, as determined on the date hereof; PROVIDED,
   HOWEVER, that on each date that pursuant to the Indenture
   any such Guarantor may guarantee an aggregate amount of
   Guaranteed Obligations greater than that on the date
   hereof, the maximum aggregate amount of Guaranteed
   Obligations guaranteed by such Guarantor pursuant to this
   Guaranty shall increase by such amount.
   
                 (ii) as of the date any Subsidiary of the
   Borrower becomes a Guarantor hereunder pursuant to Section
   7.11 of the Credit Agreement, the maximum aggregate amount
   of Guaranteed Obligations such Guarantor agrees to guaranty
   pursuant to this Guaranty shall in no event exceed the
   maximum amount of Guaranteed Obligations which can be
   guaranteed by such Guarantor pursuant to the Indenture (as
   in effect on the date hereof), as determined on such date;
   PROVIDED, HOWEVER, that on each date that pursuant to the
   Indenture such Guarantor may guarantee an aggregate amount
   of Guaranteed Obligations greater than that on the date
   such Guarantor became a Guarantor hereunder, the maximum
   aggregate amount of Guaranteed Obligations guaranteed by
   such Guarantor pursuant to this Guaranty shall increase by
   such amount;
   
   PROVIDED, FURTHER, HOWEVER, that the limitations set forth
   in this subparagraph (c) of Section 2 shall no longer apply
   if there are no Senior Secured Notes outstanding or the
   restrictions in the Indenture limiting the amount of
   Guaranteed Obligations that can be incurred by Subsidiaries
   are no longer in effect.
   
            3. Additionally, each Guarantor, jointly and
   severally, unconditionally and irrevocably, guarantees,
   subject to Section 2 hereof, the payment of any and all
   Guaranteed Obligations of Borrower to the Creditors,
   whether or not due or payable by Borrower, upon the
   occurrence in respect of Borrower of any of the events
   specified in Section 9.05 of the Credit Agreement, and
   unconditionally and irrevocably, jointly and severally,
   promises to pay such Guaranteed Obligations to the Credi-
   tors, or order, on demand, in lawful money of the United
   States.  This Guaranty shall constitute a guaranty of
   payment, and not of collection.
   
            4. The liability of each Guarantor hereunder is
   exclusive and independent of any security for or other
   guaranty of the indebtedness of Borrower whether executed
   by such Guarantor, any other Guarantor, any other guarantor
   or by any other party, and the liability of each Guarantor
   hereunder shall not be affected or impaired by (a) any
   direction as to application of payment by Borrower or by
   any other party, (b) any other continuing or other
   guaranty, undertaking or maximum liability of a guarantor
   or of any other party as to the indebtedness of Borrower,
   (c) any payment on or in reduction of any such other
   guaranty or undertaking, (d) any dissolution, termination
   or increase, decrease or change in personnel by Borrower,
   (e) any payment made to any Creditor which any Creditor
   repays to Borrower pursuant to court order in any bank-
   ruptcy, reorganization, arrangement, moratorium or other
   debtor relief proceeding, and each Guarantor waives any
   right to the deferral or modification of its obligations
   hereunder by reason of any such proceeding, (f) any action
   or inaction by the Creditors as contemplated in Section 6
   hereof, or (g) any invalidity, irregularity or
   unenforceability of all or part of the Guaranteed
   Obligations or of any security therefor.
   
            5. The obligations of each Guarantor hereunder
   are independent of the obligations of any other Guarantor,
   any other guarantor or Borrower, and a separate action or
   actions may be brought and prosecuted against each Guar-
   antor whether or not action is brought against any other
   Guarantor, any other guarantor or Borrower and whether or
   not any other Guarantor, any other guarantor or Borrower is
   joined in any such action or actions.  Any payment by
   Borrower or other circumstance which operates to toll any
   statute of limitations as to Borrower shall operate to toll
   the statute of limitations as to each Guarantor with
   respect to the Obligations of Borrower.
   
            6. Each Guarantor hereby waives notice of accep-
   tance of this Guaranty and notice of any liability to which
   it may apply, and waives promptness, diligence,
   presentment, demand of payment, protest, notice of intent
   to accelerate, notice of acceleration, notice of dishonor
   or nonpayment of any such liabilities, suit or taking of
   other action by the Administrative Agent or any other
   Creditor against, and any other notice to, any party liable
   thereon (including such Guarantor, any other guarantor or
   Borrower).
   
            7. Any Creditor may, to the extent permitted by
   applicable law, at any time and from time to time without
   the consent of, or notice to, any Guarantor, without
   incurring responsibility to such Guarantor, without
   impairing or releasing the obligations of such Guarantor
   hereunder, upon or without any terms or conditions and in
   whole or in part:
   
            (a) change the manner, place or terms of payment
          of, and/or change or extend the time of payment of,
          renew or alter, any of the Guaranteed Obligations, any
          security therefor, or any liability incurred directly
          or indirectly in respect thereof, and the guaranty
          herein made shall apply to the Guaranteed Obligations
          as so changed, extended, renewed or altered;
   
            (b) sell, exchange, release, surrender, realize
          upon or otherwise deal with in any manner and in any
          order any property by whomsoever at any time pledged
          or mortgaged to secure, or howsoever securing, the
          Guaranteed Obligations or any liabilities (including
          any of those hereunder) incurred directly or
          indirectly in respect thereof or hereof, and/or any
          offset thereagainst;
   
            (c) exercise or refrain from exercising any
          rights against Borrower or others or otherwise act or
          refrain from acting;
   
            (d) settle or compromise any of the Guaranteed
          Obligations, any security therefor or any liability
          (including any of those hereunder) incurred directly
          or indirectly in respect thereof or hereof, and may
          subordinate the payment of all or any part thereof to
          the payment of any liability (whether due or not) of
          Borrower to creditors of Borrower;
   
            (e) apply any sums by whomsoever paid or howso-
          ever realized to any liability or liabilities of
          Borrower to the Creditors regardless of what
          liabilities of Borrower remain unpaid;
   
            (f)  release or substitute any one or more
          endorsers, guarantors, any Credit Party or other
          obligors;
   
            (g) consent to or waive any breach of, or any
          act, omission or default under, any of the Credit
          Documents or any of the instruments or agreements
          referred to therein, or otherwise amend, modify or
          supplement any of the Credit Documents or any of such
          other instruments or agreements; and/or
   
            (h) act or fail to act in any manner referred to
          in this Guaranty which may deprive such Guarantor of
          its right to subrogation against Borrower to recover
          full indemnity for any payments made pursuant to this
          Guaranty.
   
            8.  To the extent permitted by applicable law, no
   invalidity, irregularity or unenforceability of all or any
   part of the Guaranteed Obligations or of any security
   therefor shall affect, impair or be a defense to this
   Guaranty, and this Guaranty shall be primary, absolute and
   unconditional notwithstanding the occurrence of any event
   or the existence of any other circumstances which might
   constitute a legal or equitable discharge of a surety or
   guarantor except, with respect to any Guarantor, payment in
   full of the Guaranteed Obligations guaranteed by it, or,
   with respect to any Guarantor, the release of such
   Guarantor from this Guaranty pursuant to Section 22 hereof
   and the Credit Agreement.
   
            9.  This Guaranty is a continuing one and all
   liabilities to which it applies or may apply under the
   terms hereof shall be conclusively presumed to have been
   created in reliance hereon.  To the extent permitted by
   applicable law, no failure or delay on the part of any
   Creditor in exercising any right, power or privilege here-
   under shall operate as a waiver thereof; nor shall any
   single or partial exercise of any right, power or privilege
   hereunder preclude any other or further exercise thereof or
   the exercise of any other right, power or privilege.  The
   rights and remedies herein expressly specified are cumula-
   tive and not exclusive of any rights or remedies which any
   Creditor would otherwise have.  No notice to or demand on
   any Guarantor in any case shall entitle such Guarantor to
   any other further notice or demand in similar or other
   circumstances or constitute a waiver of the rights of any
   Creditor to any other or further action in any circum-
   stances without notice or demand.  It is not necessary for
   any Creditor to inquire into the capacity or powers of
   Borrower or any of its Subsidiaries or the officers,
   directors, partners or agents acting or purporting to act
   on its behalf, and any indebtedness made or created in
   reliance upon the professed exercise of such powers shall
   be guaranteed hereunder.
   
            10.  Any indebtedness of Borrower now or here-
   after held by any Guarantor is hereby subordinated to the
   indebtedness of Borrower to the Creditors; and such
   indebtedness of Borrower to any Guarantor, if the
   Administrative Agent, after an Event of Default has
   occurred, so requests, shall be collected, enforced and
   received by such Guarantor as trustee for the Creditors and
   be paid over to the Creditors on account of the
   indebtedness of Borrower to the Creditors, but without
   affecting or impairing in any manner the liability of such
   Guarantor under the other provisions of this Guaranty. 
   Prior to the transfer by any Guarantor of any note or
   negotiable instrument evidencing any indebtedness of
   Borrower to such Guarantor, such Guarantor shall mark such
   note or negotiable instrument with a legend that the same
   is subject to this subordination.  Without limiting the
   generality of the foregoing, each Guarantor hereby agrees
   with the Creditors that it will not exercise any right of
   subrogation which it may at any time otherwise have as a
   result of this Guaranty (whether contractual, under Section
   509 of the Bankruptcy Code or otherwise) until all
   Guaranteed Obligations have been irrevocably paid in full
   in cash.
   
            11.  (a) Each Guarantor waives any right (except
   as shall be required by applicable law and cannot be
   waived) to require the Creditors to (A) proceed against
   Borrower, any other Guarantor, any other guarantor or any
   other party, (B) proceed against or exhaust any security
   held from Borrower, any other Guarantor, any other
   guarantor or any other party or (C) pursue any other remedy
   in the Creditors' power whatsoever.  Each Guarantor waives,
   to the extent permitted by applicable law, any defense
   based on or arising out of any defense of Borrower, any
   other Guarantor, any other guarantor or any other party
   other than payment in full of its respective Guaranteed
   Obligations, including without limitation any defense based
   on or arising out of the disability of Borrower, any other
   Guarantor, any other guarantor or any other party, or the
   unenforceability of its respective Guaranteed Obligations
   or any part thereof from any cause, or the cessation from
   any cause of the liability of Borrower other than payment
   in full of its respective Guaranteed Obligations.  The
   Creditors may, at their election, foreclose on any security
   held by the Administrative Agent or the other Creditors by
   one or more judicial or nonjudicial sales, whether or not
   every aspect of any such sale is commercially reasonable
   (to the extent such sale is permitted by applicable law),
   or exercise any other right or remedy the Creditors may
   have against Borrower or any other party, or any security,
   without affecting or impairing in any way the liability of
   any Guarantor hereunder except to the extent the respective
   Guaranteed Obligations have been paid in full.  Each
   Guarantor waives any defense arising out of any such
   election by the Creditors, even though such election
   operates to impair or extinguish any right of reimbursement
   or subrogation or other right or remedy of such Guarantor
   against Borrower or any other party or any security.
   
            (b)  Each Guarantor waives all presentments,
   demands for performance, protests and notices, including
   without limitation notices of nonperformance, notices of
   protest, notice of intent to accelerate, notice of
   acceleration, notices of dishonor, notices of acceptance of
   this Guaranty, and notices of the existence, creation or
   incurring of new or additional indebtedness.  Each
   Guarantor assumes all responsibility for being and keeping
   itself informed of Borrower's financial condition and
   assets, and of all other circumstances bearing upon the
   risk of nonpayment of any of the Guaranteed Obligations and
   the nature, scope and extent of the risks which such
   Guarantor assumes and incurs hereunder, and agrees that the
   Creditors shall have no duty to advise any Guarantor of
   information known to them regarding such circumstances or
   risks.
   
            12.  The Creditors agree that this Guaranty may
   be enforced only by the action of the Administrative Agent
   acting upon the instructions of the Required Banks and that
   no Creditor shall have any right individually to seek to
   enforce or to enforce this Guaranty, it being understood
   and agreed that such rights and remedies may be exercised
   by the Administrative Agent for the benefit of the
   Creditors upon the terms of this Guaranty.  The Creditors
   further agree that this Guaranty may not be enforced
   against any director, officer, employee or stockholder of
   any Guarantor (except to the extent such stockholder is
   also a Guarantor hereunder).
   
            13.  Each Guarantor covenants and agrees that on
   and after the date hereof and until the termination of the
   Total Commitment and when no Letter of Credit or Note
   remains outstanding and all Guaranteed Obligations have
   been paid in full, such Guarantor shall take, or will
   refrain from taking, as the case may be, all actions that
   are necessary to be taken or not taken so that no violation
   of any provision, covenant or agreement contained in
   Section 7 or 8 of the Credit Agreement, and so that no
   Event of Default, is caused by the actions of such Guar-
   antor or any of its Subsidiaries.
   
            14.  The Guarantors hereby jointly and severally
   agree to pay all reasonable out-of-pocket costs and
   expenses of each Creditor in connection with the
   enforcement of this Guaranty and any amendment, waiver or
   consent relating hereto (including, without limitation, the
   reasonable fees and disbursements of counsel employed by
   any of the Creditors).
   
            15.  This Guaranty shall be binding upon each
   Guarantor and its successors and assigns and shall inure to
   the benefit of the Creditors and their successors and
   assigns.
   
            16.  Neither this Guaranty nor any provision
   hereof may be changed, waived, discharged or terminated
   (other than pursuant to Section 22 hereof) except with the
   written consent of the Required Banks (or to the extent
   required by Section 12.12 of the Credit Agreement, with the
   written consent of each Bank) and each Guarantor affected
   thereby (it being understood that the addition or release
   of any Guarantor hereunder shall not constitute a change,
   waiver, discharge or termination affecting any Guarantor
   other than the Guarantor so added or released).
   
            17.  Each Guarantor acknowledges that an executed
   (or conformed) copy of each of the Credit Documents has
   been made available to its principal executive officers and
   such officers are familiar with the contents thereof.
   
            18.  In addition to any rights now or hereafter
   granted under applicable law (including, without
   limitation, Section 151 of the New York Debtor and Creditor
   Law) and not by way of limitation of any such rights, upon
   the occurrence and during the continuance of an Event of
   Default (such term to mean and include any "Event of
   Default" as defined in the Credit Agreement continuing
   after any applicable grace period), each Creditor is hereby
   authorized at any time or from time to time, without notice
   to any Guarantor or to any other Person, any such notice
   being expressly waived, to set off and to appropriate and
   apply any and all deposits (general or special) and any
   other indebtedness at any time held or owing by such
   Creditor to or for the credit or the account of such
   Guarantor, against and on account of the obligations and
   liabilities of such Guarantor to such Creditor under this
   Guaranty, irrespective of whether or not such Creditor
   shall have made any demand hereunder and although said
   obligations, liabilities, deposits or claims, or any of
   them, shall be contingent or unmatured.
   
            19.  All notices, requests, demands or other com-
   munications pursuant hereto shall be deemed to have been
   duly given or made when delivered to the Person to which
   such notice, request, demand or other communication is
   required or permitted to be given or made under this Guar-
   anty, addressed to such party at (i) in the case of any
   Creditor, as provided in the Credit Agreement and (ii) in
   the case of any Guarantor, at its address set forth
   opposite its signature below; or in any case at such other
   address as any of the Persons listed above may hereafter
   notify the others in writing.
   
            20.  If any claim is ever made upon any Creditor
   for repayment or recovery of any amount or amounts received
   in payment or on account of any of the Guaranteed
   Obligations and any of the aforesaid payees repays all or
   part of said amount by reason of (a) any judgment, decree
   or order of any court or administrative body having
   jurisdiction over such payee or any of its property or (b)
   any settlement or compromise of any such claim effected by
   such payee with any such claimant (including Borrower),
   then and in such event each Guarantor agrees that any such
   judgment, decree, order, settlement or compromise shall be
   binding upon such Guarantor, notwithstanding any revocation
   hereof or of any other instrument evidencing any liability
   of Borrower, and such Guarantor shall be and remain liable
   to the aforesaid payees hereunder for the amount so repaid
   or recovered to the same extent as if such amount had never
   originally been received by any such payee.
   
            21.  THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS
   OF THE CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE
   GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
   STATE OF NEW YORK.  Any legal action or proceeding with
   respect to this Guaranty or any other Credit Document may
   be brought in the courts of the State of New York or of the
   United States of America for the Southern District of New
   York, and, by execution and delivery of this Guaranty, each
   Guarantor hereby accepts for itself and in respect of its
   property, generally and unconditionally, the jurisdiction
   of the aforesaid courts and hereby irrevocably waives, to
   the extent permitted by applicable law, any right it may
   have to object to the laying of venue of any such action or
   proceeding in the aforesaid courts and hereby further
   irrevocably waives and agrees not to plead or claim that
   any such action or proceeding has been brought in an
   inconvenient forum.  Each Guarantor hereby irrevocably
   designates, appoints and empowers Borrower, with offices on
   the date hereof at 777 N. Eldridge Road, Houston, Texas
   77079 as its designee, appointee and agent to receive,
   accept and acknowledge for any on its behalf, and in
   respect of its property, service or any and all legal
   process, summons, notices and documents which may be served
   in any such action or proceeding.  If for any reason such
   designee, appointee and agent shall cease to be available
   to act as such, each Guarantor agrees to designate a new
   designee, appointee and agent in New York City on the terms
   and for the purposes of this provision satisfactory to the
   Administrative Agent for the Banks under this Guaranty. 
   Each Guarantor further irrevocably consents to the service
   of process out of any of the aforementioned courts in any
   such action or proceeding by the mailing of copies thereof
   by registered or certified mail, postage prepaid, to each
   Guarantor at its address set forth opposite its signature
   below.  Nothing herein shall affect the right of any of the
   Creditors to serve process in any other manner permitted by
   law or to commence legal proceedings or otherwise proceed
   against each Guarantor in any other jurisdiction.
   
            (b)  Each Guarantor hereby irrevocably waives, to
   the extent permitted by applicable law, any objection which
   it may now or hereafter have to the laying of venue of any
   of the aforesaid actions or proceedings arising out of or
   in connection with this Guaranty or any other credit
   document brought in the courts referred to in clause (a)
   above and hereby further irrevocably waives and agrees not
   to plead or claim in any such court that such action or
   proceeding brought in any such court has been brought in an
   inconvenient forum.
   
            22.  (a)  In the event that all of the Capital
   Stock of any Guarantor is sold or otherwise disposed of or
   liquidated in compliance with the requirements of Section
   8.02 of the Credit Agreement (or such sale or other
   disposition has been approved in writing by the Required
   Banks (or all Banks if required by Section 12.12 of the
   Credit Agreement)), other than any such sale, disposition
   or liquidation to Borrower or any Subsidiary, such
   Guarantor shall be released from the Guaranty and the
   Guaranty shall, as to such Guarantor, terminate, and have
   no further force or effect (it being understood and agreed
   that the sale of any Person that owns, directly or
   indirectly, the Capital Stock of any Guarantor shall be
   deemed to be a sale of such Guarantor).
   
            (b)  In the event that any Guarantor shall be
   designated an Unrestricted Subsidiary pursuant to and in
   accordance with Section 8.05(b) of the Credit Agreement,
   then such Guarantor (unless it is a guarantor of any
   Indebtedness of Borrower or of any Subsidiary (other than
   of an Unrestricted Subsidiary)) shall be released from the
   Guaranty and the Guaranty shall, as to such Guarantor,
   terminate, and have no further force or effect.
   
            23.  At any time a payment in respect of (i) the
   Guaranteed Obligations is made under this Guaranty, the
   right of contribution, if any, of each Guarantor against
   any other Guarantor required to make any payment to such
   Guarantor pursuant to this Section 23 (a "CONTRIBUTOR")
   shall be determined as provided in the immediately
   following sentence, with the right of contribution of each
   Guarantor to be revised and restated as of each date on
   which a payment (a "RELEVANT PAYMENT") is made on the
   Guaranteed Obligations under this Guaranty.  At any time
   that a Relevant Payment is made by a Guarantor that results
   in the aggregate payments made by such Guarantor in respect
   of the Guaranteed Obligations to and including the date of
   the Relevant Payment exceeding such Guarantor's Contribu-
   tion Percentage (as hereinafter defined) of the aggregate
   payments made by all Guarantors in respect of the
   Guaranteed Obligations to and including the date of the
   Relevant Payment (such excess, the "AGGREGATE EXCESS
   AMOUNT"), each such Guarantor shall have a right of con-
   tribution against each Contributor who has made payments in
   respect of the Guaranteed Obligations to and including the
   date of the Relevant Payment in an aggregate amount less
   than such Contributor's Contribution Percentage of the
   aggregate payments made to and including the date of the
   Relevant Payment by all Guarantors in respect of the
   Guaranteed Obligations (the aggregate amount of such
   deficit, the "AGGREGATE DEFICIT AMOUNT") in an amount equal
   to (x) a fraction the numerator of which is the Aggregate
   Excess Amount of such Guarantor and the denominator of
   which is the Aggregate Excess Amount of all Guarantors
   multiplied by (y) the Aggregate Deficit Amount of such
   Contributor.  A Guarantor's right of contribution, if any,
   pursuant to the preceding sentences shall arise at the time
   of each computation, subject to adjustment at the time of
   any subsequent computation; PROVIDED, HOWEVER, that no
   Guarantor may take any action to enforce such right until
   the Guaranteed Obligations have been paid in full, all
   Letters of Credit have terminated and the Total Commitment
   has been terminated, it being expressly recognized and
   agreed by all parties hereto that any Guarantor's right of
   contribution arising pursuant to this Section 23 against
   any Contributor shall be expressly junior and subordinate
   to such Contributor's obligations and liabilities in
   respect of the Guaranteed Obligations and any other
   obligations owing under this Guaranty.  As used in this
   Agreement, (i) each Contributor's "CONTRIBUTION PERCENTAGE"
   shall mean the percentage obtained by dividing (x) the
   Adjusted Net Worth of such Contributor by (y) the aggregate
   Adjusted Net Worth of all Guarantors of the respective
   Guaranteed Obligations; (ii) the "ADJUSTED NET WORTH" of
   each Guarantor shall mean the greater of (x) the Net Worth
   of such Guarantor or (y) zero; and (iii) the "NET WORTH" of
   each Guarantor shall mean the amount by which the fair
   salable value of such Guarantor's assets (other than its
   equity interests in another Guarantor and its rights under
   this Section 23) on the later of the date it first became a
   Guarantor hereunder and the last date on which the maximum
   aggregate amount of Guaranteed Obligations which it
   guarantees pursuant to this Guaranty is increased over that
   amount which it guaranteed pursuant to this Guaranty on the
   date it first became a Guarantor hereunder exceeds its
   existing debts and other liabilities (including contingent
   liabilities, but without giving effect to any Guaranteed
   Obligations arising under this Guaranty), in each case
   after giving effect to all transactions occurring on such
   date.
   
            24.  Each Guarantor recognizes and agrees that,
   except for any right of contribution arising pursuant to
   Section 23, until the Guaranteed Obligations have been paid
   in full, each Guarantor who makes any payment in respect of
   the Guaranteed Obligations shall have no right to exercise
   any right of contribution or subrogation against any other
   Guarantor in respect of such payment, any such right to
   exercise any right of contribution or subrogation arising
   under law or otherwise being expressly waived by all
   Guarantors until the Guaranteed Obligations have been paid
   in full.
   
            25.  Each Guarantor recognizes and acknowledges
   that the rights to contribution arising hereunder shall
   constitute an asset in favor of the party entitled to such
   contribution.  In this connection, each Guarantor has the
   right to waive its contribution right against any other
   Guarantor to the extent that after giving effect to such
   waiver such Guarantor would remain solvent, in the
   determination of the Required Banks.
   
            26.  This Guaranty may be executed in any number
   of counterparts and by the different parties hereto on
   separate counterparts, each of which when so executed and
   delivered shall be an original, but all of which shall
   together constitute one and the same instrument.  A set of
   counterparts executed by all the parties hereto shall be
   lodged with the Guarantors and the Administrative Agent.
   
            27.  EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ALL
   RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
   COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY,
   THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
   HEREBY OR THEREBY.
   
            28.  It is understood and agreed that any
   Subsidiary of Borrower that is required to execute a
   counterpart of this Guaranty pursuant to the Credit
   Agreement shall automatically become a Guarantor hereunder
   by executing a counterpart hereof and delivering the same
   to the Administrative Agent.
   
   
                     [Signature Pages Follow]


       IN WITNESS WHEREOF, each Guarantor has caused this
Guaranty to be executed and delivered as of the date first above
written.


ADDRESS FOR EACH GUARANTOR

Global Marine Inc.                 GLOBAL MARINE BISMARCK SEA INC.
777 N. Eldridge Road
Houston, Texas 77079-4416          GLOBAL MARINE DEEPWATER DRILLING INC.

Attention:  James L. McCulloch     
Telephone No.:  (281) 596-5837     GLOBAL MARINE DRILLING COMPANY
Facsimile No.:  (281) 596-5196
                                   GLOBAL MARINE NORTH SEA INC.

                                   GLOBAL MARINE WEST AFRICA INC.

                                   PETDRILL, INC.



                                   By:  /s/ James L. McCulloch
                                   Name:  James L. McCulloch
                                   Title: Vice President

Accepted and Agreed to:

BANKERS TRUST COMPANY, 
  as Administrative Agent


By:  /s/ Patricia Hogan
Name:  Patricia Hogan
Title: Vice President