DATED     8th December 1998






                              BMBF (NO.12) LIMITED
                                   as lessor


                                       and


                 GLOBAL MARINE INTERNATIONAL DRILLING CORPORATION
                                    as lessee





               ____________________________________________________

                               HEAD LEASE AGREEMENT
                                  relating to
                    one double hulled, dynamically positioned,
         ultra-deepwater Glomar class 456 drillship "GLOMAR IRISH SEA I"
              to be constructed by Harland and Wolff Shipbuilding and
                   Heavy Industries Ltd. with hull number 1740

               ____________________________________________________



                          SCHEDULE NUMBER 52/5050 5371-3



                               TABLE OF CONTENTS

  ClauseHeading                                                Page

      1.DEFINITIONS AND INTERPRETATIONS. . . . . . . . . . . . . .1
      2.REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . 30
      3.CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . 31
      4.LEASING AND DELIVERY AND ACCEPTANCE OF EQUIPMENT . . . . 32
      5.DISCLAIMERS AND EXCLUSIONS, LESSOR'S COVENANTS . . . . . 33
      6.LEASE PERIOD . . . . . . . . . . . . . . . . . . . . . . 36
      7.RENT . . . . . . . . . . . . . . . . . . . . . . . . . . 37
      8.PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . 38
      9.COVENANTS CONCERNING INSURANCES. . . . . . . . . . . . . 40
     10.TOTAL LOSS AND DAMAGE. . . . . . . . . . . . . . . . . . 45
     11.GENERAL COVENANTS AND UNDERTAKINGS OF THE LESSEE . . . . 48
     12.OPERATIONAL COVENANTS IN RELATION TO THE VESSEL. . . . . 51
     13.SUB-LEASING AND SERVICE CONTRACTS. . . . . . . . . . . . 59
     14.BENEFIT OF THIRD PARTY OBLIGATIONS . . . . . . . . . . . 60
     15.RISK . . . . . . . . . . . . . . . . . . . . . . . . . . 61
     16.REQUISITION FOR HIRE . . . . . . . . . . . . . . . . . . 61
     17.SALVAGE. . . . . . . . . . . . . . . . . . . . . . . . . 62
     18.TITLE AND VESSEL LIENS . . . . . . . . . . . . . . . . . 62
     19.RE-DELIVERY AND SALE OF THE VESSEL . . . . . . . . . . . 63
     20.PROCEEDS OF SALE . . . . . . . . . . . . . . . . . . . . 67
     21.TERMINATION PROVISIONS . . . . . . . . . . . . . . . . . 68
     22.SECURITY; EXCLUDED OBLIGATIONS . . . . . . . . . . . . . 74
     23.CHANGE OF CIRCUMSTANCES ETC. . . . . . . . . . . . . . . 79
     24.GENERAL INDEMNITY. . . . . . . . . . . . . . . . . . . . 80
     25.GENERAL TAX INDEMNITY AND OTHER TAX PROVISIONS . . . . . 86
     26.PRESERVATION OF INDEMNITIES. . . . . . . . . . . . . . . 92
     27.ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . 93
     28.LESSOR'S RIGHT OF SET-OFF; GROSS PAYMENT OF REBATES. . . 94
     29.MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . 95
     30.CONFIDENTIALITY. . . . . . . . . . . . . . . . . . . . . 99

SCHEDULE1 Financial Schedule . . . . . . . . . . . . . . . . . .101
SCHEDULE2 The Vessel . . . . . . . . . . . . . . . . . . . . . .102
SCHEDULE3 Part 1 - Representations and Warranties by the Lessee.103
          Part 2 - Representations and warranties by the Lessor.105
SCHEDULE4 Part 1 - Conditions precedent to the obligations of 
                   the Lessor generally . . . . . . . . . . . . 106
          Part 2 - Conditions precedent to Lessor's obligations
                   to make payment of any Instalment . . . . . .108
          Part 3 - Conditions precedent to Lessor's obligations
                   to take delivery of the Vessel and to 
                   deliver the Vessel to the Lessee. . . . . . .110
          Part 4 - Lessee's Conditions Precedent generally . . .112
          Part 5 - Lessee's Conditions Precedent to Delivery . .113
SCHEDULE5 Form of Acceptance Certificate . . . . . . . . . . . .114
SCHEDULE6 Part 1 - Loss Payable Clause . . . . . . . . . . . . .115
          Part 2 - Form of Protection and Indemnity Risks Loss
                   Payable Clause . . . . . . . . . . . . . . . 116
SCHEDULE7 Form of Pollution Indemnity Clause  (Clause 12.18) . .117


THIS AGREEMENT dated  8th December, 1998 is made

BETWEEN:

    (1) BMBF (NO.12) LIMITED whose registered office is at Churchill Plaza, 
        Churchill Way, Basingstoke, Hampshire RG21 7GP, England; and

    (2) GLOBAL MARINE INTERNATIONAL DRILLING CORPORATION, a company
        incorporated under the laws of the Bahamas, whose registered office
        is at Mareva House, 4 George Street, PO Box 3937, Nassau, The Bahamas.


WHEREAS:

The Lessor carries on the trade of leasing and pursuant to the Shipbuilding 
Contract and the Novation Agreement has agreed to incur capital expenditure 
on the provision of the Vessel for leasing to the Lessee on and subject to 
the terms and conditions contained in this Agreement.


NOW IT IS AGREED:

1.    DEFINITIONS AND INTERPRETATIONS

1.1   Definitions

      In this Agreement the following words and expressions shall each have 
      the meaning respectively attributed to them below:

      "Acceptance Certificate" means the certificate given by the Lessee to 
      the Lessor pursuant to Clause 4.2, in or substantially in the form of 
      Schedule 5;

      "Accountancy Rental Earnings" has the meaning given to that expression 
       in Schedule 12 to the Finance Act 1997;
      
      "Accounting Period" means an accounting period as defined in section 12 
       of ICTA 1988;

      "Accounting Standards" means insofar as the same are applicable to the 
       Lessor or any member of the Lessor's Group:
       
       (i)  the accounting requirements of the Companies Acts;

       (ii) Statements of Standard Accounting Practice, Financial Reporting 
            Standards and any other accounting standards having the like effect
            as Financial Reporting Standards issued by the Accounting Standards
            Board from time to time or such other body or bodies as may be 
            prescribed by regulations pursuant to Section 256 of the Companies
            Act 1995 or any similar regulations;
       
       (iii)any statement, guideline, ruling or notice from time to time issued
            and having such effect that compliance therewith by UK companies 
            of a standing and business type comparable to the Lessor (or as 
            the case may be the relevant member of the Lessor's Group) is 
            customary by any of the following:       

       Accounting Standards Board
       Accounting Standards Committee
       Financial Reporting Review Panel
       Any group or body set up by any of the above for any purpose including
              (without limitation) the Urgent Issues Task Force of the 
              Accounting Standards Board
              any similar body from time to time either discharging functions
              to effect of which is analogous or corresponds to those of any 
              of the above bodies;

       "Acquisition Documents" means the Shipbuilding Contract, the Novation 
       Agreement, each of the OFE Assignments (as defined in the Novation 
       Agreement), the Contribution Deed, the Supervision Agreement, the 
       Put-Option Agreement  and each document and instrument delivered or to
       be delivered pursuant to any of them;
       
       "Actual Interest Costs" means the amounts calculated pursuant to 
       paragraph 3.5.1 of Part 3 of the Financial Schedule;

       "Additional Payment" shall have the meaning attributed to that term 
        in Clause 25.5;

       "Additional Security" means additional security for the obligations of 
       the Lessee under this Agreement, provided in accordance with Clause 22, 
       which shall be in a form and substance acceptable to the Lessor in its 
       sole discretion, and shall be recourse to an Additional Security 
       Provider acceptable to the Lessor in its sole discretion (the Lessor
       acknowledging that it will, without commitment, give consideration to 
       additional security in the form of a security interest over cash 
       deposited with the London branch of an OECD bank).

       "Additional Security Provider" means any entity to which the Lessor 
       has recourse under Additional Security;

       "Adjustment Date" in relation to a Relevant Period means the day 
       following the day on which that Relevant Period expires;

       "Allowance Accounting Period" has the meaning given to such expression 
       in paragraph 4.5.2 (f) of Part 4 of the Financial Schedule;

       "Anticipated Delivery Date" at any time means the latest date notified 
       to the Lessor by the Lessee in accordance with Clause 3.3(p) of the 
       Supervision Agreement as the anticipated Delivery Date;

       "Applicable Jurisdiction" means, in relation to each of the Lessee,
       the Sub-Lessee and (prior to Delivery) the Shipbuilder, the jurisdiction
       of any country or state or any political sub-division thereof in which
       the Vessel is from time to time registered or located or in which the
       Lessee or, as the case may be, the Sub-Lessee or (prior to Delivery)
       the Shipbuilder, is from time to time resident or from or in which any
       of the business activities of the Lessee or, as the case may be, the
       Sub-Lessee or (prior to Delivery) the Shipbuilder are from time to time
       conducted;

       "Applicable Laws" means all laws, rules, directives and regulations, 
       national or international, public or private, affecting the Vessel or
       (prior to Delivery) the Shipbuilder, the Lessee or the Sub-Lessee in 
       relation thereto in any Applicable Jurisdiction, including
       those in respect of the ownership, delivery, use, possession, operation
       or disposal of the Vessel;
       
       "Appraised Value" has the meaning given to it in Clause 22;

       "Approved Brokers" means McGriff, Seibels & Williams of Texas, Inc., 
       or such other firm or firms of insurance brokers as may from time to 
       time be approved in writing by the Lessor for the purposes of this 
       Agreement, such approval not to be unreasonably withheld;

       "Arrangement Fee" means the fee payable by the Lessor to the Arranger 
       pursuant to the Atlas Fee Letter;

       "Arranger" means Atlas Oceanic Limited;

       "Associated Costs" has the meaning given to such expression in Annex A
       to the Financial Schedule;

       "Associated Costs Rate" has the meaning given to such expression in 
       Annex A to the Financial Schedule;

       "Assumed Interest Costs" means the amounts calculated pursuant to 
       paragraph 3.5.2  of Part 3 of the Financial Schedule;

       "Assumptions" means the assumptions described in paragraph 2.3 of 
       Part 2 of the Financial Schedule (as corrected, varied or added to 
       from time to time in accordance with the Financial Schedule);

       "Atlas Fee Letter" means the letter agreement of even date herewith 
       between the Lessor and the Arranger providing for the payment of a fee
       to the Arranger;

       "Bank" means Barclays Bank PLC, registered in England with company 
       registration number 1026167;

       "Base Rate" means the base rate from time to time quoted by the Bank 
       in London as its "Base Rate" or, if no rate of interest is quoted as 
       such, the rate of interest from time to time certified by the Bank in 
       London as being the rate which the Bank uses as the base for 
       determining rates of interest charged to corporate customers;

       "BMBF Fee" means the fee payable by the Lessor to Barclays Mercantile 
       Business Finance Limited ("BMBF") pursuant to the Fee Letter to BMBF;

       "BMBF Fee Letter" means the letter agreement of even date herewith 
       between the Lessor and BMBF providing for the payment of a fee to 
       BMBF;

       "Broken Funding Costs" shall have the meaning attributed to that term 
       in paragraph 3.8 of the Financial Schedule;

       "Business Day" means a day (other than a Saturday or Sunday, or 
       holiday scheduled by law) on which dealings in Sterling deposits are 
       carried on in the London inter-bank market, and on which banks are 
       open for business in the City of London;

       "CAA 1990" means the Capital Allowances Act 1990;

       "Capitalised Lease Obligations" means (i) all Capitalised Lease 
       Obligations as defined in the Guarantee and (ii) all obligations of a
       person to pay the purchase price for property or services to the 
       extent that the obligation to make such payment is deferred for one
       hundred and eighty (180) days or more;

       "Cash Flow" means the Initial Cash Flow, the Termination Cash Flow 
       or any Revised Cash Flow or Revised Termination Cash Flow or Latest 
       Cash Flow or Latest Termination Cash Flow as the context may require;

       "Change in Law" means, in each case after the date on which this 
       Agreement is executed:

       (a)    the implementation, introduction, abolition, withdrawal or 
              variation of, any applicable law, regulation, practice or 
              concession or official directive, ruling, request, notice, 
              guideline, statement of policy or practice statement by the Bank
              of England, the European Union or any central bank or tax, 
              fiscal, revenue, monetary, governmental, local, international, 
              national or other competent authority or agency (whether or not 
              having the force of law but in respect of which compliance by 
              banks or other financial institutions or institutions of a
              similar nature to the Lessor in the relevant jurisdiction is 
              generally customary); or

       (b)    any change in any interpretation, or the introduction or making 
              of any new or further interpretation, or any new or different 
              interpretation of any applicable law, regulation, practice or 
              concession or official directive, ruling, request, notice, 
              guideline, statement of policy or practice statement by any court,
              tribunal, governmental, local, international, national or other
              competent authority or agency or the Bank of England, the 
              European Union or any central bank or tax, fiscal, revenue or 
              monetary authority or agency (whether or not having the force 
              of law but in respect of which compliance by banks or other
              financial institutions or institutions of a similar nature to 
              the Lessor in the relevant jurisdiction is generally customary);
              or

       (c)    compliance with any new or different request or direction from 
              the Bank of England, the European Union or any central bank, 
              tax, fiscal, monetary, revenue, governmental, local, 
              international, national or other competent authority or agency
              (whether or not having the force of law but in respect of
              which compliance by banks or other financial institutions or 
              institutions of a similar nature to the Lessor in the relevant
              jurisdiction is generally customary);

       "CHAPS" means the Clearing Houses Automated Payments System;

       "Classification" means  the classification of _ A1-E Mobile Offshore
       Drilling Unit - DPS-3 AMS, ACCU, R2S with the Classification Society or
       such other classification as the Lessor shall, at the request of the 
       Lessee, have agreed in writing shall be treated as the Classification
       for the purposes of this Agreement;

       "Classification Society" means the American Bureau of Shipping or any
       of Lloyds' Register of Shipping, Germanischer Lloyd, Bureau Veritas or
       Det Norske Veritas as the Lessee may, from time to time, specify in
       writing to the Lessor or such other classification society which
       the Lessor shall have agreed in writing may be treated as the
       Classification Society for the purposes of this Agreement;

       "Commencement Date" means 31st December 1999;

       "Compulsory Acquisition" means requisition for title or other
       compulsory acquisition, requisition, appropriation, expropriation,
       deprivation, forfeiture or confiscation for any reason of the Vessel
       by any Government Entity or other competent authority, whether de jure
       or de facto, but shall exclude requisition for use or hire not involving
       requisition of title;

       "Constitutive Documents" in relation to any English company means that
       company's certificate of incorporation and memorandum and articles of
       association and, in relation to any overseas person (whether 
       incorporated, established or otherwise formed, but excluding natural
       persons), means the documents having equivalent status and effect in 
       the relevant jurisdiction;

       "Contribution Deed" means a deed so entitled of even date herewith 
       between the Lessee and the Lessor;

       "Corporation Tax" means corporation tax chargeable in the context of 
       the scheme of Taxation applied to United Kingdom resident companies 
       generally at the rate applicable to such companies (disregarding the 
       provisions of section 13 of ICTA 1988 concerning the small companies'
       rate) or any Tax of a similar nature enacted in addition to or 
       substitution for corporation tax;

       "Costs of Management Time" means an aggregate amount calculated at the
       rate of Pounds-Sterling 150 per hour (indexed in line with the General
       Index of Retail Prices for all items (or any comparable index 
       substituted therefor) from the date hereof) for the time spent by 
       employees and directors of the Lessor and employees and directors of 
       the Lessor's Group;

       "Cumulative Accountancy Rental Excess" has the meaning given to that 
       expression in Schedule 12 to the Finance Act 1997;

       "Cumulative Normal Rental Excess" has the meaning given to that 
       expression in Schedule 12 to the Finance Act 1997;

       "Current Risk Position" means the risk position of the Lessor as 
       assessed by the Lessor in relation to liability for pollution damage 
       as at the date of this Agreement (but assuming the Lessor has become 
       the owner of the Vessel and Delivery has taken place) under the
       regime implemented under the Oil Pollution Act of 1990 of the United 
       States, as amended and in force as at the date of this Agreement;

       "Date of Total Loss" shall have the meaning attributed to that term in
       Clause 10.3;

       "Default Rate" in respect of Sterling amounts means the percentage rate
       per annum which is one point five per cent (1.5%) over Base Rate and, 
       in respect of other amounts means one point five per cent (1.5%) over 
       the cost to the Lessor of funding the relevant amount, in the relevant
       currency;

       "Delivery" means delivery of the Vessel as a whole by the Lessor to 
       the Lessee in accordance with Clause 4.2.2;

       "Delivery Date" means the date on which the Vessel is delivered by the 
       Lessor to the Lessee in accordance with Clause 4.2.2;

       "Document of Compliance" shall have the meaning attributable to that 
       term in the ISM Code;

       "Dollars" and "$" each mean the lawful currency for the time being of 
       the USA and in respect of all payments to be made under this Agreement 
       in Dollars, mean immediately available, freely transferable cleared 
       funds in Dollars;

       "Drawing Period" shall have the meaning attributed to that term in 
       Clause 22.4(b);

       "Economically Burdensome" shall be determined for any date in 
       accordance with the following:

       The transactions contemplated by this Agreement shall be regarded as 
       having become economically burdensome where RIRR exceeds IRR by more
       than zero point five per cent.
       (0.5%) p.a. where:
       
       IRR    is the internal rate of return to the Lessee of the transaction 
              contemplated by the Lease Documents as determined by the Lessor 
              from the Initial Cash Flow;

       RIRR   is the internal rate of return to the Lessee of the transaction
              contemplated by the Lease Documents as determined by the Lessor 
              from the Latest Cash Flow prepared in accordance with the 
              Financial Schedule as a consequence of an Assumption proving 
              not to be correct (excluding any of Assumptions 2.3.1,
              2.3.16, or 2.3.17 proving not to be correct) but taking into 
              account any increase in insurance costs incurred by the Lessee 
              as a result of an increased insurance requirement pursuant to 
              Clause 9.6 of this Agreement (such amount being debited to the
              Latest Cash Flow on the date(s) that such increased costs are
              incurred by the Lessee and assuming that such costs will reflect
              the ongoing cost of insurance cover thereafter save that to the
              extent that such costs prove to be less than those assumed, the
              Lessor shall be entitled to determine from a further Revised Cash
              Flow the RIRR to be applied in determining whether the 
              transactions contemplated by this Agreement have in fact become
              economically burdensome by taking into account such actual 
              costs).  A certificate signed by the Lessee as to the amounts 
              and dates of incurral of such costs shall, in the absence of
              manifest error, be final and binding on the Lessor;

       "Effective Rate of Corporation Tax" in relation to an Accounting Period
       means the time-weighted average of the rates of Corporation Tax for the
       Financial Years in which such Accounting Period falls in whole or in
       part;

       "Enactments Relating to Group Relief" means the provisions of Chapter 
       IV of Part X of and Schedule 18 to ICTA 1988;

       "Environment" means:

       (i)    any land including, without limitation, surface land and 
              sub-surface strata, sea bed or river bed under any water (as
              defined below) and any natural or man-made structures;

       (ii)   water including, without limitation, coastal and inland waters,
              surface waters, ground waters and water in drains and sewers; and

       (iii)  air, including air within buildings and other natural and 
              man-made structures above and below ground;

       "Environmental Claim" means any written notice from any Government 
       Entity or, subject to the proviso below, third party, alleging any 
       breach, contravention or violation of any Environmental Law or the 
       existence of any liability or potential liability arising from any 
       such breach, contravention or violation including, without limitation,
       in respect of liability to conduct, pay for or for damages in respect 
       of any investigation or audit, clean-up, redemption, administrative
       cost or charge or expense, damage to the Environment or any natural 
       resource, property loss or damage, personal injury or any penalty 
       attaching or relating to the presence, emission, release or leak of 
       any Hazardous Material in or to the Environment in each case
       pursuant to any Environmental Law, provided that "Environmental Claim"
       shall not include any notice from a third party (not being a Government
       Entity) which the Lessee, acting reasonably, believes to be spurious 
       or ill-founded; 

       "Environmental Law" means any or all applicable law (whether civil, 
       criminal or administrative), common law, statute, statutory instrument,
       treaty, convention, regulation, directive, by-law, demand, decree, 
       injunction, resolution, order or judgment (in each case having the
       force of law) and applicable codes of practice or conduct, circulars 
       and guidance notes having legal or judicial import or effect, in each 
       case of any Government Entity (whether now existing or hereafter 
       promulgated) in any Applicable Jurisdiction relating to or concerning:
       
       (a)    pollution or contamination of the Environment;

       (b)    harm, whether actual or potential, to mankind and human senses,
              other living organisms and ecological systems;

       (c)    the generation, manufacture, processing, distribution, use 
              (including abuse), treatment, storage, disposal, transport or 
              handling of Hazardous Materials; and 
       
       (d)    the emission, leak, release, spill or discharge into the 
              Environment of noise, vibration, dust, fumes, gas, odours, 
              smoke, steam, effluvia, heat, light, radiation (of any kind),
              infection, electricity or any Hazardous Material and any matter 
              or thing capable of constituting a nuisance or an actionable 
              tort or breach of statutory duty of any kind in respect of such
              matters,

       including, without limitation, the following laws of the United States
       of America: the Comprehensive Environmental Response, Compensation and
       Liability Act of 1980, as amended, the Hazardous Materials 
       Transportation Act, as amended, the Oil Pollution Act of 1990, as
       amended, the Federal Water Pollution Control Act, as amended, the 
       Resource Conservation and Recovery Act, as amended and the Toxic 
       Substance Control Act, as amended, in any such case the failure to 
       comply with which could result in the imposition of criminal or civil
       liability on the Lessor together, in each case, with the regulations
       promulgated and the guidance issued pursuant thereto having the force 
       of law;

       "Environmental Permits" means in relation to any person, all or any 
       permits, licences, consents, approvals, certificates, registrations, 
       and other authorisations and the filing of all notifications, reports 
       and assessments required under any Environmental Law in connection
       with the conduct of such person's business and the ownership, use,
       exploitation or occupation of all of its property and assets;
       
       "Excepted Circumstances" means that either (A) Delivery has not taken
       place by 11.00 a.m. (London time) on 31st December 2000 (or such later
       date as the Lessor shall have agreed for the purposes of this provision)
       and the failure of Delivery to take place by that time was not primarily
       as a result of any fault of the Lessee or any other member of the
       Guarantor's Group; or (B) the leasing of the Vessel pursuant to this 
       Agreement has terminated:

       (i)    pursuant to Clause 10 (total loss) of this Agreement; or

       (ii)   pursuant to the service of a Put Notice (as defined in the 
              Put-Option Agreement) pursuant to Clause 3.2(b) of the Put-Option
              Agreement; or

       (iii)  pursuant to the occurrence of the Termination Event referred to 
              in Clause 21.1(b) in circumstances where the Lessee was unable 
              to discharge its obligations under Clause 9 of this Agreement 
              solely by reason of the unavailability of insurance cover on the
              terms required by the said Clause 9; or

       (iv)   at any time after the Lessor has assigned its rights under this
              Agreement to a person which is not a member of the Lessor's 
              Group;

       "Excess Risks" means the proportion of claims for general average, 
       salvage and salvage charges not recoverable under the hull and machinery
       policies in respect of the Vessel in consequence of her insured value 
       being less than the value at which the Vessel is assessed for
       the purposes of such claims;

       "Excluded Property" means, in respect of the Vessel any items of 
       equipment installed on, or attached to the Vessel but which does not
       become or is not required to become, by virtue of any provision of this
       Agreement, part of the Vessel;

       "Extension Period" has the meaning given to this term in Clause 19.1(f);

       "Exxon Party" has the meaning given to it in Clause 12.18;

       "Exxon Contract" means a contract for the provision of the services of 
       the Vessel to be entered into prior to the Delivery Date between the
       Sub-Lessee and the Exxon Party in a form complying with the requirements
       of Clauses 12.18 and 13;

       "Fee Letters" means the BMBF Fee Letter and the Atlas Fee Letter;

       "Final Date" means the date one (1) year following:

       (a)    the earliest date upon which, assuming assessments are raised in
              due time, Corporation Tax would, if there were such profits, be
              required to be paid in respect of the profits of the Lessor 
              arising in the Accounting Period of the Lessor in which the 
              earlier of:

              (i)   the expiry by effluxion of time of the Primary Period; and
              (ii)  the Termination Date;

       occurs; or
       
       (b)    if more than one such payment of Corporation Tax would be so
              required in respect of such profits the earliest date on which
              the last such payment would be required;

       "Finance Lease" shall have the meaning attributed to that term in the
       United Kingdom Statement of Standard Accounting Practice 21;

       "Financial Schedule" means Schedule 1;

       "Financial Year" has the meaning attributed to "financial year" in
       Section 834(1) ICTA 1988;

       "First Instalment" shall have the meaning attributed to that term in 
       the Novation Agreement;

       "Flag State" means the Republic of Panama (or such other state as the
       Lessor may approve, such approval not to be unreasonably withheld);

       "GMIDC" means Global Marine International Drilling Corporation, a company
       incorporated under the laws of the Bahamas, whose registered office is 
       at Mareva House, 4 George Street, P.O. Box 3937, Nassau, The Bahamas;

       "Government Entity" means and includes (whether having a distinct legal
       personality or not) (i) any national government, political sub-division
       thereof or local jurisdiction therein, (ii) any board, commission, 
       department, division, organ, instrumentality, court or agency of any 
       entity referred to in (i) above, however constituted, and (iii) any 
       association, organisation or institution (international or otherwise) 
       of which any entity mentioned in (i) or (ii) above is a member or to
       whose jurisdiction any of the foregoing is subject or in whose 
       activities any of the foregoing is a participant;

       "Guarantee" means the deed of guarantee and indemnity of even date
       herewith given by the Guarantor in favour of the Lessor in form
       satisfactory to the Lessor;

       "Guarantor" means Global Marine Inc., a company incorporated under the
       laws of the State of Delaware, U.S.A., whose principal place of business
       is at 777 North Eldridge Parkway, Houston, Texas, 77079-4493, USA and
       its successors and permitted assigns;

       "Guarantor Credit Event" means the Guarantor's unsecured, unguaranteed
       and unsubordinated long term debt is rated below BBB- by Standard &
       Poor's Ratings Group, a division of McGraw Hill Corporation (or any
       successor to its ratings business) ("S&P") or is rated below Baa3 by
       Moody's Investors Service Inc. (or any successor to its ratings
       business) ("Moody's") or the unsecured, unguaranteed and unsubordinated
       long term debt of the Guarantor shall cease to be rated at all by
       Moody's or shall cease to be rated at all by S & P;

       "Guarantor's Group" means the Guarantor and its Subsidiaries (US) from
       time to time;

       "Hazardous Material" means any element or substance, whether natural or
       artificial, and whether consisting of gas, liquid, solid or vapour, 
       whether on its own or in any combination with any other element or
       substance, which is listed, identified, defined or determined by any
       applicable law to be, to have been, or to be capable of being or
       becoming harmful to mankind or any living organism or damaging to the
       Environment including without limitation oil (as defined in the United
       States Oil Pollution Act of 1990, as amended) and all hazardous 
       substances (as defined in the United States Comprehensive Environmental
       Response, Compensation and Liability Act of 1980, as amended);

       "Holding Company" has the meaning given to it in section 736 of the
       Companies Act 1985;

       "Houston Business Day" means a day (other than a Saturday or Sunday,
       or holiday scheduled by English law, Texas law or US federal law) on
       which (a) dealings in Sterling deposits are carried on in the London
       inter-bank market, (b) banks are open for business in the City of
       London and Houston, Texas;

       "ICTA 1988" means the Income and Corporation Taxes Act 1988;

       "increased cost" shall have the meaning attributed to that term in
       Clause 23.4.

       "Indemnified Persons" shall have the meaning attributed to that term in
       Clause 24.1 (a);

       "Indebtedness" of any person means, without duplication, (i) all
       indebtedness of such person for borrowed money (whether or not the
       recourse of the lender is to the whole of the assets of such person or
       only to a portion thereof), (ii) all obligations of such person
       evidenced by bonds, debentures, notes or other similar instruments,
       (iii) all obligations of such person in respect of letters of credit or
       other similar instruments (or reimbursement obligations with respect
       thereto), other than standby letters of credit, performance bonds
       and other obligations issued by or for the account of such person in
       the ordinary course of business, to the extent not drawn or, to the
       extent drawn, if such drawing is reimbursed not later than the third
       Business Day following demand for reimbursement,) (iv) all Capitalised
       Lease Obligations of such person, (v) all Indebtedness of others secured
       by a Lien on any asset of such person, whether or not such Indebtedness
       is assumed by such person (provided that if the obligations so secured
       have not been assumed in full by such person or are not otherwise such
       person's legal liability in full, then such obligations shall be deemed
       to be in an amount equal to the greater of (a) the lesser of (1) the
       full amount of such obligations and (2) the fair market value of such
       assets, as determined in good faith by the board of directors of such
       person, which determination shall be evidenced by a board resolution,
       and (b) the amount of obligations as have been assumed by such person
       or which are otherwise such person's legal liability), and (vii) all
       Indebtedness of others (other than endorsements in the ordinary course
       of business) guaranteed by such person to the extent of such guarantee;

       "Initial Cash Flow" means the cash flow annexed to the Financial
       Schedule as Annex B;

       "Initial Sub-Lease" means a lease agreement, in a form approved by the
       Lessor and initialled by the Lessor for the purposes of identification,
       of even date herewith between the Lessee and the Initial Sub-Lessee
       relating to the Vessel providing for the Vessel to be let on demise
       charter to the Initial Sub-Lessee;

       "Initial Sub-Lessee" means Global Marine U.K. Limited, a company
       incorporated under the laws of Scotland with registered number SC131375
       and registered office at North Norfolk House, Pitmedden Road, Dyce,
       Aberdeen, Grampian AB2 ODP;

       "Insolvency Event" means, in relation to any person any of the following:

       (a)    that person is unable to pay its debts as they fall due within
              the meaning of section 123(1)(e) of the Insolvency Act 1986 or
              has a voluntary arrangement proposed under section 1 of the
              Insolvency Act 1986 or admits in writing its inability to pay
              its debts as they mature or declares a moratorium on the
              payment of all or a substantial part of its indebtedness or
              makes a general assignment for the benefit of creditors or is
              subject to or applies for winding-up or liquidation proceedings
              or is successfully put into forced or voluntary liquidation
              (except for the purpose of voluntary reorganisation previously
              agreed in writing by the Lessor not involving the insolvency of
              that person); or

       (b)    that person or any creditor or shareholder of that person
              petitions or applies to any court, tribunal or authority for
              the appointment of, or that person has or suffers to be
              appointed, any examiner, administrator, administrative receiver,
              receiver, liquidator, trustee or similar officer of it, its
              undertaking or any substantial part of its assets (and in the
              case of a petition or application by a creditor, such petition
              or application is not dismissed within twenty (20) Business Days
              and the Lessee has not established to the satisfaction of the
              Lessor (acting reasonably) that the same is frivolous or
              vexatious and is being contested in good faith by all appropriate
              proceedings); or

       (c)    that person shall suffer a distress, execution, sequestration or
              other process or the same is being levied or enforced upon or
              sued out against in each case against the whole or a substantial
              part of the assets, rights or revenues of that person, and such
              distress, execution, sequestration or other process is not
              dismissed or released within twenty (20) Business Days; or

       (d)    that person otherwise takes any corporate action or that person
              or any creditor or shareholder of that person takes any steps in
              relation to that person under any law, regulation or decree of
              any applicable jurisdiction whether now or hereafter in effect
              relating to or which has an equivalent effect to any of (a), (b)
              or (c) above;

       "Instalment" means each amount which the Lessor is required to pay by
       way of reimbursement to the Supervisor under or pursuant to the
       Supervision Agreement or by way of purchase price under the Shipbuilding
       Contract and pursuant to the Novation Agreement;

       "Instalment Date" means each date on which the Lessor is required to
       make payment of an Instalment;

       "Insurances" means all policies and contracts of insurance (which
       expression includes all entries of the Vessel in a protection and
       indemnity or war risks association) which are from time to time prior
       to or during the Lease Period in place or taken out or entered into
       (a) pursuant to Clause 9 in respect of any part of the Vessel or (b)
       otherwise howsoever in connection with the Vessel and, in each case,
       all benefits thereof (including claims of whatsoever nature and return
       of premiums);

       "Insurance Adviser's Fee" means the fees, charges and expenses paid or
       payable by the Lessor to the Lessor's insurance adviser in respect of
       the transactions contemplated by the Lease Documents, incurred up to and
       including the Delivery Date (excluding any VAT thereon);

       "Insurance Side Letter" means a letter agreement so entitled of even
       date herewith between the Lessor and the Lessee setting out the Lessee's
       obligations with respect to insurance of the Vessel prior to Delivery;

       "Irrecoverable VAT" means any amounts paid or payable by or on behalf
       of the Lessor in respect of Value Added Tax under or as contemplated by
       any of the Lease Documents to the extent the Lessor shall determine that
       the Lessor or, if the Lessor is a member of a group for Value Added Tax
       purposes, the representative member has not or will not receive a credit
       (whether by way of credit or repayment) for that amount as "input tax"
       (as that expression is defined in sub-section (1) of section 24 of VATA)
       under sections 25 and 26 of VATA (nor receive a credit for it under any
       similar or equivalent legislation) PROVIDED THAT in calculating the
       amount of Irrecoverable VAT (if any) it shall be assumed that neither
       the Lessor nor any representative member has entered into any
       transactions other than as contemplated by the Lease Documents and that
       accurate and timely VAT returns have been made by the Lessor or the
       representative member;

       "ISM Code" means:

       (i)    the International Safety Management Code for the Safe Operation
              of Ships and for Pollution Prevention currently known or referred
              to as the "ISM Code",
              adopted by the Assembly of the International Maritime Organisation
              by Resolution A.741(18) on 4th November 1993 and incorporated on
              19th May 1994 into chapter IX of the International Convention for
              the Safety of Life at Sea 1974 (SOLAS 1974); and

       (b)    all further resolutions, circulars, codes, guidelines,
              regulations and recommendations which are now or may in the
              future be issued by or on behalf of the International Maritime
              Organisation or any other entity with responsibility for
              implementing the ISM code, including, without limitation,
              the "Guidelines on implementation or administering of the
              International Safety Management (ISM) Code by Administrations"
              produced by the International Maritime Organisation pursuant
              to Resolution A.788(19) adopted on 25th November 1995;

       as the same may be amended, supplemented or replaced form time to time;

       "Latest Cash Flow" as at any date upon which reference thereto is to be
       made means the most recent Revised Cash Flow produced and in effect as
       at that date pursuant to paragraph 3.2 of Part 3 of the Financial
       Schedule or if no Revised Cash Flow is in effect as at such date, the
       Initial Cash Flow;

       "Latest Termination Cash Flow" as at any date upon which reference
       thereto is to be made, means the most recent Revised Termination Cash
       Flow produced and in effect as at that date pursuant to paragraph 4.5
       of Part 4 of the Financial Schedule or, if no Revised Termination Cash
       Flow is in effect at that date, the Termination Cash Flow;

       "Lease Capital Outstanding" means at a particular date the amount
       (positive or negative, as the case may be) shown at that date in the
       Latest Cash Flow in the column headed "NCI" or, where for a particular
       date no amount is so shown, the amount last so shown at a date
       immediately preceding that particular date;

       "Lease Documents" means this Agreement, the Acquisition Documents, the
       Guarantee, the Security Documents, the Payment Agreements, the Initial
       Sub-Lease, each subsequent Sub-Lease, the Sub-Lessee Acknowledgement,
       the Exxon Contract, each subsequent Service Contract, the Side Letters,
       and each and every other letter, agreement, document or instrument of
       even date herewith between any of the parties to the above or given by
       any of the parties to the above to another of them expressed or agreed
       to be a Lease Document and any other letter, agreement, document or
       instrument from time to time entered into pursuant to or in connection
       therewith between any of the parties to the above or given by any of
       the parties to the above to another of them, in each case as from time
       to time amended or supplemented in compliance with the terms hereof or
       thereof, as the case may be;

       "Lease Period" means the period during which the Lessee shall be
       entitled to possession and use of the Vessel in accordance with this
       Agreement being the period, if any, commencing on (and including) the
       Delivery Date and terminating on (and including) the Termination Date;

       "Lease Period End Date" means the later of the Primary Period End Date
       and the last day of the final Secondary Lease Period;

       "Lessee" means Global Marine International Drilling Corporation;

       "Lessee Payment Notice" shall have the meaning given to that term in the
       Payment Agreements;

       "Lessor" means BMBF (NO.12) Limited, company number 2512609;

       "Lessor Action" means any action on the part of the Lessor required or
       permitted pursuant to this Agreement, including, but not limited to,
       the giving, refusing, revocation or withdrawal of any consent or
       approval;

       "Lessor's Cost" as at any time means the sum equal to the aggregate of
       the amounts paid by the Lessor pursuant to the Shipbuilding Contract,
       the Novation Agreement and the Supervision Agreement being the aggregate
       of the Instalments (to the extent paid up to and including that time)
       calculated in each case, by reference to the date on which the Lessor
       makes payment of the relevant Instalment;

       "Lessor's Expenses" means the Arrangement Fee, the BMBF Fee, the
       Lessor's Legal Expenses and the Insurance Adviser's Fee (if any)
       together with any desktop valuation and survey fees incurred by the
       Lessor in connection with the Vessel (or any part thereof) prior
       to the Delivery Date;

       "Lessor's Group" means the Bank and all its Subsidiaries (UK) from time
       to time and its Holding Company from time to time;

       "Lessor's Legal Expenses" means the amount of fees, disbursements and
       incidentals (excluding VAT thereon) paid or payable by the Lessor to
       Wilde Sapte (subject, in the case of Wilde Sapte's fees only, to a
       maximum amount separately agreed) and any relevant overseas legal
       advisers for services rendered to the Lessor in relation to, inter alia,
       the preparation, negotiation and completion of the transactions
       contemplated by this Agreement and the other Lease Documents;

       "Lessor's Mortgage" means the first preferred Panamanian naval mortgage
       in relation to the Vessel to be given on the Delivery Date by the Lessor
       in favour of the Lessee in the form agreed by the Lessee and the Lessor
       and initialled by each of them for the purposes of identification;

       "Lessor's Vessel Lien" means a Vessel Lien of the type referred to in
       Clause 5.2(b) but excluding Vessel Liens referred to in the proviso to
       that Clause;

       "Liability" shall have the meaning attributed to that term in Clause
       25.1(a);

       "Liability Insurances" means the insurances described in
       Clause 9.1(a)(ii);

       "LIBID" in relation to a particular amount for a particular period,
       means LIBOR for the amount and period LESS zero point one two five per
       cent (0.125%);

       "LIBOR" means, in relation to a particular period:

       (i)    the offered rate for deposits of Sterling for a period equal to
              such period at or about the Relevant Time on the first day of
              such period as displayed on Telerate page 3750 (British Bankers'
              Association Interest Settlement Rates) or such other page as may
              replace page 3750 on such system or on any other system of the
              information vendor for the time being designated by the British
              Bankers' Association to calculate British Bankers' Association's
              Interest Settlement Rate (as defined in the British Bankers'
              Association's Recommended Terms and Conditions dated 5th August,
              1985); or

       (ii)   if on such date no such rate as is mentioned in paragraph (i)
              above is displayed, LIBOR for such period shall be the arithmetic
              mean (rounded upwards if necessary to five decimal places) of the
              rates respectively quoted to the Bank by each of the Reference
              Banks at the request of the Bank (or, if not all the Reference
              Banks provide a quotation when requested, the arithmetic mean of
              the rates which are quoted) as such Reference Banks' offered rates
              for deposits of Sterling in an amount approximately equal to the
              amount in relation to which LIBOR is to be determined for a
              period equivalent to such period to prime banks in the London
              Inter-bank Market at or about on the first day of such
              period; or

       (iii)  if on such date no such rate can be ascertained pursuant to either
              paragraph (i) or paragraph (ii) of this definition, LIBOR for
              such period shall be the rate, determined by the Lessor at which
              the Bank would be able to obtain deposits of Sterling in an
              amount approximately equal to the amount in respect of which
              LIBOR is to be determined, from whatever source it may reasonably
              select for a period equivalent to such period at or about
              11.00 a.m. (London time) on the first day of such period;

       provided that for any Instalment Date, in relation to any part of the
       Lease Capital Outstanding representing the Lessor's funding of an
       Instalment or any of the Lessor's Expenses, LIBOR shall be such rate as
       shall be certified by the Lessor to the Lessee as the rate at which the
       Lessee actually obtains funds in respect of such part of the Lease
       Capital Outstanding;

       "Lien" has the meaning given to such term in the Guarantee;

       "LLA Event" means the occurrence of circumstances where Part II, Chapter
       IVA (long life assets) of CAA 1990 applies or will apply to the Vessel;

       "Losses" shall have the meaning attributed to that term in Clause 24.1(a)
       and "Loss" shall be construed accordingly;

       "Loss Payable Clause" means the loss payable clause in the form set out
       in Schedule 6;

       "Mandatory Event" means each of the events set out in Clause 21.2.2;

       "Manuals and Technical Records" means all such books, records, logs,
       manuals, handbooks, technical data, plans, drawings and other materials
       and documents required to be kept in compliance with any Applicable Laws
       or the requirements of the Classification Society relating to the Vessel;

       "Margin" means at a particular date the amount shown as at that date in
       the Latest Cash Flow in the column headed "Margin";

       "Margin Rate" means in respect of any day:-

       (i)    where RWB is less than or equal to twenty per cent (20%), the
              after tax rate of 0.2646 per annum; or

       (ii)   where RWB is greater than twenty per cent (20%) the after tax
              rate of:

              0.2646 + ((A - 20%) x B)

              where A is the RWB on that day, and B is 0.4636;

       "Material Subsidiary" means any Subsidiary (US) of the Guarantor, the
       gross revenues, profits, assets or liabilities of which represent ten
       per cent. (10%) or more of the gross revenues, profits, assets or
       liabilities (respectively) of the Guarantor's Group;

       "Maximum Exposure" for any Relevant Period means the amount of the
       highest Non-Collateralised Lessee Exposure determined for any date
       falling in that Relevant Period, as most recently determined in
       accordance with Clause 22;

       "Member" means a member (other than the Lessor) of the group of companies
       which the Lessor is for the time being a member, "member" and "group of
       companies" to have the meaning which they have in the Enactments Relating
       to Group Relief;

       "month" or "Month" means a period beginning in one calendar month and
       ending in the next succeeding (or stipulated following) calendar month
       on the day numerically corresponding to the day of the calendar month
       on which it started, provided that (i) if the period started on the last
       Business Day in a calendar month or if there is no numerically
       corresponding day, it shall end on the last Business Day in such next
       calendar month and (ii) if such numerically corresponding day is not a
       Business Day, the period shall end on the preceding Business Day and
       "months" and "monthly" shall be construed accordingly;

       "Net Proceeds of Sale" shall have the meaning attributed to that term
       in Clause 20.1.

       "Non-Collateralised Lessee Exposure" for any date means the amount
       (if any) by which the aggregate of:

       (i)    the Termination Payment calculated in accordance with Part 4 of
              the Financial Schedule for the Adjustment Date for the Relevant
              Period in which that date falls,

       (ii)   all other amounts which would fall due for payment by the Lessee
              to the Lessor under this Agreement and the other Lease Documents
              if the leasing of the Vessel under this Agreement were to
              terminate on such date pursuant to Clause 21.1 (including any
              amounts which would become payable by the Lessee under Clause 25
              and Clause 28.4); and

       (iii)  the amount of any Rental which is scheduled to be paid on such
              Adjustment Date or, as the case may be, minus the amount of any
              rebate of Rental which is scheduled to occur pursuant to
              paragraph 3.5 of the Financial Schedule on such Adjustment
              Date

       would exceed the aggregate Value of the Payment Agreements on such next
       succeeding Adjustment Date discounted at LIBID in respect of the period
       from such date to the next succeeding Adjustment Date provided that for
       all purposes of this definition (a) it shall be assumed that on the date
       for which the calculation is made the Lessor will receive Net Proceeds
       of Sale equal to the Appraised Value for that date and will make a rebate
       in accordance with Clause 20.2 and (b) the operation of Clause 22.5.1
       (excluded obligations) shall be disregarded;

       "Normal Rent" has the meaning given to that expression in Schedule 12 to
       the Finance Act 1997;

       "Notice" shall have the meaning attributed to that term in Clause 31.5;

       "Novation Agreement" means the agreement so entitled of even date
       herewith between the Shipbuilder, the Lessor and GMIDC providing for the
       novation of the Shipbuilding Contract from GMIDC to the Lessor, and
       providing for certain amendments to the Shipbuilding Contract to take
       effect upon such novation;

       "Option Party" means the Initial Sub-Lessee in its capacity as party to
       the Put-Option Agreement;

       "Original Currency" shall have the meaning attributed to that term in
       Clause 29.13;

       "Other Currency" shall have the meaning attributed to that term in
       Clause 29.13;

       "Payment Agreements" means each of the three payment agreements of even
       date herewith each between one of the Payment Banks, the Lessor, the
       Lessee and the Guarantor, each relating to the undertaking by the
       relevant Payment Bank to perform certain payment obligations in
       connection with this Lease;

      "Payment Banks" means each of Commerzbank A.G., Bank of Nova Scotia and
      Canadian Imperial Bank of Commerce, each acting through its London branch;

       "Payment Date" shall have the meaning given to that term in the Payment
       Agreements;

       "Permitted Vessel Lien" means:

       (i)    any Lessor's Vessel Lien;

       (ii)   any Vessel Lien for Taxes either not yet assessed or, if assessed,
              not yet due and payable or being contested in good faith by
              appropriate proceedings (and for the payment of which adequate
              reserves have been provided) so long as any such proceedings or
              the continued existence of such Vessel Lien do not involve
              any reasonable likelihood of the sale, forfeiture or loss of, or
              of any interest in, the Vessel (or any part thereof);

       (iii)  Vessel Liens arising out of claims, judgments or awards against
              the Lessee or any other member of the Guarantor's Group which are
              being contested in good faith or which are subject to a pending
              appeal and for which there shall have been granted a stay of
              execution pending such appeal and for the payment of which
              adequate reserves have been provided so long as any such
              proceedings do not involve any reasonable likelihood of the sale,
              forfeiture or loss of the Vessel or of any interest therein (or
              any part thereof);

       (iv)   any Vessel Lien for salvage of any amount and any ship repairer's
              or outfitter's possessory lien for a sum not exceeding five
              million Dollars ($5,000,000) or the equivalent in any other
              currency or any lien for general average or for officer's or
              crew's wages not more than ten (10) Business Days outstanding in
              the ordinary course of trading so long as such Lien does not
              involve any reasonable likelihood of the sale, forfeiture or
              loss of the Vessel or any interest therein (or any part thereof);

       (v)    any Vessel Lien created by the Lessor or any other person under
              and as permitted by any Lease Document;
       
       (vi)   any other Vessel Lien, the creation of which has been expressly
              permitted in writing by the Lessor; and

       (vii)  any Vessel Lien arising by operation of law in the ordinary
              course of the business of the Lessee in respect of amounts which
              are not overdue;
       
       "Pre-Primary Period" means the period from the date of this Agreement up
       to the Delivery Date;

       "Pre-Primary Period Rent" means each instalment of Rent in the amount
       (if any) determined pursuant to paragraph 1.1.1 of the Financial
       Schedule, as adjusted from time to time pursuant to the provisions of
       the Financial Schedule;

       "Primary Obligor" means the Guarantor, the Lessee and, prior to the
       Delivery Date, the Option Party (in that capacity) but excluding the
       Sub-Lessee solely in the capacity of sub-lessee under any Sub-Lease;

       "Primary Period" means the period commencing on the Delivery Date to
       and including the Primary Period End Date, or such shorter period as
       may be determined in accordance with the provisions of this Agreement;

       "Primary Period End Date" means the twentieth (20th) anniversary of the
       Delivery Date;

       "Primary Period Rent" means each instalment of Rent in the amount
       determined pursuant to paragraph 1.1.2 of the Financial Schedule, as
       adjusted from time to time pursuant to the provisions of the Financial
       Schedule;

       "Principles" means the principles described in paragraph 2.2 of Part 2
       of the Financial Schedule;

       "Proceeds of Sale" shall have the meaning attributed to that term in
       Clause 20.1

       "Put-Option Agreement" means the agreement so entitled of even date
       herewith between the Lessor, the Option Party and the Shipbuilder,
       providing for the re-novation from the Lessor to the Option Party, in
       certain circumstances, of the rights and obligations novated to the
       Lessor under the Novation Agreement;

       "rate of exchange" shall have the meaning attributed to that term in
       Clause 29.13,

       "Rebate" shall have the meaning attributed to that term in Clause
       25.5(b);

       "Redelivery Location" means a port in the United Kingdom or elsewhere
       reasonably acceptable to the Lessor and, otherwise than on a redelivery
       following service of a Termination Notice, agreed by the Lessee;

       "Reference Banks" means the principal London offices of each of Midland
       Bank PLC, National Westminster Bank Plc, Lloyds Bank Plc and Barclays
       Bank PLC;

       "Relevant Event" means any Termination Event or any event which, after
       the giving of notice by the Lessor or lapse of time or both, or the
       satisfaction of any other condition (or any combination thereof), would
       constitute a Termination Event;

       "Relevant Member" means any member of the Lessor's Group other than the
       Lessor;

       "Relevant Period" means:

       (a)    (subject to (c) and (d) below) the period of three (3) months
              commencing on the date the Lessor first pays any amount of Total
              Cost or, if earlier, Lessor's Expenses;

       (b)    (subject to (c) and (d) below) each succeeding period of three
              (3) months up to but excluding the last day of the Accounting
              Period of the Lessor preceding the Accounting Period of the Lessor
              in which the Final Date or, as the case may be, the Revised Final
              Date falls, or the day before the Termination Payment Date if
              earlier;

       (c)    where there has been a termination, the three month period
              commencing on the Termination Payment Date and (subject to (d)
              below) each succeeding period of three months up to but excluding
              the Final Date or, as the case may be, the Revised Final Date
              falls;

       (d)    if the day before the Anticipated Delivery Date, the Termination
              Payment Date, the Final Date or the Revised Final Date does not
              fall on the last day of any complete three month period referred
              to in (a), (b) or (c) such shorter period as shall exist between
              the last day of the last such complete period of three months
              and the last day of the Accounting Period of the Lessor preceding
              the Accounting Period of the Lessor in which the Final Date, or,
              as the case may be, the Revised Final Date falls or the day before
              the Anticipated Delivery Date or the Termination Payment Date (as
              the case may be) shall constitute a Relevant Period;

              PROVIDED THAT 

              (i)    if the Lessor incurs any amount in respect of Total Cost
                     on a day which does not fall on the last day of the period
                     referred to in (a) or any period referred to in (b) the
                     period from and including the date on which the Lessor
                     incurs any amount in respect of Total Cost to and
                     including the last day of the then current period referred
                     to in (a) or (b) above shall constitute a Relevant Period
                     for that element only of the Total Cost; and

              (ii)   if the Delivery Date does not occur on the Anticipated
                     Delivery Date, the period from the Anticipated Delivery
                     Date to the day before any revised Anticipated Delivery
                     Date shall constitute a Relevant Period (such that this
                     proviso shall apply any number of times until the Delivery
                     Date occurs);

       "Rent" means any or all (as the context requires) of the Pre-Primary
       Period Rent, the Primary Period Rent, the Secondary Period Rent and any
       other sum (including any Termination Rent or Termination Payment) payable
       by the Lessee pursuant to this Agreement which is expressed to be by way
       of Rent or additional Rent;

       "Rent Limit" shall have the meaning attributed to that term in
       Clause 22.5.1(a);

       "Rent Payment Date" means any date on which a payment of Pre-Primary
       Rent, Primary Period Rent or Secondary Period Rent is payable
       ascertained in accordance with Part 1 of the Financial Schedule;

       "Requisition Compensation" means all sums of money or other compensation
       from time to time payable in respect of the Compulsory Acquisition of
       the Vessel;

       "Restricted Amount" means any amount (or any part of any amount)
       expressed to be payable by any of the Payment Banks under the Payment
       Agreements in relation to which any one or more of the following apply:

       (a)    the obligation to pay such amount (or part) is, or is found or
              held to be, invalid, illegal or unenforceable under applicable
              law for any reason whatsoever, except where such invalidity,
              illegality or unenforceability would not have arisen but
              for the occurrence of an Insolvency Event in relation to such
              Payment Bank or any other person; or 

       (b)    immediate enforcement of the obligation to pay such amount (or
              part) is denied under applicable law for any reason whatsoever
              except where such enforcement would not have been denied but for
              the occurrence of an Insolvency Event in relation to such Payment
              Bank or any other person;

       (c)    the relevant Payment Bank is not required to make payment of such
              amount (or part) to the Lessor under the relevant Payment
              Agreement as a result of a requirement to make a deduction or
              withholding;

       "Revised Cash Flow" means any Cash Flow produced pursuant to paragraph
       3.1 of Part 3 of the Financial Schedule or sub-paragraph 5.2.2 of Part 5
       of the Financial Schedule;

       "Revised Final Date" means, in relation to a Revised Termination Cash
       Flow or a Revised Cash Flow to which paragraph 3.1.4 of Part 3 of the
       Financial Schedule applies, the date one (1) year following:

       (a)    the earliest date upon which, assuming assessments are raised in
              due time, Corporation Tax would, if there were such profits, be
              required to be paid in respect of the profits of the Lessor
              arising in the Accounting Period of the Lessor in which a payment
              or rebate of Rent becomes payable under paragraph 3.1.4 of
              Part 3 of the Financial Schedule, paragraph 4.5 of Part 4 of the
              Financial Schedule, as the case may be;

       (b)    if more than one payment of Corporation Tax would be so required
              in respect of such profits the earliest date on which the last
              such payment would be required;

       "Revised Termination Cash Flow" means any Termination Cash Flow produced
       pursuant to paragraph 4.5.1 of Part 4 of the Financial Schedule;

       "Risk Asset Weighting" means the weighted average of the counterparty
       and/or security weightings (expressed as a percentage) attributable
       from time to time to the transactions and matters contemplated by this
       Agreement and the other Operative Documents, as determined by the Lessor,
       and ascertained in accordance with applicable law and with the
       terms of official directives, regulatory requirements and official
       requests (whether or not having the force of law and including without
       limitation the guidance notes to the Capital Adequacy Return BSD 3 or
       any equivalent return for the time being in use) of the Bank of
       England, the Financial Services Authority, the European Union or the
       Bank of International Settlements for the time being in force in the
       United Kingdom;

       "RWB" means the Risk Asset Weighting in respect of that part of the
       Lessor's net investment in the transaction contemplated by this
       Agreement and the Lease Documents in respect of (i) that part of the
       Lessee's potential obligations to the Lessor under the transactions
       contemplated by the Lease Documents which is payable by the Payment
       Banks pursuant to the Payment Agreement and (ii) that part of such
       potential obligations in respect of which the Lessor has recourse to
       Additional Security;

       "Sale Assumptions" has the meaning given to such expression in
       paragraph 4.3.3(b) of Part 4 of the Financial Schedule;

       "Safety Inspectors" means the Classification Society or such other
       person approved by the Lessor appointed from time to time as an
       independent and competent person for the purpose of verifying
       compliance by the Vessel with the requirements of this Agreement
       and the Acquisition Documents;

       "Secondary Period" means each period for which the leasing of the Vessel
       under this Agreement is extended in accordance with Clause 6.2;

       "Secondary Period Rent" means each instalment of Rent in the amount
       determined pursuant to paragraph 1.2 of the Financial Schedule;

       "Security Documents" means any documents granting security to the
       Lessor over or in respect of the Additional Security or giving the
       Lessor recourse to any Additional Security Provider, including without
       limitation any agreements, instruments or other documents now or
       hereafter entered into pursuant to or in connection with any Additional
       Security;

       "Security Party" means each party to a Lease Document other than the
       Lessor;

       "Service Contract" means (i) initially the Exxon Contract and
       subsequently (ii) any extension or renewal of the Exxon Contract and
       any further or other contract between the Sub-Lessee (or any other member
       of the Guarantor's Group) and any Service Contractor providing for the
       Lessee or the Sub-Lessee (or any other such member) to provide services
       using the Vessel;

       "Service Contractor" means, in relation to the period from the date
       hereof to the expiry or termination of the Exxon Contract, the Exxon
       Party, and, in relation to any time thereafter, the person for the time
       being contracting with the Sub-Lessee or any other member of the
       Guarantor Group for the provision of services using the Vessel;

       "Settlement Date" means the earlier of:

       (i)    the first Business Day which falls after the date which falls
              ninety (90) days after the Date of Total Loss; and

       (ii)   the date on which the Total Loss Proceeds in respect of the Total
              Loss are received by the Lessor; and

       (iii)  where a Termination Event has occurred and is continuing, any
              date specified as the Settlement Date by notice in writing from
              the Lessor to the Lessee;

       "Shipbuilder" means Harland and Wolff Shipbuilding and Heavy Industries
       Ltd., a company organised and existing under the laws applicable to
       Northern Ireland, whose registered office is at Queen's Island, Belfast,
       Northern Ireland BT3 9DU;

       "Shipbuilding Contract" means the contract dated 28th March 1998 between
       the Shipbuilder and GMIDC providing for the construction and sale of
       the Vessel;

       "Shipping Register" means the official register of ships from time to
       time in the Flag State;

       "Side Letters" means (a) each of three letter agreements of even date
       herewith between the Lessor and the Lessee, respectively entitled Excess
       Tax Losses Side Letter, Indexation Side Letter and Tax Consultation Side
       Letter, (b) the Fee Letters and (c) the Insurance Side Letter;

       "Sterling" and "Pounds Sterling" and "pounds" means the lawful currency
       for the time being of the United Kingdom and in respect of all payments
       to be made under this Agreement in Sterling means immediately available,
       freely transferable cleared funds in Sterling;

       "Sterling Equivalent" means the equivalent in Sterling of an amount in
       Dollars (or any other relevant currency) determined by reference to the
       spot rate quoted by the Bank for the purchase of Dollars (or any other
       relevant currency) with Sterling at 11.00a.m. two (2) Business Days prior
       to any applicable date of payment under this Agreement;

       "Sub-Lease" means (a) the Initial Sub-Lease and (b) after the termination
       or expiry of the Initial Sub-Lease, any renewal, replacement or
       substitute lease agreement relating to the Vessel entered into by the
       Lessee in compliance with Clause 13 and the other provisions of this
       Agreement;

       "Sub-Lessee" means, initially, the Initial Sub-Lessee, and, after the
       termination or expiry of the Initial Sub-Lease, any subsequent
       sub-lessee of the Vessel complying with the requirements of Clause 13;

       "Sub-Lessee Acknowledgment" means a deed of even date herewith executed
       by the Sub-Lessee in favour of the Lessor under which the Sub-Lessee
       acknowledges to the Lessor that its rights in and to the Vessel are
       subject to and subordinate to the Lessor's rights and interests in and
       to the Vessel and under this Agreement;

       "Subsidiary (UK)" means any Subsidiary within the meaning of section 736
       of the Companies Act 1985 and the expression "Subsidiaries (UK)" shall
       be construed accordingly;

       "Subsidiary (US)" means a corporation more than 50% of the outstanding
       voting stock of which is owned, directly or indirectly, by the Guarantor
       or by one or more other Subsidiaries (US), or by the Guarantor and one
       or more other Subsidiaries (US). For the purposes of this definition,
       "voting stock" means stock that ordinarily has voting power for
       the election of directors, whether at all times or only so long as no
       senior class of stock has such voting power by reason of any contingency.
       A Joint Venture (as defined in the Guarantee) shall not be a Subsidiary
       (US).  The expression "Subsidiaries (US)" shall be construed accordingly;

       "Supervision Agreement" means the agreement so entitled of even date
       herewith between the Lessor and GMIDC;

       "Surviving Parts" in the event of a Total Loss of the Vessel means
       those spares and other parts comprising part of the Vessel which survive
       that Total Loss, whether through being stored ashore or otherwise;

       "Tax" means all present and future taxes, charges, imposts, duties,
       levies of any kind whatsoever (whether levied by deduction, withholding
       or otherwise), or any amount payable on account of or as security for
       any of the foregoing, payable at the instance of or imposed by any
       statutory, governmental, international, state, federal, provincial,
       local or municipal authority, agency, body or department whatsoever or
       any central bank, monetary agency or European Union institution, in
       each case whether in the United Kingdom or elsewhere, together with
       any penalties, additions, fines, surcharges or interest relating thereto
       and "Taxes", "Taxation" and cognate expressions shall be construed
       accordingly;

       "Tax Date" has the meaning given to that expression in paragraph 2.3.5
       of Part 2 of the Financial Schedule;

       "Tax Liability" means in respect of any person:

       (i)    any liability or any increase in the liability of that person to
              make any payment or payments of or in respect of Tax;

       (ii)   the loss or setting off against income, profits or gains or
              against any liability to make a payment or payments of or in
              respect of Tax of any relief, allowance, deduction or credit
              ("Relief") which would otherwise have been available to
              that person; and

       (iii)  the loss or setting off against any liability to make a payment
              or payments of or in respect of Tax of a right to repayment of
              Tax which would otherwise have been available to that person;

       and in any case falling within (ii) or (iii) above the amount that is
       to be treated as a Tax Liability shall be determined as follows:

       (a)    in a case which falls within (ii) above and where the Relief
              that was the subject of the loss or setting off was or would have
              been a deduction from or offset against Tax, the Tax Liability
              shall be the amount of that Relief;

       (b)    in a case which falls within (ii) above and which involves the
              loss of a Relief which would otherwise have been available as a
              deduction from or offset against gross income, profits or gains
              the Tax Liability shall be the amount of Tax which would (on the
              basis of the Tax rates current at the date of the loss and
              assuming that the person has sufficient gross income, profits or
              gains to utilise the Relief) have been saved but for the loss of
              the Relief;

       (c)    in a case which falls within (ii) above and which involves the
              setting off of a Relief which would otherwise have been available
              as a deduction from or offset against gross income, profits or
              gains, the Tax Liability shall be the amount of Tax which has
              been or will be saved in consequence of the setting off;

       (d)    in a case which falls within (iii) above, the Tax Liability shall
              be the amount of the repayment that would have been obtained but
              for the loss or setting off.

       For the purposes of this definition any question of whether or not any
       relief, allowance, deduction, credit or right to repayment of tax has
       been lost or set off, and if so, the date on which that loss or set-off
       took place, shall be conclusively determined by the Lessor;

       "Tax Losses" has the meaning given to that expression in
       paragraph 2.3.6(a) of Part 2 of the Financial Schedule;

       "Technical Records" means all technical data, manuals, log books,
       records and other materials and documents (kept or to be kept for the
       Vessel in compliance with any applicable law or regulation of the Flag
       State or of any regulatory authority, government entity or international
       body or treaty organisation from time to time) and all additions,
       renewals, revisions and replacements from time to time made in accordance
       with this Agreement;

       "Termination Assumptions" means the assumptions described in paragraph
       4.3.3 of Part 4 of the Financial Schedule (as corrected, amended or
       added to from time to time in accordance with the Financial Schedule);

       "Termination Cash Flow" means the Cash Flow produced by the Lessor
       pursuant to paragraph 4.3.1 of Part 4 of  the Financial Schedule;

       "Termination Date" means:

       (a)    the Lease Period End Date; or

       (b)    where the leasing of the Vessel to the Lessee or, if Delivery
              has not occurred, the obligation of the Lessor to lease the
              Vessel to the Lessee pursuant to this Agreement terminates by
              virtue of a Total Loss under Clause 10 of this Agreement, the
              Date of Total Loss; or

       (c)    where the leasing of the Vessel to the Lessee, or, if Delivery
              has not occurred, the obligation of the Lessor to lease the
              Vessel to the Lessee pursuant to this Agreement automatically
              terminates upon the termination of the Sub-Lease in accordance
              with Clause 21.3, the date on which the sub-leasing of the Vessel
              or, if delivery under the Sub-Lease has not occurred, the
              obligation of the Sub-Lessee to sub-lease the Vessel pursuant to
              the Sub-Lease terminates; or

       (d)    where the leasing of the Vessel to the Lessee or, if Delivery
              has not occurred, the obligation of the Lessor to lease the
              Vessel to the Lessee, pursuant to this Agreement terminates by
              reason, in either case, of the delivery by the Lessor of
              a Termination Notice pursuant to Clause 21.4 following the
              occurrence of any Termination Event, the date of the Termination
              Notice; or

       (e)    where the leasing of the Vessel or, if Delivery has not occurred,
              the obligation of the Lessor to lease the Vessel to the Lessee
              pursuant to this Agreement terminates by reason of the voluntary
              termination of the leasing of the Vessel under this Agreement
              pursuant to Clause 21.5 of  this Agreement, the date upon
              which the Voluntary Termination Notice expires;

       "Termination Event" means any of the events listed in Clause 21.1 or
       Clause 21.3;

       "Termination Fee" means the sum calculated in accordance with
       paragraph 4.4 of Part 4 of the Financial Schedule;

       "Termination Notice" has the meaning attributed to that term in
       Clause 21.4;

       "Termination Payment" means the sum ascertained in accordance with
       paragraph 4.2 of Part 4 of the Financial Schedule;

       "Termination Payment Date" means, (i) in the case of a termination
       pursuant to Clause 10 or Clause 21.3, the Settlement Date and,
       (ii) in any other case, the relevant Termination Date;

       "Termination Principles" means the principles described in paragraph
       4.3.2 of Part 4 of the Financial Schedule;

       "Termination Rent" means an amount calculated in accordance with
       paragraph 4.3 of the Financial Schedule;

       "Termination Security" at any time, means the aggregate of the security
       constituted by the potential obligations of the Payment Banks under
       Clause 5.7 of each Payment Agreement; 

       "Termination Shortfall" means, for any date falling within a Calculation
       Period, the amount (if any) by which the Termination Requirement for
       that Calculation Period exceeds the aggregate of the Value of all
       Termination Security for that date;

       "Total Cost" means the aggregate of all capital expenditure expended by
       the Lessor pursuant to the Shipbuilding Contract and the Novation
       Agreement (excluding VAT, but including Irrecoverable VAT, thereon);

       "Total Loss" means:

       (a)    the actual or constructive or agreed or compromised or arranged
              total loss of the Vessel; or

       (b)    the Compulsory Acquisition of the Vessel; or

       (c)    the hijacking, theft, condemnation, capture, seizure, arrest,
              detention, forfeiture or confiscation of the Vessel (other than
              where the same amounts to Compulsory Acquisition of the Vessel),
              unless the Vessel be released and restored to the Lessee from
              such hijacking, theft, condemnation, capture, seizure, arrest,
              detention or confiscation within one hundred and eighty (180)
              days after the occurrence thereof;

       "Total Loss Proceeds" in relation to the Vessel means any compensation
       or insurance proceeds received by the Lessor in respect of a Total Loss
       of the Vessel which the Lessor is, as against the payer thereof,
       unconditionally entitled to retain;

       "Value" means, as calculated at any time in relation to a particular
       date, the aggregate value of any security then held by the Lessor being:

       (a)    in respect of the security constituted by the undertakings of the
              Payment Banks under the Payment Agreements the sum of:

              (1)    the aggregate amount which would (following a demand under
                     Clause 5 of each Payment Agreement) be payable by the
                     Payment Banks on that date under Clause 5.7 of each
                     Payment Agreement, for the avoidance of doubt, after
                     taking account of any reduction in the amount the
                     relevant Payment Bank is required to pay by reason
                     of a requirement to make deduction or withholding

              less

              (2)    any amount which, by virtue of illegality or otherwise
                     (but excluding any illegality or other circumstance which
                     would not have arisen but for the occurrence of an
                     Insolvency Event in relation to that Payment Bank), the
                     relevant Payment Bank is relieved from its obligation to
                     make any payment under the relevant Payment Agreement;

       (b)    in respect of any Additional Security constituting Sterling cash
              deposited at a bank, the amount of Sterling to which the Lessor
              has direct and unconditional recourse and in respect of which the
              Lessor has a valid and enforceable perfected first priority
              security interest;

       (c)    in respect of any Additional Security not falling within
              paragraph (b) above, such value as the Lessor shall allocate
              acting reasonably;

       "Value Added Tax" or "VAT" means value added tax as provided for in VATA
       and legislation (whether delegated or otherwise) supplemental thereto or
       in any primary or subordinate legislation promulgated by the European
       Union or any body or agency thereofaand any tax similar or equivalent
       to value added tax imposed by any country other than the United Kingdom
       and any similar or turnover Tax replacing or introduced in addition to
       any of the same;

       "VATA" means the Value Added Tax Act 1994;

       "Vessel" means the Glomar class 456 ultra-deepwater drillship to be
       constructed by the Shipbuilder pursuant to the Shipbuilding Contract
       under hull number 1740 and to be registered on or prior to the Delivery
       Date in the name of the Lessor under the Panamanian flag under the name
       "GLOMAR IRISH SEA I" (further details of which are set out in Schedule 2)
       and includes any share or interest therein and her engines, machinery,
       boats, tackle, outfit, equipment, spare gear, belongings and
       appurtenances whether on board or ashore (but excluding consumable
       stores and provisions, bunkers, diesel fuel and lubricants) which become
       the property of the Lessor pursuant to the Acquisition Documents and
       belong to the Lessor as at the Delivery Date or are installed on the
       Vessel thereafter or which, having been removed therefrom, remain the
       property of the Lessor together with any and all substitutions therefor
       and replacements and renewals thereof from time to time made in or to
       her in accordance with the provisions of this Agreement and, where the
       context permits, the expression "Vessel" shall:

       (i)    include any part thereof and all Technical Records;

       (ii)   at all times exclude the Excluded Property;

       (iii)  at any time prior to Delivery, include all items title to which
              has passed to the Lessor pursuant to the Shipbuilding Contract
              and the Novation Agreement; and

       (iv)   at all times from and after Delivery, exclude all items to which
              Clause 9.3 of the Shipbuilding Contract applies;

       "Vessel Lien" means any right of ownership, security, retention of
       title, right of possession or detention, mortgage, charge, lien, pledge,
       encumbrance, lease or other bailment, assignment, statutory right in
       rem, hypothecation, attachment, levy, claim, detention, proceeding or
       set-off (other than any right of set-off arising in favour of a banker by
       operation of law) or any agreement or arrangement having the effect of
       creating a security interest or any other encumbrance or security
       interest whatsoever, howsoever and wheresoever created or arising;

       "Voluntary Termination Notice" shall have the meaning attributed to
       that term under Clause 21.5;

       "Writing Down Allowance" shall have the meaning given to it in 
       Section 24 CAA 1990.

1.2    Interpretation

       (a)    The expression "this Agreement" includes the recital hereto and
              each schedule as the same may from time to time be amended,
              supplemented or substituted by agreement of the parties hereto.

       (b)    In this Agreement references to:

              (i)    clauses, paragraphs, sub-paragraphs and schedules are,
                     unless otherwise specified, references to clauses,
                     paragraphs, sub-paragraphs of, and schedules to, this
                     Agreement, or the relevant part thereof, as from time to
                     time amended, supplemented or substituted in accordance
                     with the provisions of this Agreement;

              (ii)   subject to Clause 1.2(c)(i) any statute or other
                     legislative provision shall, unless otherwise specified,
                     be read to include any statutory or legislative
                     modification or re-enactment thereof, or substitution
                     therefor;

              (iii)  any agreement or instrument shall include such agreement or
                     instrument as it may from time to time be extended,
                     amended, supplemented, novated or substituted with the
                     agreement of the parties thereto;

              (iv)   "person" shall include any person, company, corporation,
                     firm, partnership, joint venture, association, trust,
                     unincorporated organisation or government or state
                     (including any agency, department or political sub-division
                     thereof) whether having distinct legal personality or not;

              (v)    "assignee" or "assignees" of a person shall include any
                     person who has assumed all or some of the rights and/or
                     obligations of the relevant person, whether by assignment,
                     novation or otherwise;

              (vi)   reference to any person shall include its successors,
                     permitted assignees and permitted transferees in accordance
                     with their respective interests;

              (vii)  the "assets" of any person shall be construed as a
                     reference to the whole or any part of its business,
                     undertaking, property, assets and revenue (including any
                     right to receive revenues);

              (viii) "indebtedness" shall be construed so as to include any
                     obligation (whether incurred as principal or as surety)
                     for the payment or repayment of money, whether present or
                     future, actual or contingent; 

              (ix)   the "winding-up", "dissolution" or "administration" of a
                     company or corporation shall be construed so as to include
                     any equivalent or analogous proceedings under the law of
                     the jurisdiction in which such company or corporation is
                     incorporated or any jurisdiction in which such company or
                     corporation carries on business including the seeking of
                     liquidation, winding-up, reorganisation, dissolution,
                     administration, arrangement, adjustment, protection or
                     relief of debtors;

              (x)    words importing the plural include the singular and vice
                     versa;

              (xi)   a "law" (1) includes any common law, statute, decree,
                     constitution, regulation, order, judgment or directive of
                     any governmental entity; (2) includes any treaty, pact,
                     compact or other agreement to which any government entity
                     is a signatory or party; (3) includes any judicial or
                     administrative interpretation or application thereof and
                     (4) is a reference to that provision as amended,
                     substituted or re-enacted;

              (xii)  the words "other" and "otherwise" shall not be construed
                     ejusdem generis with any foregoing words where a wider
                     construction is possible; and

              (xiii) the words "including" and "in particular" shall be
                     construed as being by way of illustration or emphasis and
                     shall not limit or prejudice the generality of any
                     foregoing words.

        (c)   In the Financial Schedule, references to parts, paragraph and
              annexes are, unless otherwise stated, references to parts and
              paragraphs of, and annexes to, the Financial Schedule as from
              time to time amended, supplemented or substituted, and:

              (i)    references to statutory provisions are to statutory
                     provisions as at the date of this Agreement and, to that
                     extent, Clause 1.2(b)(ii) shall not apply to the Financial
                     Schedule;

              (ii)   any references to the occurrence of an event shall include
                     a reference to the failure of an assumed event to occur;
                     and

              (iii)  any reference to a change of practice shall be a reference
                     to a change of practice as that practice is understood and
                     is or has been experienced by the Lessor's Group and
                     lessors of equivalent standing to the Lessor.

        (d)   Clause and other headings are for ease of reference only and
              shall not affect the interpretation of this Agreement.

1.3    Conflicts

       In the event of any conflict between this Agreement and any of the other
       Lease Documents to which the Lessor and the Lessee are a party, the
       provisions of this Agreement shall prevail.

1.4    Determinations

       (a)    Any reference to the timing or amount of any payment to be made
              or received, or assumed to be made or received, by the Lessor or
              to the making of any determination, calculation or quantification
              under this Agreement (each a "Determination" and "determine" shall
              be construed accordingly) shall be construed as a reference to
              such Determination as determined by the Lessor in accordance with
              this Agreement.

       (b)    If requested in writing by the Lessee, the Lessor shall provide
              the Lessee with written details (including any relevant
              calculations) of any Determination made in connection with this
              Agreement (for the avoidance of doubt Clause 30 (Confidentiality)
              of this Agreement shall apply to all information disclosed in
              accordance with this paragraph).

       (c)    The Lessor shall be entitled (but not obliged) to make a
              Determination that any Assumption (including for this purpose any
              Termination Assumption) is incorrect if in good faith it has
              reasonable grounds for believing that a change in that Assumption
              will or is likely to occur, but shall be obliged to make a
              Determination that a change in that Assumption has occurred as
              soon as is reasonably practicable after that change has actually
              occurred.

       (d)    The Lessor shall have reasonable grounds for having a belief that
              a legislative change will or is likely to occur if an official
              announcement is made by or on behalf of any body mentioned in
              the definition of Tax (including, for the avoidance of doubt, a
              statement by the Chancellor of the Exchequer) or other competent
              authority to that effect, and shall have reasonable grounds for
              having a belief that any other change will or is likely to occur
              if it has obtained information from any body mentioned in the
              definition of Tax (including any challenge or dispute by the
              Inland Revenue of anything assumed in or contemplated by the
              Financial Schedule) or other competent authority or
              professional advice relating to that information or any published
              announcement, any practice, concession or judicial decision
              (which shall, in each case, be appropriate to the change in
              point) from which it appears that a change will or is likely to
              occur.

       (e)    If the Lessee considers that:

              (i)    any Determination of the Lessor is or may not be accurate
                     or correct, the Lessee may, within twenty (20) Houston
                     Business Days of being notified of that Determination,
                     so inform the Lessor by notice in writing, giving its
                     reasons for considering it not to be accurate or correct;
                     or

              (ii)   the Lessor ought to have made a Determination but has
                     failed to do so, the Lessee may so inform the Lessor by
                     notice in writing within twenty (20) Houston Business
                     Days of the date the Lessee becomes aware of the alleged
                     omission, giving its written reasons why it considers that
                     a Determination ought to have been made.

       (f)    As soon as practicable after a notification under Clause 1.4(e)
              by the Lessee, if requested in writing by the Lessee, the Lessor
              and the Lessee shall discuss with each other the Determination
              in question.  If the Lessor and the Lessee cannot agree to the
              correctness or otherwise of such Determination within a further
              period of twenty (20) Houston Business Days of the Lessee's
              notice referred to in Clause 1.4(e) above, then both the Lessee
              and the Lessor shall be at liberty to pursue any legal action or
              proceedings;

       (g)    If the Lessor agrees that the Determination in question was
              materially inaccurate or incorrect, then:

              (i)    in relation to a Determination in connection with a Cash
                     Flow, a revised Cash Flow shall be prepared in accordance
                     with the Financial Schedule, taking account of the
                     corrected Determination;
                     or

              (ii)   in any other case, and subject to any express provision in
                     this Agreement, such necessary adjustments by way of
                     payment between the Lessor and the Lessee shall be made
                     as are required in order to leave the Lessor in the same
                     after-Tax position as that in which it would have been if
                     it had originally made the Determination as corrected.

       (h)    The foregoing provisions of this Clause 1.4 shall be without
              prejudice to the obligations of the Lessee to make payment of
              Rent or any other payment pursuant to this Agreement on the due
              date for payment in the amount demanded by the Lessor in
              accordance with the Lessor's original Determination.

       (i)    The Lessor shall be entitled to charge for (and the Lessee shall
              so pay) for the Costs of Management Time in respect of any matter
              undertaken or anything done at the request of the Lessee under
              this Clause 1.4 save and to the extent the Lessor would have
              undertaken that matter in any event or where the Lessor's
              Determination is subsequently established to have been incorrect.

2.     REPRESENTATIONS AND WARRANTIES

2.1    Representations and warranties by the Lessee

       The Lessee acknowledges that the Lessor has entered or, as the case may
       be, shall enter into the Lease Documents to which it is, or is to be, a
       party in full reliance on representations by the Lessee in the terms set
       out in Schedule 3 Part 1 and the Lessee warrants to the Lessor that the
       statements made in Schedule 3 Part 1 are, as at the date of this
       Agreement, true and accurate.

2.2    Representations and warranties by the Lessor

       The Lessor acknowledges that the Lessee has entered or, as the case
       may be, shall enter into the Lease Documents to which it is, or is to
       be, a party in full reliance on representations by the Lessor to the
       Lessee in the terms set out in Schedule 3 Part 2 and the Lessor warrants
       to the Lessee that the statements made in Schedule 3 Part 2 are, as at
       the date of this Agreement, true and accurate.

2.3    Repetition of representations and warranties

       The representations and warranties referred to in Clause 2.1 (excluding
       those set out in paragraphs (D), (E), (H), (J) and (K) of Part 1 of
       Schedule 3) shall be deemed to be repeated on, and by reference to the
       facts and circumstances existing at, each Instalment Date and the
       Delivery Date provided that in respect of each such repetition the words
       "wholly-owned" shall be treated as being deleted from sub-paragraph (M).

2.4    Survival of representations and warranties

       The representations and warranties referred to in Clauses 2.1 and 2.2
       and the rights of the respective parties in respect thereof shall
       survive the execution and delivery of this Agreement and Delivery.

2.5    Not prejudiced by the Lessor's investigation

       The rights and remedies of the Lessor in relation to any
       misrepresentation or breach of warranty on the part of the Lessee shall
       not be prejudiced by any investigation by or on behalf of the Lessor
       into the affairs of any person (other than the Lessor), by the Lessor
       being a party to the Lease Documents, by the performance of any of the
       Lease Documents or by any other act or thing which may be done or omitted
       to be done by the Lessor under any of the Lease Documents which would or
       might, but for this Clause 2.5, prejudice such rights and remedies,
       other than an express written waiver of such rights and remedies by
       the Lessor.

3.     CONDITIONS PRECEDENT

3.1    Lessor's conditions precedent

       The obligations of the Lessor under this Agreement and the other Lease
       Documents to which it is a party shall be subject to the prior
       satisfaction in full, or waiver or deferral in writing by the Lessor to
       the extent not so satisfied, of the conditions precedent set out in
       Part 1 of Schedule 4.

3.2    Conditions precedent to Lessor's obligations to make payment of any
       Instalment

       Without prejudice to Clause 3.1, the obligation of the Lessor to make
       payment of any Instalment pursuant to the terms of the Shipbuilding
       Contract and the Novation Agreement shall be subject to the prior
       satisfaction in full, or waiver in writing by the Lessor to the
       extent not so satisfied, of the conditions precedent set out in
       Part 2 of Schedule 4 in relation to that Instalment.

3.3    Additional conditions precedent to Delivery

       Without prejudice to Clauses 3.1 and 3.2, the obligation of the Lessor
       to take delivery of the Vessel pursuant to the terms of the Novation
       Agreement and to deliver the Vessel to the Lessee shall be subject to
       the prior satisfaction in full, or waiver in writing by the Lessor to
       the extent not so satisfied, of the conditions precedent set out in Part
       3 of Schedule 4 (in addition to those set out in the other Parts of
       Schedule 4).

3.4    Waiver or deferral of conditions precedent

       If any of the conditions precedent referred to in this Clause 3 are
       waived or deferred by the Lessor, the Lessor may attach to such waiver
       or deferral such requirements and further or other conditions as it
       thinks fit, and the Lessee shall fulfil, or procure fulfilment of, all
       such requirements or further or other conditions as may be notified by
       the Lessor to the Lessee, in accordance with the terms of such
       notification.  The Lessor shall be entitled to treat any failure by the
       Lessee in fulfilling or procuring the fulfilment of any such
       condition as an immediate Termination Event.

3.5    Date for satisfaction of Conditions Precedent

       If any of the conditions precedent referred to in Clause 3.1 have not
       been satisfied in full, or waived or deferred by the Lessor pursuant to
       Clause 3.4 on or before 5.00 p.m. London time on 31st December 1998, all
       of the obligations of the Lessor under this Lease and the other Lease
       Documents to which it is a party, and the obligation of the Lessor to
       lease the Vessel to the Lessee shall, without prejudice to the other
       provisions of this Agreement (including the accrued rights of either
       party against the other), lapse.

3.6    No Delivery by 31st December 2000

       If for any reason Delivery shall not have taken place by 11.00 a.m.
       London time on 31st December 2000 (whether by reason of the
       non-fulfilment of any of the conditions precedent set out in Clauses 3.2
       or 3.3 or otherwise), the Lessor (having consulted with the Lessee for
       a reasonable period not extending beyond 31st December 2000) shall be
       entitled to treat such circumstance as a Mandatory Event in accordance
       with Clause 21.2.

3.7    Lessee's conditions precedent generally

       The obligations of the Lessee under this Agreement shall be subject to
       the satisfaction or waiver by the Lessee of the conditions precedent
       set out in Part 4 of Schedule 4.  If such conditions have not been
       satisfied on or before 5.00 p.m. London time on 31st December 1998,
       the obligations of the Lessee under this Lease, including the
       obligations of the Lessee to lease the Vessel from the Lessor shall
       without prejudice to the other provisions of this Agreement (including
       the accrued rights of either party against the other), lapse.

3.8    Lessee's condition precedent to Delivery

       The obligation of the Lessee to accept delivery of the Vessel shall be
       subject to the satisfaction or waiver by the Lessee of the conditions
       precedent set out in Part 5 of Schedule 4.

4.     LEASING AND DELIVERY AND ACCEPTANCE OF EQUIPMENT

4.1    Leasing

       The Lessor agrees to lease to the Lessee, and the Lessee agrees to lease
       from the Lessor, the Vessel on and subject to the terms and conditions
       herein contained.

4.2    Delivery and Acceptance of the Vessel

4.2.1  Prior to Delivery the Lessor shall have no obligation to effect delivery
       to the Lessee of any item intended to form part of the Vessel,
       notwithstanding that title to such item may be vested in the Lessor
       pursuant to the Shipbuilding Contract and the Novation Agreement. 
       At all times prior to Delivery the Shipbuilder shall maintain possession
       of all such items in accordance with the Shipbuilding Contract and the
       Lessor shall not have any risk in, or responsibility for, any such item.

4.2.2  As between the Lessor and the Lessee, upon delivery of the Vessel as a
       whole to the Lessor pursuant to the terms of the Shipbuilding Contract
       and the Novation Agreement, the Lessor shall become unconditionally
       bound to deliver the Vessel and the Lessee shall become unconditionally
       bound to accept delivery thereof under this Agreement.  Simultaneously
       therewith, the Lessee shall deliver to the Lessor a duly executed
       Acceptance Certificate dated the date of such delivery (provided always
       that the representative of the Lessee acting for this purpose shall not
       be the same person as the representative of the Lessee acting as agent
       of the Lessor under Clause 4.3).  Such Acceptance Certificate shall,
       without further act, constitute irrevocable evidence of delivery of the
       Vessel to the Lessee hereunder and acceptance thereof for all purposes of
       this Agreement.

4.3    Lessor's Mortgage

       The Lessor agrees that (i) on the Delivery Date it will execute and
       deliver the Lessor's Mortgage to the Lessee and (ii) it will from time
       to time, at the Lessee's request and expense, do and perform such acts
       and execute and deliver such further instruments as may be reasonably
       requested by the Lessee in order to register the Lessor's Mortgage with
       the Shipping Register.

4.4    Lessor's Charged Account

       Not later than the Delivery Date the Lessor shall (i) establish a bank
       account in the name of the Lessor with Barclays Bank PLC and (ii)
       execute a charge over such account in favour of the Lessee securing the
       same obligations as are secured by the Lessor's Mortgage, on terms
       agreed by the Lessor and the Lessee, each acting reasonably.  Following
       the execution of such charge, all loss payee notices shall be amended so
       as to direct insurers to pay Total Loss Proceeds into such account.
       
4.5    If reasonably requested by the Lessee, the Lessor will issue in favour
       of any Service Contractor a letter on terms to be agreed between the
       Lessee and the Lessor, each acting reasonably, confirming that for
       the duration of the relevant Service Contract the Lessor will not
       interrupt the quiet enjoyment of the Lessee or, as appropriate, the
       Sub-Lessee for so long as the Lessee is entitled to the use and
       possession of the Vessel hereunder provided that no such letter shall be
       expressed to, or operate so as to, restrict or limit the rights,
       interests, remedies and powers of the Lessor under this Agreement and
       the other Lease Documents.

4.6    Unincorporated OFE at Delivery

       If at Delivery there exists any Owner Furnished Equipment (as defined in
       the Shipbuilding Contract) which has not been used in the construction of
       the Vessel (as contemplated by Clause 9.3 of the Shipbuilding Contract),
       the Lessee shall notify the Lessor, giving details of the items
       concerned, and the Lessee will at the request of the Lessor, enter into
       such documents as the Lessor shall reasonably specify effecting a
       transfer of title from the Lessor to the Lessee of each such item,
       without recourse or warranty.

5.     DISCLAIMERS AND EXCLUSIONS, LESSOR'S COVENANTS

5.1    Disclaimers and exclusions

       (a)     The Lessee acknowledges and agrees that:

               (i)   THE VESSEL HAS BEEN DESIGNED, MANUFACTURED,
                     ASSEMBLED AND CONSTRUCTED WITHOUT REFERENCE
                     TO OR INVOLVEMENT OF THE LESSOR AND THAT THE
                     LESSEE ALONE HAS SELECTED THE VESSEL FOR
                     PURCHASE BY THE LESSOR PURSUANT TO THE NOVATION
                     AGREEMENT AND LEASING BY THE LESSOR TO THE
                     LESSEE HEREUNDER;

                (ii )THE LESSOR HAS NOT MADE OR GIVEN NOR SHALL BE
                     DEEMED TO HAVE MADE OR GIVEN ANY TERM,
                     CONDITION, REPRESENTATION, WARRANTY OR
                     COVENANT, EXPRESS OR IMPLIED (WHETHER STATUTORY
                     OR OTHERWISE), AS TO THE SEAWORTHINESS,
                     SUITABILITY, CAPACITY, AGE, STATE, VALUE, QUALITY,
                     DURABILITY, CONDITION, APPEARANCE, SAFETY, DESIGN,
                     CONSTRUCTION, OPERATION, PERFORMANCE,
                     DESCRIPTION, MERCHANTABILITY, SATISFACTORY
                     QUALITY, FITNESS FOR USE OR PURPOSE OR ANY
                     PARTICULAR USE OR PURPOSE OR SUITABILITY OF THE
                     VESSEL OR ANY PART THEREOF, AS TO THE ABSENCE OF
                     LATENT OR OTHER DEFECTS, WHETHER OR NOT
                     DISCOVERABLE, AS TO THE ABSENCE OF ANY
                     INFRINGEMENT OF ANY PATENT, TRADEMARK OR
                     COPYRIGHT, AS TO THE ABILITY OF THE VESSEL TO
                     SATISFY THE REQUIREMENTS OF ANY LAW, RULE,
                     SPECIFICATION OR CONTRACT PERTAINING THERETO, OR
                     AS TO TITLE TO THE VESSEL OR ANY OTHER
                     REPRESENTATION OR WARRANTY WHATSOEVER,
                     EXPRESS OR IMPLIED, WITH RESPECT TO THE VESSEL, ALL
                     OF WHICH ARE HEREBY EXCLUDED; AND 

               (iii) THE LESSEE IS TAKING THE VESSEL ON LEASE ON AN "AS
                     IS, WHERE IS, AND WITH ALL FAULTS" BASIS, AND THAT
                     THE LESSEE'S ACCEPTANCE OF DELIVERY FROM THE
                     LESSOR IN ACCORDANCE WITH CLAUSE 4.2 (DELIVERY
                     AND ACCEPTANCE OF VESSEL) SHALL BE CONCLUSIVE
                     EVIDENCE (EXCEPT AS AGAINST THE SHIPBUILDER OR
                     THE MANUFACTURER OF ANY PART OF THE VESSEL)
                     THAT THE VESSEL IS COMPLETE, IN GOOD ORDER AND
                     CONDITION, OF SATISFACTORY QUALITY, FIT FOR ANY
                     PURPOSE FOR WHICH IT MAY BE INTENDED OR REQUIRED,
                     SEAWORTHY IN ALL RESPECTS, WITHOUT DEFECT OR
                     INHERENT VICE WHETHER OR NOT DISCOVERABLE BY
                     THE LESSEE, SUITABLE IN ALL RESPECTS AND IN EVERY
                     WAY SATISFACTORY.

       (b)    Save as otherwise expressly and specifically provided by this
              Agreement or any other Lease Document, the Lessee hereby waives
              as between itself and the Lessor and agrees not to seek to
              enforce, all its rights, express or implied (whether statutory
              or otherwise), whether against the Lessor in respect of the
              Vessel (or any part thereof) or against the Vessel or any part
              thereof (except rights arising out of any act or omission of the
              Lessor which is a breach by the Lessor of its express and
              specific obligations to the Lessee under this Agreement or any
              other Lease Document).  

       (c)    The Lessor shall be under no obligation to provide to the Lessee
              or to any other person any replacement for the Vessel (or any
              part thereof) during any period when the Vessel (or any part
              thereof) is unavailable for use for any reason whatever nor,
              otherwise to compensate the Lessee in respect of such
              unavailability for use.  

       (d)    Save as expressly provided in this Agreement or the other Lease
              Documents, and without prejudice to the generality of Clauses 5.1
              (a) and 5.1(b) (Disclaimers and exclusions), the Lessor shall be
              under no liability to the Lessee or any other person whatsoever
              and howsoever arising, and from whatever cause, and whether in
              contract, tort or otherwise, in respect of the satisfactory
              condition or fitness for purpose of the Vessel or any loss
              (consequential or otherwise), liability or damage of, or to, or
              in connection with, the Vessel or any part thereof (including
              delay in delivery thereof to the Lessee under this Agreement, or
              by the Lessee to the Sub-Lessee under any Sub-Lease, or thereafter
              or delay of any nature whatsoever) or any person or property
              whatsoever irrespective of whether such loss, liability or damage
              shall arise from any action or omission of the Lessor and whether
              or not the same shall arise from the Lessor's negligence, actual
              or imputed (other than any action or omission of the Lessor which
              is a breach by the Lessor of its express and specific obligations
              to the Lessee under the Lease Documents to which the Lessor is
              party).

5.2    Lessor's covenants etc.

       (a)    The Lessor covenants to the Lessee that throughout the Lease
              Period the Lessor (other than through the acts or omissions of
              any party to the Lease Documents (other than the Lessor), or any
              of such party's agents or representatives, acting as agent or
              representative of the Lessor) will not, otherwise than pursuant
              to its rights under any of the Lease Documents or which may exist
              under any applicable law and except as may be required by law or
              any ruling or recommendation of any Government Entity compliance
              with which is customary for the Lessor, interfere with the quiet
              use, operation, possession and quiet enjoyment of the Vessel by
              the Lessee.  The Lessee acknowledges that the covenant by the
              Lessor contained in this Clause 5.2(a) and in Clause 5.2(b)
              is the sole covenant by the Lessor in respect of quiet enjoyment
              and is in substitution for, and to the exclusion of, any other
              covenant for quiet enjoyment which may have otherwise been given
              or implied at law or otherwise, all of which are hereby expressly
              excluded and waived by the Lessee.

       (b)    The Lessor covenants with the Lessee that, subject to the proviso
              in this Clause 5.2(b), throughout the Lease Period the Lessor
              shall not create or permit to arise or suffer to exist any Vessel
              Lien on the Vessel which arises solely from, or solely as a
              result of:

              (i)    any claim against or affecting the Lessor that is not
                     related to, or does not arise directly or indirectly as
                     a result of, the transactions contemplated by this
                     Agreement or any of the other Lease Documents; or

              (ii)   any claim for Taxes against the Lessor other than Taxes
                     in respect of which the Lessor is required to be
                     reimbursed, indemnified against or otherwise compensated
                     by the Lessee or by any other person under or pursuant to
                     the Lease Documents;

              (iii)  any act or omission of the Lessor (but not of any party to
                     the Lease Documents (other than the Lessor) or any of such
                     party's agents, employees or representatives acting as
                     agent or representatives of the Lessor) constituting a
                     breach by the Lessor of its express and specific
                     obligations under this Agreement or the other Lease
                     Documents; or

              (iv)   any act or omission of the Lessor which constitutes the
                     wilful misconduct of the Lessor or recklessness of the
                     Lessor with knowledge of the probable consequences (but
                     in each case excluding any act, omission or recklessness
                     of any party to the Lease Documents (other than the
                     Lessor), or any of such party's agents, employees or
                     representatives, acting as agent or representative of the
                     Lessor),

              PROVIDED THAT if any of (i), (ii), (iii) or (iv) above applies to
              any Vessel Lien, the Lessor shall not be liable to pay or
              discharge the same, or the amount of the same or remove the same,
              if adequate reserves for the payment of such amount have been
              provided and such Vessel Lien is being disputed by the Lessor in
              good faith and in a manner effectively staying such Vessel Lien.

5.3    Unfair Contract Terms Act 1977

       Without prejudice to the indemnities of the Lessor by the Lessee
       contained in any of the Lease Documents, nothing in this Clause 5 shall
       afford to the Lessor any wider exclusion of any liability of the Lessor
       to any person for death or personal injury than the Lessor may
       effectively exclude having regard to the provisions of the Unfair
       Contract Terms Act 1977.

6.     LEASE PERIOD

6.1    Primary Period

       The leasing of the Vessel hereunder shall commence on the Delivery Date
       and shall, subject to this Clause 6, continue until the Primary Period
       End Date unless earlier terminated in accordance with this Agreement.

6.2    Secondary Period

6.2.1  The Lessee may, by written notice to the Lessor to be received by the
       Lessor no later than one month prior to the date upon which the leasing
       of the Vessel under this Agreement would otherwise expire by effluxion
       of time request that the leasing of the Vessel be extended for a
       Secondary Period (or, as the case may be, a further Secondary Period)
       of a period specified by the Lessee up to one year, subject to earlier
       termination under any provision of this Agreement.  Any notice once
       given by the Lessor pursuant to this Clause 6.2 may only be withdrawn
       with the written consent of the Lessor.

6.2.2  The continuation of the leasing under Clause 6.2.1 shall be subject to:

       (i)    no Termination Event having occurred and being continuing; and

       (ii)   the Lessee having satisfied the Lessor (acting reasonably) that
              the Vessel has not reached and is not likely to reach during the
              relevant Secondary Period, the end of its useful economic life
              and is likely to remain, during such Secondary Period, safe and
              seaworthy.

6.3    Termination by the Lessor

       The Lessee acknowledges that the Lessor will undertake a review of the
       transaction constituted by this Agreement and the other Lease Documents,
       (taking into account, but without limitation, the return to the Lessor
       from such transaction and the business, operations, prospects and
       creditworthiness of the Guarantor, the Lessee, each Payment Bank
       (including any proposed replacements) and any other Additional Security
       Provider).  Such review shall be carried out during the period of three
       months commencing 1st July 2012 and if, following such review, the
       Lessor shall conclude in its absolute discretion (but acting in good
       faith) that it is not satisfied with such transaction and such factors
       taken into account or with the security for the actual and contingent
       obligations (for these purposes disregarding Clause 22.5.1) of
       the Lessee provided under the Lease Documents, the Lessor shall be
       entitled, by notice in writing given not later than 1st September 2012,
       to require the Lessee to serve a notice of voluntary termination in
       accordance with Clause 21.5(B), and the Lessee shall comply with
       any such requirement not later than one month after receipt of the
       notice from the Lessor.

7.     RENT

7.1    Pre-Primary Period Rental

       If so required by the Lessor as contemplated by paragraph 1.1.1 of the
       Financial Schedule, the Lessee shall pay to the Lessor a Pre-Primary
       Period Rent on each Rent Payment Date throughout the Pre-Primary Period,
       each such Pre-Primary Period Rent to be calculated in accordance with
       the provisions of the Financial Schedule.  Each such amount of Pre-
       Primary Rent shall be subject to adjustment and supplement in accordance
       with the provisions of the Financial Schedule.

7.2    Primary Period Rent

       The Lessee shall pay to the Lessor, in respect of the Primary Period, a
       Primary Period Rent on each Rent Payment Date throughout the Primary
       Period, each such Primary Period Rent to be calculated in accordance
       with the provisions of the Financial Schedule.  Each such amount of
       Primary Period Rent shall be subject to adjustment and supplement in
       accordance with the provisions of the Financial Schedule.

7.3    Secondary Period Rent

       The Lessee shall pay to the Lessor on the first day of each Secondary
       Period a Secondary Period Rent calculated in accordance with paragraph
       1.2 of the Financial Schedule.

7.4    Additional Rent

       The Lessee shall, on the dates ascertained in accordance with the
       Financial Schedule (or, if no such date is specified, upon written
       demand by the Lessor), whether before, during or after the Lease Period,
       pay all amounts calculated and due to the Lessor under the Financial
       Schedule and expressed to be payable by way of additional Rent.

8.     PAYMENTS

8.1    Accounts

8.1.1  Each payment to be made by the Lessee to the Lessor in Sterling pursuant
       to this Agreement shall be made from a bank account in the United
       Kingdom in Sterling in cleared funds for value on the due date by means
       of CHAPS to the account of Barclays Mercantile Business Finance Limited
       (General Account no.2) with the Bank at its branch at 54 Lombard Street,
       London EC3V 9EX, England, account number 60152242, CHAPS number 20-00-00,
       quoting "Schedule number 52/5050 5371-3"  or to such other bank
       account in the United Kingdom as the Lessor may from time to time
       designate by not less than ten (10) Houston Business Days' notice to
       the Lessee.  Any payment which is to be made to the Lessor in a currency
       other than Sterling pursuant to this Agreement shall be made to such
       account as the Lessor shall notify the Lessee in writing.

8.1.2  Each payment to be made by the Lessor to the Lessee in Sterling pursuant
       to this Agreement shall be made in Sterling in cleared funds for value
       on the due date by means of CHAPS to the account of the Lessee with The
       Chase Manhattan Bank at its London branch, sort code 60-92-42, account
       number 23106101, or to such other bank account in the United Kingdom as
       the Lessee may from time to time designate by not less than ten
       (10) Business Days' notice to the Lessor.  Any payment which is to be
       made to the Lessee in a currency other than Sterling pursuant to this
       Agreement shall be made to such account as the Lessee shall notify the
       Lessor in writing.

8.2    Payments unconditional

       The Lessee's obligation to pay Rent and make other payments, and perform
       any obligations, owed to the Lessor pursuant to or in connection with
       this Agreement or any of the other Lease Documents to which it is a
       party shall be absolute and unconditional and shall not be affected by
       and shall be irrespective of any contingency whatsoever including
       (but not limited to):

       (a)    any right of set-off, counterclaim, recoupment, defence,
              deduction, withholding or other right;

       (b)    any unavailability of the Vessel for any reason, including,
              but not limited to, requisition thereof, or any prohibition or
              interruption of or other restriction against the Lessor's, the
              Lessee's, the Sub-Lessee's or any other person's use,
              operation or possession of the Vessel, any interference with
              such use, operation or possession or failure to deliver any
              part of the Vessel or any lack or invalidity of title or any
              other defect in the title, suitability, seaworthiness,
              satisfactory quality, merchantability, fitness for any purpose,
              condition, appearance, safety,  design, or operation of any kind
              or nature of the Vessel, or the ineligibility of the Vessel for
              any particular use or trade, or for want of registration or the
              absence or withdrawal of any permit, licence, authorisation
              or other documentation required under the applicable law of any
              relevant jurisdiction for the ownership, leasing, use, operation
              or location of the Vessel, or (subject to Clause 10.1(a) (Total
              Loss)) the Total Loss of, or any damage to, the Vessel or any
              part thereof;

       (c)    any insolvency, bankruptcy, winding-up, administration,
              reorganisation, reconstruction, arrangement, readjustment or
              rescheduling of debt, dissolution, liquidation or similar
              proceedings by or against the Lessor, the Bank, the Lessee or
              any other person (whether a party to any Lease Document or not);

       (d)    any invalidity or unenforceability or lack of due authorisation
              of, or other defect in, this Agreement or any of the other Lease
              Documents or any particular provision hereof or thereof;

       (e)    any failure or delay on the part of any party, whether with or
              without fault on its part, duly to perform or comply with its
              obligations under this Agreement or any of the other Lease
              Documents; and

       (f)    any other case which but for this provision would or might have
              the effect of terminating or in any way affecting any obligation
              of the Lessee hereunder

       but without prejudice to the rights of the Lessee to damages or specific
       performance or any other injunctive relief in respect of this Agreement
       or any of the other Lease Documents, it being the declared intention of
       the parties that the provisions of this Clause and the obligations of
       the Lessee to pay Rent and make other payments in accordance with this
       Agreement and the other Lease Documents shall survive any frustration
       and that save as expressly and specifically provided in this Agreement
       no moneys payable or paid hereunder by the Lessee to the Lessor shall
       in any event or circumstances be repayable to the Lessee.

8.3    Interest on overdue amounts

       (a)    If any amount payable by the Lessee to the Lessor under this
              Agreement or any of the other Lease Documents is not paid in full
              on the date such amount becomes due and payable hereunder or
              thereunder, the Lessor shall (without prejudice to the rights of
              the Lessor under Clause 21 (Termination Provisions)) be entitled,
              in addition, to demand interest on the unpaid sum at the Default
              Rate from and including such date to and including the date of
              actual payment.

       (b)    If any amount payable by the Lessor to the Lessee under this
              Agreement is not paid in full on the date such amount becomes
              due and payable hereunder, the Lessee shall be entitled, in
              addition, to demand interest on the unpaid sum at Base Rate from
              and including such date to and including the date of actual
              payment.

       (c)    All interest under this Clause 8.3 shall accrue (after as well
              as before judgment) on a day to day basis and be compounded
              quarterly and shall be calculated on the basis of the actual
              number of days elapsed and (i) a three hundred and sixty-five
              (365) day year in relation to Sterling amounts (unless, as a
              result of the introduction of the Euro, the normal bank basis
              for interest calculations in Sterling becomes a 360 day year,
              in which case the calculation shall be on the basis of a 360 day
              year) and amounts in other currencies where that is the normal
              bank basis for interest calculations under the relevant currency,
              or (ii) a three hundred and sixty (360) day year for amounts in
              other currencies. 

8.4    Time of the essence

       Punctual payment of amounts payable by the Lessee to the Lessor and
       performance by the Lessee of each of its obligations under this
       Agreement shall, subject to any express periods of grace set out in
       Clause 21.1 (Termination Events) and save as may be agreed in writing
       by the Lessor, be of the essence and shall be conditions of this
       Agreement.

8.5    Business Days

       If any payment of Rent under this Agreement is due on a day which is not
       a Business Day, it shall, unless expressly provided to the contrary in
       this Agreement or the relevant other Lease Document, be paid on the
       immediately preceding Business Day.  If any payment other than Rent
       under this Agreement or any other Lease Document is due on a day which
       is not a Business Day, it shall, unless expressly provided to the
       contrary in this Agreement or the relevant other Lease Document, be
       paid on the succeeding Business Day.

8.6    Application of payments

       If the Lessee shall pay to the Lessor, or the Lessor shall otherwise
       recover, any amount expressed to be payable by the Lessee under this
       Agreement or any of the other Lease Documents in an amount less than the
       total amount then due, or due and outstanding, the sum so paid may be
       applied by the Lessor (irrespective of any contrary appropriation by
       the Lessee) in or towards satisfaction of such amounts which are due for
       payment payable by the Lessee under this Agreement and the other Lease
       Documents in such manner or order and at such time as the Lessor may
       think fit.

9.COVENANTS CONCERNING INSURANCES

9.1    Insurances in respect of the Vessel

       The Lessee hereby covenants with the Lessor and undertakes that,
       throughout the Lease Period and thereafter until sale of the Vessel,
       it will:

       (a)    insure and keep the Vessel insured free of cost and expense to
              the Lessor and in the joint names of the Lessee, the Lessor and
              those of the other Indemnified Persons who are involved in the
              administration of the Lease Documents, without liability on the
              part of the Lessor and the other Indemnified Persons for
              premia or calls except, to the extent necessary, in respect of
              insurances relating to protection and indemnity risks (each as
              their interests may appear) in respect of claims arising in
              connection with the ownership or operation of the Vessel:

              (i)    against fire and usual marine risks (including Excess
                     Risks to the extent not covered under the Liability
                     Insurances) and war risks, on an agreed value basis in
                     accordance with the practice from time to time of
                     prudent owners of similar types of vessel as the Vessel,
                     provided that the amount of such insurances shall be equal
                     to or greater than the highest Tax Written Down Value for
                     the Vessel for the period of such insurances; and

              (ii)   against protection and indemnity risks (including oil
                     pollution liability) on terms and conditions which are
                     the same or substantially the same as the insurance taken
                     out with respect to the same risks by other owners of
                     similar types of vessel as the Vessel operating in the
                     jurisdictions in which the Vessel is operating at the
                     relevant time and which is reasonably available to the
                     Lessee (taking into account the provisions of this
                     Agreement and the fact that although the Lessor is the
                     owner of the Vessel it has no operational interest in the
                     Vessel) and shall be in an amount of two hundred million
                     Dollars ($200,000,000) any one occurrence or such
                     greater amount as is either (x) the general practice from
                     time to time of owners of equivalent tonnage to and similar
                     types of vessel as the Vessel to obtain in the
                     jurisdiction(s) in which the Vessel is being operated at
                     the time when such general practice is being determined
                     (provided such greater amount is reasonably obtainable by
                     the Lessee) or (y) required by any rules, regulations,
                     laws, treaties or conventions of the Flag State from time
                     to time or of the jurisdiction in which the Vessel is
                     being operated at any particular time or (z) following a
                     Change of Law with respect to an Environmental Law in a
                     jurisdiction in which the Vessel is being operated at any
                     particular time, and the Lessor reasonably determining
                     that such a Change of Law has resulted in the actual or
                     potential liability of the Lessor with respect to an
                     Environmental Claim increasing above the Lessor's
                     liability as at the date of this Agreement under the Oil
                     Pollution Act of 1990, as amended, of the United States of
                     America (the "Measured Liability"), the amount of such
                     increase in liability over the Measured Liability or,
                     where the Vessel is employed in the storage of
                     hydrocarbons, for the amount which is the general
                     practice from time to time of owners of similar types of
                     vessels as the Vessel employed in such use in
                     jurisdictions in which the Vessel is being operated at
                     any particular time;

              and in each case the Lessor may rely upon the advice of its
              legal, insurance and other advisers and the Lessee further agrees
              that the Lessor shall be deemed to have acted reasonably in
              connection with any Lessor Action under or in connection with
              this Clause 9 if the Lessor has relied upon any such advice of
              its legal, insurance or other advisers;

       (b)    if the Lessor requires an increase in the amount insured in
              respect of oil pollution liability risks in accordance with the
              provisions of Clause 9.1(a)(ii), the Lessee shall effect such
              increase within ten (10) Business Days of being notified by the
              Lessor to effect such increase or, if later, the date upon which
              such increase is required pursuant to the rules, regulations,
              laws, treaties or conventions referred to in Clause 9.1(a)(ii)(y)
              or, as the case may be, the date upon which the Change of Law
              referred to in Clause 9.1(a)(ii)(z) comes into effect;

       (c)    effect the Insurances, including the Liability Insurances
              aforesaid in Dollars (where appropriate in an equivalent amount
              at the time of each renewal of the Insurances to the amount
              required expressed in Sterling) or such other freely 
              transferable and convertible currency acceptable to the Lessor
              and through the Approved Brokers or such other insurance
              companies and/or underwriters or by entry of the Vessel with a
              mutual insurance association or club;

       (d)    punctually pay all premiums, calls, contributions or other sums
              payable in respect of all such Insurances and to produce all
              relevant receipts or other evidence of payment when so required
              by the Lessor and, in the event that any premium or call is
              charged to be levied upon the Lessor, the Lessee shall
              forthwith reimburse the Lessor with any amount so paid;

       (e)    at least ten (10) Business Days (or such shorter period as the
              Lessor may from time to time agree) before the relevant policies,
              contracts or entries expire, notify the Lessor of the names of
              the marine and war risks brokers and/or the war risks or
              protection and indemnity risks associations and/or underwriters
              proposed to be employed by the Lessee for the purposes of the
              renewal of such Insurances and of the amounts in which such
              Insurances are proposed to be renewed and the risks to be covered
              and, subject to compliance with the provisions of this
              Clause 9.1, procure that appropriate instructions for the
              renewal of such Insurances are given to the Approved Brokers
              and/or to the approved war risks and protection and indemnity
              risks associations at least ten (10) days (or such shorter period
              as the Lessor may from time to time agree) before the relevant
              policies, contracts or entries expire, and that the Approved
              Brokers and/or the approved war risks and protection and
              indemnity risks associations and/or approved underwriters will
              at least seven (7) days before such expiry (or within such
              shorter period as the Lessor may from time to time agree)
              confirm in writing to the Lessor as and when such renewals have
              been effected in accordance with the instructions so given;

       (f)    if any of the Insurances referred to in Clause 9.1(a)(i) form
              part of a fleet cover for the Lessee or the Guarantor and any
              Subsidiaries (US), and such Approved Brokers are or would be
              entitled to exercise rights of set-off or cancellation in
              relation to claims under such Insurances relating to the Vessel
              for non-payment of premiums in respect of other vessels covered
              by the same Insurances, the Lessee shall use all reasonable
              endeavours (having regard to the then current market practice
              including the practice prescribed by the Lloyd's Insurance
              Brokers' Committee and/or any other professional association of
              which the Approved Brokers are members) to procure that the
              Approved Brokers shall undertake to the Lessor:

              (i)    not to exercise against the policy or against any claims
                     in respect of the Vessel any Lien or right of set-off for
                     unpaid premiums in respect of vessels other than the
                     Vessel covered under such fleet cover or for unpaid
                     premiums in respect of any other such policies of
                     insurance; and

              (ii)   not to cancel the Insurances for the Vessel by reason of
                     the non-payment of premiums for vessels covered by such
                     fleet cover,
       
              or, in lieu of the undertakings referred to in paragraphs (i)
              and (ii), shall instruct the Approved Brokers to issue a separate
              policy of insurance in respect of the Vessel as and when the
              Lessor may so require;

       (g)    promptly arrange for the execution and delivery of such
              guarantees or indemnities as may from time to time be required
              by any protection and indemnity or war risks association in
              accordance with its rules or the terms of entry of the Vessel;

       (h)    procure:

              (i)    that all original slips, cover notes, policies,
                     certificates of entry and other instruments of insurance
                     issued from time to time shall forthwith be deposited with
                     the Approved Brokers in respect of those of the Insurances
                     in respect of the Vessel which are effected through
                     Approved Brokers; and

              (ii)   that the interest of the Lessor shall be endorsed on the
                     Insurances referred to in Clause 9.1(a)(i) by noting the
                     interests of the Lessor on the policies and by the
                     endorsement of the relevant Loss Payable Clause on the
                     policies required under Clause 9.1(a)(i) and (ii);

       (i)    procure that the Approved Brokers or the insurers and any
              protection and indemnity or war risks association or the war
              risks insurers in which the Vessel may from time to time be
              entered or with whom cover may be placed shall deliver to the
              Lessor a letter or letters of undertaking in such form as the
              Lessor may reasonably require having regard to the then current
              market practice and the practices prescribed by the
              "International Group" of protection and indemnity associations
              or successor association or body and/or the Lloyd's Insurance
              Brokers' Committees and/or any other professional association of
              which the Approved Brokers are members;

       (j)    comply with the terms and conditions of the Insurances, not do,
              consent to or permit any act or omission which might invalidate
              or render unenforceable the whole or any part of the Insurances
              and not (without first obtaining the consent of the insurers to
              such employment and complying with such requirements as to
              extra premium or otherwise as the insurers may prescribe) employ
              the Vessel or suffer the Vessel to be employed otherwise than in
              conformity with the terms of the Insurances (including any
              warranties express or implied therein) and within the
              geographical limits thereof; and

       (k)    supply to the Lessor all necessary information, documentation
              and assistance which may be required by the Lessor from time to
              time in respect of the Insurances and in connection with making
              any claim under the Insurances,

       PROVIDED HOWEVER THAT if, in the event of requisition of the Vessel for
       hire, it is proved to the satisfaction of the Lessor that such
       requisition is upon terms whereby the requisitioning authority has
       assumed the responsibility of the Lessee to the Lessor to indemnify
       or recompense it in respect of or otherwise to make good all losses
       which would ordinarily be covered by the insurance required to be
       effected by the Lessee under this Agreement, the Lessee shall be
       relieved from its insurance obligations under this Agreement in respect
       of such period of requisition or in the event that the requisitioning
       authority shall have assumed only a partial responsibility as aforesaid,
       the insurance obligations of the Lessee under this Agreement shall be
       modified in such manner and to such extent as the Lessor may approve in
       its absolute discretion having regard to the insurance provisions
       contained in this Agreement.

9.2    If, at the time of any renewal of the Insurances, there is, in the
       opinion of the Lessor acting reasonably:

       (a)    any material adverse change in the credit standing or claims
              payment record of the relevant insurer or war risks or
              protection and indemnity association; or

       (b)    any material adverse change in the terms on which the relevant
              Insurances are placed; or

       (c)    any change affecting the insurance market which may have, or may
              be likely to have, a material adverse effect on the Insurances
              in respect of the Vessel,

       then the Lessor may, having consulted with its insurance advisers,
       stipulate reasonable requirements for the Insurances in the light of
       such changes.  If the Lessor has stipulated such requirements to the
       Lessee, the Lessor and the Lessee shall (at the cost of the Lessee)
       respectively cause their insurance advisers to meet to consider the
       Lessor's requirements and, if such advisers do not agree promptly with
       respect to such requirements, the matter shall be referred to an
       appropriate independent insurance adviser agreed by the Lessor and
       the Lessee.  In the absence of agreement as to an appropriate
       independent insurance adviser, either the Lessor or the Lessee may
       request the President for the time being of the Law Society to
       appoint an appropriate independent insurance adviser who shall act as an
       expert and not as an arbitrator and whose assessment with respect to
       such requirements shall be final and binding on the Lessor and the
       Lessee.

       If the insurance advisers of the Lessor and the Lessee agree with
       respect to such requirements and on the changes required to be effected
       to the then current insurance requirements or if the independent
       insurance adviser, appointed by the President of the Law Society,
       stipulates changes required to be effected to the then current insurance
       requirements then (a) the Lessee shall, at its own cost, promptly, and
       in any event within sixty (60) days of such agreement, or as the case
       may be stipulation, effect or procure that there is effected such
       requirements and (b) the Lessor shall be entitled, at the Lessee's cost,
       to effect contingent third party liability insurances for the Lessor and
       members of the Lessor's Group to cover such requirements.

9.3    Collection of claims

       The Lessee shall do all things necessary and provide all documents,
       evidence and information to enable the Lessor to collect or recover all
       moneys which shall at any time become due to the Lessor in respect of
       the Insurances.

9.4    Application of recoveries

       The Lessee shall apply all sums receivable under the Liability
       Insurances which are paid to it in accordance with the relevant Loss
       Payable Clause and Clause 10.5.

9.5    Other insurances and assureds

       The Lessee shall not, without the prior written consent of the Lessor,
       during the Lease Period take out additional insurances for the Lessee's
       sole benefit, or permit the Lessee or the Lessor to be named insured in
       insurances with respect to the Vessel, other than as required under this
       Agreement, where such additional insurances will or may prejudice the
       Insurances or recovery thereunder or will exceed the amount permitted by
       the warranties or other conditions of the Insurances (unless the
       insurers under the Insurances have consented thereto) and will, upon the
       Lessor's request, immediately furnish the Lessor with particulars of any
       such additional insurances (including copies of any cover notes or
       policies) and of the written consent of the insurers under the
       Insurances in any case where such consent is necessary.  The Lessor
       acknowledges that the provisions of this Clause 9.5 are without
       prejudice to the Lessee's right to take out loss of hire insurances in
       respect of the Vessel in accordance with usual market practice.

9.6    Encumbrances

       The Lessee shall not create or permit to exist any Lien over the
       Lessee's interest in the Insurances or any Requisition Compensation
       save as contemplated by this Agreement.

9.7    Broker's report

       On the date of this Agreement and on each date when the Insurances are
       renewed, the Lessee shall, at its own expense, furnish or cause to be
       furnished to the Lessor evidence that the Insurances have been placed
       in accordance with this Clause 9 and are in full force and effect
       together with an opinion signed by a firm of insurance brokers other
       than the Approved Brokers stating that the Insurances then in effect
       are consistent with the requirements for the Insurances under this
       Agreement and in compliance with the terms of this Clause 9.

9.8    Omission to comply with insurance provisions

       If at any time the Lessee shall fail to comply with:

       (a)    any of the provisions of this Clause 9 in relation to or in
              connection with all or any part of the Liability Insurances and
              the Vessel; or

       (b)    any of the material provisions of this Clause 9 in relation to or
              in connection with all or any part of the Hull Insurances and
              the Vessel,

       then the Lessor shall be entitled (at the Lessee's cost and expense),
       either (i) to procure such insurance or entries in a war risks
       association and/or protection and indemnity association or associations
       in accordance with the aforesaid provisions, or (ii) at any time
       whilst such failure is continuing to require the Vessel to remain in
       port or, as the case may be, to proceed to and remain in a port
       designated by the Lessor until such provisions are fully complied with,
       or both, but without prejudice to the right of the Lessor in any such
       case to treat such failure as being within Clause 21 (Termination
       provisions). Rent shall continue to accrue during such time and any
       expense incurred by the Lessor in relation to or in connection with any
       of the arrangements described above shall be recoverable from
       the Lessee on demand.

9.9    Lessor's Insurance

       Any insurance effected by the Lessor which the Lessee is not obliged to
       effect under this Clause 9 shall not be brought into account in relation
       to any claim under any indemnity in favour of any Indemnified Person
       under any of the Lease Documents.

9.10   Pre-Delivery Insurances - Insurance Side Letter

       The Lessee shall comply with the requirements of the Insurance Side
       Letter.

10.    TOTAL LOSS AND DAMAGE

10.1   Total Loss

       In the event of:

       (a)    a Total Loss occurring prior to Delivery, the obligation of the
              Lessor to lease the Vessel to the Lessee shall terminate on the
              Date of Total Loss; or

       (b)    a Total Loss occurring during the Lease Period, the Lease Period
              shall end on the Date of Total Loss and the obligation of the
              Lessee to pay Rent (other than any Termination Payment) under
              Clause 7 (Rent) becoming due on any Rent Payment Date which falls
              on or after the Date of Total Loss shall cease; and

       the Lessee shall (without prejudice to the obligations of the Lessee
       pursuant to any provision of this Agreement or the Lease Documents to
       pay to the Lessor all sums which may become due to the Lessor or be
       ascertained after the date of Total Loss) pay to the Lessor, as
       compensation for the Lessor's full financial loss consequent upon such
       termination, the amounts set out below and on the dates prescribed
       below for those amounts (but subject always to its application both
       before and after the date on which such payment is made, to the
       provisions of the Financial Schedule):

       (i)    if (during the Lease Period) on or after the Date of Total Loss
              but before the Settlement Date there falls a day which, if the
              leasing of the Vessel had not terminated, would have been a Rent
              Payment Date, the Lessee shall on that Rent Payment Date pay to
              the Lessor an amount equal to the Rent which would have become
              payable had the Total Loss not occurred; and

       (ii)   on the Settlement Date, the Lessee shall pay to the Lessor an
              amount equal to the aggregate of:

              (A)    the Termination Payment calculated for the Settlement Date;

              (B)    all instalments of Rent (if any) which have become due
                     prior to the Date of Total Loss and remain unpaid; and

              (C)    all other amounts due and payable from the Lessee to the
                     Lessor pursuant to any Lease Document, including, without
                     limitation, any Broken Funding Costs.

10.2   Application of Total Loss Proceeds

       All moneys received by the Lessor from insurers in respect of a Total
       Loss and all Requisition Compensation received by the Lessor shall be
       applied by the Lessor as follows:

       (a)    firstly, in retention by the Lessor of an amount equal to any
              expenses, taxes or duties incurred by the Lessor in connection
              with the collection of such proceeds;

       (b)    secondly, in retention by the Lessor of an amount equal to half
              of one per cent.  (0.5%) of the amount by which the Total Loss
              Proceeds (after deducting the amount referred to in paragraph (a)
              above) exceed the Termination Payment;

       (c)    thirdly, any balance remaining shall be paid to the Lessee by
              way of rebate of Rent.

10.3   Date of Total Loss

       For the purposes of this Agreement, a Total Loss in respect of the
       Vessel shall be deemed to have occurred:

       (a)    in the case of an actual total loss of the Vessel at noon (London
              time) on the actual date the Vessel was lost or, if such date is
              not known, on the date on which the Vessel was last reported;

       (b)    in the case of constructive total loss of the Vessel, on the
              date and at the time notice of abandonment of the Vessel is given
              to the insurers of the Vessel for the time being (provided a
              claim for such constructive total loss is admitted by
              the insurers) or, if the insurers do not admit such a claim, on
              the date and time at which a constructive total loss is
              subsequently adjudged by a competent court of law to have
              occurred; 

       (c)    in the case of a compromised or arranged total loss, on the date
              upon which a binding agreement as to such compromised or
              arranged total loss has been entered into by the insurers of the
              Vessel;

       (d)    in the case of Compulsory Acquisition, on the date on which the
              relevant requisition of title or other compulsory acquisition
              occurs; and

       (e)    in the case of hijacking, theft, condemnation, confiscation,
              capture, detention or seizure of the Vessel (other than where
              the same amounts to Compulsory Acquisition of the Vessel), upon
              the expiry of the period of one hundred and eighty (180) days
              after the date upon which the relevant hijacking, theft,
              condemnation, confiscation, capture, detention or seizure
              occurred.

       The date on which a Total Loss shall be deemed pursuant to this Clause
       10.3 to have occurred is referred to as the "Date of Total Loss".

10.4   Damage Claims

       In the event of repairable damage occurring to the Vessel any insurance
       moneys receivable in respect thereof shall be paid to the Lessee.

10.5   Third party claims

       Any insurance moneys paid under the Liability Insurances shall be paid
       to the person to whom the liability (or alleged liability) covered by
       such insurances or entry was incurred or to the person otherwise
       entitled thereto.

10.6   Insufficient Insurance recovery

       The Lessee acknowledges and agrees that in the event of repairable
       damage to the Vessel or a liability or alleged liability covered by the
       Insurances taken out or entries made referred to in Clause 9.1(a)
       (Insurance undertakings) being incurred or alleged, and if the
       insurance moneys paid in respect thereof are insufficient to pay the
       cost or estimated cost of making good or repairing such damage or
       discharging the liability or alleged liability, the Lessor will have
       no responsibility to make good or pay the deficiency.

10.7   Notice of abandonment

       For so long as no Relevant Event has occurred which is continuing, the
       Lessee shall, subject to the prior written consent of the Lessor, be
       entitled to determine whether or not a case has arisen for the giving
       of notice of abandonment to abandon the Vessel to the insurers and/or
       claim a constructive total loss and the Lessee is hereby authorised by
       the Lessor, following the Lessor's consent as specified above, to give
       such notice of abandonment if the Lessee so determines.  Such consent
       by the Lessor shall not be unreasonably withheld.

10.8   Further action on part of Lessor

       (a)    If the Lessee is, pursuant to Clause 10.7 above, entitled to give
              a notice of abandonment, the Lessor shall upon the request and
              at the cost of the Lessee promptly execute such documents as may
              be required to enable the Lessee to abandon the Vessel to the
              insurers and/or claim a constructive total loss of the Vessel
              and, subject to paragraph (c) below, the Lessor shall give the
              Lessee all reasonable assistance in pursuing the said claim,
              provided that the Lessor may, (taking into account paragraph
              (b) below) in its absolute discretion, refuse to permit the
              Lessee or any person claiming through the Lessee to pursue any
              such claim in the name of the Lessor or any other member of the
              Lessor's Group.

       (b)    The Lessor shall, at the request of the Lessee consult with the
              Lessee for a period not exceeding thirty (30) days in good faith
              if the Lessee or any person claiming through the Lessee requests
              permission to pursue any claim in the name of the Lessor or any
              other member of the Lessor's Group provided that the Lessor shall
              be under no obligation and have no liability other than to the
              extent of its agreement to hold discussions with the Lessee as
              set out above.

       (c)    The Lessee will indemnify the Lessor against all costs and
              expenses incurred by the Lessor in complying with this Clause
              10.8.  Such indemnity will initially be set at an interim
              maximum of Pounds-Sterling 50,000.  The Lessor will notify the
              Lessee as soon as practicable after the Lessor has incurred
              costs and expenses of Pounds-Sterling 50,000.  The Lessor will
              have no obligation to take any action which would incur further
              costs or expenses until all accrued costs and expenses have been
              paid and a further interim maximum liability is agreed.

10.9   Sale of Vessel following Total Loss

       If the insurers of the Vessel have satisfied or admitted in full their
       obligations under the Insurances and have expressly waived any rights
       they may have, or would or might require, in the Vessel, the Lessee, as
       the agent of the Lessor, shall pursuant to Clause 19.2 (Sale of the
       Vessel) as soon as practicable after the date of Total Loss of the
       Vessel endeavour to arrange a sale of the Vessel.  Any such sale shall
       comply with Clause 19 (Re-delivery and sale of the Vessel).

11.    GENERAL COVENANTS AND UNDERTAKINGS OF THE LESSEE

11.1   Notification of Relevant Event

       The Lessee undertakes with the Lessor that, from the date of this
       Agreement and so long as any moneys are owing to the Lessor (actually
       or contingently) under this Agreement or any of the other Lease
       Documents to promptly notify the Lessor of the occurrence of any
       Relevant Event promptly upon becoming aware thereof.

11.2   Notification of termination of Sub-Lease

       The Lessee undertakes with the Lessor that, from the date of this
       Agreement and so long as any moneys are owing to the Lessor (actually
       or contingently) under this Agreement or any of the other Lease
       Documents to promptly notify the Lessor of the termination of the
       sub-leasing of the Vessel or the obligation of the Lessee to sub-lease
       the Vessel pursuant to the Sub-Lease.

11.3   Supply of accounts and financial information

       The Lessee shall provide to the Lessor (or, as the case may be, shall
       procure that there is provided to the Lessor) such reasonably available
       financial information relating to the Lessee as the Lessor may
       reasonably require.  In particular the Lessee shall, from the date
       of this Agreement and so long as any moneys are owing to the Lessor
       (actually or contingently) under this Agreement or any of the Lease
       Documents, properly prepare or cause to be properly prepared financial
       statements for the Lessee in respect of each financial year and, if the
       same are available, (on the same basis) each half of each financial
       year and will in each case deliver or cause to be delivered a copy of
       the same to the Lessor as soon as practicable but in any event not later
       than one hundred and twenty (120) days after the end of the financial
       period to which they relate.  If the financial statements for the
       Lessee are not audited, they shall be accompanied by a certificate
       signed by an officer of the Guarantor addressed to the Lessor stating
       that, to the best of such person's knowledge and belief, having made
       due enquiry, such statements represent a true and fair view of the
       assets, liabilities, profit, loss and financial condition of the Lessee.

11.4   Information concerning the Vessel

       The Lessee undertakes with the Lessor that, from the date of this
       Agreement and so long as any moneys are owing to the Lessor (actually
       or contingently) under this Agreement, or any of the other Lease
       Documents it will promptly furnish the Lessor with all such information
       as the Lessor may from time to time reasonably request in writing
       regarding the Vessel, its insurance, condition, maintenance, employment,
       position and engagements, particulars of all towages and salvages and
       copies of all charters, leases and other contracts for the employment
       of the Vessel, or otherwise concerning the Vessel.

11.5   Notification requirements in relation to the Vessel

       The Lessee shall notify the Lessor in writing promptly at the Lessee's
       cost and expense of:

       (a)    any accident to the Vessel involving repairs the cost whereof
              will or is, in the reasonable opinion of the Lessee, likely to
              exceed ten per cent. (10%) of the Lessor's Cost or the equivalent
              in any other currency;

       (b)    any occurrence in consequence whereof the Vessel has become or
              is, in the reasonable opinion of the Lessee, likely to become a
              Total Loss;

       (c)    any requirement made by any insurer or the Classification Society
              or by any competent authority in relation to the Vessel which is
              not complied with in accordance with its terms (excluding any
              requirement in respect of which non-compliance will not adversely
              affect the Insurances and will not materially adversely affect
              the operation or safety of the Vessel or the rights and interests
              of the Lessor);

       (d)    any material assistance which has been given to the Vessel
              which has resulted or may result in a lien for salvage being
              acquired over the Vessel;

       (e)    any failure to pay promptly and regularly the wages and
              allotments or the insurance and pension contributions (if any)
              of the crew of the Vessel;

       (f)    the requisition for hire at any time of the Vessel;

       (g)    any serious or potentially serious injury to an individual or
              group of individuals caused by, or in connection with, the
              Vessel which is likely to give rise to any claim against the
              Lessor or any other member of the Lessor's Group or to any
              other claim or claims in an amount exceeding five million
              Dollars ($5,000,000) in aggregate (or the equivalent in any
              other currency);

       (h)    any damage to property caused by, or in connection with, the
              Vessel likely to give rise to any claim against the Lessor or
              any other member of the Lessor's Group or to any other claim
              in an amount exceeding five million Dollars ($5,000,000) (or the
              equivalent in any other currency); 

       (i)    any event requiring notification under Clause 11.8 or Clause
              13.3; and
      
       (j)    any other event which occurs in connection with the Vessel which
              in the reasonable opinion of the Lessee affects or might affect
              the rights of the Lessor or involves or might involve any
              material loss or liability to or of the Lessor.

11.6   Location of the Vessel

       The Lessee shall, at its own expense, provide to the Lessor such
       information as the Lessor may reasonably request concerning the position
       of the Vessel, and in particular the Lessee shall notify the Lessor of
       any change of location and the identity of the current Service Contractor
       as soon as practical on each occasion it is proposed to change the
       jurisdiction(s) of the Vessel's location and, if so requested by the
       Lessor, the Lessee shall, to the extent possible, give the Lessor
       notice of the jurisdiction(s) of the proposed location or locations
       for the forthcoming twelve months.

11.7   Taxes

       (a)    The Lessee shall not and shall procure that no other member of
              the Guarantor's Group shall claim any capital allowances in
              respect of any expenditure relating to the Vessel incurred or to
              be incurred by the Lessor or otherwise in respect of the Vessel
              which would adversely affect the Lessor's claim to capital
              allowances.

       (b)    The Lessee shall pay and discharge from time to time all Taxes
              and other outgoings whatsoever lawfully imposed on the Vessel or
              any income therefrom (other than Corporation Tax) attributable to:

              (i)    any Rent or Termination Payment actually receivable
                     hereunder; or

              (ii)   any other amounts payable to and unconditionally received
                     by the Lessor under this Agreement or pursuant to or in
                     connection with any of the other Lease Documents; or

              (iii)  any sales or other proceeds (including, without
                     limitation, insurance moneys) actually received and
                     retained by the Lessor in respect of the Vessel as a
                     result of the use, possession, control and command
                     of the Vessel.

       (c)    The Lessee will not use any part of the Vessel or permit any part
              of the Vessel to be used and shall procure that no part of the
              Vessel is used during the requisite period (as defined in section
              40 CAA 1990) so as to result in the application of any of
              sections 42, 43, 44, and 46 CAA 1990 and shall immediately notify
              the Lessor if at any time within such requisite period the
              Vessel is used for leasing to a non-resident other than permitted
              leasing, "non-resident" and "permitted leasing" bearing for this
              purpose the respective meanings set out in section 50 CAA 1990
              and the Lessee shall also notify the Lessor of any event or
              matter which under section 48 CAA 1990 ought to be notified by
              the Lessor to the Board of the Inland Revenue or any Inspector of
              Taxes in connection with the Vessel or the leasing thereof and
              shall promptly furnish when the Lessor may require such
              information as may properly be required to be so furnished by
              the Lessor to the Board of the Inland Revenue and Inspector of
              Taxes regarding the leasing of the Vessel or the use to which it
              is being put or has been put, in order to enable the Lessor to
              comply with the provisions of section 48 CAA 1990 or to respond
              to such a request.

11.8   Environmental Laws

       The Lessee shall comply, or procure compliance with, all requirements of
       Environmental Law which are applicable to the Vessel insofar as
       non-compliance therewith could reasonably be expected to give rise to
       any claim or liability of any description for the Lessor or any other
       member of the Lessor's Group (including their respective directors,
       employees and agents) or to any other claim or liability which could
       reasonably be expected to have a material adverse effect on the
       financial condition, business or prospects of (i) the Guarantor's Group
       as a whole or (ii) any Primary Obligor (including, without limitation,
       obtaining and maintaining in full force and effect all Environmental
       Permits required from time to time and all requirements relating to
       manning, submission of oil spill response plans, designation of
       qualified individuals and establishing financial responsibility) and
       promptly notify the Lessor of (i) any Environmental Claim which has
       been made or threatened against the Lessor, the Lessee, the Sub-Lessee
       or (to the knowledge of the Lessee or the Sub-Lessee) the Service
       Contractor in relation to or is caused by or is in connection with the
       Vessel; and (ii) any revocation, suspension, amendment, variation,
       withdrawal or refusal to grant any Environmental Permit or any
       requirement relating to the manning, submission of oil response
       plans, designation of qualified individuals and establishing financial
       responsibility, which, in the case of either (i) or (ii) above, might
       reasonably be expected to have a material adverse effect on the
       interests of the Lessor or on the ability of the Lessee to fulfil its
       obligations under this Agreement and the other Lease Documents.


12.    OPERATIONAL COVENANTS IN RELATION TO THE VESSEL

12.1   Use of Vessel

       The Lessee shall, subject to the provisions of this Agreement, as
       between itself and the Lessor, have full and exclusive use, possession,
       control and command of the Vessel during the Lease Period.

12.2   Design requirements

       The Lessee shall ensure that the Vessel is operated in a proper, and
       safe manner at all times in accordance with its design requirements and
       subject to any limitations placed on such operation by that design or
       any recommendations of any builder or repairer of the Vessel in the
       manner prescribed by any legislation in force in any applicable
       jurisdiction.

12.3   Compliance with Laws and regulations

       The Lessee shall not cause nor permit the Vessel to be operated in any
       manner which is contrary to international law or any other law or
       regulation that is applicable to the Vessel or any member of the
       Guarantor's Group relating to the Vessel or to the exploitation or
       development, or any accumulation, of hydrocarbons and the Lessee shall
       ensure that the Vessel shall only be utilised in accordance with all
       safety requirements, codes of practice, guidance notes and the like
       from time to time in force or issued by any Safety Inspector and in
       accordance with the terms of all applicable permits and consents
       including, but not limited to, any such permit or consent from time to
       time issued by the Classification Society or any other body.  The
       Lessee shall ensure that the Vessel is operated in compliance with the
       ISM Code at all times from the date on which the ISM Code becomes
       applicable to the Vessel up to the sale of the Vessel by the Lessor, and
       that at all such times there is a valid Safety Management Certificate
       and Document of Compliance (in each case as defined in the ISM Code)
       in effect in relation to the Vessel.

12.4   Operation in accordance with insurance arrangements

       The Lessee will not use the Vessel nor cause nor permit the Vessel to
       be used or operated in any manner or for any purpose excepted from any
       insurance policy or policies or certificate or certificates of entry
       comprising the whole or part of any Insurances, or for the purpose of
       the storage of any goods of any description excepted from any such
       insurance policy or policies or certificate or certificates of entry
       and shall not do or permit to be done anything which could be expected
       to invalidate any insurance policy or certificate of entry or the
       Insurances evidenced thereby.

12.5   Alterations

       The Lessee may at any time alter any items of equipment or fit any
       additional equipment (including Excluded Property) required for the
       purpose of the operation of the Vessel and may make any alteration to
       the type or performance characteristics of the Vessel that it
       considers is necessary or desirable without impairing the safety of
       operation of the Vessel, provided that:

       (a)    if any such alteration or fitting when taken on its own or as a
              series of changes constitutes a substantial change to the
              Vessel (measured by value or by physical extent), the Lessee
              shall promptly notify the Lessor thereof in writing;

       (b)    such alterations or additional equipment shall not impair the
              safety, seaworthiness of the Vessel, prejudice the effectiveness
              of any of the Insurances or give rise to any contravention of
              any other provision of this Agreement and, without the prior
              written consent of the Lessor, they shall not materially reduce
              the value of the Vessel;

       (c)    any additional equipment fitted by the Lessee to the Vessel
              shall belong to the Lessee, who may remove such additional
              equipment at any time before the expiration of the Lease Period
              (subject to the above proviso) or earlier termination of the
              chartering of the Vessel under this Agreement.  The cost of
              fitting or removing any equipment together with the cost of
              making good any damage caused by such fitting or removal shall
              be payable by the Lessee.  The Lessee shall notify the Lessor in
              writing of any alterations to the Vessel and of all equipment
              that is fitted to the Vessel by the Lessee which, in the Lessee's
              reasonable opinion, may have a material adverse impact on the
              market value of the Vessel, within a reasonable period of such
              alterations being carried out or, as the case may be, the
              fitting or removal of such additional equipment; and

       (d)    any such additional equipment which belongs to any member of the
              Guarantor's Group which is not removed pursuant to paragraph (c)
              above prior to the expiration of the Lease Period may be sold or
              otherwise disposed of by the Lessor (subject to Clause 19.2)
              without the need for any further act by the Lessee or any other
              person.  Where that additional equipment is in addition to
              (and not in replacement of) the equipment forming part of the
              Vessel as at the Delivery Date, a sum equal to the proceeds of
              sale or other disposal of such additional equipment which has
              been sold or disposed of by the Lessor shall, subject to Clause
              28, be paid to the Lessee as soon as practicable after the
              completion of such sale or other disposal.

       The cost of fitting or removing any such additional equipment together
       with the cost of making good any damage caused by such fitting or
       removal shall be payable by the Lessee.  The Lessee shall notify the
       Lessor in writing of any material alterations to the Vessel and shall
       provide details of all that is fitted to or removed from the Vessel by
       the Lessee which, in the Lessee's reasonable opinion, may have a
       material adverse impact on the market value of the Vessel, within a
       reasonable period of such alterations being carried out, or the fitting
       or removal of such additional equipment.

12.6   Manning

       The Lessee shall be responsible for providing or procuring that there be
       provided the officers and crew (together the "Crew") on board the Vessel
       who shall remain the employees of the Lessee or the Sub-Lessee, or such
       other person as the Lessee shall engage to provide crewing services for
       the Vessel.  The Crew shall be responsible for the manning and operation
       of the Vessel on behalf of the Lessee or, as the case may be, the
       Sub-Lessee and, as between the Lessor and the Lessee, at the risk of
       the Lessee.

12.7   Expenses incidental to use and operation

       The Lessee shall, subject to the provisions of this Agreement, be
       responsible for all expenses, charges and penalties of every kind
       whatsoever incidental to the use and operation of the Vessel during the
       Lease Period and shall ensure that the Vessel is kept and maintained in
       accordance with any law, regulation, consent or other requirement from
       time to time applicable to the Vessel.

12.8   Maintenance and repair

       The Lessee shall, or shall procure that the Sub-Lessee shall, throughout
       the Lease Period and thereafter until sale of the Vessel:

       (a)    at no expense to the Lessor, maintain the Vessel (and each part
              thereof) in a good state of repair (fair wear and tear excepted),
              in efficient and safe operating condition, and in accordance
              with the Lessee's maintenance schedule and practice from time to
              time and shall keep the Vessel with the Classification with the
              Classification Society in force at all times free of notations,
              recommendations and reservations (other than where compliance
              with the terms of the relevant notation, recommendation or
              reservation is not overdue) affecting class and the Lessee shall
              ensure that the Vessel complies at all times with all applicable
              requirements recommendations and reservations of the
              Classification Society (whether resulting from a survey of the
              Vessel or not), the insurers and any applicable law, regulations
              and requirements applicable to equipment of a type similar to
              the Vessel in force at all times and shall forward to the Lessor
              on request subject to availability, copies of all certificates as
              may be required for the proper use and operation of the Vessel
              for the time being;

       (b)    procure all repairs to or replacement of any badly worn, damaged,
              broken or lost parts or equipment to be effected promptly and in
              such manner (with regard to both workmanship and quality of
              materials) as not to reduce materially the value of the Vessel
              without the prior written consent of the Lessor and the Lessee
              shall be responsible for all costs and expenses so incurred; and

       (c)    procure that (to the extent reasonably practicable) title to all
              replacement parts or equipment attached to or installed on the
              Vessel under Clause 12.8(b) shall vest (by such delivery) in the
              Lessor (and the Lessee shall, at its cost and expense procure
              that any necessary action is taken to ensure that such vesting is
              effective).

12.9   Obstruction

       The Lessee shall, or shall procure that the Sub-Lessee shall, throughout
       the Lease Period and thereafter until sale of the Vessel, pay all
       charges and expenses of every kind and nature whatsoever incidental to
       the use and operation of the Vessel under this Agreement and, if the
       Vessel or any part thereof becomes a wreck or an obstruction to
       navigation, any costs and expenses arising which may be incurred by or
       made or asserted against the Lessor in connection with or as a
       consequence of the removal or destruction of the wreck or obstruction,
       provided that the Lessee shall have the right to contest in good faith
       any such charge or expense (and no person employed to control or operate
       the Vessel shall be deemed to be a servant of the Lessor for any purpose
       whatsoever) and to this end the Lessor shall upon receipt of the
       written request from the Lessee not unreasonably refuse to lend to the
       Lessee, at the Lessee's expense, all necessary assistance in connection
       with any litigation, arbitration or other administrative proceedings to
       which the Lessee may be a party or in which the Lessee may be otherwise
       involved in connection with the contest of the validity or amount of
       such charge or expense provided that no Primary Obligor shall be
       permitted to use the Lessor's name in any such litigation, arbitration
       or other administrative proceedings unless the Lessor has given its
       express prior written consent.

12.10  Storage and Transport of Hydrocarbons

       The Lessee shall procure that, unless the Lessee has given the Lessor
       prior written notice and complied with any change in the Insurances
       reasonably required by the Lessor taking into account the prudent
       practice of owners of vessels of equivalent type and pattern of use
       to the Vessel, the Vessel shall not transport hydrocarbons or similar
       substances and the Vessel shall not store hydrocarbons or similar
       substances unless the requirements of Clause 9 have been complied with
       in all respects.

12.11  Safety and operation

       The Lessee shall, or shall procure that the Sub-Lessee shall, take such
       steps as are reasonably practicable to ensure that the Vessel and all
       constituent parts thereof will be safe and without risk to health when
       in use and that the Vessel is not operated beyond its specified or
       recommended limits or capacity.  To this end and without prejudice to the
       generality of the foregoing the Lessee shall ensure that any defects in
       the Vessel which could be or cause a danger to safety and a risk to
       health are repaired and made good so far as is reasonably practicable in
       accordance with the Lessee's normal practices.  For this purpose the
       Lessee shall cause the Vessel to be inspected regularly and its various
       systems tested provided that such inspection and testing will only be
       carried out in accordance with and at the interval specified in the
       Lessee's maintenance schedule for the Vessel or otherwise at times
       and in such manner as a prudent operator of vessels of a similar type to
       the Vessel and engaged in a similar trade would normally expect to
       carry out such inspection and testing.  The Lessee shall also take all
       reasonable steps to ensure that appropriate safety measures are adopted
       and all provisions of all applicable laws, codes and regulations
       relating to the Vessel are complied with and the Lessee shall ensure or
       procure where required by any applicable law that at all times from the
       date on which the ISM Code becomes applicable to the Vessel the Vessel
       is subject to a Safety Management System which complies in all respects
       with the ISM Code and has a valid Safety Management Certificate and
       that there is a valid Document of Compliance which is applicable to the
       Vessel.

12.12  Operational control

       The Lessor acknowledges that, as between itself and the Lessee, the
       Lessee (or, where the Vessel is subject to any Sub-Lease, the Sub-Lessee)
       shall have the full operational control of the Vessel throughout the
       Lease Period and any Extension Period, but without prejudice to the
       operation or enforcement of the covenants of the Lessee set out in this
       Agreement or to the right of the Lessor following the delivery by it of
       a Termination Notice to repossess the Vessel in accordance with Clause
       19.1.

12.13  Consents

       The Lessee shall procure that at all times during the Lease Period
       there are maintained in full force and effect all relevant
       authorisations (governmental and otherwise) and will promptly obtain any
       further authorisation in each case which are or may become necessary
       for the operational use of the Vessel or the performance by the Primary
       Obligors of their respective obligations to the Lessor under this
       Agreement and the other Lease Documents.

12.14  Good practice

       The Lessee shall ensure that in all respects the Vessel will be operated
       and maintained to comply in all material respects with all applicable
       laws in accordance with good oil field and marine practice.

12.15  Arrest and detention

       If the Vessel is at any time during the Lease Period:

       (a)    arrested, seized, taken into custody or otherwise detained by
              any court or other tribunal or by any Government Entity (other
              than by a Compulsory Acquisition or any requisition for hire or
              by reason of a Lessor's Vessel Lien); or

       (b)    subjected to distress or other legal proceedings by reason of
              any process, claim, the exercise of any rights conferred by a
              Vessel Lien or by any other action  whatsoever (other than by
              reason of a Lessor's Vessel Lien),

       the Lessee shall procure the release of the Vessel from such arrest,
       seizure, detention, distress or proceedings not later than 30 days
       after receiving notice thereof by providing bail or otherwise as the
       circumstances may require.  The Lessor acknowledges and accepts that
       the Lessee shall, unless and until a Relevant Event shall have occurred
       which is continuing, have the sole right to contest any litigation,
       arbitration or administrative proceedings in respect of the foregoing
       and the Lessor shall, upon receipt of the written request from the
       Lessee and being secured to the Lessor's satisfaction against its costs
       and expenses of so doing, not unreasonably refuse to render all
       necessary assistance as the Lessee may reasonably require in connection
       therewith, provided that the Lessor's name may not be used in any manner
       in any such litigation, arbitration or other proceedings unless the
       Lessor has given its express prior written consent.

12.16  Registration

       (a)    The Lessee shall not do and shall procure that no other member of
              the Guarantor's Group shall do anything or permit anything to be
              done whereby the registration of the Vessel in the Shipping
              Register under the laws of the Flag State may be forfeited or
              imperilled.

       (b)    The Lessee shall comply with and procure the compliance with the
              provisions of all applicable laws and regulations necessary to
              maintain the registration of the Vessel in the Shipping Register
              in the Flag State.

       (c)    The Lessee shall be entitled to implement a change of the
              registration of the Vessel subject to the prior written consent
              of the Lessor, such consent not to be unreasonably withheld
              provided that no such change may be permitted which could
              reasonably be expected to give rise to a breach of Clause
              11.7(c).  The Lessor agrees from time to time, at the Lessee's
              expense, to do and perform such acts and execute and deliver such
              instruments as may be reasonably requested by the Lessee in order
              to implement any such change.

       (d)    Not later than six (6) months after the Delivery Date the Lessee
              shall deliver to the Lessor a certified extract in the English
              language from the register of the Flag State, evidencing the
              definitive registration of the Vessel.

12.17  Notice of lease

       (a)    The Lessee shall place and keep or procure that there is placed
              and kept prominently displayed in the control room of the Vessel
              throughout the Lease Period a framed printed notice in plain type
              in English of such size that the paragraph of reading matter
              shall cover a space of not less than six (6) inches wide by nine
              (9) inches high, substantially reading as follows:

              "NOTICE OF LEASE"

              "This Vessel is the property of BMBF (NO.12) Limited (the
              "Lessor") and is subject to a head lease granted by the Lessor
              in favour of Global Marine International Drilling Corporation
              (the "Lessee ").  This Vessel is subject to a sub-lease granted
              by GMIDC in favour of Global Marine U.K. Limited (the
              "Sub-Lessee").

              Neither the Lessee, the Sub-Lessee, nor any charterer, service
              contractor, manager, nor any servant or agent of any thereof have
              any authority whatsoever to contract on behalf of the Lessor or
              to pledge the credit of the Lessor or the involvement of the
              Lessor in any liability whatsoever and none of the Lessee,
              the Sub-Lessee, the Contractor, any manager of this vessel and
              any other person has any right, power or authority to create,
              incur or permit to be imposed upon this vessel any lien
              whatsoever except for general average, crew's wages or salvage."

              The Lessee undertakes that it shall not place or permit to be
              placed in or on the Vessel any other notice dealing with the
              rights of any person without the prior written consent of the
              Lessor.

       (b)    The Lessee undertakes to procure that the notice specified in
              Clause 12.17(a) is not removed or covered up.

       (c)    The Lessee shall, or shall procure that the Sub-Lessee shall,
              throughout the Lease Period and thereafter until sale of the
              Vessel, carry a true and complete copy of this Agreement with
              the Vessel's papers and on demand exhibit the same to any person
              having business with the Vessel which might reasonably be
              considered to give rise to any Vessel Lien other than any
              Permitted Vessel Lien.

12.18  Service Contractor's Oil Pollution Indemnity

       (a)    The Lessee shall ensure that:

              (i)    the party (the "Exxon Party") entering into the Exxon
                     Contract with the Sub-Lessee shall be a member of the
                     Exxon group of companies;

              (ii)   not later than the Delivery Date, the Lessor shall have
                     received:

                     (A)    an original of the Exxon Contract, duly executed
                            by the Exxon Party and the Sub-Lessee (or a
                            certified copy thereof if the confirmation
                            relating to certified copies is given as
                            referred to in sub-paragraph (ii)(B) below),

                     (B)    a legal opinion from Watson, Farley & Williams,
                            New York counsel, addressed to the Lessor, dated
                            the Delivery Date, confirming that, under the laws
                            of Texas and the federal laws of the USA, the
                            pollution indemnity referred to in paragraph
                            (A) above may be directly enforced against the
                            Exxon Party by the Lessor and each Indemnified
                            Person in all respects in the same manner as
                            if the Lessor or such Indemnified Person were
                            itself a party to such contract (including
                            confirmation that such direct enforcement may be
                            effected on the basis of a certified copy of the
                            Exxon Contract without the need for an original
                            thereof).

       (b)    The Lessee shall use all reasonable efforts and endeavours to (i)
              ensure that the Exxon Contract contains a pollution indemnity in
              substantially the form set out in Schedule 7 and on the same
              terms as that given to the Sub-Lessee and (ii) procure that the
              Lessor (on behalf of itself and each of the Indemnified
              Persons) receives from each subsequent Service Contractor the
              benefit of an indemnity or indemnities with respect to oil
              pollution in same form as the Lessor is entitled to receive under
              the foregoing provisions from the Exxon Party.

       (c)    The Lessee shall provide to the Lessor on or shortly prior to,
              or, if in the Lessee's reasonable opinion that is impractical, as
              soon as practical after, the Sub-Lessee entering into a Service
              Contract (other than with the Initial Service Contractor) a
              certificate executed by a duly authorised officer of the Lessee,
              certifying that:

              (i)    the Sub-Lessee or, if applicable and subject to the terms
                     of this Agreement, the Lessee is about to enter into or,
                     as the case may be, has entered into a Service Contract;
                     and

              (ii)   either (A) an original and complete counterpart of such
                     Service Contract is attached, and the same contains an
                     indemnity or indemnities with respect to oil pollution
                     for the benefit of the Indemnified Persons (either
                     expressly or by an indemnity or indemnities in favour of
                     a class of persons within which the Indemnified Persons
                     fall) by operation of the third party beneficiary
                     doctrine under the law governing the Service Contract and
                     that such indemnity is in the same terms as the indemnity
                     given in favour of the Sub-Lessee or (B) that the Lessee
                     complied with its obligations under sub-paragraph (b)
                     above but that the relevant Service Contractor nonetheless
                     refused to issue any such indemnity or indemnities.

              Where (ii)(A) applies, such certificate shall be accompanied by
              an original counterpart of the entire Service Contract referred
              to (or by a certified copy thereof if the confirmation relating
              to certified copies is provided as referred to in Clause
              12.18(a)(ii)(B) above).

       (d)    Not less than two months prior to the expiry of the Exxon
              Contract, and as soon as practicable upon any earlier termination
              of the Exxon Contract, the Lessee shall notify the Lessor of such
              termination or expiry.

12.19  Inspection

12.19.1Without imposing or implying any obligation on the Lessor, the Lessor
       may inspect, and may instruct an agent on its behalf, at any reasonable
       time upon reasonable notice, to inspect the Vessel.

12.19.2The costs of such inspection shall be borne by:

       (a)    the Lessor if, at the time of the inspection, no Relevant Event
              has occurred which is continuing and such inspection reveals
              that all provisions of this Agreement with regard to the
              operation and maintenance of the Vessel are being substantially
              complied with; and

       (b)    the Lessee in each other case.

12.19.3Provided no Relevant Event has occurred which is continuing, the Lessor
       agrees that no such inspection shall interfere with the operation,
       maintenance or repair of the Vessel.  No more than one inspection shall
       take place in any period of 12 months unless the Lessor has grounds for
       believing that any of the requirements of this Lease are not being
       complied with in all respects.

12.19.4The Lessor also agrees that it or its agent shall comply with all
       safety, fire and operational regulations and instructions which may be
       given on the occasion of any inspection.

13.    SUB-LEASING AND SERVICE CONTRACTS

13.1   The Lessee shall procure that the Vessel is not, without the prior
       written consent of the Lessor, sub-leased or chartered to any person
       other than to the Sub-Lessee on the terms of the Initial Sub-Lease or
       in accordance with Clause 13.2 and, without limiting the foregoing,
       such terms shall provide that the Initial Sub-Lease shall automatically
       terminate on the date on which the Lessee is required to redeliver the
       Vessel under Clause 19.  The Lessee shall procure that there is no
       further sub-leasing or parting with possession of the Vessel by the
       Sub-Lessee and that at all times during the Lease Period the Vessel is
       under the management and control of the Sub-Lessee.

13.2   The Lessee may not sub-lease, charter or otherwise part with possession
       of the Vessel except under the Initial Sub-Lease or otherwise in
       accordance with each of the following requirements:

       (i)   the sub-lessee must be, and at all times during the period of the
             sub-lease remain, either (a) a member of the Guarantor's Group or
             (b) another party which has been consented to in writing by the
             Lessor for these purposes.  The Lessee acknowledges that if during
             the term of any sub-lease the condition set out in this
             paragraph (i) shall cease to be fulfilled, such failure shall
             constitute a Mandatory Termination Event in accordance with
             Clause 21.2;

       (ii)  the rights of the sub-lessee under the sub-lease must be
             effectively subject and subordinate to the rights and interests of
             the Lessor in the Vessel and under this Agreement, and the
             sub-lease must provide that the leasing of the Vessel thereunder
             shall automatically terminate upon the date the Lessee is required
             to redeliver the Vessel to the Lessor under Clause 19;

       (iii) the sub-lessee must provide the Lessor directly with a written
             acknowledgement of the matters referred to in paragraph (ii) above
             and an undertaking to redeliver the Vessel to the Lessor as
             contemplated in paragraph (ii) above upon any termination
             of the Lease Period whilst the Vessel is subject to the sub-lease,
             without exercising any Vessel Lien over any part of the Vessel;

       (iv)  no sub-leasing shall be permitted which results in a contravention
             of Clause 11.7(c);

       (v)   any sub-lease must be on terms which are not inconsistent with
             the terms of this Agreement and do not adversely affect the rights
             of the Lessor hereunder or in relation to the Vessel, and shall
             not permit further sub-sub-leasing.

13.3   In the event that any Sub-Lessee performs any act to be performed by
       the Lessee hereunder which, if it had been performed by the Lessee, it
       would fully satisfy an obligation of the Lessee to the Lessor hereunder,
       such obligation of the Lessee shall be deemed satisfied as between the
       Lessor and the Lessee to the extent so performed by such Sub-Lessee.

14.    BENEFIT OF THIRD PARTY OBLIGATIONS

14.1   The Lessor agrees that, at the request and expense of the Lessee, it
       will enter into from time to time an instrument or instruments of
       assignment in favour of the Lessee (in such form as the Lessee may
       reasonably specify) under which it will assign to the Lessee all or
       any of (i) all the Lessor's right, title and interest in and to all
       warranties and indemnities given by the Builder (whether in relation to
       the OFE (as defined in the Novation Agreement) or any other part of the
       Vessel) to the extent that the same are then vested in the Lessor and
       are capable of assignment, each OFE Supplier and each other manufacturer,
       repairer or supplier of any part of the Vessel, and (ii) all right,
       title and interest in and to all other claims and rights or action
       whatsoever of the Lessor against the Builder under the Shipbuilding
       Contract, each OFE Supplier and all guarantees, letters of credit and
       other security for the Builder's, each OFE Supplier's and each other
       manufacturer's, repairer's or supplier's obligations to the extent that
       the same have been vested in the Lessor by the Shipbuilding Contract or
       otherwise and are capable or assignment.

14.2   The Lessor will from time to time, at the request and expense of the
       Lessee, give notice of any of such assignment to all relevant parties,
       each such notice to be in such form as the Lessee may reasonably
       specify.

14.3   The Lessor shall, at the request and expense of the Lessee, and subject
       to the Lessor being indemnified and secured to its satisfaction against
       all potential costs and expenses to be incurred, take all such actions
       as the Lessee may reasonably require in order to give full effect to
       any such assignment.  The Lessee shall be entitled to take action in
       the Lessor's name in relation to any disputes with the Builder, but not
       otherwise, subject to Clause 24.4, and such entitlement shall be
       subject to the following matters:

       (i)    the Lessee shall keep the Lessor fully informed as to the conduct
              of such disputes and shall give timely notice to the lessor of
              any meetings with Counsel or with the Builder or any attendance
              at court, and the Lessor shall be entitled to attend any such
              meetings;

       (ii)   the Lessee shall have due regard to the Lessor's wishes in
              relation to the conduct of such dispute in relation to the
              interest of the lessor and each member of the Lessor Group in
              preserving the Lessor's and the Lessor Group's reputation as
              financial institutions and their respective business interests
              and customer relationships; and

       (iii)  notwithstanding the above, the Lessor may at any time notify the
              Lessee that the Lessor is of the opinion that the continuance of
              such dispute in the name of the Lessor is contrary to the
              Lessor's or any member of the Lessor Group's reputation as
              financial institutions or the business interests or customer
              relations of any of them.  A certificate signed by a director of
              the Lessor shall be conclusive as to the correctness of such
              opinion.  If the Lessor so notifies the Lessee, the Lessee shall
              forthwith cease to be entitled to conduct such dispute in the
              name of the Lessor.

15.    RISK

       Throughout the Lease Period and until redelivery of the Vessel in
       accordance with Clause 19.1 (Re-delivery of the Vessel), the Vessel
       shall be in every respect at the risk of the Lessee.  The Lessee shall
       bear all risks howsoever arising whether of navigation of the
       Vessel or the operation or maintenance of the Vessel (or any part
       thereof) or otherwise.  The Lessee agrees that the Lessor shall not be
       liable for any liability, claim, loss, damage or expense of any kind or
       nature caused directly or indirectly by the Vessel or any part
       thereof or any inadequacy thereof for any purpose or any deficiency or
       defect therein or the use or performance thereof or any repairs or
       servicing thereto or any delay in providing or failure to provide any
       thereof or any interruption or loss of service or use thereof or any
       loss of business or other consequential damage or any damage whatsoever
       and howsoever caused or any other matter which but for this provision
       might operate to frustrate this Agreement, save for direct losses and
       expenses suffered or incurred by the Lessee (including any losses and
       expense against which the Lessee is obliged to indemnify any
       third party irrespective of any limit on the right of recourse by that
       third party to the Lessee or its assets) which result solely from a
       breach by the Lessor of its express and specific obligations under the
       Lease Documents to which it is party.

16.    REQUISITION FOR HIRE

16.1   If the Vessel is requisitioned for hire by any Government Entity during
       the Lease Period, then subject to Clause 10 and to any other provision
       for early termination of the leasing of the Vessel (pursuant to a
       Mandatory Termination Event or otherwise), the leasing of the Vessel
       shall continue in full force and effect for the remainder of the Lease
       Period and the Lessee shall remain fully responsible for the due
       compliance with all its obligations under this Agreement other than in
       respect of provisions which the Lessee is precluded from performing as
       a result of such requisition.

16.2   The Lessee shall during the Lease Period be entitled to all requisition
       hire paid to the Lessor or to the Lessee by such Government Entity or
       other competent authority on account of such requisition in respect of
       the Vessel.  Following the expiration or earlier termination of the
       Lease Period, the Lessee shall pay to the Lessor forthwith upon receipt
       of all requisition hire in respect of the Vessel received by it which
       relates to any period after the end of the Lease Period and until such
       payment shall hold such moneys received by it on trust for the Lessor.

16.3   The Lessee shall be under no liability to the Lessor in respect of any
       change in the structure, state and condition of the Vessel in so far as
       such change is due to the manner in which the Vessel has been used or
       treated or to the events that have occurred during the period of
       requisition.  Nonetheless the Lessee shall ensure that any compensation
       payable by the requisitioning authority in respect of such change shall,
       unless the Lessor otherwise agrees in writing:

       (a)    if relating to any period after the end of the Lease Period be
              paid to the Lessor and until payment be held on trust for the
              Lessor; and

       (b)    otherwise be retained by the Lessee,

       and, in each such case, applied in accordance with Clause 16.4 or
       Clause 16.5 (as applicable).

16.4   Any such compensation as is referred to in Clause 16.3 which relates to
       any period prior to the end of the Lease Period shall be applied:

       (a)    if received and permitted to be retained by the Lessee pursuant
              to Clause 16.3, by the Lessee as it thinks fit;

       (b)    if received by the Lessor, by the Lessor in payment to the Lessee.

16.5   Any such compensation as is referred to in Clause 16.3 which relates to
       any period after the end of the Lease Period shall, be applied:

       (a)    first in reimbursement of the Lessee or, as the case may be, in
              direct payment, for any survey costs incurred in connection with
              any re-delivery survey required by the Lessor pursuant to Clause
              19.1 (re-delivery of the Vessel);

       (b)    secondly by the Lessor in reimbursement of the Lessee of any
              amounts expended by the Lessee in or towards restoring the Vessel
              (so far as is possible) to the condition which it was required to
              be in hereunder at the time the requisition took place or, as the
              case may be, in making direct payment to any relevant shipyard or
              other repairer or supplier; or

       (c)    thirdly provided that the Vessel has at such time (so far as is
              possible) been restored to the condition which it was required to
              be in hereunder at the time the requisition took place, in
              retention by the Lessor of any surplus until the completion of
              sale of the Vessel at which time such surplus shall be aggregated
              with the moneys received from the purchaser of the Vessel and
              shall form part of the Proceeds of Sale.

16.6   In the event that the Vessel shall at the end of the Lease Period for
       any reason whatsoever be under requisition for hire the provisions of
       this Agreement in respect of re-delivery and sale of the Vessel shall
       unless the Lessor otherwise agrees in writing apply at the end of the
       period of requisition for hire regardless that the Lease Period shall
       have expired before the end of the requisition period.

17.    SALVAGE

       All salvage and towage and all proceeds from derelicts shall, subject to
       the Lessor's prior right (if any Relevant Event has occurred and is
       continuing) to retain therefrom any sums which may be due from the
       Lessee to the Lessor under this Agreement be for the Lessee's benefit
       and the cost of repairing damage occasioned thereby shall be borne by
       the Lessee.

18.    TITLE AND VESSEL LIENS

18.1   Title

       During the Lease Period the Vessel shall at all times be the property of
       and belong to the Lessor.  Nothing in the Lease Documents shall have the
       effect of or be deemed to have the effect of passing title or beneficial
       ownership of the Vessel or any part thereof to the Lessee or the
       Sub-Lessee.  For the avoidance of doubt, it is expressly agreed that,
       save for the Lessor's Mortgage none of the Lessee or the Sub-Lessee
       shall, as against the Lessor, have an option or right to acquire title
       to or any proprietary right or interest in or to all or any of the
       Vessel.

18.2   Vessel Liens

       The Lessee shall not and shall procure that no member of the Guarantor
       Group shall (save as provided in Clause 19.2(e) (Sale of the Vessel) or
       pursuant to the Lease Documents) sell nor purport to sell the Vessel or
       any part thereof, nor create, incur or permit to arise or be imposed on
       the Vessel any Vessel Lien, other than Permitted Vessel Liens.

19.RE-DELIVERY AND SALE OF THE VESSEL

19.1Re-delivery of the Vessel

       (a)    Except where a sale of the Vessel has been effected on the
              required date for redelivery pursuant to Clause 19.2, the event
              of a Total Loss (other than as provided in Clause 10.7 (Notice of
              abandonment), in which event Clause 19.1(c) shall apply) and
              subject to the provisions of Clause 16.6 and sub-paragraph (d)
              below, the Lessee shall at the end of the Lease Period re-deliver
              the Vessel together with all certificates relating to the Vessel
              to the Lessor free of all Vessel Liens (other than Vessel Liens
              falling within paragraphs (i), (ii), or (v) of the definition of
              Permitted Vessel Liens), and the Lessor shall accept such
              re-delivery, at such nearby safe port as the Lessor may require.
              Subject to the provisions of Clause 16.5, the Lessee shall at its
              expense before such re-delivery make all such repairs and do all
              such work as may be necessary so that the Vessel at the date of
              re-delivery shall be:

              (i)    unless otherwise agreed by the Lessor in writing, in such
                     state of repair and operating condition as it is required
                     to be maintained in accordance with the provisions of this
                     Agreement, fair wear and tear and changes and alterations
                     properly made by the Lessee as permitted under this
                     Agreement excepted; and

              (ii)   with all equipment, fittings, spare and replacement parts
                     installed in or on, or which are attached to, or which are
                     part of the Vessel in accordance with this Agreement other
                     than Excluded Property which was entitled to be (and was)
                     removed prior to re-delivery in accordance with Clause
                     12.5 (Alterations).

              The cost of satisfying the requirements specified in paragraphs
              (i) to (iii) above and remedying any defects or deficiencies
              shall be borne by the Lessee or the Lessee shall pay to the
              Lessor the cost of effecting the same.

       (b)    At or about the time of re-delivery following a termination of
              the leasing of the Vessel pursuant to Clause 21.1 (termination
              events), Clause 21.2 (mandatory events) or Clause 21.3
              (termination of the Sub-Lease) or following the end of a
              period of requisition for hire which ends after the expiration of
              the Lease Period, a survey shall, if the Lessor (acting
              reasonably) so requires, be made to determine the state and
              condition of the Vessel.  In that event, the Lessee and the
              Lessor shall each appoint surveyors to be present at such survey
              and the surveyors present shall determine the condition of the
              Vessel and shall state the repairs or work necessary to place the
              Vessel at the date of re-delivery in the structure, state and
              condition required to demonstrate compliance by the Lessee
              with the repair and maintenance covenants contained in this
              Agreement.  If the said surveyors disagree they shall refer the
              matter to a senior surveyor of the Classification Society whose
              decision shall be final and binding on the parties hereto.
              All reasonable costs occasioned by any such survey including the
              costs of the said surveyors appointed by the Lessee and the
              Lessor and, if appointed, the costs of the senior surveyor of
              the Classification Society shall be payable by the Lessee, but
              if the Vessel is found by such senior surveyor to be in the
              condition provided for in this Agreement, fair wear and tear
              alone and changes and alterations properly made by the Lessee
              as permitted under this Agreement excepted, such reasonable
              costs shall be payable by the Lessor.  If the Lessee
              fails to appoint a surveyor as specified, the survey shall be
              conducted by the Lessor's appointee alone and references to the
              "senior surveyor" in this Clause shall be ignored.

       (c)    In the event of a Total Loss to which Clause 10.9 applies, the
              Lessee shall, at the Lessee's cost and expense, re-deliver the
              Vessel and all Surviving Parts to the Lessor at such location
              and upon such other terms and conditions as the Lessor and the
              Lessee may agree at such time.
      
       (d)    Notwithstanding sub-paragraph (a) above, the Lessee may retain
              possession of the Vessel following the end of the Lease Period
              for the duration of the Extension Period (as defined below)
              subject to the following conditions:

              (1)    the Lease Period has not expired by effluxion of time (or
                     by reason of the non-renewal of any Secondary Period);

              (2)    the Vessel has not become a Total Loss;

              (3)    the Lessee has provided the Lessor with confirmation from
                     the relevant insurers that the Insurances required under
                     Clause 9 are and (subject to insurer's usual rights of
                     cancellation) will throughout a period specified by the
                     relevant insurers (being the relevant expiry date of the
                     relevant insurances, referred to as the "Next Expiry
                     Date") remain in full force and effect and in full
                     compliance with Clause 9 notwithstanding the occurrence
                     of the events which caused the Lease Period to terminate;
                     and

              (4)    no Insolvency Event has occurred in relation to the Lessee
                     or the Guarantor.

       (e)    Throughout any Extension Period the Lessee shall comply with the
              requirements of Clauses 9, 10, 11, 12, 13, 14, 15, 16, 17 and 18
              as if the Lease Period had not ended and for the avoidance of
              doubt the provisions of Clauses 24, 25 and 26 shall continue to
              apply in respect of any Extension Period.  The Lessee shall
              comply with the requirements of Clause 19.1(a) and (b) forthwith
              upon the termination or expiry of the Extension Period.

       (f)    "Extension Period" means the period commencing on the date on
              which a Termination Notice has been served and ending on the
              earlier of:

              (i)    the date falling ninety (90) days after service of the
                     Termination Notice; or

              (ii)   the date falling ninety (90) days after service of any
                     notice to remedy served by the Lessor as contemplated by
                     Clause 21; or

              (iii)  the date of any Sale or other disposal of the Vessel by
                     the Lessor; or

              (iv)   where an Insolvency Event has occurred in relation to the
                     Lessee or the Guarantor, or where the requirements of
                     Clause 9.1(a)(ii) cease to be complied with at any time,
                     the date of any notice served by the Lessor on the Lessee
                     terminating the Extension Period; or

              (v)    the Next Expiry Date.

19.2    Sale of the Vessel

        (a)   Upon any termination of the leasing of the Vessel (or, as the
              case may be, the right of the Lessee to take the Vessel on lease)
              under this Agreement through effluxion of time or otherwise (but
              in the case of a Total Loss, only to the extent that the Lessor
              is free to dispose of the same) the Vessel shall be sold in
              accordance with the remaining provisions of this Clause 19.2.

        (b)   To the extent of its entitlement to act as the Lessor's sales
              agent in accordance with paragraph (d) below, the Lessee shall
              have the right to decide the means, timing and terms of disposal
              of the Vessel subject always to compliance with paragraphs (c)
              and (d) below and all the other provisions of this Agreement.

        (c)   Any sale pursuant to this Clause 19 shall comply with the
              following conditions:

              (i)    the sale shall be at a cash price payable by the purchaser
                     in full on completion in Dollars or such other currency
                     as the Lessor may agree (such agreement not to be
                     unreasonably withheld) direct to the Lessor;

              (ii)   the sale shall be at a price which (excluding VAT or other
                     similar taxes wheresoever and howsoever arising) shall be
                     not less than open market value of the Vessel;

              (iii)  the sale may be to any person other than:

                     (A)    the Lessee; or

                     (B)    the Sub-Lessee; or

                     (C)    any person who is purchasing on behalf of or in
                            trust for the Lessee or the Sub-Lessee; or

                     (D)    any person who is purchasing as part of an
                            arrangement under which title will or may pass to
                            any of the persons mentioned in (A), (B) or (C)
                            above;

              (iv)   the sale shall be made without any condition,
                     representation, recourse or warranty whatsoever to or on
                     the part of the Lessor or any member of the Lessor's Group
                     upon terms which do not otherwise expose the Lessor to any
                     liability, including but not limited to any Tax Liability
                     (excluding Corporation Tax chargeable on capital gains and
                     any Tax Liability from a disposal for capital allowances
                     purposes), which it would not have had but for execution
                     of the relevant sale documents (save for liability for
                     breach of the warranty set out in this Clause 19.2(c)) and
                     otherwise without any representation, recourse or warranty
                     whatsoever to or on the part of the Lessor other than a
                     warranty that the Lessor shall pass such title to the
                     Vessel as the Lessor has acquired pursuant to the
                     Shipbuilding Contract and the Novation Agreement and this
                     Agreement subject to all Vessel Liens, save for Lessor's
                     Vessel Liens;

              (v)    a sale shall be on an "as is, where is and with all faults"
                     basis and, unless the Lessor otherwise agrees, on terms
                     that risk in the Vessel shall pass to the purchaser on
                     entry into of the contract for sale, and the sale
                     contract shall be governed by the laws of England;

              (vi)   a sale shall exclude, so far as permitted by the laws of
                     England and any other laws governing or applicable to the
                     sale of the Vessel, all liability of the Lessor, in
                     contract or tort, in relation to the Vessel to the same
                     extent as such liabilities are excluded by Clause 5
                     (disclaimers and exclusions) but save for the warranty
                     given by the Lessor pursuant to Clause 19.2(d)(iv) above;
                     and

              (vii)  if the Vessel is at the date of entry into any contract
                     for the sale of the Vessel subject to any requisition for
                     hire, the sale shall be subject to such requisition.

              The Lessee shall, whether or not the Vessel is sold through the
              Lessee as sales agent pursuant to Clause 19.2(e) and whether or
              not the Vessel is in the possession of the Lessee, the Sub-Lessee
              or the Lessor, indemnify the Lessor on demand and keep the Lessor
              indemnified on a full indemnity basis (subject to Clause 24.2
              (exclusions from general indemnity) against all Losses from
              time to time suffered or incurred by or made against the Lessor
              which are connected with the repossession, re-delivery, storage,
              maintenance, protection, sale or attempted sale of the Vessel.

       (d)    the Lessee is hereby irrevocably appointed by the Lessor as its
              sole and exclusive marketing agent for the Vessel (including all
              equipment referred to in Clause 12.5(d)), any sale of the Vessel
              to be completed only at the time of or following the expiration
              or earlier termination of the leasing of (or the obligation of
              the Lessor to lease) the Vessel pursuant to this Agreement,
              PROVIDED THAT:

              (i)    such agency shall terminate if no sale has been completed
                     within one year of the expiration or earlier termination
                     of the Lease Period (or such longer period as the Lessor
                     may agree in writing); and

              (ii)   the Lessee shall keep the Lessor fully informed at all
                     times of all actions taken in the capacity as the Lessor's
                     agent under this Clause, and in particular the Lessee
                     shall promptly notify the Lessor of all offers received
                     for the purchase of the Vessel, giving full details of
                     the terms of the offer and the party making the offer;

              (iii)  the authority of the Lessee is limited to the extent that
                     the Lessee shall not be authorised to sell the Vessel or
                     any part thereof or to approve or execute on behalf of the
                     Lessor any document (including, but not limited to, any
                     term sheet or heads of terms) relating to the sale of the
                     Vessel, but the Lessor agrees that it shall, at the
                     Lessee's cost and expense upon reasonable notice, execute
                     such agreement as may be requested for the sale of the
                     Vessel provided that the same complies with the provisions
                     of Clause 19.2(c).

       (e)    The Lessor is hereby appointed and constituted by the Lessee as
              the Lessee's attorney-in-fact for the Lessee and in the Lessee's
              name and place to take all steps necessary to obtain
              deregistration of the Vessel from the applicable registry of a
              Flag State, provided that:

              (i)    such power shall not be exercised until the termination of
                     the leasing of the Vessel under and in accordance with
                     this Agreement; and

              (ii)   (for the avoidance of doubt) shall be without prejudice to
                     any rights of the Lessee as mortgagee of the Vessel,

              and provided further that no registry or other third party
              relying on any action taken by the Lessor purporting to act
              pursuant to such power shall be concerned to ascertain whether
              the conditions set out in sub-paragraph (i) have been satisfied.

20.   PROCEEDS OF SALE

20.1  Proceeds of Sale

       The "Proceeds of Sale" of the Vessel shall be (i) the total proceeds of
       sale thereof (excluding Value Added Tax and other similar taxes
       wheresoever and howsoever arising) unconditionally and irrevocably 
       received and retained by the Lessor, including any compensation received
       by the Lessor for any breach of any contract for the sale of the
       Vessel; or (ii) any capital sums unconditionally received by the Lessor,
       before Delivery, by way of purchase price for the Vessel (or
       compensation for the loss of the Lessor's rights under the Novation
       Agreement) but excluding any sums received by the Lessor pursuant to
       the Put-Option Agreement.  If the Vessel is sold (or such compensation
       is received) in a currency other than Sterling, the "Proceeds of Sale"
       thereof shall be the amount of Sterling which the Lessor is able to
       purchase with the foreign currency by reference to the spot rate of
       exchange of the Bank for purchasing Sterling with such currency which
       it receives for such sale on the day of receipt of such foreign currency
       or as soon thereafter as foreign exchange transactions are able to be
       made in the City of London.  The "Net Proceeds of Sale" shall be the
       balance of the Proceeds of Sale after deduction of broker's commission
       and all other costs and expenses reasonably incurred by the Lessor in
       connection with the sale.

20.2   Application of Proceeds of Sale

       Following the termination or expiration of the leasing of the Vessel and
       if the completion of a sale or other disposition of the Vessel or the
       rights and obligations of the Lessor under the Novation Agreement takes
       place, the Net Proceeds of Sale (or any part thereof) shall be applied
       by the Lessor as soon as practicable after receipt, but in any event not
       later than the next Business Day, as follows:

       (i)    firstly, in retention by the Lessor of an amount equal to zero
              point five per cent.  (0.5%) of the amount by which the Net
              Proceeds of Sale exceed the Termination Payment;

       (ii)   secondly, the Lessor shall pay an amount equal to the balance, if
              any, of such money to the Lessee by way of rebate of Rent.

21.    TERMINATION PROVISIONS

21.1   Termination Events

       The Lessor and the Lessee agree that it is a fundamental term and
       condition of this Agreement that none of the following events shall
       occur at any time after the date of this Agreement, and that the
       occurrence of any of the following events shall constitute a
       repudiation of this Agreement by the Lessee:

       (a)    any Primary Obligor fails to pay any amount due to the Lessor or
              any agent or trustee for the account of the Lessor under this
              Agreement or any other Lease Document on the due date and such
              default is not remedied within five (5) Houston Business Days
              after the Lessee or such Primary Obligor is notified by
              the Lessor of such non-payment; or

       (b)    any of the following events occur:

              (1)    the Lessee fails to obtain and/or maintain or procure that
                     there are obtained and maintained the Insurances or if any
                     insurer in respect of any of such insurances cancels any
                     of such insurances or disclaims liability by reason, in
                     either case, of mis-statement in any proposal for any of
                     such insurances or for any other failure or default on the
                     part of any person (other than the Lessor), and, in the
                     case only of the insurances required to be maintained
                     pursuant to Clause 9.1(a)(i) the Lessee shall fail within
                     ten (10) Business Days to obtain or procure that
                     replacement Insurances complying in all respects with
                     Clause 9 are effected, or

              (2)    the Lessor gives notice pursuant to Clause 9.1(b)
                     requiring an increase in the amount insured in respect of
                     oil pollution liability risks in accordance with
                     Clause 9.1(a)(ii) and such insurances are not increased
                     within ten (10) Business Days, or such later date as
                     provided for in the case of Clause 9.1(a)(ii)(y) or Clause
                     9.1(a)(ii)(z) of the Lessor serving such notice on the
                     Lessee pursuant to Clause 9.1(b); or

       (c)    the provisions of Clause 9 (financial covenants) of the Guarantee
              are not complied with at any time and such non-compliance is not
              remedied within a period of sixty (60) days of the Lessor serving
              notice on the Guarantor or the Lessee requiring such remedy; or
       
       (d)    the provisions of Clause 22 (Security) are not complied with at
              any time; or

       (e)    the Lessee fails to comply with any obligation imposed by
              Clause 6.3, Clause 21.2 or Clause 21.5 on the required date; or

       (f)    any Primary Obligor fails to observe or perform any of its
              obligations to the Lessor under any Lease Document to which it
              is party (other than an obligation referred to in paragraphs
              21.1(a), 21.1(b), 21.1(c), 21.1(d) or 21.1(e) above and
              does not remedy the failure within thirty (30) days of receipt
              by such Primary Obligor of a notice from the Lessor notifying
              such Primary Obligor of the relevant failure and requiring the
              failure to be remedied; or

       (g)    an Insolvency Event occurs in relation to any Primary Obligor
              and (x) in the case only of the Put-Option Party, arrangements
              satisfactory to the Lessor have not been implemented within
              thirty (30) days of such event for another member of the
              Guarantor's Group (in relation to which no Insolvency Event
              has occurred) to assume all the obligations of the Put-Option
              Party under the Lease Documents and (y) in the case only of the
              Sub-Lessee, arrangements satisfactory to the Lessor have not
              been implemented within thirty (30) days of such event (by means
              of another member of the Guarantor's Group (in relation
              to which no Insolvency Event has occurred) assuming all the
              rights and obligations of the Sub-Lessee under the Sub-Lease or
              entering into a replacement sub-lease in compliance with
              Clause 13 or otherwise) so as to ensure that the requirements of
              Clause 11.7(c) are satisfied at all times during the Lease
              Period; or

       (h)    the Guarantor, the Lessee or any Primary Obligor which is the
              Sub-Lessee for the time  being suspends or ceases or threatens
              in writing to suspend or cease to carry on its business and, in
              the case only of the Sub-Lessee, arrangements satisfactory to
              the Lessor as mentioned in Clause 21.1(g)(y) above have not
              been implemented within thirty (30) days; or

       (i)    any Indebtedness of any Primary Obligor or any Material
              Subsidiary in an aggregate amount of at least twenty-five million
              Dollars ($25,000,000) becomes due before its stated maturity by
              reason of a breach or event of default (howsoever described), or
              any Indebtedness of any Primary Obligor in an aggregate amount of
              at least twenty five million Dollars ($25,000,000) is not
              discharged at maturity or when called; or

       (j)    any representation or warranty made to the Lessor by any Primary
              Obligor in any Lease Document (other than the Sub-Lease) or, in
              each case, in any certificate, opinion or statement delivered or
              made by any Primary Obligor (or any officer of such person in
              each case) to the Lessor pursuant thereto proves to have been
              incorrect or inaccurate when made or when deemed to be repeated
              pursuant to the terms of the relevant Lease Document and the
              incorrectness or inaccuracy (a) if, in the Lessor's reasonable
              opinion, capable of remedy, has not been remedied within twenty
              (20) Business Days of a notice from the Lessor to the Lessee
              requiring such remedy and (b) gives rise to a material adverse
              effect on the rights or interests of the Lessor under or
              pursuant to this Agreement and the Lease Documents; or

       (k)    any Lease Document (excluding the Service Contract and the
              Sub-Lease) does not or ceases to constitute the legal, valid,
              binding and enforceable obligation in accordance with its terms
              of each Security Party which is party to it by reason of any
              breach of any Lease Document by a Primary Obligor or by
              reason of any representation or warranty of any Primary Obligor
              set out in any Lease Document (including each Payment Agreement
              but excluding the Service Contract and the Sub-Lease) being
              incorrect in a manner which gives rise to a material adverse
              effect on the rights and interests of the Lessor under the Lease
              Documents and, except in the case of the Guarantee, if the same
              is in the Lessor's reasonable opinion capable of remedy, has not
              been remedied within twenty (20) Business Days of a notice from
              the Lessor to the Lessee requiring such remedy; or

       (l)    the Safety Inspector or any successor body having the supervisory
              responsibility exercised as at the date of this Agreement by the
              Safety Inspector gives notice or otherwise requires that the
              operation of the Vessel (or any part thereof) be terminated or
              varied in any material respect and either (i) such notice or
              requirement is not complied with in all material respects or
              (ii) if such notice or requirement relates to the termination of
              the operation of the Vessel such notice or requirement is not
              cancelled or withdrawn within sixty (60) days or such longer
              period as the Lessor may agree; or

       (m)    the Guarantor disclaims, repudiates, challenges or contests the
              validity of the Guarantee; or

       (n)    the Lessee fails to comply with any condition or requirement
              imposed as contemplated by Clause 3.4 on the required date; or

       (o)    while the Vessel is subject to a Sub-Lease, the Sub-Lessee ceases
              to satisfy the conditions set out in Clause 13.2.

21.2   Mandatory Termination

21.2.1 The Lessee acknowledges and agrees that the occurrence of any of the
       events set out in Clause 21.2.2 (each a "Mandatory Event") shall entitle
       the Lessor to serve a notice on the Lessee requiring the Lessee to serve
       a notice of voluntary termination in accordance with Clause 21.5(D),
       and the Lessee shall comply with any such requirement not later than ten
       (10) Business Days after receipt of the notice from the Lessor:

21.2.2 Each of the following events is a Mandatory Event, namely if:
       
       (a)    any Additional Security Provider fails to make a payment under
              any Additional Security and within fifteen (15) Houston Business
              Days the Lessee has not provided the Lessor with alternative
              Additional Security with the same Value;
              or

       (b)    any Additional Security Provider fails to perform any other
              obligation to the Lessor under any Additional Security and the
              same has not been remedied to the satisfaction of the Lessor
              within fifteen (15) Houston Business Days of a notice from the
              Lessor to the Lessee requiring such remedy;

       (c)    an Insolvency Event (or any other event which, at the time of
              giving the relevant Additional Security, the Lessee agreed
              should constitute a Mandatory Event) shall occur in relation to
              an Additional Security Provider and within fifteen (15) Houston
              Business Days of a notice from the Lessor to the Lessee
              requiring such remedy the Lessee shall not have replaced the
              relevant Additional Security in a manner satisfactory in all
              respects to the Lessor in accordance with the requirements of
              Clause 22.3.1; or

       (d)    other than by reason of any breach of any Lease Document by a
              Primary Obligor or by reason of any representation or warranty of
              any Primary Obligor set out in any Lease Document being
              incorrect, any Lease Document (including each Payment Agreement
              but excluding the Service Contract and the Sub-Lease) does not
              or ceases to constitute the legal, valid, binding and enforceable
              obligations of each Security Party which is party to it in
              accordance with its terms (in the case of enforceability,
              subject to applicable laws relating to bankruptcy, insolvency or
              liquidation or any other laws or legal procedures affecting
              generally the enforcement of creditors' rights and the
              applicable general principles of equity) and, except in the case
              of the Guarantee, the same shall not have been remedied to the
              satisfaction of the Lessor within a period of thirty (30) days of
              a notice from the Lessor to the Lessee requiring such
              remedy; or

       (e)    any permit or consent required for any reason in connection with
              the transactions contemplated by the Lease Documents (excluding
              the Sub-Lease and the Service Contract) by or for the Vessel or
              by any Security Party shall cease to be in full force and effect
              in any respect and, in the Lessor's opinion, such cessation has a
              material adverse effect on the ability of any Security Party
              to perform its obligations under the Lease Documents to which it
              is party and the cessation shall not have been remedied within a
              period of thirty (30) days of a notice from the Lessor to the
              Lessee requiring such remedy; or

       (f)    prior to Delivery, any event occurs which entitles the Lessor to
              terminate the Shipbuilding Contract or to serve a Put Notice
              (as defined in the Put-Option Agreement) under the Put-Option
              Agreement; or

       (g)    any Payment Bank gives notice pursuant to any of Clauses 5.1,
              5.2 or 5.3 of the relevant Payment Agreement of its intention to
              make a payment in accordance  with Clause 5.7 of the relevant
              Payment Agreement and satisfactory alternative arrangements
              (as contemplated by Clause 5.6 of each Payment Agreement)
              which are satisfactory to the Lessor in its sole discretion have
              not been implemented; or

       (h)    any amount which any Payment Bank is (or would otherwise be)
              required to pay to the Lessor under any Payment Agreement
              (actually or contingently) is or will be reduced (after taking
              account of the operation of Clause 4.4 of the relevant Payment
              Agreement) by reason of a requirement for such Payment
              Bank to make a deduction or withholding, and within the period of
              consultation referred to in Clause 4.8 of the relevant Payment
              Agreement alternative arrangements (as contemplated by
              Clause 22.6.2) which are satisfactory to the Lessor in its
              sole discretion have not been implemented;

       (i)    for any reason Delivery shall not have taken place by 11.00 a.m.
              London time on 31st December 2000 (whether by reason of the
              non-fulfilment of any of the conditions precedent referred to in
              Clauses 3.2 or 3.3 or otherwise); or

       (j)    if during the term of any Sub-Lease the condition set out in
              Clause 13.2(i) shall cease to be fulfilled unless at such time
              and at all times thereafter there is no Sub-Lease and the Vessel
              is in the possession of the Lessee and (b) at all times
              the requirements of Clause 11.7(c) are fully complied with.

21.3   Termination of the Sub-Lease and Compulsory Acquisition

       The leasing of the Vessel (or, prior to Delivery, the obligation of the
       Lessor to lease the Vessel to the Lessee) under this Agreement shall
       immediately terminate without the need for any notice or declaration or
       other act on the part of any party:

       (i)    if at any time the requirements of Clause 11.7(c) shall cease to
              be complied with whether by reason of the Compulsory Acquisition
              of the Vessel or otherwise, or

       (ii)   if for any reason (other than as a result of a Total Loss, in
              which case Clause 10 (Total Loss) shall apply, or after the end
              of the requisite period as defined in Section 40 CAA 1990) the
              sub-leasing of the Vessel (or, prior to delivery thereof to
              the Lessee, the obligation of the Lessee to sub-lease the Vessel
              to the Sub-Lessee) under the Sub-Lease shall terminate, any such
              termination hereunder to be simultaneous with the termination of
              the leasing under the Sub-Lease, provided that the leasing of the
              Vessel under this Agreement shall not terminate pursuant to this
              paragraph if, simultaneously with the termination of the leasing
              under the Sub-Lease, the Vessel becomes subject to a replacement
              Sub-Lease complying in all respects with Clause 13, such that at
              all times the requirements of Clause 11.7(c) are fully complied
              with.

       The Lessee shall promptly notify the Lessor in writing of any such
       termination.

21.4   Termination by Lessor

       The Lessee acknowledges and agrees that the occurrence of a Termination
       Event shall go to the root of this Agreement and accordingly shall be a
       breach of a condition which the Lessor shall be entitled to treat as a
       repudiation by the Lessee of this Agreement and the Lessor shall be
       entitled to give a notice (a "Termination Notice") to the Lessee to
       terminate forthwith the leasing of the Vessel and the Lessor's consent
       to the Lessee's possession of the Vessel and, if Delivery has not
       occurred, to terminate the obligation of the Lessor to take delivery of
       and lease the Vessel to the Lessee.

21.5   Voluntary termination by Lessee

       (A)    The Lessee may, upon giving the Lessor the relevant period of
              written notice specified in paragraphs (B), (C), (D) and (E)
              below (each a "Voluntary Termination Notice") terminate the
              leasing of the Vessel or, as the case may be, the Lessor's
              obligation to lease the Vessel (without prejudice to any
              continuing obligations on the part of the Lessee including,
              without limitation, its indemnity obligations pursuant to this
              Agreement). Any Voluntary Termination Notice shall be irrevocable.

       (B)    Where the Lessee has been so required by the Lessor under Clause
              6.3, the Lessee shall serve a Voluntary Termination Notice within
              the required time period in accordance with the requirements of
              Clause 6.3 and any notice served by the Lessee thereunder shall
              expire on a date specified by the Lessee, being not later than
              the first Business Day in January 2013 and not earlier than one
              month after the date of the notice.

       (C)    Any Voluntary Termination Notice (other than one served pursuant
              to Clause 6.3 or Clause 22.2(ii)) shall specify a date for
              termination, being a Rent Payment Date falling not later than
              forty-five (45) Business Days after the date of the notice.

       (D)    Where the Lessee has been so required by the Lessor under Clause
              21.2, the Lessee shall serve a Voluntary Termination Notice
              within the required time period in accordance with the
              requirements of Clause 21.2 and any notice served by the Lessee
              thereunder shall expire on a date specified by the Lessee,
              being not later than five (5) Houston Business Days after the
              last date on which the notice is required to be given (or, if
              earlier, in the case of a notice served pursuant to Clause
              21.2(c) or (d), the Houston Business Day prior to the date on
              which the relevant Lease Document will cease to be legal, valid
              or binding or, as the case may be, on which the permit or consent
              will cease to be in full force and effect).

       (E)    Where the Lessee has elected to do so pursuant to Clause 22.2(ii),
              the Lessee shall serve a Voluntary Termination Notice within the
              fifteen (15) Business Day period referred to in that Clause, and
              any notice served by the Lessee thereunder shall expire on a date
              specified by the Lessee, being not later than ten (10) Houston
              Business Days after the date of the notice.

21.6   Payments on termination

       (a)    On the Termination Payment Date the Lessee shall pay to the
              Lessor an amount equal to the Termination Payment, calculated as
              at the Termination Payment Date.

       (b)    For the avoidance of doubt, the Lessee shall continue to be
              liable to the Lessor to pay all other sums due or to become due
              under the Lease Documents (including, without limitation, Broken
              Funding Costs) as and when the same become due and payable in
              accordance with the Lease Documents.

       (c)    The payment required from the Lessee pursuant to Clause 21.6(a)
              shall, in the case of a notice given by the Lessor pursuant to
              the occurrence of a Termination Event set out in Clause 21.1, be
              by way of agreed compensation for loss of bargain and, in all
              other cases, shall be by way of a liquidated sum or debt. 
              Such payment shall be the exclusive monetary compensation payable
              by the Lessee to the Lessor as a direct consequence of the
              termination of the leasing of the Vessel but shall be without
              prejudice to:

              (i)    the Lessor's right to recover damages from the Lessee in
                     an amount up to (but not exceeding) the Termination
                     Payment in circumstances where the obligation of the
                     Lessee to pay the Termination Payment is unenforceable
                     (in whole or in part) for any reason; and

              (ii)   the Lessor's right to recover payments from the Lessee
                     pursuant to any provisions of this Agreement and the
                     Financial Schedule which expressly provide for the Lessee
                     to make payments to the Lessor (other than the
                     Termination Payment), whether on, before or after the
                     Termination Date.

       (d)    This Clause 21.6 is, for the avoidance of doubt, expressly
              subject to the provisions of Clause 22.5.

21.7   Other obligations and liabilities

       If the leasing of the Vessel or, as the case may be, the right of the
       Lessee to take the Vessel on lease, is terminated (otherwise than
       following a Total Loss, in which case Clause 10.1 (Total Loss) shall
       apply), the obligation of the Lessee to pay Primary Period Rent or
       Secondary Period Rent which would otherwise have fallen due on any Rent
       Payment Dates which fall on or after the Termination Payment Date shall
       cease but without prejudice to the obligations of the Lessee to make
       payment of any other moneys then due and unpaid, or which may become
       due or be ascertained thereafter (including under the Financial
       Schedule and whether by way of additional Rent or otherwise), or to
       perform any of its other obligations, under any other provisions of this
       Agreement or the other Lease Documents.

21.8   Rights of the Lessor

       The Lessor shall on and at any time following the Termination Date be
       entitled to take any one or more of the following courses of action:

       (i)    proceed by appropriate court action or actions to enforce its
              rights and remedies under and pursuant to this Agreement and the
              other Lease Documents;

       (ii)   take possession of the Vessel, for which purpose the Lessor may
              enter any premises belonging to or in the occupation of or under
              the control of the Lessee or the Sub-Lessee where the Vessel may
              be located;

       (iii)  cause the Vessel to be redelivered to the Lessor at the
              Redelivery Location; and

       (iv)   by serving notice require the Lessee to redeliver the Vessel to
              the Lessor at the Redelivery Location.

       For the avoidance of doubt, the Lessor shall not be obliged to take
       possession of the Vessel following a termination of the leasing of the
       Vessel under this Agreement.

21.9   Payments after termination

       The Lessee shall, on the dates ascertained in accordance with the
       Financial Schedule (or, if no such date is specified, upon written
       demand by the Lessor), pay all amounts calculated and due to the Lessor
       under the Financial Schedule and expressed to fall due after the Lease
       Period.

22.    SECURITY; EXCLUDED OBLIGATIONS

22.1   The Guarantee

       The Lessor shall at all times during the Lease Period and for so long
       thereafter as the Lessee may have any actual or contingent obligations
       or liabilities to the Lessor hereunder or under any of the other Lease
       Documents have the benefit of the Guarantee from the Guarantor.

22.2   Guarantor Credit Event and LLA Event Occurrence

22.2.1 If a Guarantor Credit Event or an LLA Event shall occur, the Lessee
       shall promptly notify the Lessor of such occurrence and shall within
       fifteen (15) Houston Business Days of the date upon which such Guarantor
       Credit Event or, as the case may be, LLA Event shall have occurred,
       either (i) provide Additional Security to the Lessor in accordance with
       the provisions of Clause 22.3 or (ii) make an irrevocable election, by
       written notice to the Lessor, to terminate the leasing of the Vessel in
       accordance with Clause 21.5(E).

22.2.2 If at any time either of S&P or Moody's ceases to publish ratings in
       respect of companies generally, the Lessor will, without commitment,
       consult with the Lessee and give consideration to nominating an
       alternative internationally recognised credit rating organisation, and
       an equivalent alternative ratings trigger, to apply for the purpose of
       the definition of "Guarantor Credit Event" in Clause 1.1 and with a view
       to agreeing with the Lessee appropriate amendments to such definition.

22.3   Provision of Security following Guarantor Credit Events or LLA Event

22.3.1 If a Guarantor Credit Event or an LLA Event shall occur, then, unless
       the Lessee has made an election in accordance with Clause 22.2(ii), the
       Lessee shall provide Additional Security acceptable to the Lessor in its
       sole discretion, in addition to the Guarantee and the Payment Agreements,
       of a Value not less than the Maximum Exposure for the then current
       Relevant Period and shall thereafter be obliged to maintain Additional
       Security of a Value at least equal to the Maximum Exposure for each
       successive Relevant Period.  Such Additional Security shall initially be
       provided within 15 (fifteen) Houston Business Days of the date upon
       which a Guarantor Credit Event or, as the case may be, LLA Event first
       occurs and shall be adjusted by, as appropriate, the provision of
       further Additional Security by the Lessee to the Lessor (acceptable to
       the Lessor in its sole discretion) to reflect any increase in the amount
       of Maximum Exposure no later than 10 (ten) Houston Business Days prior
       to the commencement of each successive Relevant Period or by the
       release by the Lessor, so far as reasonably practical, of Security
       provided pursuant to this Clause 22.3, to reflect any decrease in the
       amount of Maximum Exposure no later than ten (10) Business Days after
       the commencement of each Relevant Period.

22.3.2 If Clause 22.3.1 applies in relation to any Relevant Period and on the
       Adjustment Date therefor any amount would otherwise be payable by the
       Lessor to the Lessee pursuant to this Agreement (other than under Clause
       10.2 or Clause 10.4), the obligation of the Lessor to pay such amount
       shall be conditional upon the Lessee first having complied with its
       obligations under Clause 22.3.1 with respect to the Relevant Period
       ending on such Adjustment Date.

22.3.3 If at any time a Guarantor Credit Event or an LLA Event shall have
       occurred and be continuing, the Lessee shall thenceforth procure that
       no later than 31st December in each year during the Primary Period, 
       there is provided to the Lessor a desktop valuation of the Vessel in
       Dollars, prepared by an independent valuer of international standing
       with respect to vessels of similar type to the Vessel, and prepared on
       the basis (a) that the Vessel is free of the leases under this Agreement
       and the Sub-Lease and free of any Lessor's Vessel Liens but otherwise
       subject to any subsisting Vessel Liens and (b) of a sale between a
       willing buyer and a willing seller.  If the Lessee shall fail to procure
       the delivery of such a valuation by 31st December in any year, the
       Lessor shall be entitled to do so at the Lessee's expense.  At any date
       the "Appraised Value" of the Vessel shall be the Sterling Equivalent
       as at such date of the Dollar value of the Vessel as shown in the
       valuation most recently prepared under this Clause.

22.3.4 Where Clause 22.3.3 applies, the Lessee shall be obliged to provide the
       first valuation without any need for a request from the Lessor, but
       thereafter shall be obliged to provide valuations only following receipt
       of a request from the Lessor.

22.3.5 If at any time after the occurrence of a Guarantor Credit Event such
       Guarantor Credit Event shall no longer be continuing, the Lessor shall,
       at the request and expense of the Lessee, take such actions as may be
       necessary in order to release any Additional Security which has then
       been provided to the Lessor pursuant to this Clause 22.3.

22.4   Payment Agreements

22.4.1 The Lessor shall at all times during the Lease Period and for so long
       thereafter as the Termination Sum or any part thereof shall remain due
       and payable hereunder have the benefit of security which shall take the
       form of the Payment Agreements.  The Value of such security shall, on
       any date on which an Instalment is payable by the Lessor under the
       Shipbuilding Contract and the Novation Agreement (other than the final
       Instalment), be not less than the aggregate of such Instalment and all
       previous such Instalments previously paid by the Lessor under the
       Shipbuilding Contract and the Novation Agreement. The Value of such
       Security shall thereafter be in accordance with the requirements of
       Clause 22.4.2.

22.4.2 The Lessee shall procure that on or prior to the date for payment by the
       Lessor of the final Instalment under the Shipbuilding Contract and the
       Novation Agreement, the Lessor receives evidence from each Payment Bank
       that all necessary notices have been given, and all necessary payments
       have been made to the Payment Banks, such that the Payment Banks have
       become unconditionally liable under the Payment Agreements:

       (i)    (on the assumption that for the purposes of the Payment Agreements
              LIBOR will at all times be equal to eight per cent. (8%)), to
              pay, on each Rent Payment Date up to and including the thirteenth
              Rent Payment Date, an aggregate amount pursuant to Clause 4.1 of
              each of the Payment Agreements not less than the Rent which will
              be payable on such Rent Payment Date as shown in the Revised
              Cash Flow produced by the Lessor immediately prior to the Delivery
              Date; and

       (ii)   (on the assumptions that (1) for the purposes of the Payment
              Agreements LIBOR will at all times be equal to eight per cent.
              (8%) and (2) the Lessor will make a demand on each Payment Bank
              pursuant to Clause 5.4 of the relevant Payment Agreement
              requiring it to make a payment under Clause 5.7 thereof the first
              Business Day in January 2013) to pay, on the first Business Day
              in January 2013, an aggregate amount which is not less than the
              Termination Payment calculated in accordance with Part 4 of the
              Financial Schedule for such date, as shown in a Termination Cash
              Flow produced by the Lessor immediately prior to the Delivery
              Date.

22.5   Excluded Obligations

22.5.1 The parties hereto agree that, the Lessee shall have no obligation to
       make payment to the Lessor, and accordingly the Lessor shall have no
       right of recourse against the Lessee or its assets and the Lessee
       shall have no personal liability:

       (a)    in respect of each instalment of Primary Period Rent, to the
              extent (the "Rent Limit") of the aggregate amount which the
              Payment Banks are expressed to be obliged to pay to the Lessor
              pursuant to Clause 4.1 of the Payment Agreements to the Lessor
              on the due date for payment of such instalment, to the extent
              that such aggregate amount does not constitute a Restricted
              Amount;

       (b)    in respect of the Termination Payment (where it falls due for
              payment after Delivery), to the extent (the "Termination Payment
              Limit") of the aggregate amount which the Payment Banks are
              expressed to be obliged to pay to the Lessor pursuant to Clause
              5.7 of the Payment Agreements to the Lessor on the due date for
              payment of the Termination Payment, to the extent that such
              aggregate amount does not constitute a Restricted Amount; and

       (c)    in respect of the Termination Payment (where it falls due for
              payment on or prior to Delivery), to the extent (the
              "Termination Payment Limit") of the balance (if any) remaining
              after deducting (1) the amount (if any) falling due
              for payment by the Option Party to the Lessor under Clause 5.1
              of the Put-Option Agreement on the Termination Payment Date from
              (2) the aggregate amount which the Payment Banks are expressed to
              be obliged to pay to the Lessor pursuant to Clause 5.7 of the
              Payment Agreements to the Lessor on the due date for payment of
              the Termination Payment, to the extent that such aggregate
              amount does not constitute a Restricted Amount.

22.5.2 Retained Obligations

       Save insofar as the Lessor has expressly agreed to release the Lessee's
       obligations and the Lessor's rights of recourse against the Lessee under
       Clause 22.5.1, the Lessee shall remain fully liable and the Lessor shall
       have full recourse against the Lessee and its assets, and the
       Lessee shall be personally liable, for all of the obligations of the
       Lessee expressed to arise under the Lease Documents (but without
       prejudice to Clause 28.2).  Accordingly and without limiting the
       generality of the foregoing, to the extent that the amount of any
       instalment of Primary Period Rent exceeds the Rent Limit for that
       instalment or the amount of any Termination Rent exceeds the Termination
       Payment Limit, and to the extent that any amount received by the Lessor
       from a Payment Bank is required to be repaid by the Lessor as a result
       of such amount constituting a Restricted Amount, the Lessee shall be
       obliged to make payment of the relevant excess, or as the case may be,
       the amount required to be repaid, in full and the Lessor shall have
       full recourse to the Lessee and to its assets, and the Lessee shall be
       personally liable, to the extent that such payment is not made.

22.5.3 Excess Payments under Payment Agreements

       (a)    If on any Rent Payment Date the aggregate amount payable to the
              Lessor by the Payment Banks under Clause 4.1 of the Payment
              Agreements (less any parts thereof which constitute Restricted
              Amounts) exceeds the aggregate amount due and payable by the
              Lessee to the Lessor under this Agreement on that date
              (disregarding for this purpose the operation of Clause 22.5.1),
              the Lessor, shall, within five (5) Business Days of such Rent
              Payment Date, pay to the Lessee, by way of rebate of Rent, an
              amount equal to the excess.

       (b)    If on the Termination Payment Date the aggregate amount payable
              to the Lessor from the Payment Banks under Clause 5.7 of the
              Payment Agreements (less any parts thereof which constitute
              Restricted Amounts and after deducting the amount (if any)
              falling due for payment by the Option Party to the Lessor
              under Clause 5.1 of the Put-Option Agreement) exceeds the
              aggregate amount due and payable by the Lessee to the Lessor
              under this Agreement on that date (disregarding for this purpose
              the operation of Clause 22.5.1), the Lessor, shall, within five
              (5) Business Days of such date, pay to the Lessee, by way of
              rebate of Rent, an amount equal to the excess.

       (c)    The Lessor agrees to pay to the Lessee an amount equal to each
              amount payable to the Lessor by any Payment Bank under Clause 4.6
              of the relevant Payment Agreement within (less any parts thereof
              which constitute Restricted Amounts) five (5) Business Days of
              the due date for payment thereof.

       (d)    Any payment under this Clause 22.5.3 shall be subject to the
              provisions of Clause 25.7 and Clause 28.1.

22.6   Claims under the Payment Agreements

22.6.1 If any Payment Bank gives notice pursuant to any of Clauses 5.1, 5.2 or
       5.3(b) of the relevant Payment Agreement giving details of any of the
       events or circumstances referred to therein, the Lessor and the Lessee
       shall consult with each other for a period not exceeding 60 days (or 30
       days in the case of Clause 5.3(b) thereof) with a view to agreeing
       on alternative arrangements (as contemplated by Clause 5.6 of each
       Payment Agreement) which are satisfactory to both the Lessor and the
       Lessee.  The Lessor agrees that it will not serve a notice on any
       Payment Bank under Clause 5.6 of any Payment Agreement without
       the Lessee's prior written consent.

22.6.2 If any amount which any Payment Bank is (or would otherwise be) required
       to pay to the Lessor under any Payment Agreement (actually or
       contingently) is or will be reduced (after taking account of the
       operation of Clause 4.4 of the relevant Payment Agreement) by reason of
       a requirement for that Payment Bank to make a deduction or withholding,
       the Lessor and the Lessee shall consult with each other for a period not
       exceeding the period referred to in Clause 4.8 of the relevant Payment
       Agreement with a view to agreeing on alternative arrangements for
       providing alternative security to the Lessor in a manner satisfactory to
       the Lessor in its sole discretion.  If such alternative arrangements
       have not been agreed by the Lessor within such period, the Lessor shall
       be at liberty to serve notice under Clause 5.4 of any of the Payment
       Agreements and/or to treat such circumstance as a Mandatory Event within
       Clause 21.2.2(h).

22.6.3 The Lessor shall be at liberty to serve any notice under Clause 5 of the
       Payment Agreement at any time when the Termination Payment has become
       due for payment (whether immediately or on a determinable date in the
       future).

22.6.4 The Lessor shall be at liberty to serve any notice under Clause 5 of any
       of the Payment Agreements at any time upon the occurrence of an
       Insolvency Event in relation to the relevant Payment Bank.  No
       Insolvency Event in relation to any Payment Bank shall of itself
       constitute a Termination Event under this Agreement or a breach or
       default on the part of the Lessee hereunder.

22.6.5 The Lessor agrees that, other than as permitted in this Clause 22.6,
       the Lessor shall not serve any notice under Clause 5.4 of any of the
       Payment Agreements without the prior written consent of the Lessee.
       The Lessee agrees that the Lessor's undertakings in this Clause 22.6
       may be enforced only in damages and may not be enforced by specific
       performance or injunction and the Lessee agrees not to seek to assert
       any remedy in respect of such undertakings other than a claim in damages.

23.    CHANGE OF CIRCUMSTANCES ETC.

23.1   Change of circumstances

       This Clause 23.1 applies if at any time the Lessor shall be of the
       opinion that the effect of a Change in Law including, without limitation,
       any such change that relates to the application or modification of any
       reserve, deposit, cash ratio, liquidity or similar requirement or to
       capital adequacy or that affects the manner in which or the extent to
       which the Lessor or any Relevant Member allocates capital resources to
       its obligations or to any other form of banking or monetary controls) is
       that:

       (a)    the Lessor or a Relevant Member incurs a cost or an additional
              cost as a result of the Lessor having entered into or assuming,
              performing, maintaining or funding its obligations under or
              pursuant to any of this Agreement or the other Lease Documents; or

       (b)    the Lessor or a Relevant Member incurs a cost or an additional
              cost in making payment of, funding or maintaining all or any
              amounts of Balance, or all or any commitments or obligations
              under or pursuant to any of this Agreement or the other Lease
              Documents; or

       (c)    any amount payable to the Lessor or a Relevant Member or the
              effective return to the Lessor or a Relevant Member under or
              pursuant to any of this Agreement or the other Lease Documents or
              on all or any of its capital is reduced; or

       (d)    the Lessor or a Relevant Member makes any payment or foregoes any
              interest or other return on or calculated by reference to any
              amount received or receivable by it under or pursuant to any of
              this Agreement or the other Lease Documents.

23.2   Demands by Lessor

       If Clause 23.1 applies, then the Lessor may serve one or more demands on
       the Lessee, notifying the Lessee of the relevant event as and when the
       same shall occur and reasonable details of the basis of the calculation
       of the amount referred to in Clause 23.3 provided that the Lessor shall
       not be entitled to serve any demand in respect of a Change in Law which
       arises as a consequence of (or of any law or regulation implementing)
       directive 93/6/EEC, as amended by directives 98/31/EEC and 98/33/EEC or
       any other proposals for international convergence of capital measurement
       and capital standards published by the Basle Committee on Banking
       Regulations and Supervisory Practices in July 1988 unless it
       results from any change in such directives or proposals (or any law or
       regulation implementing the same) occurring or change in the official
       interpretation or application thereof after 10th September 1998.

23.3   Payment by the Lessee

       Promptly following the service of any demand, the Lessee shall pay to
       the Lessor such amount as the Lessor determines and certifies in the
       demand will compensate it or a Relevant Member for the applicable
       increased cost and in relation to the period expressed to be covered
       by such demand.

23.4   Meaning of "increased cost"

       In this Clause 23 "increased cost" means the aggregate of:

       (a)    the cost or additional cost incurred referred to in Clause 23.1
              (a); and/or

       (b)    the cost or additional cost incurred referred to in Clause 23.1
              (b) that is attributable to the Lessor or the relevant member of
              the Lessor's Group in making payment of, funding or maintaining
              all or any amounts of Balance, or all or any commitments or
              obligations under or pursuant to any of this Agreement or the
              other Lease Documents; and/or

       (c)    the reduction in the amount payable or in the return referred to
              in Clause 23.1 (c); and/or

       (d)    the payment or foregone interest or return referred to in Clause
              23.1(d) as appropriate;

              PROVIDED THAT an increased cost does not include:

              (i)    any increased cost compensated for by the payment of
                     Associated Costs;

              (ii)   any Tax Liability; and

              (iii)  any Risk Asset Weighting.

23.5   Method of calculation

       When calculating an increased cost, the Lessor may allocate or spread
       costs, liabilities and losses to or across the liabilities or assets of
       itself or members of the Lessor's Group, or any class of such
       liabilities or assets, and on such basis, as it considers appropriate,
       provided that the Lessor shall allocate or spread costs, liabilities and
       losses which affect a class of transactions including the transaction
       constituted by the Lease Documents on a proportionate basis as among the
       transactions in that class.  A certificate under hand of an officer of
       the Lessor specifying the amount of such compensation shall in the
       absence of manifest error be conclusive.  Nothing contained in this
       Clause shall oblige the Lessor to disclose any information relating to
       the way in which it and members of the Lessor's Group employ their
       capital or arrange their internal financial affairs.

24.    GENERAL INDEMNITY

24.1   General indemnity

       (a)    The Lessee hereby agrees at all times to pay promptly or, as the
              case may be, indemnify and hold the Lessor and each member of
              the Lessor's Group and their respective officers, directors,
              secondees, agents and employees (together the "Indemnified
              Persons") harmless on a full indemnity basis from and against
              each and every liability, loss, charge, claim, demand, action,
              proceeding, damage, judgment, order or other sanction,
              enforcement, penalty, fine, fee, commission, interest, Vessel
              Liens, salvage, general average cost and expense of whatsoever
              nature suffered or incurred by or imposed on any Indemnified
              Person, including Costs of Management Time (together "Losses"):

              (i)    arising directly or indirectly out of or in any way
                     connected with the purchase, manufacture, ownership,
                     possession, performance, transportation, management, sale,
                     import to or export from any jurisdiction, control, use
                     or operation, registration, navigation, certification,
                     classification, management, manning, provisioning, the
                     provision of bunkers and lubricating oils, testing,
                     design, condition, delivery to or by the Lessor,
                     acceptance, leasing, sub-leasing, insurance,
                     maintenance, repair, drydocking, service, modification,
                     refurbishment, survey, conversion, overhaul, replacement,
                     removal, repossession, return, redelivery, sale or
                     disposal by the Lessee or any other person of the Vessel,
                     or otherwise in connection with the Vessel including,
                     without prejudice to the generality of the foregoing,
                     any Losses arising from any pollution or other
                     environmental damage caused by or emanating from the
                     Vessel or caused by the Vessel becoming a wreck or an
                     obstruction to navigation, whether or not any such
                     Liability may be attributable to any defect in the Vessel
                     or to the design, construction or use thereof or from any
                     maintenance, service, repair, overhaul, inspection or to
                     any other reason whatsoever (whether similar to any of the
                     foregoing or not), and regardless of when the same shall
                     arise (whether prior to, during or after termination of
                     the leasing of the Vessel under this Agreement) and
                     whether or not the Vessel (or any part thereof) is in the
                     possession or control of the Lessee or the Sub-Lessee or
                     any other person and whether or not the same is in the
                     United Kingdom waters or abroad;

             (ii)    as a consequence of any claim that any design, article or
                     material in the Vessel or any part thereof or relating
                     thereto or the operation or use thereof constitutes an
                     infringement of patent, copyright, design or other
                     proprietary right; 

             (iii)   in preventing or attempting to prevent the arrest,
                     seizure, taking in execution, requisition, impounding,
                     forfeiture or detention of the Vessel or in securing or
                     attempting to secure the release of the Vessel (but
                     excluding, in a case where Clause 12.15 applies, any
                     Losses incurred prior to the thirty day period mentioned
                     in such clause, unless it was reasonable to have incurred
                     such Losses);

              (iv)   as a consequence (direct or indirect) of the breach by any
                     Primary Obligor of any of their respective obligations to
                     the Lessor under any of the Lease Documents or of any of
                     the warranties and  representations on the part of any
                     Primary Obligor made in this Agreement or in any of the
                     other Lease Documents being untrue or inaccurate in any
                     respect whatsoever when made;

              (v)    any costs and expenses incurred by the Lessor in
                     connection with the sale or Total Loss of the Vessel
                     (including, without limitation, broker's commissions,
                     redelivery costs (if any), marketing expenses,
                     legal costs, storage, insurance, registration fees and
                     any other expenses of the Lessor incurred pending the
                     sale or disposal of the Vessel or otherwise in connection
                     with the sale or disposal of the Vessel), in each case
                     unless incurred by reason of a contravention by the
                     Lessor of Clause 19;

              (vi)   any costs, expenses, damages, liabilities, penalties,
                     fees and other outgoing expended, incurred or suffered by
                     the relevant Indemnified Person in connection with:

                     (A)    the arrest, seizure, taking into custody or other
                            detention by any court or other tribunal or by any
                            Government Entity (other than by reason of a
                            Lessor's Vessel Lien); or

                     (B)    the subjection to distress by reason of any
                            process, claim, the exercise of any rights
                            conferred by a Vessel Lien (other than Lessor's
                            Vessel Liens) or by any other action whatsoever,

                     of any vessel owned or leased by any member of the
                     Lessor's Group, which are expended, suffered or incurred
                     as a result of or in connection with any claim or alleged
                     claim against, or liability or alleged liability of, any
                     member of the Guarantor's Group together with any costs
                     and expenses or other outgoings which may be paid or
                     incurred by any member of the Lessor's Group in releasing
                     such vessel from any such arrest, seizure, custody,
                     detention or distress, which shall be deemed to include,
                     in the event that such release is secured by the provision
                     by any member of the Lessor's Group of any guarantee or
                     bond or other security (including a cash deposit):

                     (1)    any fee paid to any third party for the issue of
                            any such guarantee or bond; or

                     (2)    if such guarantee or bond is issued by a member of
                            the Lessor's Group, an amount equal to the fee
                            which the Lessor certifies would have been charged
                            by such member of the Lessor's Group to the Lessee
                            had the Lessee requested the issue in favour of a
                            third party of a guarantee or bond in an equivalent
                            maximum principal amount of the same currency; or

                     (3)    in the case of a cash deposit, interest on the
                            amount of such deposit (less any interest actually
                            received by the Lessor thereon, but after adding
                            back the amount of any Tax Liability in respect of
                            such interest) for the period from (and including)
                            the date on which such deposit is provided to
                            (but excluding) the earlier of (a) the date
                            upon which the Lessee either pays to the Lessor or,
                            as the Lessor may require, ensures that there is
                            credited to an account with the Bank and charged in
                            favour of the Lessor upon terms acceptable to the
                            Lessor an amount equal to such deposit in
                            substitution or security therefor and (b) the date
                            of the release of such deposit at the rate per
                            annum which is the aggregate of the cost to the
                            Lessor or the applicable Relevant Member of funding
                            such deposit in the relevant currency plus one
                            point five per cent. (1.5%); or

                     (4)    in the case of any other security, the cost to the
                            Lessor or the applicable Relevant Member in
                            providing such security;

             (vii)   if the Vessel becomes a wreck or obstruction to
                     navigation, against all losses, costs, damages and
                     expenses which such Indemnified Person may in consequence
                     thereof incur, including in respect of the removal or
                     destruction of the wreck or obstruction under statutory or
                     other powers,

              other than a Tax Liability or any amount in respect of which the
              Indemnified Person is entitled to be indemnified pursuant to
              Clause 26.1 (General Tax indemnity) or would, but for an
              exception contained in Clause 26.2 (Restriction on General Tax
              indemnity), be so indemnified (each of the above other than a
              Tax Liability being referred to as a "Liability").

       (b)    Without prejudice to the generality of the provisions of Clause
              24.1(a), Clause 24.1 (a) shall extend to claims of persons
              (including governments or other bodies whether corporate or
              otherwise) who have incurred expenditure in taking preventative
              measures against loss or damage or have suffered or allege
              that they have suffered loss, damage or injury in connection
              with anything done or omitted to be done by any person in
              relation to, in respect of, or in connection with, the Vessel,
              including in connection with any oil or other substance
              emanating or threatening to emanate from the Vessel and shall
              extend to levies, impositions, calls or contributions on, or
              required to be made by, the Lessor during or in respect of the
              period commencing on the date hereof and terminating on a sale
              of the Vessel following the termination or expiration
              of the leasing of the Vessel hereunder.

       (c)    The indemnities contained in Clause 24.1(a) shall extend to
              include:

              (i)    the Sterling cost (including fees and commissions) to
                     the Indemnified Person in acquiring any currency (other
                     than Sterling) with Sterling in order to satisfy or
                     discharge in a currency other than Sterling any Liability;

              (ii)   all costs of interest, fees and other amounts whatsoever
                     suffered or incurred by any Indemnified Person in order to
                     fund the satisfaction or discharge of any Liability; and

              (iii)  each Loss suffered or incurred by the Lessor in satisfying
                     or discharging, or indemnifying any Indemnified Person
                     (other than itself) against, any Liability, or any matter
                     referred to in (i) or (ii) above, whether or not such
                     Liability is suffered or incurred by the Lessor under
                     any formal or informal arrangement, and whether or
                     not any such formal or informal arrangement existed at the
                     time the Liability was suffered or incurred by such
                     Indemnified Person.

24.2   Exclusions from general indemnity

       The indemnities contained in Clauses 24.1(a) and 24.1(b) shall not
       extend to any Liability:

       (a)    to the extent that such Liability is caused by any act of an
              Indemnified Person which constitutes the wilful or reckless
              misconduct of such Indemnified Person;

       (b)    to the extent that such Liability is caused by any failure on
              the part of the Lessor to comply with any of its express and
              specific obligations under any of the Lease Documents to which
              the Lessor is party;

       (c)    to the extent that such Liability constitutes the Lessor's Cost
              or any part thereof;

       (d)    to the extent that such Liability constitutes a cost which is
              expressly to be borne by the Lessor under any other provision of
              this Agreement or the Novation Agreement and which the Lessee
              establishes was not intended to be within the scope of the
              indemnities granted in favour of the Lessor or any other member
              of the Lessor's Group in any Lease Document; or

       (e)    to the extent that such Liability is solely caused by a failure
              by any Payment Bank to comply with any of its obligations under
              the relevant Payment Agreement to which it is party, excluding
              any part thereof constituting a Restricted Amount; or

       (f)    to pay any survey costs which are expressed to be payable by the
              Lessor in this Agreement.

24.3   Notification of indemnity claims

       Without prejudice to the provisions of this Clause 24 and without
       limiting in any way whatsoever, or being a condition precedent or
       subsequent to, the indemnities in favour of any Indemnified Person
       hereunder or prompt payment thereunder, the Lessor shall:

       (a)    notify the Lessee in writing as soon as practicable after receipt
              by the Lessor of notice of a Liability (provided such notice is
              in writing).  Such notification to the Lessee from the Lessor
              shall give such details as the Lessor then has and which are in
              all the circumstances reasonable having regard to the contents of
              the notice of a Liability received by the Lessor; and

       (b)    where reasonably practicable notify the Lessee of the Lessor's
              intention to pay or procure the payment of any moneys in respect
              of any such Liability before any such payment is made, provided
              that interest on any moneys payable to the Lessor or any
              Indemnified Person under Clause 24.1 in respect of such
              Liability shall only accrue at LIBOR (or, in relation to any
              currency other than Sterling, the Lessor's funding cost in that
              other currency) from the date on which the Lessor or that
              Indemnified Person incurs that Liability, until such time as the
              Lessor notifies the Lessee of that Liability, after which
              interest will accrue at the Default Rate until reimbursed in
              full under Clause 24.1.

24.4   Defence of Claims

       Without prejudice to the provisions of this Clause 24, the Lessee shall
       (subject to having first obtained the consent of the relevant insurers,
       if any, and complying in all respects with its obligations under this
       Agreement) be entitled to take (at its own cost) such actions as the
       Lessee reasonably deems fit to defend or avoid any liability arising in
       respect of a liability or to take such action in the name of the Lessor,
       provided that the Lessee's ability to take action in the name of the
       Lessor shall be subject to:

       (a)    the Lessor first being indemnified and secured to its reasonable
              satisfaction against all losses, costs, damages and expenses
              incurred and from time to time reasonably anticipated to be
              incurred in connection therewith;

       (b)    the ability of the Lessee to commence court proceedings in the
              name of the Lessor, or to instigate a counterclaim in the name
              of the Lessor, shall be subject to the prior written consent of
              the Lessor (which consent the Lessor shall be at full liberty
              to withhold);

       (c)    if court proceedings have been commenced by a third party
              against the Lessor as defendant or if, pursuant to sub-clause
              (b) above, the Lessor gives its consent to the use of its name
              in court proceedings (whether by way of claim or counterclaim),
              the Lessor shall permit the Lessee to have the full conduct of the
              court proceedings, or to instigate a counterclaim in the name of
              the Lessor, but the Lessee shall (i) consult with the Lessor and
              keep the Lessor fully informed in relation to their conduct and
              have due regard to the wishes of the Lessor in relation to the
              conduct of such court proceedings acknowledging the interest of
              the Lessor and each member of the Lessor Group in preserving the
              Lessor's and the Lessor Group's reputation as financial
              institutions and their respective business interests and customer
              relations and (ii) give timely notice to the Lessor of any
              meetings with Counsel or attendance at court, and the Lessor
              shall be entitled to attend any such meetings or court
              attendances;

       (d)    in relation to all other matters, the Lessee shall keep the
              Lessor fully informed and have due regard to the wishes of the
              Lessor in relation to the use of the Lessor's name acknowledging
              the Lessor's interest in preserving the Lessor's and each member
              of the Lessor's Group's reputation as financial institutions
              and their respective business interests and customer relations;
              and

       (e)    notwithstanding sub-paragraph (c) above, the Lessor may at any
              time notify the Lessee that the Lessor is of the opinion that the
              continuance of such proceedings by the Lessee in the name of the
              Lessor is contrary to the Lessor's or any member of the Lessor
              Group's reputation as financial institutions or the business
              interests or customer relations of any of them.  A certificate
              signed by a director of the Lessor shall be conclusive as to the
              correctness of such opinion.  If the Lessor so notifies the
              Lessee, the Lessee shall forthwith cease to be entitled to
              conduct the court proceedings in the name of the Lessor, and the
              Lessor shall be at liberty to conduct, settle or discontinue
              such proceedings as it sees fit.

24.5   Recoveries from third parties

       If any Indemnified Person shall recover from or be paid by, any person
       (other than the Lessee, the Guarantor or the Sub-Lessee) any amount
       (other than under Clause 26) in respect of any payments paid or
       discharged by the Lessee in accordance with this Clause 25, then
       provided that the Lessor has received payment of such amount and is
       satisfied that such amount is unconditionally available for retention
       by the Lessor, the Lessor shall pay to the Lessee a sum equal to the
       value of such recovered or paid amount together with any interest
       actually earned on such recovered or paid amount (less the amount of any
       Tax Liability thereon), such payment by the Lessor to be subject always
       to the provisions of Clause 25.5.

24.6   Other indemnities

       Each of the indemnities contained in this Clause 24 or otherwise
       contained in this Agreement or in any other of the Lease Documents is
       in addition to, and not in substitution for, and shall not be affected
       or prejudiced by, any other security, guarantee or indemnity (including
       the other indemnities aforesaid) now or hereafter held by the Lessor.

24.7   Pass through of indemnity benefits

       Where in this Clause 24 or in Clause 25 below an indemnity is expressed
       to be for the benefit of any person who is not a party to this Agreement
       the Lessor shall be entitled to indemnify such person on the same terms
       (and subject in particular to Clause 25.4) mutatis mutandis as the
       indemnities expressed to be for the benefit of such person in this Clause
       25 and the Lessee shall indemnify the Lessor and hold the Lessor
       harmless on a full indemnity basis from and against each amount paid or
       payable by the Lessor to such person under any such indemnity.  Any
       insurance effected by the Lessor shall not be brought into account in
       relation to any claim under any indemnity in favour of the Lessor
       or any other Indemnified Person under this Agreement.

24.8   Waiver of rights

       The Lessee further agrees and does hereby agree, without prejudice to
       the express provisions of this Agreement, to waive any rights as against
       the Lessor that the Lessee may have under the 1976 Convention on the
       Limitation of Liability for Maritime Claims (as most recently enacted in
       the United Kingdom pursuant to the Merchant Shipping Act 1995) to
       limit or reduce any amount that the Lessee is or may be obliged to pay.

25.    GENERAL TAX INDEMNITY AND OTHER TAX PROVISIONS

25.1   General Tax indemnity and payment of certain outgoings

       The Lessee shall pay and discharge or cause to be paid and discharged,
       as soon as the same arise or become payable (and shall, if requested by
       the Lessor, produce to the Lessor evidence of the payment and discharge
       thereof) and indemnify the Lessor and each Relevant Member and keep the
       Lessor and each Relevant Member fully indemnified against:

       (a)    any Tax Liabilities; and

       (b)    any licence duties, registration, recording, titling or filing
              fees, charges or levies and any interest or penalties payable in
              connection with any of the same;

       which arise or become payable at any time in respect of, in consequence
       of or by reference to:

       (i)    the Vessel (or any part thereof) or any interest therein; or

       (ii)   any document, payment, matter, circumstance or transaction
              entered into, made or occurring pursuant to, contemplated by or
              in accordance with this Agreement or by any of the other Lease
              Documents including (without limitation) the agreement to
              purchase, ownership, delivery to or by the Lessor, leasing,
              use, possession, operation, import, export, return, storage,
              maintenance, protection, sale, attempted sale or other
              disposition of the Vessel (or any part thereof) or any interest
              therein;

       or which arise or become payable as a result (whether alone or in
       connection with any other matter or circumstance) of anything done in
       response to any request by the Lessee or any other member of the
       Guarantor's Group.

25.2   Restriction on general tax indemnity

       The Lessee shall not be obliged to indemnify the Lessor or as the case
       may be the applicable Relevant Member pursuant to Clause 25.1:

       (a)    against Corporation Tax attributable to any Rent or Termination
              Payment or interest actually receivable hereunder by the Lessor
              or to any other amounts payable to and unconditionally received
              by the Lessor under this Agreement or pursuant to or in
              connection with any of the other Lease Documents or to any
              sales or other proceeds (including, without limitation,
              insurance moneys) actually received and retained by the Lessor
              in respect of the Vessel;

       (b)    against any Tax Liability or liability in respect of any of the
              matters referred to in Clause 25.1(b) to the extent it would not
              have arisen but for the reasonably avoidable delay or failure by
              the Lessor or, as the case may be, the applicable Relevant
              Member in the filing of Tax returns or the payment of Taxes or any
              duties, fees, charges or levies referred to in Clause 25.1(b)
              assessed on or payable by the Lessor or, as the case may be, the
              applicable Relevant Member which delay or failure has not been
              consented to, or requested by the Lessee or any other member of
              the Guarantor's Group or unless such failure or delay by the
              Lessor or, as the case may be, the applicable Relevant Member
              arises from a failure by the Lessee or any other member of the
              Guarantor's Group promptly to provide the Lessor or, as the case
              may be, the applicable Relevant Member with correct, suitable and
              adequate information to enable the Lessor or, as the case may
              be, the applicable Relevant Member to file the relevant Tax
              return or pay such Taxes or other amounts;

       (c)    against any Tax Liability to the extent that it is taken into
              account in accordance with the provisions of the Financial
              Schedule in computing the amount of any Rent or Termination
              Payment or any adjustment thereto or would be so taken into
              account but for the operation of paragraph 3.4.1 of part 3 of
              the Financial Schedule; 

       (d)    against any Tax Liability which is imposed by way of deduction or
              withholding from any payment due from the Lessee under this
              Agreement to the Lessor, whether or not the Lessee is required
              to make any payment or increased payment in respect thereof
              under Clause 25.3;

       (e)    against any Tax Liability which is suffered by the Lessor by
              reason of the non-deductibility for the purposes of Taxation of
              any payment made by the Lessor to the Lessee, whether or not the
              Lessor is entitled to make any withholding in respect thereof
              under Clause 25.7;

       (f)    to the extent that such Tax Liability is caused by any act of the
              Lessor which constitutes wilful or reckless misconduct of the
              Lessor;

       (g)    against any Tax Liability in respect of VAT or Irrecoverable
              VAT, whether or not the Lessee is required to make any payment or
              increased payment in respect thereof under Clause 25.4.

25.3   Payments and Taxes

       (a)    All sums payable to the Lessor and/or any member of the Lessor's
              Group pursuant to or in connection with this Agreement or any of
              the other Lease Documents shall be paid in full without any
              set-off or counterclaim whatsoever and free and clear of all
              deductions or withholdings whatsoever save only as may be
              required by law.

       (b)    If any deduction or withholding is required by law in respect of
              any payment due to the Lessor and/or any member of the Lessor's
              Group pursuant to or in connection with this Agreement or any of
              the other Lease Documents or any document contemplated by or
              entered into pursuant hereto or thereto , the Lessee shall:

              (i)    ensure or procure that the deduction or withholding is
                     made and that it does not exceed the minimum legal
                     requirement therefor;

              (ii)   pay, or procure the payment of, the full amount deducted
                     or withheld to the relevant Taxation or other authority in
                     accordance with the applicable law;

              (iii)  (A)    if the payment is to be made by the Lessee, increase
                            the payment in respect of which the deduction or
                            withholding is required so that the net amount
                            received by the Lessor or, as the case may be, the
                            applicable Relevant Member as aforesaid after the
                            deduction or withholding (and after taking account
                            of any further deduction or withholding which is
                            required to be made which arises as a consequence
                            of the increase) shall be equal to the amount which
                            the Lessor or, as the case may be, that Relevant
                            Member would have been entitled to receive in the
                            absence of any requirement to make a deduction or
                            withholding; or (as the case may be)

                     (B)    (except to the extent that the deduction or
                            withholding arises under a Payment Agreement and
                            constitutes an Excluded Amount (as defined in the
                            relevant Payment Agreement) and the relevant
                            Payment Bank is required under Clause 4.4 thereof
                            to make an increased payment in respect thereof)
                            if the payment is to be made by any person other
                            than the Lessee, pay directly to the Lessor
                            or, as the case may be, that Relevant Member such
                            sum (a "compensating sum") as will, after taking
                            into account any deduction or withholding which is
                            required to be made in respect of the compensating
                            sum, enable the Lessor or, as the case may be, that
                            Relevant Member to receive, on the due date for
                            payment, a net sum equal to the sum which the
                            Lessor or, as the case may be, that Relevant
                            Member would have received in the absence of
                            any obligation to make a deduction or withholding;
                            and

             (iv)    promptly deliver or procure the delivery to the Lessor or,
                     as the case may be, that Relevant Member of appropriate
                     receipts evidencing the deduction or withholding which has
                     been made.

       (c)    If the Lessor or, as the case may be, the applicable Relevant
              Member determines in its absolute discretion that it has
              received, realised, utilised and retained a Tax benefit by reason
              of any deduction or withholding in respect of which the Lessee
              has made an increased payment or paid a compensating sum under
              this Clause 25.3 the Lessor or, as the case may be, that Relevant
              Member shall, provided the Lessor or, as the case may be, that
              Relevant Member has received all amounts which are then due and
              payable under any of the provisions of this Agreement and the
              other Lease Documents, pay to the Lessee (to the extent that the
              Lessor or, as the case may be, that Relevant Member can do so
              without prejudicing, the amount of that benefit and the right of
              the Lessor or, as the case may be, that Relevant Member to obtain
              any other benefit relief or allowance which may be available to
              it) as soon as reasonably practicable such amount, if any, as the
              Lessor shall determine in its absolute discretion will leave the
              Lessor or, as the case may be, that Relevant Member in no better
              and no worse position than the Lessor or, as the case may be,
              that Relevant Member would have been in if the deduction or
              withholding had not been required,

              PROVIDED THAT:

              (i)    the Lessor or, as the case may be, that Relevant Member
                     shall have an absolute discretion as to the time at which
                     and the order and manner in which it realises or utilises
                     any Tax benefit;

              (ii)   the Lessor or, as the case may be, that Relevant Member
                     shall not be obliged to disclose any information regarding
                     its business, Tax affairs or Tax computations;

              (iii)  if the Lessor or, as the case may be, that Relevant Member
                     has made a payment to the Lessee pursuant to Clause
                     25.3(c) on account of any Tax benefit and it subsequently
                     transpires that the Lessor or, as the case may be, that
                     Relevant Member did not receive that Tax benefit, or
                     received a lesser Tax benefit, the Lessee shall pay on
                     demand to the Lessor such sum as the Lessor may determine
                     as being necessary to restore the after-Tax position of
                     the Lessor or, as the case may be, that Relevant Member to
                     that which it would have been had no adjustment under this
                     proviso (iii) been necessary.  Any sums payable by the
                     Lessee to the Lessor under this proviso (iii) shall be
                     subject to the provisions of Clause 25.5;

             (iv)    the Lessor or, as the case may be, that Relevant Member
                     shall not be obliged to make any payment under this Clause
                     25.3 if, by doing so, it would contravene the terms of
                     any applicable law or any notice, direction or
                     requirement of any governmental or regulatory authority
                     (whether or not having the force of law);

              PROVIDED FURTHER THAT if the Lessee requests the Lessor, in
              writing, to make an application pursuant to the provisions of a
              double tax treaty for relief (whether in whole or in part) in
              respect of any deduction or withholding required by law, the
              Lessor shall (at the cost of the Lessee) take such action as
              the Lessee shall reasonably request to make such application to
              an applicable Tax authority.  If the Lessor subsequently obtains
              a repayment (whether in whole or in part) of such deduction or
              withholding from that Tax authority in circumstances where the
              Lessee has made an increased payment or paid a compensating sum
              under this Clause 26.3 the Lessor shall, provided that the
              Lessor has received all amounts which are then due and payable
              by the Lessee under any of the provision of this Agreement and
              the other Lease Documents, pay to the Lessee as great an amount
              of the repayment as possible as will leave the Lessor in no
              worse position than the Lessor would have been in if the
              deduction or withholding had not been required.

25.4   Value Added Tax

       (a)    If the Lessor makes any supply for Value Added Tax purposes
              pursuant to or in connection with this Agreement or any of the
              other Lease Documents or any transaction or document contemplated
              herein or therein, the Lessee shall (save to the extent that the
              Lessor is entitled to be indemnified in respect of that Value
              Added Tax by an increased payment under Clause 25.4(b) below) at
              such time as the Lessor certifies to the Lessee that any amount
              of VAT payable in respect of that supply has not been paid to the
              Lessor and having duly accounted for such VAT to Customs and
              Excise at the correct time and having duly claimed bad debt
              relief in respect of that VAT the Lessor either has or has
              not received such relief, pay on demand to the Lessor an amount
              equal to the aggregate of any Value Added Tax which is payable in
              respect of that supply and has not been the subject of bad debt
              relief and interest on an amount equal to any Value Added Tax
              payable in respect of the supply at LIBOR ascertained in respect
              of the date on which such VAT was accounted for to Customs and
              Excise for the period from that date until the date of the
              Lessor's certificate or the date upon which bad debt relief is
              received.

       (b)    Save where expressly provided to the contrary, all payments made
              under this Agreement and the other Lease Documents are calculated
              without regard to Value Added Tax.  If any such payment
              constitutes the whole or any part of the consideration for a
              taxable or deemed taxable supply (whether that supply is
              taxable pursuant to the exercise of an option or otherwise), the
              amount of that payment shall be increased by an amount equal to
              the amount of Value Added Tax which is chargeable in respect of
              the taxable supply in question PROVIDED THAT the Lessor shall not
              be liable to pay an amount in respect of Value Added Tax until
              such time as, and to the extent that it receives a credit
              for such VAT as "input tax", as defined in sub-section (1) of
              section 24 of VATA, under sections 25 and 26 of VATA, in which
              case such payment shall be made as soon as practicable after the
              credit is received.

       (c)    If any amount of Value Added Tax paid by the Lessor pursuant to
              this Agreement or any of the Lease Documents shall be
              Irrecoverable VAT, the Lessee shall forthwith on demand by the
              Lessor indemnify the Lessor and keep the Lessor fully indemnified
              at all times against such Irrevocable VAT PROVIDED THAT if the
              Lessor determines that such Irrecoverable VAT subsequently proves
              to be recoverable, the Lessor shall pay to the Lessee such
              amount, if any, as the Lessor in its absolute discretion shall
              determine will leave the Lessor in no better and no worse a
              position than the Lessor would have been in if no payment had
              been made by the Lessee to the Lessor under this Clause 25.4(c).

25.5   Grossing-up of indemnity payment

       If the Lessor makes a payment or suffers a loss in respect of which it
       is entitled to be indemnified or reimbursed or otherwise kept harmless
       pursuant to any provision of this Agreement or any of the other Lease
       Documents and the Lessor determines in its absolute discretion that:

       (a)    (i)    the loss or payment is not or will not be wholly
                     deductible in computing the profits of the Lessor for the
                     purposes of Tax whilst the payment to be made by way of
                     indemnity or reimbursement (for the purpose of this
                     Clause 25.5, the "Payment") will or is likely to
                     give rise to a Tax Liability for the Lessor; or

              (ii)   the Payment is likely to give rise to a Tax Liability for
                     the Lessor in any Accounting Period of the Lessor earlier
                     than the Accounting Period in which the loss or payment is
                     deductible;

              then, at the time of the Payment the Lessee shall pay such an
              amount (the "Additional Payment") as will, after taking into
              account any Tax Liability likely to be suffered or incurred by
              the Lessor in respect of the Payment or the Additional Payment,
              leave the Lessor in the same after-Tax position as it would
              have been in had the Payment not given rise to any Tax Liability
              and the loss or payment had not been deductible PROVIDED THAT if
              at the time of the Payment the Lessor considers that no
              Additional Payment is necessary but subsequently determines that
              an Additional Payment is necessary to indemnify the Lessor, the
              Additional Payment shall be paid by the Lessee to the Lessor
              following a demand by the Lessor;

       (b)    the loss or payment has proved to be wholly deductible in
              computing the profits of the Lessor for the purposes of Tax
              whilst the Payment by the Lessee has provided not to give rise to
              any Tax Liability for the Lessor, then the Lessor shall pay to
              the Lessee a rebate of Rent (for the purposes of this Clause 26.5
              the "Rebate") of such amount as will leave the Lessor in no
              better and no worse position than it would have been in if the
              Payment had not given rise to a Tax Liability for the Lessor and
              the loss or payment had not been deductible,

       PROVIDED THAT if the Lessor subsequently determines that any payment by
       the Lessee to the Lessor under this Clause 25.5 by way of an Additional
       Payment or, as the case may be, any Rebate was calculated on an
       incorrect basis, such adjustment shall be made between the Lessor and
       Lessee as the Lessor determines necessary to restore the after-Tax
       position of the Lessor to that which it would have been if no adjustment
       had been necessary.

25.6   Documentary and other similar Taxes

       All stamp, documentary, registration or other like duties or Taxes,
       including any penalties, additions, fines, surcharges or interest
       relating thereto, which are imposed on or chargeable on or in
       connection with this Agreement or any of the other Lease Documents shall
       be paid by the Lessee PROVIDED THAT the Lessor shall be entitled but not
       obliged to pay any such duties or Taxes, whether or not they are its
       primary responsibility, whereupon the Lessee shall on demand indemnify
       the Lessor against those duties or Taxes.  The Lessor agrees that if
       it decides to pay any such duties or Taxes, it shall give the Lessee not
       less than five (5) Houston Business Days' notice before making such
       payment.

25.7   Deductibility

       Notwithstanding anything contained in this Agreement or any of the other
       Lease Documents, if the Lessor determines that any payment which it is
       required to make to the Lessee under this Agreement or under any of the
       other Lease Documents, by way of rebate of Rent or otherwise (but
       excluding any rebate of Rent under Clause 10.2 or Clause 20.2), will
       not or may not be fully deductible in computing the Lessor's liability
       to Corporation Tax for the Accounting Period of the Lessor in which the
       payment is made, the Lessor shall be entitled to withhold and retain
       from that payment such amount as the Lessor determines to be necessary
       to enable it to occupy the same after-Tax position as it would
       occupy if the payment were fully deductible as aforesaid;

       PROVIDED THAT if:

       (a)    any such payment is made without withholding and the Lessor
              subsequently determines that the payment will not or may not be
              fully deductible as aforesaid; or

       (b)    any such payment is made subject to withholding and the Lessor
              subsequently determines that no such withholding ought to have
              been made or the basis on which the withholding was calculated
              was incorrect;

       such adjustment shall be made between the Lessor and the Lessee as the
       Lessor determines to be necessary, taking into account the time value of
       money, to enable the Lessor to occupy the same after-Tax position as it
       would occupy if no such adjustment were necessary.  Any sum payable by
       the Lessee to the Lessor under this proviso shall be subject to the
       provisions of Clause 25.5.

26.   PRESERVATION OF INDEMNITIES

       Without prejudice to damages or other claim which either party may, at
       any time, have against the other hereunder or under any of the Lease
       Documents it is hereby agreed and declared that the indemnities given by
       the Lessee in favour of the Lessor or any member of the Lessor's Group
       contained in this Agreement shall continue in full force and effect
       notwithstanding any sale or other disposition of the Vessel, a Total
       Loss having occurred or any breach of the terms hereof or thereof by
       the Lessor (including fundamental breach), the repudiation by the Lessor
       or the Lessee of this Agreement or any of the Lease Documents or the
       expiration of the Lease Period through effluxion of time or otherwise
       or the termination of the leasing or sale of the Vessel hereunder or
       any other circumstance whatsoever.

27.    ASSIGNMENT

27.1   Assignment by Lessor

27.1.1 The Lessee acknowledges and agrees that the Lessor shall be entitled at
       any time and from time to time to assign, transfer, novate or otherwise
       dispose of all (but not part only) of its interest in the Vessel and
       the Lease Documents:

       (a)    to any person (the "Transferee") who is not a member of the
              Lessor's Group with the consent of the Lessee (such consent not
              to be unreasonably withheld) PROVIDED ALWAYS THAT:

              (i)    the assignment, transfer, novation or other disposal shall
                     be on terms that the Lessee shall be under no greater
                     obligation or liability under this Agreement and the other
                     Lease Documents to which it is a party than it would have
                     been under but for such assignment, transfer, novation or
                     other disposal;

              (ii)   the transferee (or its ultimate parent company) is a bank
                     or financial institution rated with one of Moody's
                     Investors Service, Inc. (or any successor to its ratings
                     business) or Standard & Poor's, a division of the
                     McGraw-Hill Companies (or any successor to its ratings
                     business) with a rating no lower than the rating of
                     Barclays Bank Plc with that ratings agency at that time;

              (iii)  the rights of the Lessee under the Lease Documents shall
                     not be adversely affected and shall be on equivalent
                     terms to the Lease Documents in force prior to the
                     assignment, transfer, novation or other disposal (and,
                     without prejudice to the generality of the foregoing,
                     the Lessee shall receive a mortgage from the replacement
                     lessor and a parent support letter from the replacement
                     lessor's ultimate parent in equivalent terms to those
                     granted pursuant to this Agreement); and

              (iv)   it shall, without limitation, be reasonable for the Lessee
                     to withhold its consent if it certifies that the proposed
                     transferee (or its ultimate parent company or a Subsidiary
                     (UK) of its ultimate parent company) is a company which
                     the Lessee or any other company or the Guarantor's Group
                     has valid business reasons for not entering into a
                     relationship with, without specifying those reasons; and

       (b)    to any person who is a member of the Lessor's Group without the
              need for the Lessee's consent provided that the Lessee shall be
              under no greater obligation or liability under this Agreement
              and the other Lease Documents to which it is party than it would
              have been under but for such assignment, transfer, novation
              or other disposal,

       and in each case, and the Lessee hereby agrees and undertakes that it
       will upon the request of the Lessor execute such further documents and
       give such notices as the Lessor may reasonably require in order to
       effect such assignment, transfer, novation or other disposal, provided
       that any costs incurred by the Lessee (including any reasonable legal
       fees and Irrecoverable VAT thereon) in connection therewith or with any
       consequential amendments to the Lease Documents shall be reimbursed by
       the Lessor.

27.1.2 The Lessor agrees to notify the Lessee promptly after any acquisition
       by the Lessor of any vessel or any rights to acquire any vessel, ship or
       similar seagoing structure (other than the Vessel).  If so requested by
       the Lessee within two (2) months following any such notification, the
       Lessor shall procure that the rights and interests of the Lessor in
       the Vessel and the rights and obligations of the Lessor under the Lease
       Documents are transferred at the cost of the Lessor to another member of
       the Lessor Group (which does not own any vessel, ship or similar
       seagoing structure) within a period of two (2) months following the
       request.

27.2   Assignment by the Lessee

       (A)    Except as expressly permitted by Clause 27.2(B), the Lessee may
              not assign, transfer or part with any of its rights or
              obligations under, or the benefit or burden of, this Agreement or
              the other Lease Documents to which the Lessee is a party
              without the prior written consent of the Lessor.

       (B)    The Lessee shall be entitled at any time and from time to time to
              assign and transfer the entire burden and benefit of this
              Agreement and each of the other Lease Documents to which it is a
              party (together but not separately) to any person who is a member
              of the Guarantor's Group without the need for the Lessor's
              consent provided that:

              (i)    the transferee, the Guarantor and any other necessary
                     person shall have entered into such documentation as may
                     be necessary to give effect to such assignment and
                     transfer (including any amendment that may be necessary
                     to the terms of the Guarantee to ensure that the
                     Guarantee extends to the obligations of the assignee
                     hereunder) and the Lessor shall be under no greater
                     obligation or liability under this Agreement and the other
                     Lease Documents than it would have been under but for such
                     transfer, and the Lessor shall not suffer or incur any
                     greater cost or loss of benefit under this Agreement and
                     the other Lease Documents as a result of such assignment
                     or transfer; and

              (ii)   any costs and expenses (including stamp duty) in respect
                     of such transfer shall be for the Lessee's account.

       (C)    The Lessor agrees from time to time, and at the Lessee's expense,
              to co-operate with the Lessee and do and perform such acts and
              execute and deliver such instruments as the Lessee may reasonably
              request to effect such assignment and transfer referred to in
              Clause 27.2(B).

28.    LESSOR'S RIGHT OF SET-OFF; GROSS PAYMENT OF REBATES

28.1   Subject to the following provisions of this Clause 28, if at any time a
       Relevant Event shall have occurred and be continuing, the Lessor shall
       be entitled to set off or withhold from any sum or sums expressed in
       this Agreement or any of the Lease Documents to be payable by the Lessor
       to the Lessee any amounts due or expressed to be due (or which
       would, if demanded, be due) from the Lessee, to the Lessor under this
       Agreement or any of the Lease Documents.  Save as aforesaid the Lessee,
       authorises the Lessor to apply any credit balance to which the Lessee is
       entitled on any account of the Lessee with the Lessor in satisfaction of
       any sum due and payable from the Lessor hereunder or under any of the
       other Lease Documents but unpaid; for this purpose, the Lessor is
       authorised to purchase with the moneys standing to the credit of any
       such account such other currencies as may be necessary to effect such
       application.  The Lessor shall not be obliged to exercise any right
       given to it by this Clause 28.1

28.2   All sums payable by the Lessor under Clause 10.2 and Clause 20.2 shall
       be paid in full without any set-off or counterclaim whatsoever and free
       and clear of all deductions or withholdings whatsoever save only as may
       be required by law.

28.3   If any deduction or withholding is required by law in respect of any
       payment due to the Lessee under Clause 10.2 or Clause 20.2, the Lessor
       shall increase the payment in respect of which the deduction or
       withholding is required so that the net amount received by the
       Lessee after the deduction or withholding (and after taking account of
       any further deduction or withholding which is required to be made which
       arises as a consequence of the increase) shall be equal to the amount
       which the Lessee would have been entitled to receive in the absence of
       any requirement to make a deduction or withholding.

28.4  If the Lessor has been required to make any payment under Clause 28.3,
      the Lessee shall, on the date on which the Lessor is required to make the
      payment, pay to the Lessor an amount equal to the amount which the Lessor
      is required to pay under Clause 28.3.  Any such payment shall be subject
      to the terms of Clause 25.5.

29.   MISCELLANEOUS

29.1  General Fees and Expenses

      The Lessee shall on demand:

      (a)     pay or reimburse to the Lessor all costs and expenses (including,
              without limitation, the Lessor's Expenses and survey costs) of
              the Lessor properly incurred in connection with the negotiation,
              preparation or execution of the Lease Documents and any
              amendment, variation or waiver from time to time hereto or
              thereto or any consent from time to time hereunder or thereunder
              and with delivery to or by the Lessor, redelivery or sale of the
              Vessel or any part thereof, save to the extent that such costs
              and expenses have been taken into account in the Financial
              Schedule;

      (b)     pay or reimburse to the Lessor all costs and expenses (including,
              without limitation, legal fees and survey costs and expenses)
              properly incurred by the Lessor in connection with the operation
              of Clauses 4.3 to 4.6 inclusive and paragraph 2 of Schedule 4,
              Part 5 and of Clause 3.6 of the Novation Agreement and in
              connection with or incidental to the breach by any party (other
              than the Lessor and any Payment Bank) of any of its respective
              obligations under the Lease Documents, the protection,
              preservation or enforcement of any right or remedy conferred upon
              the Lessor under any of the Lease Documents or by law, or to any
              action or act to recover possession of the Vessel or any part
              thereof, whether or not any such action progresses to judgment;

      (c)     pay or reimburse to the Lessor all costs and expenses (including,
              without limitation, fees of legal and other advisers) incurred in
              connection with any action or act brought by the Lessor to
              recover any Rent or other payments due from any party (other than
              the Lessor and any Payment Bank) under this Agreement or any of
              the other Lease Documents; and

      (d)     pay or reimburse to the Lessor all costs and expenses (including
              without limitation, legal, insurance and other advisers) properly
              incurred by the Lessor in connection with a Total Loss of the
              Vessel.

29.2  The Lessee acknowledges receipt of a copy of the Fee Letters setting out
      arrangement and other fees and hereby authorises the payment of these
      fees as set out in such letters.

29.3  The Lessee shall pay to the Lessor, by way of fee, the Costs of
      Management Time to the extent provided in Clause 1.4 and the Costs of
      Management Time incurred by the Lessor in connection with any of the
      matters referred to in Clauses 4.3 to 4.6 inclusive, Clause 10 and
      Clause 24.1, the operation of Clause 12 and Clause 21, any exercise of
      the Lessee's rights under Clause 27.2, the operation of the letter of
      even date herewith from the Lessor to the Lessee entitled "Tax
      Consultation", any amendment or supplement to this Agreement or the Lease
      Documents and any restructuring of the transaction implemented by this
      Lease and the Lease Documents (unless requested by, and for the sole
      benefit of, the Lessor).

29.4  Delay in enforcement, waivers etc.

      All waivers of any right, power or privilege by any of the Lessor or the
      Lessee shall be in writing signed by the Lessor or, as the case may be,
      the Lessee.  No failure or delay on the part of the Lessor or the Lessee
      in exercising any power or right hereunder shall operate as a waiver
      thereof nor shall any single or partial exercise of any such right or
      power preclude any other or further exercise of any such right or power.
      The rights and remedies herein provided are cumulative and not exclusive
      of any rights or remedies provided by law or in equity.

29.5  Variation

      This Agreement shall only be varied by an instrument in writing executed
      by the parties hereto.

29.6  Invalidity

       If any term or provision of this Agreement or the application thereof to
       any person or circumstance shall to any extent be invalid or
       unenforceable the remainder of this Agreement or application of such
       term or provision to persons or circumstances other than those as to
       which it is already invalid or unenforceable shall not be affected
       thereby and each term and provision of this Agreement shall be valid and
       shall be enforceable to the fullest extent permitted by law.

29.7   Notices

       (a)    Any demand, consent, record, election or notice (a "Notice")
              required or permitted to be given by either party to the other
              under this Agreement shall be in writing and sent by first class
              prepaid airmail post or delivered by hand or sent by fax
              addressed as follows:

              (i)    if to the Lessor to:

                     BMBF (NO.12) LIMITED
                     c/o Barclays Mercantile Business Finance Limited
                     Churchill Plaza
                     Churchill Way
                     Basingstoke
                     Hampshire RG21 7GL

                     Fax:+(44) (0)1256 810283
                     Attention:Company Secretary
                     Referring to:"Schedule number 52/5050 5371-3"

              (ii)   if to the Lessee to:

                     Global Marine International Drilling Corporation
                     c/o McKinney Bancroft & Hughes,
                     Mareva House,
                     4 George Street,
                     PO Box 3937,
                     Nassau,
                     The Bahamas.

                     Fax:+ (1) 242 328 2520
                     Attention:Richard H.R. Lightbourn

              or in each case to such address or facsimile number as one party
              may, by not less than three (3) Houston Business Days' notice,
              notify in writing to the other party hereto.
       
       (b)    Any Notice shall be deemed to have been given or received to or
              by the party to whom it is addressed ten (10) days following
              posting, if posted by first class prepaid airmail post and on
              receipt, if delivered by hand.  Any notice sent by fax shall
              be treated as received only when the sender has received a fax by
              return from the recipient acknowledging receipt.

       (c)    Any notice to the Lessee shall be copied to the Guarantor in
              accordance with the notice provisions of the Guarantee but no
              failure to serve a copy on the Guarantor will invalidate a
              notice served on the Lessee.

29.8   Applicable law

       This Agreement shall be governed by and construed, and performance
       thereof shall be determined, in accordance with the laws of England.

29.9   Counterparts

       This Agreement may be executed in several counterparts and any single
       counterpart or set of counterparts, signed in either case by all of the
       parties, shall be deemed to be an original, and all taken together shall
       constitute one and the same instrument.

29.10  Further assurances

       The Lessee agrees from time to time, and at the Lessee's expense, to do
       and perform such other and further acts and execute and deliver any and
       all such other instruments as may be required by law or reasonably
       requested by the Lessee to establish, maintain and protect the rights
       and remedies of the Lessor and to carry out and effect the intent and
       purpose of this Agreement and the other Lease Documents.

29.11  Entire agreement

       This Agreement, in conjunction with the other Lease Documents to which
       the Lessor is a party and any letter agreements of even date herewith or
       subsequent hereto between the Lessor and any other party to the Lease
       Documents, constitute the entire agreement between the parties hereto in
       relation to the leasing of the Vessel by the Lessor to the Lessee, and
       supersede all previous proposals, term sheets, agreements and other
       written and oral communications in relation thereto.

29.12  Submission to jurisdiction

       (a)    The Lessee (which shall include its respective successors and
              permitted assigns from time to time) hereby submits to the
              non-exclusive jurisdiction of the courts of England with regard
              to this Agreement and the other Lease Documents to which the
              Lessor is a party (the "Relevant Agreements").  Any legal
              action or proceedings with respect to this Agreement and the
              other Lease Documents may be brought in the courts of England or
              such other jurisdiction as the Lessor may elect.  By its
              execution and delivery of this Agreement, the Lessee:

              (i)    hereby accepts for itself and in respect of its property,
                     generally and unconditionally, the non-exclusive
                     jurisdiction of the aforesaid courts with respect to the
                     Relevant Agreements;

              (ii)   waives any objections on the grounds of venue or forum
                     non conveniens or any similar grounds and agrees that
                     legal proceedings in any one or more jurisdictions shall
                     not preclude legal proceedings in any other jurisdiction
                     with respect to the Relevant Agreements;

              (iii)  agrees that final judgment against it in any action or
                     proceedings shall be conclusive and may be enforced in
                     any other jurisdiction with respect to the Relevant
                     Agreements within or outside England by suit on the
                     judgment, a certified copy of which shall be conclusive
                     evidence of the fact and of the amount of its
                     Indebtedness; and

              (iv)   hereby consents generally in respect of any legal action
                     or proceeding arising out of or in connection with the
                     Relevant Agreements to the giving of any relief or the
                     issue of any process in connection with such action or
                     proceeding including, without limitation, the making,
                     enforcement or execution against any property whatsoever
                     (irrespective of its use or intended use) of any order
                     or judgment which may be made or given in such action or
                     proceeding.

       (b)    The Lessee in the case of the courts of England, hereby
              designates, appoints and empowers WFW Legal Services Limited
              (ref: CALP/2628.16002), at the address of its registered office
              for the time being, (presently of 15 Appold Street, London EC2A
              2HB) to receive, for it and on behalf of it, service of
              process in any legal action or proceedings with respect to the
              Relevant Agreements.  The Lessee agrees that it will at all
              times continuously maintain an agent to receive service of
              process in England on its behalf and on behalf of its property
              with respect to the Relevant Agreements and if, for any reason,
              such agent named above or its successor shall no longer serve as
              agent of the Lessee to receive service of process in England, the
              Lessee shall promptly appoint a successor in England and advise
              the Lessor thereof.  It is understood that a copy of any process
              served as above will be promptly forwarded (if necessary) by
              first class prepaid air mail post to the Lessee but the failure
              of the Lessee to receive such copy shall not affect in any way
              the service of such process on the said person as the agent of
              the Lessee.

29.13  Judgment currency

       If, under any applicable law, whether as a result of a judgment against
       any of the parties hereto or the liquidation of any of the parties
       hereto for any other reason, any payment under or in connection with
       this Agreement or any of the other Lease Documents is made or is
       recovered in a currency (the "Other Currency") other than that in which
       it is required to be paid hereunder or thereunder (the "Original
       Currency") then, to the extent payment (when converted at the rate of
       exchange and after deducting commission on the date of payment or, in
       the case of a liquidation, the latest date for the determination of
       liabilities permitted by the applicable law) falls short of the amount
       which is required to be paid under or in connection with this Agreement
       or any of the other Lease Documents as aforesaid, the payer shall as a
       separate and independent obligation fully indemnify the payee on demand
       against the amount of the shortfall; and for the purposes of this Clause
       29.11 "rate of exchange" means the rate at which the payee is able as at
       11.00 a.m. (London time) on the relevant date to purchase the Original
       Currency from the Bank in London with the Other Currency.

30.    CONFIDENTIALITY

30.1   The Lessor hereby undertakes to the Lessee not to disclose and shall
       ensure that its officers, employees, agents and advisers shall treat as
       confidential the terms of the Lease Documents and any and all business
       or financial or other information supplied in or in connection with the
       Lease Documents ("Confidential Information") and that it shall not
       (except, where reasonably required in connection with this transaction,
       to any Government Entity of the United Kingdom), without the prior
       written consent of the Lessee, disclose to any third party any of the
       Confidential Information, save that it shall be entitled to disclose
       any Confidential Information:-

       (a)    to another member of the Lessor's Group or to any agent or
              adviser of the Lessor or of such other member; or

       (b)    to the extent required by law or a valid court order or in
              connection with any proceedings, enforcement of rights or
              benefits, or protection of rights or benefits, under this
              Agreement or any of the other Lease Documents or
              pursuant to a direction of the Bank of England or the Financial
              Services Authority or required by any regulatory, governmental or
              taxing authority; or

       (c)    to the extent it has become part of the public knowledge or
              literature (except through a breach of this Clause 30.1).

30.2   The Lessee hereby undertakes not to disclose and shall ensure that its
       officers, employees, agents and advisers shall not directly or
       indirectly disclose (without the consent of the Lessor) to any third
       party (except, where reasonably required in connection with this
       transaction, to any Government Authority of the United Kingdom or the
       United States of America, including, for the avoidance of doubt, the
       Securities and Exchange Commission) information relating to the
       commercial terms of transactions effected by the Lease Documents, as
       evidenced by the form, terms or substance of the Lease Documents
       PROVIDED THAT the restriction contained in this Clause 30.2 shall not
       apply to any disclosure:-

       (a)    to another member of the Guarantor's Group or to any agent or
              adviser of the Lessee or of such other member in which case the
              Lessee shall be liable for any such person's breach of this
              Clause 30.2; or

       (b)    to the extent required by law or a valid court order or in
              connection with any proceedings, enforcement of rights or
              benefits, or protection of rights or benefits, under this
              Agreement or any of the other Lease Documents or
              required by any governmental, regulatory or taxing authority;
              or

       (c)    to the extent it has become part of the public knowledge or
              literature (except through breach of this Clause 30.2).

30.3   The provisions of this Clause 30 shall survive the expiry or earlier
       termination of the Lease Period, the Final Date and the sale or Total
       Loss of the Vessel.

AS WITNESS this Agreement is executed by each of the parties hereto, in the
case of the Lessee as its deed and is intended to be and is hereby delivered by
the Lessee and in the case of the Lessor, under the hands of its duly
authorised representative, in each case the day and year above written.



                                SCHEDULE 1

                            Financial Schedule


                                SCHEDULE 2

                                The Vessel


Name of Vessel                             GLOMAR IRISH SEA I

Registration
Registered Owner                           To be registered in the name of:
                                           BMBF (NO.12) Limited
                                           Churchill Plaza, Churchill Way,
                                           Basingstoke, Hampshire RG21 7GP
                                           England

Flag of Registration                       To be registered under the
                                           Panamanian flag under the laws of
                                           the Republic of Panama

Shipbuilder                                Harland & Wolff Shipbuilding and
                                           Heavy Industries Ltd.
                                           Queens Island, Belfast,
                                           Northern Island BT3 9DU 

Class/Type                                 Class 456 Ultra-Deepwater Drillship

Hull Number                                1740

Main dimensions at normal drilling draft
Length Between Perpendiculars              210.0 metres 

Breadth (molded)                           36.0 metres

Depth (molded)                             17.8 metres

Design Variable Deck Load                  25,000 tonnes

Deadweight (approximately)                 30,000 tonnes




                                SCHEDULE 3

                                  Part 1

                Representations and Warranties by the Lessee


(A)    The Lessee is a company duly incorporated with limited liability and
       validly existing under the laws of the Bahamas and has the corporate
       power to own its assets and carry on its business as it is being 
       presently conducted.

(B)    The Lessee has the corporate power and authority to enter into and
       perform its obligations under each of the Lease Documents to which it
       is a party and to consummate the transactions contemplated thereby.

(C)    The execution, delivery and performance of each of the Lease Documents
       to which the Lessee is a party and the consummation of the transactions
       contemplated thereby have been duly authorised by all necessary or
       appropriate corporate action on the part of the Lessee, do not require
       any shareholder approval, or approval or consent of any trustee or
       holders of any indebtedness or obligations of the Lessee except such as
       have been duly obtained and are in full force and effect, and do not
       contravene any law, governmental rule, regulation or decree, judgment,
       injunction or order binding on the Lessee or any of its assets, or the
       Constitutive Documents of the Lessee or contravene the provisions of,
       or constitute a default under, any mortgage, contract or other agreement
       or instrument to which the Lessee is a party or by which it or any of
       its assets is bound or affected, or will result in the creation of any
       Lien upon the property or assets of the Lessee (other than as provided
       in the Lease Documents).

(D)    Neither the execution nor the delivery nor the performance by the
       Lessee of any of the Lease Documents to which it is a party nor the
       consummation by the Lessee of any of the transactions contemplated
       thereby, require the consent or approval of, the giving of notice
       to, the registration with, or the taking of any other action in
       respect of, any governmental or other authority or agency.

(E)    Each of the Lease Documents to which the Lessee is a party constitutes,
       or when executed and delivered will constitute, the legal, valid and
       binding obligations of the Lessee, enforceable against it in accordance
       with its terms, subject to applicable laws relating to bankruptcy,
       insolvency or liquidation or any other laws or legal procedures
       affecting generally the enforcement of creditors' rights and the
       applicable general principles of equity;

(F)    There are no pending or threatened litigation, arbitration or
       administrative actions or proceedings against the Lessee or any of its
       property or assets before any court, arbitrator or administrative agency
       or authority which will or might reasonably be expected to have a
       materially adverse effect on the financial condition, business or
       operation of the Lessee or on the ability of the Lessee to perform at
       all times its obligations under each of the Lease Documents to which it
       is a party.

(G)    No Termination Event has occurred and is continuing or would result
       from the entry into or performance of this Agreement or any of the
       other Lease Documents to which the Lessee is a party.

(H)    It is not necessary or advisable under any applicable laws, in order to
       ensure the validity of this Agreement or any of the other Lease
       Documents, to establish or protect the property rights of the Lessor in
       the Vessel or any part thereof that any of the Lease Documents or
       any other instrument relating thereto be filed, registered or recorded
       or that any other action be taken or if any such filings, registrations,
       recordings or other actions are necessary or advisable, the same have
       been effected or will have been effected on or before the Delivery Date.

(I)   The claims of the Lessor against the Lessee under this Agreement and
      under any of the other Lease Documents to which it and the Lessor are
      parties will rank at least pari passu with the claims of all its other
      unsecured creditors save those whose claims are preferred solely by
      mandatory application of any bankruptcy, insolvency, liquidation or
      other analogous laws of general application.

(J)   The choice by the Lessee of English law to govern this Agreement and any
      of the other Lease Documents to which it is a party and the submission
      by it to the jurisdiction of the High Court of Justice in London in the
      Lease Documents to which it is a party is valid and binding.

(K)   Neither the Lessee nor any of its assets is entitled to any immunity on
      the grounds of sovereignty or otherwise from any legal actions or
      proceedings (which shall include, without limitation, suit, attachment
      prior to judgment, execution or other enforcement).

(L)   Under the law in force at the date of this Agreement, all payments to be
      made by the Lessee to the Lessor under this Agreement and any of the
      other Lease Documents to which it is party may be made by it free and
      clear of and without deduction for any Taxes and no deductions or
      withholdings are required to be made therefrom.

(M)   The Lessee is a wholly-owned direct or indirect Subsidiary (US) of the
      Guarantor.

(N)   The Vessel on the Delivery Date will:

      (i)     be eligible in all respects for registration in the Flag State;

      (ii)    maintain the Classification free of all overdue recommendations,
              reservations, notations and requirements of the Classification
              Society and will be tight, staunch, strong and seaworthy and
              will have placed on board full classification and other
              certificates required under all Applicable Laws and the rules,
              regulations and requirements of the Classification Society and
              the International Maritime Organisation including those to which
              the Vessel, her Master, officers and crew are subject at the
              Delivery Date; and

      (iii)   in compliance with all material applicable Environmental Laws
              and Environmental Permits required in connection with the Vessel;

(O)    At Delivery, the United States Oil Pollution Act 1990 will not apply to
       any of the Primary Obligors in relation to the Vessel at Delivery, but,
       to the extent it does so apply in the light of its location, the Primary
       Obligors will at Delivery comply with all applicable requirements in
       relation to the Vessel of such act, as amended, the regulations
       promulgated and guidance having the force of law issued pursuant thereto.



                                  SCHEDULE 3

                                    Part 2

                 Representations and Warranties by the Lessor

(A)    The Lessor is duly incorporated and validly existing under the laws of
       England as a limited liability company and has the corporate power to
       own its assets and to carry on its business as it is being presently
       conducted.

(B)    The Lessor has the power to execute, deliver and perform its obligations
       under the Lease Documents to which it is a party and all necessary
       corporate, shareholder and other action has been duly obtained or taken
       to authorise the execution, delivery and performance of the same.

(C)    The execution, delivery and performance of each of the Lease Documents
       to which the Lessor is a party and the consummation of the transactions
       contemplated thereby have been duly authorised by all necessary or
       appropriate corporate action on the part of the Lessor, do not require
       any shareholder approval, or approval or consent of any trustee or
       holders of any indebtedness or obligations of the Lessor except such as
       have been duly obtained and are in full force and effect, and do not
       contravene any law, governmental rule, regulation or decree, judgment,
       injunction or order binding on the Lessee or any of its assets, or
       the Constitutive Documents of the Lessor or contravene the provisions
       of, or constitute a default under, any mortgage, contract or other
       agreement or instrument to which the Lessor is a party or by which it
       or any of its assets is bound or affected, or will result in the
       creation of any Lien upon the property or assets of the Lessor (other
       than the mortgage over the Vessel to be provided to the Lessee or as
       otherwise provided in the Lease Documents).

(D)    Neither the execution nor the delivery nor the performance by the Lessor
       of any of the Lease Documents to which it is a party nor the
       consummation by the Lessor of any of the transactions contemplated
       thereby, require the consent or approval of, the giving of notice
       to, the registration with, or the taking of any other action in
       respect of, any governmental or other authority or agency.

(E)    Each of the Lease Documents to which the Lessor is a party constitutes,
       or when executed and delivered will constitute, the legal, valid and
       binding obligations of the Lessor, enforceable against it in accordance
       with its terms, subject to applicable laws relating to bankruptcy,
       insolvency or liquidation or any other laws or legal procedures
       affecting generally the enforcement of creditors' rights and the
       applicable general principles of equity.

(F)    The Lessor does not own or have any rights to acquire any vessel other
       than the Vessel.



                                    SCHEDULE 4

                                      Part 1

           Conditions precedent to the obligations of the Lessor generally


The Lessor shall have received each of the following in form and substance
satisfactory to the Lessor:

1.     In respect of each Primary Obligor

       (a)    a copy certified by a duly authorised officer of the relevant
              person to be a true, complete and up-to-date copy of the
              Constitutive Documents of that person;

       (b)    a copy, certified by a duly authorised officer of the relevant
              person to be a true copy, and as being in full force and effect
              and not amended or rescinded, of resolutions of the board of
              directors or governors (or of a committee of the board of
              directors or governors) of that person:

              (i)    authorising the entering into by that person of such of
                     this Agreement and the other Lease Documents to which
                     such person is party; and
              
              (ii)   authorising an individual or individuals to sign and
                     deliver on behalf of that person such of this Agreement
                     and the other Lease Documents to which such person is
                     party,

              or, in each case such other evidence as the Lessor may require
              that all necessary corporate action has been taken for the
              authorisations referred to in paragraphs (i) and (ii) above;

       (c)    a copy certified by a duly authorised officer of that person to
              be a true copy, and as being in full force and effect and not
              revoked or withdrawn, of any power of attorney issued by that
              person pursuant to the said resolutions; and

       (d)    a certificate of incumbency in relation to each Primary Obligor
              together with a list of authorised signatories with specimen
              signatures and, in relation to each Primary Obligor a certificate
              of goodstanding in relation to that person.

2.     Evidence that the Shipbuilding Contract and the Novation Agreement have
       each been approved by the board of directors of the Shipbuilder, and
       that the signatory for the Shipbuilder is authorised to execute the
       Shipbuilding Contract and the Novation Agreement.

3.     Insurances

3.1    Evidence that all items intended to form part of the Vessel or to which
       the Lessor has title are insured on terms acceptable to the Lessor
       including, but not limited to, receipt by the Lessor of letters of
       undertaking from the Approved Brokers.

3.2    An opinion from the insurance advisers to the Lessor, as to the adequacy
       of the Insurances.

4.     A power of attorney or a certified true copy extract of the up-to-date
       signature book of each Payment Bank, evidencing the extent of the
       signing authority of all relevant signatories and specimen signatures of
       those signatories or other evidence reasonably acceptable to the Lessor
       of the authority of the relevant signatories to execute each of the
       Lease Documents to which the relevant entity is party.

5.     Evidence that all governmental and other licences, approvals, consents,
       registrations and filings necessary for any matter or thing contemplated
       by the Lease Documents and for the legality, validity, enforceability,
       admissibility and evidence and effectiveness thereof have been obtained
       or effected on an unconditional basis and remain in full force and
       effect (or, in the case of effecting any registrations and filings,
       that arrangements are satisfactory to the Lessor have been made for the
       effecting of the same within any applicable time limit).

6.     Legal opinions, in each form satisfactory to the Lessor:

       (i)    from Higgs & Johnson, Bahamas counsel to the Lessee;

       (ii)   from Richards, Layton & Finger, Delaware counsel to the Guarantor
              (including confirmation as to the US tax implications for the
              Lessor of entering into this Agreement and the other Lease
              Documents);

       (iii)  from Watson, Farley & Williams, New York, in relation to the
              ability of the Lessor to enforce the benefit of the pollution
              indemnity provisions in the Service Contract; and

       (iv)   such other legal opinions as the Lessor may reasonably request.

7.     Evidence that any consents which may be required for the due execution
       and performance of any Security Party (excluding the Service Contractor)
       of any Lease Document to which it is party have been obtained and are
       in full force and effect.

8.     Evidence of the acceptance of appointment by each service of process
       agent appointed or required to be appointed under the Lease Documents to
       which the Lessor is a party.

9.     An original counterpart of the Service Contract (if it has then been
       executed) (or a certified copy to the extent permitted by
       Clause 12.18(a)(ii)(A)) and an original counterpart of each
       other Lease Document to which the Lessor is a party, and a copy,
       certified by an officer of the Lessee as a true, complete and up to
       date copy, of each other Lease Document in each case duly executed and
       delivered by each party thereto other than the Lessor.

10.    A copy, certified as a true  and up-to-date copy by a duly authorised
       officer of the Lessee, of the Shipbuilding Contract and all amendments
       thereto as well as evidence that notices, invoices and certificates
       required thereunder have been duly executed and delivered together with
       a certified copy thereof.

11.    Evidence that the conditions precedent to the Lease Documents, including
       each of the Payment Agreements, the Shipbuilding Contract, the Novation
       Agreement, the Put-Option Agreement and the Sub-Lease (other than the
       conditions precedent contained in this Agreement) have been fulfilled or
       waived in accordance with the respective terms of the Lease Documents.

12.    A certificate from the Lessee stating that all the conditions precedent
       set out in Schedule 4, Part 4 have been satisfied or waived.


                                    SCHEDULE 4

                                      Part 2

Conditions precedent to Lessor's obligations to make payment of any Instalment


The Lessor shall have received each of the following in form and substance
satisfactory to the Lessor in relation to each Instalment:

1      Corporate power and authority

1.1    Confirmation from a duly authorised officer of each Primary Obligor that
       there has been no change in the Constitutive Documents of the relevant
       person since the date on which a certified copy thereof was provided to
       the Lessor, or, as the case may be a copy certified by a duly authorised
       officer of the relevant person of any amendments thereto and
       confirmation that the board resolutions or other corporate authorisation
       referred to in paragraph 1.2 of part 1 of this schedule 4 remain
       unamended and in force.

1.2    In relation to each Payment Bank either (i) confirmation that any
       document to be executed by that Payment Bank, as the case may be, will
       be executed by the individuals in respect of which valid and existing
       powers of attorney appointing such individual as attorneys in fact
       for the relevant party has already been received or in respect of which
       a certified true copy extract of an up-to-date signature book has been
       received and that the respective powers of attorney or signature books
       of each Payment Bank, remain valid, in full force and unamended or
       (ii) a further certified copy of the relevant power of attorney
       appointing such individual as an attorney in fact with power to sign
       such documents on behalf of the Payment Bank, or signature book of each
       Payment Bank.

2      Payments and Accounts

2.1    Evidence that the requirements of Clause 22.4.1 have been satisfied in
       relation to the Instalment Date for that Instalment, including
       confirmation from each Payment Bank that it has received (a) all
       applicable conditions precedent (including 'bring-down' legal opinions)
       under the relevant Payment Agreement and (b) the relevant payment or
       payments due from the Lessee on the relevant date to such Payment Bank
       pursuant to the terms of the relevant Payment Agreement.

2.2    Evidence that any consents which may be required for the due execution
       and performance of any Primary Obligor and each Payment Bank of any
       Lease Document to which it is party have been obtained and are in full
       force and effect.

2.3    Each of the representations and warranties to the Lessor on the part of
       each of the Payment Banks under the relevant Payment Agreement shall be
       true and accurate on the relevant Instalment Date as if given on that
       date by reference to the facts and circumstances then existing
       (excluding any representations and warranties which are not repeated on
       such date);

2.4    Any costs and expenses required by the terms of this Agreement to be
       paid by the Lessee and which are not taken into account in the
       Financial Schedule.

3.     The Vessel

       Evidence that amounts, the Sterling Equivalent of which (as at the
       respective payment dates under the Shipbuilding Contract) equals or
       exceeds the amount of the applicable Instalment, have fallen due under
       the Shipbuilding Contract.

4.     Representations and Warranties

       Confirmation from each Primary Obligor that each of the representations
       and warranties to the Lessor on the part of that Primary Obligor under
       any Lease Document are true and accurate on the date for payment of the
       relevant Instalment as if given on that date by reference to the facts
       and circumstances then existing.

5.     No Relevant Event

       Confirmation that no Relevant Event has occurred or would result from
       the payment of that Instalment.



                                 SCHEDULE 4
                                   Part 3

Conditions precedent to Lessor's obligations to take delivery of the Vessel and
                   to deliver the Vessel to the Lessee


In addition to the conditions set out in Parts 1 and 2 of this Schedule 4, the
Lessor shall have received each of the following in form and substance
satisfactory to the Lessor:


1.     Delivery of the Vessel from the Contractor and a protocol of delivery
       and acceptance in respect thereof;

2.     the Acceptance Certificate duly executed by the Lessee;

3.     a certificate duly executed by the person appointed in that behalf
       pursuant to the Supervision Agreement evidencing such person's
       acceptance of the Vessel on behalf of the Lessor in accordance with the
       terms of the Shipbuilding Contract and the Novation Agreement.

4.     all other documents required to be delivered by the Shipbuilder on the
       Delivery Date pursuant to the Shipbuilding Contract, including a
       confirmation of class certificate for the Vessel dated no earlier than
       ten (10) days prior to the Delivery Date showing the Vessel to
       be free from any overdue recommendations affecting class.

5.     a certificate duly executed by the Sub-Lessee evidencing the
       Sub-Lessee's unconditional acceptance of the Vessel in accordance with
       the terms of the Sub-Lease;

6.     a certificate from the Lessee as to the exact location of the Vessel;

7.     Classification Certificate in relation to the Vessel showing the Vessel
       to be free from any overdue recommendations affecting class;

8.     certified extract in the English language from the register of the Flag
       State, evidencing the provisional registration of the Vessel;

9.     confirmation that each of the representations and warranties to the
       Lessor on the part of each of the Primary Obligors under each Lease
       Document to which they are respectively party are true and accurate on
       the Delivery Date as if given on that date by reference to the
       facts and circumstances then existing (excluding any representations and
       warranties which are not repeated on the Delivery Date);

10.    confirmation that no Relevant Event has occurred or would result from
       the Delivery of the Vessel on the Delivery Date or the leasing of the
       Vessel to the Lessee pursuant to this Agreement.

11.    Payment of any costs and expenses required to be paid by the Lessee and
       which are not taken into account in the Financial Schedule.

12.    A legal opinion, in form satisfactory to the Lessor, from Watson, Farley
       & Williams, New York, in relation to the ability of the Lessor to
       enforce the benefit of the pollution indemnity provisions in the Service
       Contract.

13.    An original counterpart of the Exxon Contract, duly executed by the
       Exxon Party, (or a certified copy to the extent permitted by Clause
       12.18(a)(ii)(A)) together with the legal opinion required to be provided
       pursuant to Clause 12.18.

14.    Insurances - evidence that the Vessel is insured on terms acceptable to
       the Lessor including, but not limited to, an opinion from the insurance
       advisors to the Lessor as to the adequacy of the insurances and receipt
       by the Lessor of a certificate and letters of undertaking from the
       Approved Brokers and the mutual association or club with which the
       Liability Insurances are placed and a certified copy certificate of
       entry in respect of the insurance cover for the Vessel referred to in
       Clause 9.

15.    An opinion from the insurance advisers to the Lessor, as to the
       adequacy of the Insurances.

16.    A valuation of the Vessel addressed to the Lessor from Kennedy Marr,
       dated not earlier than one month prior to the Delivery Date,
       establishing that the market value of the Vessel is not less than the
       aggregate of the amounts paid or to be paid by the Lessor under the
       Shipbuilding Contract and the Novation Agreement.

17.    An opinion issued to the Lessor by suitably experienced independent
       engineers or valuers establishing that the Primary Period does not
       exceed the useful life of the Vessel.

18.    A certificate from the Guarantor confirming that all Consents and
       Licences required for the operation of the Vessel under the Contract
       have been acquired or, as the case may be, specifying those consents
       and licences which have not yet been obtained, provided however that
       the Lessor reserves the right to request copies of any such consents
       and licences.

19.    A certificate from the Lessee stating that all conditions precedent set
       out in Schedule 4, Part 5 have been satisfied or waived.



                                  SCHEDULE 4
                                    Part 4

                    Lessee's Conditions Precedent generally


The Lessee shall have received:

1.     In respect of the Lessor:

       (a)    a copy, certified by the secretary of the Lessor to be a true,
              complete and up-to-date copy of the Constitutive Documents of the
              Lessor;

       (b)    a copy, certified by a duly authorised officer of the Lessor to
              be a true copy, and as being in full force and effect and not
              amended or rescinded, of resolutions of the board of directors
              of the Lessor:

              (i)    authorising the Lessor to enter into this Agreement and
                     the Lease Documents to which it is a party; and

              (ii)   authorising an individual or individuals to sign and
                     deliver on behalf of the Lessor this Agreement and the
                     other Lease Documents to which the Lessor is a party.

2.           A letter from Barclays Bank PLC addressed to the Lessee and the
             Guarantor relating to the Lessor in the form previously agreed.



                                  SCHEDULE 4

                                    Part 5

                   Lessee's Conditions Precedent to Delivery


1.     The Lessor shall have executed the Lessor's Mortgage as required under
       Clause 4.3(i).

2.     The Lessor shall have complied with Clause 4.4.



                                   SCHEDULE 5

                         Form of Acceptance Certificate


Acceptance Certificate dated [     ], BMBF (NO.12) Limited pursuant to a Lease
Agreement dated[     ], December 1998 (the "Head Lease") between BMBF (NO.12)
Limited (the "Lessor") as the lessor and Global Marine International Drilling
Corporation (the "Lessee") as lessee.

Terms used herein shall have the meaning given thereto in the Head Lease.

1.     the Lessee confirms that, as between the Lessee and the Lessor
       (and without prejudice to any claims the Lessee may have against the
       Shipbuilder) the Vessel has been delivered by the Lessor to the Lessee
       and accepted by the Lessee from the Lessor as of [          ], 199[ ]
       in a condition and otherwise all in accordance with the Head Lease free
       of all Liens other than Permitted Liens.

2.     the Lessee confirms that on the aforesaid date of delivery the Vessel
       became subject to and governed by the provisions of the Head Lease.

3.     Each of the Lessee and the Guarantor confirms that as at the date hereof:

       (i)    no Relevant Event has occurred and is continuing; and

       (ii)   the representations and warranties on its part set out in
              Schedule 3 of the Head Lease are true and accurate.



                                   SCHEDULE 6

                                     PART 1

      Form of Hull and Machinery (Marine and War Risks) Loss Payable Clause


All recoveries under this policy shall be applied as follows:

(a)    at any time during the Lease Period, all claims hereunder in respect of
       actual or constructive or compromised or arranged total loss shall be
       paid in full to such account of the Lessor as the Lessor may notify to
       the insurers;

(b)    all other claims hereunder shall be paid in full to the Lessee or to
       its order, unless and until the Lessor shall have notified insurers
       hereunder to the contrary, whereupon all such claims shall be paid to
       such account of the Lessor as the Lessor may notify to the insurers.



                                      SCHEDULE 6

                                        PART 2

             Form of Protection and Indemnity Risks Loss Payable Clause


Payment of any recovery which BMBF (NO.12) Limited (the "Lessor") or Global
Marine International Drilling Corporation (the "Lessee") or Global Marine U.K.
Limited (the "Sub-Lessee") is entitled to make out of the funds of the
Association in respect of any liability, costs or expenses incurred by the
Lessor, the Lessee or the Sub-Lessee, shall be paid to the person to whom the
liability (or alleged liability) covered by the entry was incurred or to the
extent that the liability (or alleged liability) to such person has previously
been discharged by the Lessor, the Lessee or the Sub-Lessee, such moneys shall
be paid to the Lessor or its order or, as the case may be, the Lessee or its
order or, as the case may be the Sub-Lessee or its order in reimbursement of
the moneys so expended by it in satisfaction of such liability or alleged
liability.  The Association shall be at liberty at the request of the Lessor
and/or the Lessee and/or the Sub-Lessee to provide bail or other security to
prevent the arrest or obtain the release of the Vessel, without liability to
the Lessor.


                                   SCHEDULE 7

               Form of Pollution Indemnity Clause (Clause 12.18)


Company shall be responsible for and shall defend, indemnify and hold harmless
Contractor, the legal and beneficial owners of the Drilling Unit, any party
who is the mortgagee, lessor, lessee or charterer of the Drilling Unit,
affiliates, officers, directors, agents, employees, representatives,
subcontractors, owners and shareholders and insurers of each (individually
and collectively hereinafter sometimes referred to as "Contractor Group")
from and against any and all claims, demands, judgements and causes of action
made, raised or asserted by any party for all pollution, contamination or
seepage (including cost of clean-up, control and damages to third parties)
resulting from a blowout or uncontrolled well flow arising out of the Contract
Services, even if caused by the sole or joint fault, negligence of any degree,
wilful misconduct or breach of contract of a member of Contractor Group;
except to the extent Contractor is liable therefor under Subsection 5.1(f)
 above.

SIGNED                                )
for and on behalf of                  )
BMBF (NO.12) LIMITED                  ) Tim Holgate
by                                    )
its duly authorised signatory         )
in the presence of:                   )

Tony Price



EXECUTED as a DEED and DELIVERED      )
for and on behalf of GLOBAL MARINE    )
INTERNATIONAL DRILLING                )
CORPORATION                           ) Walter A. Baker
by                                    )
its duly authorised attorney-in-fact  )
in the presence of:                   )

Tony Price