<PAGE>

                                                                    EXHIBIT 10.9





                  REVOLVING CREDIT AND NOTE PURCHASE AGREEMENT




                          DATED AS OF DECEMBER 20, 2001




                                      AMONG




                                DELTA TOWING, LLC
                                AS THE BORROWER,




                          R&B FALCON DRILLING USA, INC.
                                AS RBF NOTEHOLDER




                                       AND




                          BETA MARINE SERVICES, L.L.C.
                               AS BETA NOTEHOLDER


<PAGE>

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                                               PAGE
<S>                                                                                                           <C>

ARTICLE I DEFINITIONS.............................................................................................1

       Section 1.1.        Definitions............................................................................1

ARTICLE II EXTENSIONS OF CREDIT AND REPAYMENTS...................................................................13

       Section 2.1.        The Purchase of the Term Notes........................................................13
       Section 2.2.        Type of Term Notes....................................................................13
       Section 2.3.        Interest on the Term Notes............................................................13
       Section 2.4.        Payment of Principal and Interest; Maturity...........................................14
       Section 2.5.        Revolving Credit Facility.............................................................17
       Section 2.6.        Notice of Borrowings under Revolving Credit Facility..................................18
       Section 2.7.        Applicable Interest Rates.............................................................18
       Section 2.8.        The Notes.............................................................................18
       Section 2.9.        Borrower's Optional Termination.......................................................19

ARTICLE III CREDIT DOCUMENTS AND COLLATERAL......................................................................19

       Section 3.1.        Credit Documents and Further Assurances...............................................19
       Section 3.2.        Supplements to Fleet Mortgage.........................................................19

ARTICLE IV INDEMNIFICATION.......................................................................................19

       Section 4.1.        Legal Fees, Other Costs and Indemnification...........................................19
       Section 4.2.        Increased Cost and Reduced Return.....................................................20
       Section 4.3.        Payment Office........................................................................21
       Section 4.4.        Discretion of Noteholder..............................................................21
       Section 4.5.        Withholding Taxes; Payments Free of Withholding.......................................21

ARTICLE V CONDITIONS PRECEDENT...................................................................................23

       Section 5.1.        Conditions to Effectiveness...........................................................23
       Section 5.2.        Conditions to Each Revolving Loan.....................................................24

ARTICLE VI REPRESENTATIONS AND WARRANTIES........................................................................25

       Section 6.1.        Representations and Warranties........................................................25

ARTICLE VII COVENANTS............................................................................................27

       Section 7.1.        Covenants of the Borrower.............................................................27

ARTICLE VIII LIMITATION ON DIVIDENDS.............................................................................38

       Section 8.1.        Distributions.........................................................................38
</Table>


                                      -i-
<PAGE>

<Table>
<S>                                                                                                           <C>

ARTICLE IX BOOKS AND RECORDS.....................................................................................39

       Section 9.1.        Books and Records; Examination........................................................39
       Section 9.2.        Financial Statements and Reports......................................................39
       Section 9.3.        Notice of Affiliate Transactions; Annual List.........................................41

ARTICLE X EVENTS OF DEFAULT......................................................................................42

       Section 10.1.       Events of Default.....................................................................42
       Section 10.2.       Non-Bankruptcy Defaults...............................................................44
       Section 10.3.       Bankruptcy Defaults...................................................................45
       Section 10.4.       Remedies Upon an Event of Default.....................................................45
       Section 10.5.       Default Prior to 10-Year Anniversary..................................................46

ARTICLE XI MISCELLANEOUS.........................................................................................46

       Section 11.1.       Termination and Survival of Obligations...............................................46
       Section 11.02.      Notices...............................................................................46
       Section 11.3.       Payments and Computations.............................................................46
       Section 11.4.       Setoff................................................................................47
       Section 11.5.       Amendments, Waivers and Consents......................................................47
       Section 11.6.       Waivers...............................................................................47
       Section 11.7.       Successors and Assigns................................................................48
       Section 11.8.       Participations and Assignments........................................................48
       Section 11.9.       Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.......................51
       Section 11.10.      Confidentiality of Agreement..........................................................53
       Section 11.11.      Limitation of Liability...............................................................53
       Section 11.12.      Headings; Counterparts................................................................53
       Section 11.13.      Cumulative Rights and Severability....................................................54
       Section 11.14.      Interest Rate Limitation..............................................................54
       Section 11.15.      FINAL AGREEMENT OF THE PARTIES........................................................54
       Section 11.16.      Certain Excepted Vessels..............................................................55
</Table>

EXHIBITS:

         Exhibit 1.01A:     Form of Parent Guarantee
         Exhibit 1.01B:     Form of Parent Pledge Agreement
         Exhibit 1.01C:     Form of Security Agreement
         Exhibit 2.8A:      Form of Tier 1 Note
         Exhibit 2.8B:      Form of Tier 2 Note
         Exhibit 2.8C:      Form of Tier 3 Note
         Exhibit 2.8D:      Form of Revolving Note
         Exhibit 5.2B:      Form of Notice of Borrowing


                                      -ii-
<PAGE>

SCHEDULES:

       Schedule 1.1:         Related Entities
       Schedule 6.1(c):      Excepted Matters



                                      -iii-
<PAGE>

                  REVOLVING CREDIT AND NOTE PURCHASE AGREEMENT

         THIS REVOLVING CREDIT AND NOTE PURCHASE AGREEMENT, dated as of December
20, 2001, is among R&B Falcon Drilling USA, Inc., a Delaware corporation (the
"RBF Noteholder"), Beta Marine Services, L.L.C., a Louisiana limited liability
company (the "Beta Noteholder)," and Delta Towing, LLC, a Delaware limited
liability company (the "Borrower"), and amends and restates the Note Agreement
dated as of January 30, 2001 among RBF Noteholder, Beta Noteholder and the
Borrower.

         The parties hereto agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

         Section 1.1. Definitions. The following terms used herein have the
meanings set forth, or referred to, below:

         "Accounting Determination" is defined in Section 1.2.

         "Acquisition Expenditures" is defined in the LLC Agreement.

         "Affiliate" means, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with, the Person in question. For
purposes of this definition, "control" means the possession, direct or indirect,
of the power to direct or cause the direction of the management and policies of
a Person, whether through ownership of voting securities or general partnership
or managing member interests, by contract or otherwise. Without limiting the
generality of the foregoing, a Person shall be deemed to control any other
Person in which it owns, directly or indirectly, a majority of the ownership
interests.

         Without limiting the generality of the foregoing, each entity described
on Schedule 1.1 shall be deemed to be an Affiliate of Beta Noteholder and the
Borrower under this Agreement, even though Beta Noteholders or the Borrower may
not directly or indirectly through one or more intermediaries control, and may
not be controlled by or under common control with, such entity, so long as the
members of the Chouest family own directly or indirectly at least 50% in the
aggregate of the ownership interests of such entity.

         "Affiliate Transaction" is defined in the LLC Agreement.

         "Annual Budget" is defined in Section 9.2(c)(ii).

         "Arm's Length Transaction" is defined in the LLC Agreement.

         "Asset Sale" has the meaning assigned to such term in the LLC Agreement
other than a Casualty Event.




                                       1
<PAGE>

         "Assumed Liabilities" has the meaning assigned to such term in the
General Assignment and Assumption Agreement.

         "Audited Financial Statements" is defined in Section 9.2(c)(i).

         "Borrower" is defined in the preamble hereof.

         "Borrower Independent Auditors" is defined in Section 9.1.

         "Borrower's Optional Termination" is defined in Section 2.9.

         "Business Day" means any day that is not a Saturday, Sunday or a
holiday on which national banks in Houston, Texas are closed for business.

         "Capital Expenditures" is defined in the LLC Agreement.

         "Capital Stock" or "ownership interests" in any Person means any and
all shares, interests, participations or other equivalents in the equity
interest (however designated) in such Person and any rights (other than debt
securities convertible into an equity interest, unless and until so converted),
warrants or options to acquire an equity interest in such Person.

         "Casualty Event" means any of the following events: (a) an event
resulting in destruction of or damage to any Property; (b) an event that results
in an insurance settlement on the basis of an actual or a constructive loss of
any Property; (c) theft, illegal confiscation or disappearance of any Property;
or (d) condemnation or other taking of title of any Property by a Governmental
Authority or the requisition or taking of use of any Property by a Governmental
Authority, including, without limitation, any event described in Section 15 of
Article I of the Fleet Mortgage.

         "Casualty Proceeds" means all compensation, damages and other payments,
including, without limitation, any payments described in Section 15 of Article I
of the Fleet Mortgage and any insurance proceeds from insurance required to be
provided hereunder or from any other Person pursuant to any charter or other
contract for the use of a Vessel or other Property of the Borrower or any of its
Subsidiaries, if any, received by the Borrower, the Noteholders, or the Trustee,
jointly or severally, from any Governmental Authority or other Person with
respect to or in connection with a Casualty Event.

         "Classified Vessels" is defined in Section 7.1(y).

         "Closing Date" is defined in the Master Formation Agreement.

         "Code" means the Internal Revenue Code of 1986, as amended.

         "Collateral" means all Property of the Borrower, whether now owned or
hereafter acquired, and all ownership interests in the Borrower now or hereafter
existing.

         "Collateral Trust Agreement" means the Collateral Trust Agreement dated
as of January 31, 2001 among the Trustee, the Noteholders, the Borrower and the
Company.



                                       2
<PAGE>

         "Company" means Delta Towing Holdings, LLC, a Delaware limited
liability company.

         "Contribution Agreement" means the Contribution Agreement dated as of
January 31, 2001 between the RBF Noteholder and the Company.

         "Co-Sale Right Holder" is defined in Section 11.8(d)(i).

         "Credit Documents" means this Agreement, the Notes and the Security
Documents.

         "Current Ratio" means at the end of any calendar month, the ratio of
(a) current assets of the Borrower and its Subsidiaries, other than cash and
cash equivalents (and specifically excluding amounts available for borrowing
under the Revolving Credit Facility), to (b) current liabilities of the Borrower
and its Subsidiaries, in each case, as determined in accordance with GAAP on a
consolidated basis.

         "Default" means any Event of Default or any event or condition that
with the lapse of time or giving of notice, or both, would constitute an Event
of Default.

         "Default Rate" is defined in Section 2.7.

         "Distributions" is defined in Section 8.1.

         "Distribution Calculation Statement" is defined in the LLC Agreement.

         "Documented Vessels" means (i) all Vessels described on Schedule 2.1(c)
of the General Assignment and Assumption Agreement, except those Vessels
designated thereon as not being documented Vessels, and (ii) all other
documented Vessels hereafter owned by the Borrower or any of its Subsidiaries.

         "Dollar" or "$" mean lawful currency of the United States of America.

         "EBITDA" means for the Borrower and its Subsidiaries for any period:

                  (a)      net income of the Borrower and its Subsidiaries; plus

                  (b)      to the extent deducted in computing such net income,
                           the sum of (i) Interest Expense, (ii) income tax
                           expense, (iii) depreciation, depletion and
                           amortization expense, (iv) non-cash charges resulting
                           from the cumulative effect of changes in accounting
                           principles and (v) any other non-cash charges or
                           losses; minus

                  (c)      to the extent added in computing such net income, (i)
                           any Interest Income, (ii) non-cash gains resulting
                           from the cumulative effect of changes in accounting
                           principles and (iii) any other non-cash gains;

all as determined in accordance with GAAP on a consolidated basis. For purposes
of this definition, depreciation, depletion and amortization expense will
include any gains (deductions from depreciation, depletion and amortization) or
losses (additions to depreciation, depletion and


                                       3
<PAGE>

amortization) on asset retirements and excess purchase price amortization
adjustments. For the avoidance of doubt, EBITDA shall not include any revenues
or expenses constituting Member-Indemnified Expenditures.

         "Effective Date" is defined in Section 5.1.

         "Election Period" is defined in Section 11.8(c)(i).

         "Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of
non-compliance or violation, investigations or proceedings relating to any
Environmental Law or any permit issued under any Environmental Law ("Claims"),
including, without limitation, (a) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law, and (b)
any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting from
Hazardous Materials or arising from alleged injury or threat of injury to the
environment.

         "Environmental Law" means any federal, state, local or foreign statute,
law, rule, regulation, ordinance, code, policy or rule of common law now or
hereafter in effect, including any judicial, administrative or arbitral order,
consent, decree or judgment, relating to the environment.

         "Event of Default" is defined in Section 10.1.

         "Excess Cash Flow" means, for each Fiscal Quarter, without duplication:

                  (a)      EBITDA for such Fiscal Quarter, excluding any gain or
                           loss resulting from any Asset Sale during such Fiscal
                           Quarter; minus

                  (b)      Capital Expenditures of the Borrower in cash and
                           Acquisition Expenditures of the Borrower in cash
                           during such Fiscal Quarter, provided that such
                           expenditures are either within the limitations set
                           forth in Section 8.08 of the LLC Agreement or have
                           been approved by the Required Noteholders; minus

                  (c)      Interest Expense paid in cash during such Fiscal
                           Quarter; minus

                  (d)      principal prepayments paid in cash on the Notes
                           pursuant to Section 2.4(f) between the period
                           beginning on and including the Payment Date occurring
                           during such Fiscal Quarter and ending on but not
                           including the next succeeding Payment Date.

provided, however, that in the event that Working Capital as of the last day of
such Fiscal Quarter is less than $11.5 million, "Excess Cash Flow" shall be
reduced by the difference between Working Capital as of the last day of such
Fiscal Quarter and $11.5 million.


                                       4
<PAGE>

                  Excess Cash Flow for each Fiscal Quarter shall be as reflected
in the financial statements delivered pursuant to Section 9.2(b)(ii), unless,
not later than twelve (12) months after the delivery to the Noteholders of the
examination report described in Section 9.2(d) for the Fiscal Year in which such
Fiscal Quarter occurs, the Required Noteholders or the Borrower's independent
accountants determine that Excess Cash Flow as so reported is incorrectly
computed and notify the Borrower in writing of the amount that such Excess Cash
Flow should be increased ("Note Payment Increase Amount") or decreased ("Note
Payment Decrease Amount") to correct the computation of Excess Cash Flow.

         "Fiscal Quarter" means the three-month period ended March 31, June 30,
September 30 and December 31 of each Fiscal Year.

         "Fiscal Year" means the 12-month (or shorter) period ending on the last
day of December of each year.

         "Fixed Charge Coverage Ratio" means on any date the ratio of (a)
EBITDA, minus Capital Expenditures of the Borrower and its Subsidiaries, to (b)
Fixed Charges, in each case, for the applicable Twelve-month Period.

         "Fixed Charges" means for any period, without duplication, with respect
to the Borrower and its Subsidiaries, determined in accordance with GAAP on a
consolidated basis, the sum of (a) gross cash interest expense (including the
interest component of capitalized leases) for such period, plus (b) the
aggregate principal amount of all scheduled payments in respect of Indebtedness
payable during such period, plus (c) dividends paid or payable in cash on
preferred or preference interests in the Borrower during such period.

         "Fixed Rate" means an interest rate equal to 8% per annum.

         "Fleet Mortgage" means the First Preferred Fleet Mortgage dated as of
January 31, 2001, made by the Borrower to the Trustee covering all Documented
Vessels.

         "GAAP" means United States generally accepted accounting principles,
from time to time in effect applied on a consistent basis.

         "General Assignment and Assumption Agreement" means the General
Assignment and Assumption Agreement dated as of January 30, 2001 between RBF
Noteholder and the Borrower.

         "Governmental Authority" means any federal, state, local or foreign
government or any provincial, departmental or other political subdivision
thereof, or any entity, body or authority exercising executive, legislative,
judicial, regulatory, administrative or other governmental functions or any
court, department, commission, board, bureau, agency, instrumentality or
administrative body of any of the foregoing.


                                       5
<PAGE>

         "Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Indebtedness
or other obligation of any other Person or in any manner, providing for the
payment of any Indebtedness or other obligation of any other Person or otherwise
protecting the holder of such Indebtedness or other obligation against loss
(whether arising by virtue of partnership arrangements, by obtaining letters of
credit, by agreement to keep-well, to purchase assets, goods, securities or
services, or to take-or-pay or otherwise), provided that the term "Guarantee"
shall not include endorsements for collection or deposit in the ordinary course
of business. For the purpose of all computations made under this Agreement, the
amount of a Guarantee in respect of any obligation shall be deemed to be equal
to the amount that would apply if such obligation were the direct obligation of
such Person rather than the primary obligor or, if less, the maximum aggregate
potential liability of such Person under the terms of such Guarantee.

         "Hazardous Material" has the meaning assigned to that term in the
Comprehensive Environmental Response Compensation and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Acts of 1986, and shall
also include oil, gas and other liquid or gaseous hydrocarbons or any other
substance defined as "hazardous" or "toxic" or words with similar meaning and
effect under any Environmental Law applicable to the Borrower or any of its
Subsidiaries.

         "Highest Lawful Rate" means as to any Noteholder, the maximum
nonusurious rate of interest that, under applicable law, may be contracted for,
taken, reserved, charged or received by such Noteholder in respect of the Notes
and the other Credit Documents at any time or from time to time. If the maximum
rate of interest which, under applicable law, any of the Noteholders is
permitted to charge the Borrower in respect of the Notes shall change after the
date hereof, to the extent permitted by applicable law, the Highest Lawful Rate
applicable to such Notes shall be automatically increased or decreased, as the
case may be, as of the effective time of such change without notice to the
Borrower or any other Person.

         "Indebtedness" of any person means, without duplication, (a) all
obligations of such person for borrowed money or with respect to deposits or
advances of any kind; (b) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments; (c) all obligations of such person
upon which interest charges are customarily paid; (d) all obligations of such
person under conditional sale or other title retention agreements relating to
property or assets purchased by such person; (e) all obligations of such person
issued or assumed as the deferred purchase price of property or services
(excluding trade accounts payable, trade advertising and accrued obligations);
(f) all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property owned or acquired by such person, whether or not the
obligations secured thereby have been assumed; (g) all Guarantees by such person
of Indebtedness of others; (h) all Capital Lease obligations of such person; (i)
all obligations of such person in respect of interest rate protection
agreements, foreign currency exchange agreements or other interest or exchange
rate hedging arrangements; (j) all obligations of such person as an account
party in respect of letters of credit and bankers' acceptances; and (k) equity
issued by such person that is redeemable before the scheduled maturity of the
Tier 1 Notes. The Indebtedness of any person shall include the Indebtedness of
any partnership in which such person is a general partner, other


                                       6
<PAGE>

than to the extent that the instrument or agreement evidencing such Indebtedness
expressly limits the liability of such person in respect thereof.

         "Indemnified Parties" is defined in Section 4.1

         "Indemnified Taxes" is defined in Section 4.6.

         "Interest Expense" means, for any period, the aggregate of all
expenditures incurred by the Borrower and its Subsidiaries during such period
that, in accordance with GAAP on a consolidated basis, are or should be included
in "interest expense" in the consolidated statement of income of the Borrower
and its Subsidiaries.

         "Interest Income" means, for any period, the aggregate of all receipts
by the Borrower and its Subsidiaries during such period that, in accordance with
GAAP on a consolidated basis, are or should be included in "interest income" in
the consolidated statement of income of the Borrower and its Subsidiaries.

         "Investment" is defined in Section 7.1(r).

         "Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset and
(c) in the case of securities, any purchase option, call or similar right of a
third party with respect to such securities.

         "LLC Agreement" means the Limited Liability Company Agreement of Delta
Towing Holdings, LLC dated as of January 31, 2001, between the Noteholders.

         "Louisiana Collateral Documents" means the Collateral Mortgage Note
dated January 30, 2001, in the principal amount of $147,000,000.00, payable to
Bearer; the Collateral Mortgage dated January 30, 2001 made by the Borrower in
favor of the Trustee and the Collateral Pledge Agreement dated effective as of
January 30, 2001 made by the Borrower in favor of the Trustee.

         "Marine Business" has the meaning assigned to such term in the Master
Formation Agreement.

         "Maritime Law" means any federal, state, local or foreign statute, law,
rule, regulation, ordinance, code, policy or rule of common law now or hereafter
in effect, including any judicial, administrative or arbitral order, consent,
decree or judgement, relating to the marine activities or trade.

         "Master Formation Agreement" means the Master Formation Agreement dated
as of January 30, 2001 by and between Gary Chouest, Laney Chouest, Dino Chouest,
the Beta Noteholder and the RBF Noteholder.


                                       7
<PAGE>

         "Material Adverse Effect" means an effect that results in a material
adverse (a) change, since the date of this Agreement, in (i) the business,
properties, assets or financial condition of the Borrower and its Subsidiaries
or the prospects of the Obligors, or (ii) the ability of the Obligors to perform
their obligations under any Operative Document to which such Obligor is a party,
or (b) change in the rights and remedies of the Noteholders or the Trustee under
the Credit Documents.

         "Member - Indemnified Expenditures" is defined in the LLC Agreement.

         "Membership Interest" is defined in the LLC Agreement.

         "Note" means any of the Revolving Note and the Term Notes, as the same
may be amended, renewed, extended, replaced, rearranged or otherwise modified
from time to time.

         "Noteholder" means any of the RBF Noteholder, the Beta Noteholder and
any successor or permitted assign of either thereof, in each case so long as
such Person holds a Note which has not been paid or otherwise discharged in
full.

         "Note Payment Decrease Amount" is defined in the definition of Excess
Cash Flow.

         "Note Payment Increase Amount" is defined in the definition of Excess
Cash Flow.

         "Obligors" means collectively the Borrower and the Company.

         "Obligations" means all obligations of the Obligors to pay principal
and interest on the Notes, fees, costs and expenses, and all other amounts now
or hereafter owing under any Credit Document and to perform all other
obligations of any Obligor under any Credit Document.

         "Offer Notice" has the meaning assigned to such terms in Section
11.8(c)(i).

         "Operative Documents" means the Master Formation Agreement, the General
Assignment and Assumption Agreement, the Contribution Agreement, the LLC
Agreement, the other Transaction Documents and the Credit Documents.

         "Parent Guarantee" means the Parent Guarantee dated as of January 31,
2001 made by the Company in favor of the Trustee for the benefit of the
Noteholders in the form of Exhibit 1.01A attached hereto.

         "Parent Pledge Agreement" means the Parent Pledge Agreement dated as of
January 31, 2001 made by the Company in favor of the Trustee in the form of
Exhibit 1.01B attached hereto.

         "Participants" is defined in Section 11.8(a).

         "Payment Date" means each April 30, July 30, October 30 and January 30
after the Closing Date.


                                       8
<PAGE>

         "Payment Office" means the office of the Noteholder or its designee
specified on the appropriate signature page hereto, or designated pursuant to
Section 4.4, as the office to which the Borrower shall make payments on the
Notes held by that Noteholder.

         "Permitted Beta Noteholder Transferee" means a transferee of all or any
portion of Beta Noteholder's Note or a transferor's membership interest in Beta
Noteholder; provided that the Transfer to such transferee either (1) occurs by
reason of or incident to the death or divorce of the transferor; provided that
the transferee is a member of the transferor's immediate family or a trust,
corporation, limited liability company or partnership controlled by such
transferor or members of such transferor's immediate family or (2) is made to
the Chouests or to any of the transferor's (or, in the case of a Transfer of
Beta Noteholder's Note, the Chouests') lineal ascendants or descendants;
provided that the transferee does not Transfer such interest except to the
original transferor or to any of such transferor's lineal ascendants or
descendants; provided that at all times prior to his death, Gary Chouest retains
direct or indirect (including by reason of his percentage ownership in Beta
Noteholder) ownership of at least a 11.25% interest in the Notes issued to Beta
Noteholder following such Transfer.

         "Permitted Indebtedness" is defined in Section 7.1(p).

         "Permitted Liens" is defined in Section 7.1(o).

         "Person" or "person" means any natural person or any trust, estate,
unincorporated organization, firm, corporation, association, partnership, joint
venture, joint stock company, limited liability company or Governmental
Authority, whether acting in an individual, fiduciary or other capacity.

         "Property" means, with respect to any Person, any interest of such
Person in any kind of asset, whether real, personal or mixed, or tangible or
intangible, including, without limitation, Capital Stock in any other Person.

         "Required Noteholders" means at the time of any determination thereof
the Noteholders holding Notes representing more than fifty percent (50%) of the
aggregate principal amount then outstanding under all the Notes.

         "Revolver Maturity Date" means the earliest to occur of (i) the
Revolving Credit Termination Date, (ii) termination of the Revolving Credit
Facility pursuant to Section 2.9 and (iii) termination of the Revolving Credit
Facility pursuant to Section 10.2 or 10.3.

         "Revolving Credit Facility" means any working capital facility obtained
by the Borrower from one or more third-party lenders in replacement of or in
addition to the facility provided for under Section 2.5.

         "Revolving Credit Maximum" means $4,000,000.

         "Revolving Credit Period" means the period commencing on the Effective
Date and ending on but not including the Revolver Maturity Date.

         "Revolving Credit Termination Date" means December 20, 2004.


                                       9
<PAGE>

         "Revolving Loan" is defined in Section 2.5.

         "Revolving Note" is defined in Section 2.8.

         "Security Agreement" means the Security Agreement, dated as of January
31, 2001, between the Borrower and the Trustee in the form attached hereto as
Exhibit 1.01C.

         "Security Documents" means the Fleet Mortgage, the Security Agreement,
the Parent Pledge Agreement, the Parent Guarantee, the Collateral Trust
Agreement, the Louisiana Collateral Documents and all other security agreements,
mortgages and other agreements or instruments at any time delivered by the
Borrower or any other Person providing any credit or other support or granting a
Lien on any of such Person's property to any Noteholder or the Trustee for the
benefit of the Noteholders to secure all or any part of the Obligations.

         "Selling Noteholder" is defined in Section 11.8(c)(i).

         "Senior Officer" means the president, any vice president or the chief
financial officer of the Borrower.

         "Subsidiary" or "subsidiary" means, with respect to any Person (herein
referred to as the "parent"), any corporation, partnership, limited liability
company, association or other business entity (a) of which securities or other
ownership interests representing more than 50% of the equity or more than 50% of
the ordinary voting power or more than 50% of the general partner interests are,
at the time any determination is being made, owned, controlled or held, or (b)
that is, at the time any determination is made, otherwise controlled, by the
parent or one or more subsidiaries of the parent or by the parent and one or
more subsidiaries of the parent. As used in this Agreement, unless the context
indicates otherwise, Subsidiary means a Subsidiary of the Borrower.

         "T2 Prior Interest Amount" is defined in Section 2.3(c).

         "T3 Prior Interest Amount" is defined in Section 2.3(d).

         "Taxes" or "taxes" means any and all national, federal, state,
provincial or local income, gross receipts, license, payroll, employment,
excise, severance, stamp, occupation, premium, windfall profits, environmental,
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, assets, real property, personal
property, sales, use, transfer, registration, value added, alternative or
add-on, minimum, estimated or other tax of any kind whatsoever, including any
interest, penalty or addition thereto, whether disputed or not.

         "Term Note" means any of the Tier 1 Notes, the Tier 2 Note and the Tier
3 Note.

         "Tier 1 Amortization Default" means the failure to pay the principal of
the Tier 1 Notes as required in the proviso to the first sentence of Section
2.4(a).

         "Tier 1 Maturity Date" means January 30, 2024.


                                       10
<PAGE>

         "Tier 1 Note" is defined in Section 2.8.

         "Tier 2 Note" is defined in Section 2.8.

         "Tier 3 Note" is defined in Section 2.8.

         "Tier 1 Noteholder" means a Noteholder holding a Tier 1 Note.

         "Tier 2 Noteholder" means a Noteholder holding a Tier 2 Note.

         "Tier 3 Noteholder" means a Noteholder holding a Tier 3 Note.

         "Tier 1 Repayment Date" means the date that all principal of and the
accrued interest on the Tier 1 Notes are paid in full.

         "Tier 2 Repayment Date" means the date that all principal of and the
accrued interest on the Tier 2 Notes are paid in full.

         "Tier 2 & 3 Extended Termination Date" is defined in Section 10.5.

         "Tier 2 & 3 Termination Date" means the tenth anniversary date after
the Closing Date, unless on or before such date:

                  (a)      any Noteholder has delivered to the Borrower a notice
                           stating that a Note Payment Increase Amount is owing;

                  (b)      an Event of Default under Section 10.1(f) or (g) has
                           occurred and such Event of Default is continuing;

                  (c)      any Noteholder has delivered to the Borrower a notice
                           stating that an Event of Default has occurred, other
                           than pursuant to Section 10.1(f) or (g), and such
                           Event of Default is continuing; or

                  (d)      any Noteholder has delivered to the Borrower a notice
                           stating that an Event of Default exists as a result
                           of the failure to cure an Extended Cure Default
                           within the time provided therefor.

         In any such event, the Tier 2 & 3 Termination Date shall occur only
after all Obligations that are or have become due and payable, whether by
acceleration or otherwise, on or prior to the applicable Tier 2 & 3 Extended
Termination Date shall have been paid in full.

         "Transfer" or "transfer" means a sale, transfer, conveyance, assignment
or other disposition (or a series of related dispositions), including, without
limitation, any transfer pursuant to an option to purchase, any sale or
assignment (with or without recourse) of any accounts receivable and any sale
and leaseback of assets, but excluding any involuntary transfer by operation of
law and any transfers of an asset pursuant to any casualty or theft with respect
to such asset.


                                       11
<PAGE>

         "Transaction Documents" has the meaning set forth in the Master
Formation Agreement but also includes any other documents entered into in
connection with or pursuant to the Master Formation Agreement.

         "Transocean" means Transocean Sedco Forex Inc., a Cayman Islands
company.

         "Trustee" means The Bank of New York acting in its capacity as trustee
for the Noteholders under the Collateral Trust Agreement and the Security
Documents and any successor trustee appointed under the Collateral Trust
Agreement.

         "Twelve-month Period" means on any date the most recently ended period
of twelve consecutive calendar months or, if less, the actual number of
consecutive calendar months that has elapsed since January 31, 2001, in each
case, the last calendar month of such period being the latest month in respect
of which financial statements required by Section 9.2(a)(i) are due.

         "USA" or "US" means the United States of America (including all states
and political subdivisions thereof).

         "Unaudited Financial Statements" is defined in Section 9.2(a).

         "Vessels" means the offshore tugs, inland tugs, crewboats and service
barges described on Schedule 2.1(c) of the General Assignment and Assumption
Agreement and any other vessels hereafter owned by the Borrower or any of its
Subsidiaries from time to time.

         "Wholly Owned Subsidiary" means, for any Person, any Subsidiary of
which such Person owns, directly or indirectly, 100% of the Capital Stock.

         "Working Capital" means as of any date as determined in accordance with
GAAP on a consolidated basis (i) the current assets of the Borrower and its
Subsidiaries, minus (ii) the current liabilities of the Borrower and its
Subsidiaries (other than the current maturities of the Notes).

         The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms. References in this Agreement to
"Articles", "Sections", "Schedules" or "Exhibits" shall be to Articles,
Sections, Schedules or Exhibits of or to this Agreement unless otherwise
specifically provided. "Include" or "includes" and "including" shall be deemed
to be followed by "without limitation" whether or not they are in fact followed
by such word or words of like import. Unless otherwise indicated, references to
a contract or other agreement shall include references to such contracts and
agreements as amended, supplemented, restated or otherwise modified from time to
time, in each case in accordance with the terms of the Credit Documents, if
applicable, and references to statutes, regulations and other laws are to
statutes, regulations and laws as amended or modified.


                                       12
<PAGE>

                                   ARTICLE II
                       EXTENSIONS OF CREDIT AND REPAYMENTS

         Section 2.1. The Purchase of the Term Notes. Subject to the terms and
conditions of this Agreement, the Noteholders shall severally purchase Term
Notes from the Borrower to evidence extensions of credit to the Borrower in the
aggregate principal amount not to exceed $147,000,000. The Term Notes purchased
by the RBF Noteholder shall be in the aggregate principal amount of $144,000,000
and shall evidence the Borrower's payment obligation for the purchase price of
the Marine Business in accordance with, and subject to the terms and conditions
of, the Master Formation Agreement. The Term Note purchased by the Beta
Noteholder shall be in the principal face amount of $3,000,000 and the proceeds
from that purchase shall be used by the Borrower for working capital purposes.

         Section 2.2. Type of Term Notes. The Term Notes shall be divided into
three types, as follows:

                  (a)      Tier 1 Notes.

                           (i)      The $3,000,000 Term Note of the Beta
                                    Noteholder shall be a Tier 1 Note; and

                           (ii)     The first $80,000,000 of the credit extended
                                    by the RBF Noteholder shall be evidenced by
                                    a Tier 1 Note;

                  (b)      Tier 2 Note. The next $20,000,000 of the credit
                           extended by RBF Noteholder shall be evidenced by a
                           Tier 2 Note; and

                  (c)      Tier 3 Note. The next and remaining amount of credit
                           extended by RBF Noteholder (i.e., $44,000,000) shall
                           be evidenced by a Tier 3 Note.

         Section 2.3. Interest on the Term Notes.

                  (a)      Interest will accrue (computed on the basis of a 365-
                           or 366-day year, and actual days elapsed) on the
                           principal outstanding under the Term Notes from time
                           to time from the Closing Date to the date of payment
                           thereof at the applicable rate provided in Section
                           2.7 and, subject to Section 11.14, will be compounded
                           as described in Section 2.3(b)-(d).

                  (b)      The interest accrued on the principal of the Tier 1
                           Notes shall be compounded annually on each
                           anniversary of the Closing Date.

                  (c)      The interest accrued on the principal of, and accrued
                           interest on, the Tier 2 Note shall not be compounded
                           until the Tier 1 Repayment Date. Interest on the Tier
                           2 Note that accrues before the Tier 1 Repayment Date
                           is referred to as the "T2 Prior Interest Amount".
                           Thereafter, the interest accrued on the Tier 2 Note
                           and the T2 Prior Interest Amount on and after the
                           Tier 1 Repayment Date shall be compounded on each
                           subsequent anniversary of the Closing Date.


                                       13
<PAGE>

                  (d)      The interest accrued on the principal of, and accrued
                           interest on, the Tier 3 Note shall not be compounded
                           until the Tier 2 Repayment Date. Interest on the Tier
                           3 Note that accrues before the Tier 2 Repayment Date
                           is referred to as the "T3 Prior Interest Amount".
                           Thereafter, the interest accrued on the Tier 3 Note
                           and the T3 Prior Interest Amount on and after the
                           Tier 2 Repayment Date shall be compounded on each
                           subsequent anniversary of the Closing Date.

         Section 2.4. Payment of Principal and Interest; Maturity.

                  (a)      Tier 1 Notes. Subject to Sections 10.2 and 10.3 and
                           without prejudice to the Borrower's obligation to pay
                           interest as required herein, the Borrower shall pay
                           to the Tier 1 Noteholders on each Payment Date, for
                           application toward payment of the principal of and
                           accrued and unpaid interest on the Tier 1 Notes as
                           hereinafter provided, an amount equal to (i) until
                           the Tier 2 & 3 Termination Date, 100%, and (ii)
                           thereafter 50%, of the Excess Cash Flow for the
                           preceding Fiscal Quarter until the Tier 1 Repayment
                           Date, provided, however, that, in any event, the
                           Borrower shall repay at least (1) 10% of the
                           aggregate principal amount of the Tier 1 Notes no
                           later than the third anniversary of the Closing Date,
                           (2) 30% of the aggregate principal amount of the Tier
                           1 Notes no later than the fifth anniversary of the
                           Closing Date and (3) 75% of the aggregate principal
                           amount of the Tier 1 Notes no later than the seventh
                           anniversary of the Closing Date. Each such payment
                           shall be applied first to interest accrued and unpaid
                           on the Tier 1 Notes for any previous Fiscal Quarters,
                           if any, and then to the unpaid principal of the Tier
                           1 Notes. On each Payment Date, the Borrower shall
                           also pay to the Tier 1 Noteholders accrued interest
                           on the Tier 1 Notes for the preceding Fiscal Quarter.
                           Notwithstanding anything to the contrary contained
                           herein or in the other Credit Documents, all
                           principal and accrued and unpaid interest on, the
                           Tier 1 Notes shall be due and payable on the earlier
                           of (i) the Tier 1 Maturity Date, and (ii) the date on
                           which such Notes are accelerated in accordance with
                           Section 10.2 or 10.3.

                  (b)      Tier 2 Note. Subject to Sections 10.2 and 10.3 and
                           without prejudice to the Borrower's obligation to pay
                           interest as required herein, the Borrower shall pay
                           to the Tier 2 Noteholders on each Payment Date on and
                           after the Tier 1 Repayment Date to the Tier 2
                           Repayment Date, for application toward payment of the
                           principal of and accrued and unpaid interest on the
                           Tier 2 Note as hereinafter provided, an amount equal
                           to 75% of the Excess Cash Flow for the preceding
                           Fiscal Quarter. Each such payment shall be applied
                           first to the unpaid T2 Prior Interest Amount and then
                           to the unpaid principal of the Tier 2 Note. On each
                           Payment Date, the Borrower shall also pay to the Tier
                           2 Noteholder, accrued and unpaid interest on the
                           principal of the Tier 2 Note and on the T2 Prior
                           Interest Amount for the preceding Fiscal Quarter.



                                       14
<PAGE>

                           In the event that all principal of and accrued
                           interest on the Tier 2 Note and the unpaid T2 Prior
                           Interest Amount are not repaid on or before the later
                           of the Tier 2 & 3 Termination Date and, if
                           applicable, the Tier 2 & 3 Extended Termination Date,
                           the Tier 2 Noteholders shall waive and lose their
                           right to receive any repayment of the remaining
                           principal of and interest on the Tier 2 Note and the
                           unpaid T2 Prior Interest Amount other than payment of
                           any remaining unpaid principal and interest on the
                           Tier 2 Note payable in connection with the period
                           ending on the Tier 2 & 3 Termination Date.

                  (c)      Tier 3 Note. Subject to Sections 10.2 and 10.3 and
                           without prejudice to the Borrower's obligation to pay
                           interest as required herein, the Borrower shall pay
                           to the Tier 3 Noteholders on each Payment Date on and
                           after the Tier 2 Repayment Date until the Tier 2 & 3
                           Repayment Date, for application toward payment of the
                           principal of and accrued and unpaid interest on the
                           Tier 3 Note as hereinafter provided, an amount equal
                           to 50% of the Excess Cash Flow for the preceding
                           Fiscal Quarter. Each such payment shall be applied
                           first to the unpaid T3 Prior Interest Amount and then
                           to the unpaid principal of the Tier 3 Note. On each
                           Payment Date, the Borrower shall also pay to the Tier
                           3 Noteholder, accrued and unpaid interest on the
                           principal of the Tier 3 Note and the T3 Prior
                           Interest Amount for the preceding Fiscal Quarter.

                           In the event that all principal and accrued interest
                           on the Tier 3 Note and the unpaid T3 Prior Interest
                           Amounts are not repaid on or before the later of the
                           Tier 2 & 3 Termination Date and, if applicable, the
                           Tier 2 & 3 Extended Termination Date, the Tier 3
                           Noteholders shall waive and lose their right to
                           receive any repayment of the remaining principal and
                           interest of the Tier 3 Note and the unpaid T3 Prior
                           Interest Amount other than payment of any remaining
                           unpaid principal and interest on the Tier 3 Note
                           payable in connection with the period ending on the
                           Tier 2 & 3 Termination Date.

                  (d)      Casualty Event. All Casualty Proceeds shall be paid
                           directly to the Trustee to be held and applied by the
                           Trustee as provided in Section 4.05 of the Collateral
                           Trust Agreement. To the extent the Borrower or any of
                           its Subsidiaries or Affiliates receives any Casualty
                           Proceeds, within one (1) Business Day after such
                           receipt, the Borrower shall deposit, or cause to be
                           deposited, the same with the Trustee. All Casualty
                           Proceeds that are not paid to the Borrower to repair,
                           restore or replace the affected Property (or in
                           reimbursement therefor) pursuant to Section 4.05 of
                           the Collateral Trust Agreement shall, unless in their
                           sole discretion the Required Noteholders otherwise
                           agree in writing, be used to prepay the Obligations
                           to the extent of such proceeds, such prepayment to be
                           applied as follows:

                           (i)      first, to any unpaid fees, expenses or
                                    amounts other than principal or interest
                                    comprising the Obligations;


                                       15
<PAGE>

                           (ii)     second, to accrued and unpaid interest on
                                    the Tier 1 Notes during such Fiscal Quarter;

                           (iii)    third, to the accrued and unpaid interest on
                                    the Tier 1 Notes for any previous Fiscal
                                    Quarter;

                           (iv)     fourth, to the unpaid principal of the Tier
                                    1 Notes;

                           (v)      fifth, to the accrued and unpaid interest on
                                    the Tier 2 Note during such current Fiscal
                                    Quarter;

                           (vi)     sixth, to the accrued and unpaid interest on
                                    the Tier 2 Note for any previous Fiscal
                                    Quarter;

                           (vii)    seventh, to the unpaid T2 Prior Interest
                                    Amount;

                           (viii)   eighth, to the unpaid principal of the Tier
                                    2 Note;

                           (ix)     ninth, to the accrued and unpaid interest on
                                    the Tier 3 Note during such current Fiscal
                                    Quarter;

                           (x)      tenth, to the accrued and unpaid interest on
                                    the Tier 3 Note for any previous Fiscal
                                    Quarter;

                           (xi)     eleventh, to the unpaid T3 Prior Interest
                                    Amount;

                           (xii)    twelfth, to the unpaid principal of the Tier
                                    3 Note;

                           (xiii)   thirteenth, to the accrued and unpaid
                                    interest on the Revolving Note;

                           (xiv)    fourteenth, to the unpaid principal of the
                                    Revolving Note; and

                           (xv)     any excess Proceeds remaining after such
                                    application, shall be paid to the Borrower
                                    or to such other Person as may be directed
                                    by a court of competent jurisdiction.

                  (e)      Asset Sales. The cash proceeds of any Asset Sale (net
                           of direct costs of such Asset Sale) shall be
                           deposited with the Trustee within one (1) Business
                           Day after receipt thereof by the Borrower or any of
                           its Subsidiaries or Affiliate of the Borrower and
                           held by the Trustee in accordance with Section 4.04
                           of the Collateral Trust Agreement. On the 91st day
                           after the receipt of such proceeds, the Trustee shall
                           apply the same toward payment of the Obligations as
                           though such proceeds were Casualty Proceeds being so
                           applied to the Obligations under Section 2.4(d),
                           unless upon request by the Borrower the Required
                           Noteholders agree in writing, in their sole
                           discretion, to another use of those proceeds by the
                           Borrower. Notwithstanding the foregoing, cash
                           proceeds of any


                                       16
<PAGE>

                           Asset Sale that are received or held by the Trustee
                           at a time when an Event of Default exists shall be
                           applied by the Trustee toward payment of the
                           Obligations as aforesaid absent contrary instructions
                           from the Required Noteholders.

                  (f)      Optional Payments. The Borrower may prepay the Term
                           Notes without premium or penalty at any time in whole
                           or at any time and from time to time in part, so long
                           as the Borrower shall have given notice of such
                           prepayment to the Noteholders no later than 12:00
                           noon (Houston time) three (3) Business Days before
                           the date of such prepayment. Such notice shall be
                           irrevocable and the amount of any prepayment
                           specified in such notice shall be due and payable on
                           the date so specified and shall be applied toward
                           payment of the Obligations as though such prepayment
                           were Casualty Proceeds being so applied to the
                           Obligations under Section 2.4(d).

                  (g)      Note Payment Increase/Decrease Amount. The Borrower
                           shall pay any Note Payment Increase Amount within 10
                           days after receipt of any notice that a Note Payment
                           Increase Amount is due and owing. The Noteholders
                           shall pay to the Borrower severally in accordance
                           with their respective pro rata shares of any Note
                           Payment Decrease Amount, any Note Payment Decrease
                           Amount within 10 days after their receipt of any
                           notice that a Note Payment Decrease Amount is due and
                           owing.

                  (h)      Pro Rata. All payments of principal and interest on
                           each type of Term Note shall be paid to the
                           Noteholders that hold that type of Term Note, pro
                           rata based on the principal amount outstanding under
                           that type of Term Note.

         Section 2.5. Revolving Credit Facility.

                  (a)      During the Revolving Credit Period, the RBF
                           Noteholder agrees, on the terms and conditions set
                           forth in this Agreement, to make revolving loans to
                           the Borrower from time to time (each, a "Revolving
                           Loan") in an aggregate amount such that, after giving
                           effect to any Revolving Loan, the aggregate amount of
                           all Revolving Loans then outstanding does not exceed
                           the Revolving Credit Maximum. Each Revolving Loan
                           shall be in the principal amount of $100,000 or any
                           larger increment of $50,000, except that any such
                           Loan may be in the full amount then available for
                           borrowing under this Section 2.5 up to the Revolving
                           Credit Maximum. Within the limits specified in this
                           Agreement, the Borrower may borrow under this Section
                           2.5, prepay Revolving Loans to the extent permitted
                           by Section 2.5(b) and reborrow at any time during the
                           Revolving Credit Period under this Section 2.5. The
                           Revolving Loans shall be due and payable on the
                           Revolver Maturity Date. The Revolving Loans shall be
                           used by the Borrower only for capital expenditures
                           and working capital.


                                       17
<PAGE>

                  (b)      Interest on each Revolving Loan shall accrue
                           (computed on the basis of a 365- or 366-day year and
                           actual days elapsed) from the date such Loan is made
                           to the date of payment thereof at the applicable rate
                           provided in Section 2.7. Such interest shall be due
                           and payable on each Payment Date and on the Revolver
                           Maturity Date.

                  (c)      The Borrower may prepay the principal of the
                           Revolving Note without premium or penalty at any time
                           in whole or at any time and from time to time in
                           part, so long as the Borrower shall have given the
                           RBF Noteholder notice of such prepayment no later
                           than 12:00 noon (Houston time) three (3) Business
                           Days before the date of such prepayment.

         Section 2.6. Notice of Borrowings under Revolving Credit Facility. The
Borrower shall give the RBF Noteholder notice (a "Notice of Borrowing") not
later than 10:00 A.M. (Houston time) one (1) Business Day before each desired
borrowing under Section 2.5, specifying (a) the date of such borrowing, which
shall be a Business Day, (b) the amount of such borrowing and (c) the wire
transfer instructions with respect thereto. Each Notice of Borrowing shall be
irrevocable. The RBF Noteholder shall make the requested Revolving Loan
available to the Borrower as directed in the applicable Notice of Borrowing
unless the RBF Noteholder determines in its sole discretion that any applicable
condition specified in Article V has not been satisfied.

         Section 2.7. Applicable Interest Rates.

                  (a)      Each Note shall bear interest on the principal amount
                           thereof from time to time outstanding at a rate per
                           annum equal to the Fixed Rate. The T2 Prior Interest
                           Amount and the T3 Prior Interest Amount, to the
                           extent permitted by applicable law, shall bear
                           interest on the amount thereof as set forth in
                           Section 2.4(b) and 2.4(c), respectively, at a rate
                           per annum equal to the Fixed Rate.

                  (b)      If any payment of any Obligation is not made when due
                           (whether by acceleration or otherwise), such amount
                           shall bear interest (computed on the basis of a year
                           of 365 or 366 days, as applicable, and actual days
                           elapsed) until such amount is paid in full at a rate
                           per annum equal to the sum of two percent (2%) plus
                           the Fixed Rate (the "Default Rate"). All interest
                           accruing at the Default Rate shall be due and payable
                           on demand.

         Section 2.8. The Notes. The Notes shall be payable to the order of the
applicable Noteholder and be in the form of Exhibits 2.8A, 2.8B, 2.8C and 2.8D
(the "Tier 1 Notes," the "Tier 2 Note," the "Tier 3 Note" and the "Revolving
Note," respectively). Each Noteholder shall record on its books and records or
on schedules to its Notes the amount of the principal owing thereunder and all
payments of principal and interest received by such Noteholder allocable to such
Note. Such records, whether shown on the books and records of the Noteholders or
on a schedule to the Notes, shall be conclusive evidence as to all such matters
absent manifest error; provided, however, that the failure of any Noteholder to
record any of the foregoing or any error in any such record shall not limit or
otherwise affect the obligation of the


                                       18
<PAGE>

Borrower to repay all principal outstanding under the Notes, together with
accrued interest thereon. The Borrower agrees to execute and deliver to the
Noteholders appropriate additional Notes as may be necessary in connection with
any assignments pursuant to Section 11.8.

         Section 2.9. Borrower's Optional Termination. The Borrower may for any
reason at any time elect to terminate any or all of the Revolving Credit
Facility and the other financial arrangements provided in this Agreement (a
"Borrower's Optional Termination"). The Borrower shall give the Noteholders at
least three (3) Business Days' written notice of the date on which it intends to
effect a Borrower's Optional Termination. Such election shall be irrevocable and
upon the date specified therein all Obligations shall be due and payable. On the
date so specified, the Borrower shall prepay all Obligations, including all
accrued and unpaid interest thereon. Notwithstanding the foregoing, if the
Borrower's Optional Termination is limited to the termination of the Revolving
Credit Facility, then only those Obligations, including all accrued and unpaid
interest thereon, arising out of the Revolving Credit Facility must be prepaid
on such date.

                                   ARTICLE III
                         CREDIT DOCUMENTS AND COLLATERAL

         Section 3.1. Credit Documents and Further Assurances. The Borrower
shall perform its obligations under the Credit Documents. At any time or from
time to time upon the request of any Noteholder, the Borrower shall execute and
deliver (or cause to be executed and delivered) such further documents and do
such other acts and things as any Noteholder or the Trustee may reasonably
request in order to effect fully the transactions contemplated by the Credit
Documents. Without limiting the generality of the foregoing, the Borrower shall
execute and deliver any documents, including amendments to, or replacements of,
the Credit Documents and take such other action as may be necessary or as the
Noteholders shall have reasonably requested to create and perfect the intended
Liens in the Collateral.

         Section 3.2. Supplements to Fleet Mortgage. Within 10 days after (a)
the Borrower or any of its Subsidiaries acquires any Documented Vessel, or (b)
any Vessel owned by the Borrower or any of its Subsidiaries becomes a Documented
Vessel, the Borrower shall, or shall cause the applicable Subsidiary to, execute
and deliver any and all supplements to the Fleet Mortgage and such other
documents as the Required Noteholders may request, to subject such Vessels to
the intended Liens of the Fleet Mortgage and the other Security Documents.

                                   ARTICLE IV
                                 INDEMNIFICATION

         Section 4.1. Legal Fees, Other Costs and Indemnification. The Borrower,
upon demand by the applicable Noteholder or the Trustee, agrees to pay the
out-of-pocket costs and expenses (including without limitation the fees and
disbursements of legal counsel to the Noteholders and the Trustee) (a) of the
Noteholders and the Trustee in connection with any amendment, waiver or consent
related thereto, whether or not the transactions contemplated therein are
consummated, and (b) of the Trustee and the Noteholders in connection with
advising the Trustee and the Noteholders of their rights and responsibilities
under the Credit Documents during any Default or Event of Default or in
connection with the enforcement by the Noteholders


                                       19
<PAGE>

and the Trustee of any of the Credit Documents against any Obligor. The Borrower
further agrees to indemnify the Noteholders, the Trustee and their respective
directors, officers, employees and attorneys (in each case in their capacities
as such) (collectively, the "Indemnified Parties"), against all losses, claims,
damages, penalties, judgments, liabilities and expenses (including, without
limitation, all reasonable attorneys' fees and other reasonable expenses of
litigation or preparation therefor), whether or not such Indemnified Party is a
party thereto which any of them may pay or incur arising out of or relating to
(i) any action, suit or proceeding by any Governmental Authority or any other
Person against the Indemnified Party and relating to any applicable law, (ii)
any action, suit or proceeding by any Person not a party to this Agreement (a
"third party") or Governmental Authority against such Indemnified Party and
relating to the execution, delivery or performance (or non-performance) of any
Credit Document by the Borrower and its Subsidiaries, the extensions of credit
evidenced by the Notes or the application or proposed application by the
Borrower and its Subsidiaries of the proceeds of any Note, REGARDLESS OF WHETHER
SUCH CLAIMS OR ACTIONS ARE FOUNDED IN WHOLE OR IN PART UPON STRICT LIABILITY OR
THE ALLEGED SIMPLE OR CONTRIBUTORY NEGLIGENCE OF ANY OF THE INDEMNIFIED PARTIES
AND/OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES OR ATTORNEYS,
(iii) any investigation of any third party or any Governmental Authority
involving the Noteholders or the Trustee (in such capacity hereunder) and
related to any use made or proposed to be made by the Borrower of the proceeds
of the credit extended hereunder, or any transaction financed or to be financed
in whole or in part, directly or indirectly with the proceeds of any credit
extended hereunder, and (iv) any investigation of any third party or any
Governmental Authority, litigation or proceeding involving the Noteholders or
the Trustee and related to any environmental cleanup, audit or compliance with
respect to the Borrower or any of its Subsidiaries or any properties of the
Borrower or any of its Subsidiaries, or any other matter relating to any
Environmental Law or the presence of any Hazardous Material (including, without
limitation, any losses, liabilities, damages, injuries, costs, expenses or
claims asserted or arising under any Environmental Law) with respect to the
Borrower or any of its Subsidiaries or any properties or operations of the
Borrower or any of its Subsidiaries, regardless of whether caused by, or within
the control of, the Borrower or any of its Subsidiaries; provided, however, that
the Borrower shall not be obligated to indemnify any Indemnified Party for any
of the foregoing arising out of such Indemnified Party's gross negligence, or
willful misconduct. The Borrower, upon demand by any Noteholder or the Trustee
at any time, shall reimburse the applicable Indemnified Party for any legal or
other expenses incurred in connection with investigating or defending against
any of the foregoing. The Noteholders and the Borrower agree that any payments
by the Borrower under this Section 4.1 are not duplicative of amounts
recoverable by the Noteholders under the other Operative Documents.

         Section 4.2. Increased Cost and Reduced Return.

                  (a)      If, on or after the date hereof, the adoption of or
                           any change in any applicable law, rule or regulation,
                           or any change in the interpretation or administration
                           thereof by any Governmental Authority, central bank
                           or comparable agency:


                                       20
<PAGE>

                           (i)      subjects any Noteholder (or its Payment
                                    Office) to any tax, duty or other expense
                                    related to any Note, or shall change the
                                    basis of taxation of payments to any
                                    Noteholder (or its Payment Office) of the
                                    principal of or interest on its Notes, or
                                    any other amounts due under any Credit
                                    Document; or

                           (ii)     imposes, modifies or deems applicable any
                                    reserve, special deposit or similar
                                    requirement or imposes on any Noteholder (or
                                    its Payment Office) any other condition
                                    affecting the principal amount of the Notes
                                    held by it, or its participation in any
                                    thereof;

                           (iii)    and the result of any of the foregoing is to
                                    increase the cost to such Noteholder (or its
                                    Payment Office) of maintaining any Note or
                                    participating therein, or to reduce the
                                    amount of any sum received or receivable by
                                    such Noteholder (or its Payment Office) in
                                    connection therewith under the Credit
                                    Documents, by an amount deemed by such
                                    Noteholder to be material, then from time to
                                    time, within thirty (30) days after receipt
                                    of a certificate from such Noteholder
                                    pursuant to subsection (b) below setting
                                    forth in reasonable detail such
                                    determination and the basis thereof, the
                                    Borrower shall be obligated to pay to such
                                    Noteholder such additional amount or amounts
                                    as will compensate such Noteholder for such
                                    future increased cost or reduction.

                  (b)      If any Noteholder seeks compensation under this
                           Section 4.2, such Noteholder shall give written
                           notice to the Borrower of the circumstances that
                           entitle such Noteholder to such compensation. A
                           certificate of any Noteholder claiming compensation
                           under this Section 4.2 and setting forth the
                           additional amount or amounts to be paid to it
                           hereunder shall be conclusive in the absence of
                           manifest error. In determining such amount, such
                           Person may use any reasonable averaging and
                           attribution methods.

         Section 4.3. Payment Office. Any Noteholder may, at its option, elect
to change its Payment Office from time to time and designate another in a
written notice to the Borrower.

         Section 4.4. Discretion of Noteholder. Subject to the other provisions
of this Agreement, any Noteholder shall be entitled to purchase and maintain its
Notes in any manner it sees fit.

         Section 4.5. Withholding Taxes; Payments Free of Withholding. Except as
otherwise required by law, each payment by the Borrower to the Noteholders under
this Agreement or any other Credit Document shall be made without withholding
for or on account of any present or future taxes imposed by or within the
jurisdiction in which the Borrower is domiciled, any jurisdiction from which the
Borrower makes any payment, or (in each case) any political subdivision or
taxing authority thereof or therein, excluding taxes, assessments or other
governmental charges:



                                       21
<PAGE>

                  (a)      imposed on, based upon, or measured by its income,
                           and branch profits, franchise and similar taxes
                           imposed on it, by any jurisdiction in which such
                           Noteholder is organized or maintains its principal
                           place of business or Payment Office or which subjects
                           such Noteholder to tax by reason of a connection
                           between the taxing jurisdiction and such Noteholder
                           (other than a connection resulting from the
                           transactions contemplated by this Agreement);

                  (b)      imposed as a result of a connection between the
                           taxing jurisdiction and such Noteholder, other than a
                           connection resulting from the transactions
                           contemplated by this Agreement;

                  (c)      imposed as a result of the transfer by such
                           Noteholder of its interest in this Agreement or any
                           other Credit Document or a designation by the
                           Noteholder of a new Payment Office;

                  (d)      which would not have been imposed but for (A) the
                           failure of such Noteholder to provide an Internal
                           Revenue Service Form W-8BEN or W-8ECI, as the case
                           may be, or any substitute or successor form
                           prescribed by the Internal Revenue Service, or any
                           other certification, documentation or proof which is
                           reasonably requested by the Borrower, or (B) a
                           determination by a taxing authority or a court of
                           competent jurisdiction that a certification,
                           documentation or other proof provided by such
                           Noteholder to establish an exemption from such tax,
                           assessment or other governmental charge is false;

(all such non-excluded taxes, assessments or other governmental charges and
liabilities being herein referred to as "Indemnified Taxes"). If any such
withholding is so required, the Borrower shall make the withholding, pay the
amount withheld to the appropriate Governmental Authority before penalties
attach thereto or interest accrues thereon and forthwith pay such additional
amount as may be necessary to ensure that the net amount actually received by
the Noteholders is free and clear of such Indemnified Taxes (including
Indemnified Taxes on such additional amount) and is equal to the amount that the
Noteholders would have received had such withholding not been made. If any
Noteholder pays any amount in respect of any Indemnified Taxes, penalties or
interest, the Borrower shall reimburse such Noteholder for such payment on
demand in the currency in which such payment was made. If the Borrower pays any
Indemnified Taxes, or penalties or interest in connection therewith, it shall
deliver official tax receipts evidencing the payment or certified copies
thereof, or other satisfactory evidence of payment if such tax receipts have not
yet been received by the Borrower (with such tax receipts to be promptly
delivered when actually received), to the Noteholder on whose account such
withholding was made within fifteen (15) days of such payment. The Borrower
shall pay the Noteholders any indemnification or compensation hereunder no later
than thirty (30) days after the date on which such Noteholder makes written
demand upon the Borrower therefor.



                                       22
<PAGE>

                                    ARTICLE V
                              CONDITIONS PRECEDENT

         Section 5.1. Conditions to Effectiveness. This Agreement shall become
effective on the first date (the "Effective Date") that all conditions in this
Section 5.1 are satisfied.

                  (a)      The Borrower shall deliver to the Noteholders (except
                           as otherwise provided below), the following documents
                           in form and substance acceptable to the Noteholders:

                           (i)      a certificate of the Secretary or Assistant
                                    Secretary of each Obligor certifying (A) the
                                    resolutions of such Obligor's board of
                                    managers or other governing body approving
                                    this Agreement and the issuance of the
                                    Revolving Note and each other Credit
                                    Document to which it is a party, and (B) the
                                    name, signature, and authority of each
                                    officer who executes on such Obligor's
                                    behalf any Credit Document (on which
                                    certificate the Noteholders may conclusively
                                    rely until a revised certificate is
                                    received);

                           (ii)     to the RBF Noteholder, a duly executed
                                    Revolving Note, payable to the order of the
                                    RBF Noteholder;

                           (iii)    all instruments and other documents
                                    required, or deemed desirable by the RBF
                                    Noteholder, to create and perfect the RBF
                                    Noteholder's or the Trustee's intended Liens
                                    in the Collateral in all appropriate
                                    jurisdictions as collateral security for the
                                    Revolving Loans and related Obligations,
                                    including appropriate amendments to the
                                    other Credit Documents and evidence
                                    satisfactory to the RBF Noteholder that all
                                    appropriate documents necessary to effect an
                                    amendment to the Fleet Mortgage to include
                                    the Revolving Note thereunder have been sent
                                    for filing for recordation in the Coast
                                    Guard's National Vessel Documentation Center
                                    in compliance with Maritime Law;

                           (iv)     such other approvals, opinions or documents
                                    as the RBF Noteholder may request;

                           (v)      no default or event of default (in each
                                    case, as defined in each Operative Document)
                                    under any Operative Document by any Obligor
                                    or any other Person shall exist, and the
                                    Obligors shall have no notice that (A) any
                                    Obligor or any Affiliate of any Obligor or
                                    any other Person has reason to, could or
                                    intends to take or has taken any steps to
                                    cancel or terminate any Operative Document,
                                    or (B) the Operative Documents are not
                                    otherwise in full force and effect;



                                       23
<PAGE>

                  (b)      The Borrower shall have furnished to the Noteholders
                           a certificate executed on behalf of the Borrower by a
                           Senior Officer, which indicates that it is made in
                           favor of and for the benefit of the Trustee and the
                           Noteholders, certifying, representing and warranting
                           that all conditions to the Effective Date have
                           occurred and specifically certifying, without
                           limitation, that the conditions provided in Section
                           5.1(a)(v) have been satisfied;

                  (c)      No Default or Event of Default shall then exist or
                           shall occur as a result of the issuance of the
                           Revolving Note;

                  (d)      The representations and warranties of the Borrower
                           contained in the Credit Documents shall be true and
                           correct on the Effective Date both before and after
                           giving effect to the issuance of the Revolving Note;
                           and

                  (e)      The Guarantor under the Parent Guarantee shall have
                           consented to this amended and restated note
                           agreement.

         Section 5.2. Conditions to Each Revolving Loan. No Revolving Loan shall
be made to the Borrower unless:

                  (a)      the Effective Date shall have occurred;

                  (b)      the Borrower shall have delivered to the RBF
                           Noteholder a Notice of Borrowing substantially in the
                           form attached hereto as Exhibit 5.2B;

                  (c)      the Borrower shall have delivered a certificate from
                           Senior Officer of the Borrower certifying that as if
                           the date of such borrowing:

                           (i)      both before and after giving effect to each
                                    borrowing under Section 2.5 (i) no Default
                                    or Event of Default exists, and (ii) the
                                    representations and warranties of the
                                    Borrower contained in the Credit Documents
                                    are true and correct;

                           (ii)     the Current Ratio is equal to or greater
                                    than 1.00 to 1.00 for the applicable
                                    Twelve-month Period and setting forth in
                                    reasonable detail the calculation used to
                                    determine compliance with such Current
                                    Ratio; and

                           (iii)    the Fixed Charge Coverage Ratio is equal to
                                    or greater than 1:00 to 1:00 for the
                                    applicable Twelve-month Period and setting
                                    forth in reasonable detail the calculation
                                    used to determine compliance with such Fixed
                                    Charge Coverage Ratio.



                                       24
<PAGE>

                                   ARTICLE VI
                         REPRESENTATIONS AND WARRANTIES

         Section 6.1. Representations and Warranties. The Borrower represents
and warrants to the Noteholders that each of the following statements is true
and correct in all material respects:

                  (a)      Existence and Qualification. The Borrower (i) is a
                           duly organized and existing limited liability company
                           in good standing under the laws of the State of
                           Delaware; (ii) has all necessary limited liability
                           company power to own and operate the Vessels and to
                           carry on the Marine Business contemplated in
                           connection therewith; and (iii) is duly licensed or
                           qualified and in good standing in each jurisdiction
                           in which the nature of the business transacted by it
                           or the nature of the property owned or leased by it
                           makes such licensing or qualification necessary.

                  (b)      Limited Liability Company Power and Authority;
                           Validity. The Borrower has the limited liability
                           company power and authority to execute, deliver and
                           carry out the terms and provisions of the Operative
                           Documents to which it is a party and to consummate
                           the transactions contemplated hereby and has taken
                           all necessary limited liability company and member
                           action to authorize the execution, delivery and
                           performance of such Operative Documents and to
                           consummate the transactions contemplated hereby. The
                           Borrower has duly executed and delivered each
                           Operative Document to which it is a party and each
                           such Operative Document constitutes the legal, valid
                           and binding obligation of such Person enforceable
                           against it in accordance with its terms, subject as
                           to enforcement only to bankruptcy, insolvency,
                           reorganization, moratorium or other similar laws
                           affecting the enforcement of creditors' rights
                           generally and equitable principles.

                  (c)      No Violation. Neither the execution, delivery or
                           performance by each Obligor of the Operative
                           Documents to which it is a party nor compliance by it
                           with the terms and provisions thereof, nor the
                           consummation by it of the transactions contemplated
                           herein or therein, will (i) contravene in any
                           material respect any applicable provision of any law,
                           statute, rule or regulation, or any applicable order,
                           writ, injunction or decree of any court or
                           governmental instrumentality, including, without
                           limitation, the Maritime Law of the USA, with respect
                           to the location of the Vessels or any other
                           applicable jurisdiction, except as described on
                           Schedule 6.1(c) (the "Excepted Matters"), (ii)
                           conflict with or result in any breach of any term,
                           covenant, condition or other provision of, or
                           constitute a default under, or result in the creation
                           or imposition of (or the obligation to create or
                           impose) any Lien other than any Permitted Lien upon
                           any of the property or assets of the Borrower under,
                           the terms of any legal or contractual obligation to
                           which the Borrower is a party or by which it or any
                           of their properties or assets is bound or to which
                           any of them may be



                                       25
<PAGE>

                           subject, or (iii) violate or conflict with any
                           provision of the organizational documents of the
                           Borrower.

                  (d)      Litigation. There are no actions, suits, proceedings
                           or counterclaims (including, without limitation,
                           arbitration, derivative or injunctive actions)
                           pending or, to the knowledge of the Borrower,
                           threatened against the Obligors or their Affiliates
                           that are reasonably likely to have a Material Adverse
                           Effect.

                  (e)      Use of Proceeds; Margin Regulations.

                           (i)      The proceeds of the Notes shall be used only
                                    as described in Sections 2.1 and 2.5.

                           (ii)     The Borrower is not engaged in the business
                                    of extending credit for the purpose of
                                    purchasing or carrying margin stock. No
                                    proceeds of any Note will be used for a
                                    purpose which violates Regulation U or X of
                                    the Board of Governors of the Federal
                                    Reserve System. After application of the
                                    proceeds of the Notes, none of the assets of
                                    the Borrower consists of "margin stock" (as
                                    defined in Regulation U of the Board of
                                    Governors of the Federal Reserve System).

                  (f)      Investment Company Act. The Borrower is not an
                           "investment company" or a company "controlled" by an
                           "investment company," within the meaning of the
                           Investment Company Act of 1940, as amended.

                  (g)      Public Utility Holding Company Act. The Borrower is
                           not a "holding company," or a "subsidiary company" of
                           a "holding company," or an "affiliate" of a "holding
                           company" or of a "subsidiary company" of a "holding
                           company," within the meaning of the Public Utility
                           Holding Company Act of 1935, as amended.

                  (h)      No Material Adverse Change. There has occurred no
                           event or effect, other than any event specifically
                           permitted, contemplated or provided for under any
                           Operative Document, that has had or is reasonably
                           likely to have a Material Adverse Effect.

                  (i)      Consents. Except for the Excepted Matters, at the
                           time of consummation thereof, all consents and
                           approvals of, and filings and registrations with, and
                           all other actions of, all Governmental Authorities,
                           authorities or instrumentalities required to have
                           been obtained or made by the Obligors and their
                           Affiliates prior to such time in order to consummate
                           the purchase of the Term Notes and issuance of the
                           Revolving Note hereunder, and to execute, deliver and
                           perform the Operative Documents, have been or will
                           have been obtained or made and are or will be in full
                           force and effect.



                                       26
<PAGE>

                  (j)      Compliance with Statutes, Etc. Except for the
                           Excepted Matters, the Obligors and their Affiliates
                           are in compliance with all applicable Maritime Law
                           and other statutes, regulations and orders of, and
                           all applicable restrictions imposed by, all
                           Governmental Authorities, domestic and foreign,
                           including, without limitation, all applicable laws
                           with respect to the location of the Vessels, in
                           respect of the conduct of their business as currently
                           conducted by the ownership and operation of their
                           properties as currently operated by it, except for
                           such instances of non-compliance as are not
                           reasonably likely to, individually or in the
                           aggregate, have a Material Adverse Effect, and has
                           all necessary permits and licenses, and other
                           necessary authorizations, with respect thereto with
                           such exceptions (if any) as are not reasonably likely
                           to, individually or in the aggregate, have a Material
                           Adverse Effect.

                                   ARTICLE VII
                                    COVENANTS

         Section 7.1. Covenants of the Borrower. The Borrower hereby covenants
and agrees that until the Obligations have been paid in full:

                  (a)      Operative Documents. The Borrower shall fully comply
                           with and perform its obligations under the Operative
                           Documents.

                  (b)      Limited Liability Company Existence. The Borrower
                           shall preserve and maintain its limited liability
                           company existence. The Borrower shall not, and shall
                           not permit any of its Subsidiaries to, make or permit
                           to exist any Investment or enter into or permit to
                           exist any partnerships, joint ventures or any other
                           business combinations, mergers or consolidations
                           involving itself or any of its Subsidiaries.

                  (c)      Maintenance of Property and Operations. The Borrower
                           shall, and shall cause each of its Subsidiaries to,
                           obtain and maintain all material permits, licenses,
                           consents, approvals and other authorizations,
                           including those required under all applicable laws,
                           from all Governmental Authorities necessary to be
                           obtained by it in connection with the operation and
                           maintenance of the Vessels and the Marine Business.

                           The Borrower shall maintain and operate the Vessels
                           in a good operating condition (ordinary wear and tear
                           excepted), in compliance with all applicable
                           contracts and other agreements, laws and regulations
                           and in accordance with manufacturer's warranties and
                           recommended maintenance procedures, insurance
                           policies and industry practices.

                           The Borrower shall, at its own expense, insofar as is
                           practicable, perform all ordinary maintenance on the
                           Vessels and make all proper renewals and replacements
                           necessitated by wear, tear and normal depreciation.
                           Unless a Casualty Event results in a total loss,
                           actual or constructive, as



                                       27
<PAGE>

                           constructive total loss is defined in the relevant
                           policy or policies of hull insurance, the Borrower
                           shall, in a workmanlike manner, diligently commence
                           and pursue the repair, restoration or replacement of
                           any Property damaged as a result of a Casualty Event
                           such that the damaged Property is restored to at
                           least its value and operating condition immediately
                           prior to the subject Casualty Event, or is replaced
                           with comparable or better Property, unless the
                           subject Property, immediately prior to such Casualty
                           Event, was no longer used or useful to its Marine
                           Business; provided, however, that in the event the
                           Borrower does not receive the Casualty Proceeds
                           pursuant to Section 4.05(c)(ii) of the Collateral
                           Trust Agreement, the Borrower shall not be obligated
                           to make such repair or restoration.

                  (d)      Taxes. The Borrower shall and shall cause each of its
                           Subsidiaries to, file all tax returns required to be
                           filed in any jurisdiction and to duly pay and
                           discharge all Taxes upon or against it or its
                           properties before penalties accrue thereon, unless
                           and to the extent that the same are being contested
                           in good faith and by appropriate proceedings and
                           reserves have been established in conformity with
                           GAAP and for which the non-payment thereof is not
                           expected to result in a Material Adverse Effect.

                  (e)      Burdensome Restrictions. Promptly upon any Senior
                           Officer becoming aware thereof, the Borrower shall
                           give to the Noteholders written notice of (i) the
                           adoption of any new requirement of law which is
                           reasonably likely to have a Material Adverse Effect,
                           and (ii) the existence or occurrence of any strike,
                           slow down or work stoppage which is reasonably likely
                           to have a Material Adverse Effect.

                  (f)      Insurance. The Borrower shall maintain (and shall
                           cause each of its Subsidiaries to maintain), or cause
                           to be maintained, at its own expense, with reputable
                           insurance companies or mutual associations (clubs)
                           reasonably acceptable to the Required Noteholders, at
                           a minimum, the following types of insurance in at
                           least the following amounts and other insurance in
                           such other amounts and having such other terms as the
                           Required Noteholders may require from time to time:

                           (i)      Worker's compensation and employer's
                                    liability insurance to the extent required
                                    by applicable law. Such policy to contain
                                    coverage for risks arising from Maritime Law
                                    and the Jones Act and similar laws with a
                                    limit no less than $5,000,000 (including
                                    excess liability) combined single limit per
                                    occurrence.

                           (ii)     Comprehensive general liability or
                                    commercial general liability (or equivalent
                                    coverage (including excess liability))
                                    insurance including contractual liability,
                                    pollution and suitably endorsed to cover
                                    maritime operations with minimum limits of
                                    $5,000,000 per



                                       28
<PAGE>

                                    occurrence for deaths or injuries and
                                    property damage arising out of one
                                    accident).

                           (iii)    All Vessels owned or chartered by, or
                                    operated in performance of any operations
                                    of, the Borrower or any of its Subsidiaries,
                                    shall be covered with (A) P&I Insurance (on
                                    SP23 Form or equivalent) including crew, in
                                    the amount that would be obtained by
                                    reasonably prudent operators of businesses
                                    similar to the Marine Business, but in no
                                    event less than $5,000,000 (including excess
                                    liability), and (B) hull insurance (on a
                                    current American Institute or equivalent
                                    hull form), including wreck removal coverage
                                    (legal, contractual and voluntary) and full
                                    collision coverage (floating and stationary)
                                    (x) against the risks of fire, explosion and
                                    marine perils (including without limitation
                                    a collision or Four-Fourths Running Down
                                    Clause and Inchmaree Clause in favor of the
                                    Trustee), (y) against pollution liability
                                    risks under policies of insurance issued in
                                    accordance with the Oil Pollution Act of
                                    1990, and (z) against all other risks
                                    insured under the form of policy known as
                                    "American Institute Hull Form" or
                                    equivalent. The hull policy with respect to
                                    the Vessels shall have a minimum value of
                                    not less than the appraised value of such
                                    Vessels or, if there shall not be an
                                    appraised value for a Vessel, a value agreed
                                    to between the Required Noteholders and the
                                    Borrower; provided, however, that for at
                                    least the first five (5) months after the
                                    Closing Date the value shall not be less
                                    than the current insured value under the
                                    policies in effect as of the Closing Date.

                           (iv)     If any Vessel shall at any time be located
                                    in war-endangered waters or in other waters
                                    which may under the hull policy be
                                    considered excluded by any "free of capture
                                    and seizure" clause, the Borrower shall give
                                    prompt prior written notice thereof to the
                                    Noteholders, and at the request of the
                                    Required Noteholder shall insure (through a
                                    separate policy or by endorsement to the
                                    applicable hull policy) such Vessel against
                                    war and political risks in the amount
                                    required to be maintained under the hull
                                    policy with respect thereto.

                           (v)      The Borrower may exclude from the Hull and
                                    P. & I. insurance any breach of warranty
                                    coverage, and may eliminate from the Hull
                                    and P. & I. insurance any risks ordinarily
                                    covered thereunder, provided that it insures
                                    such risks under a separate or different
                                    form of policy.



                                       29
<PAGE>

                           (vi)     Where the valuation of the Vessels in any
                                    policy of insurance required hereunder may
                                    be pertinent, such valuation shall not
                                    exceed the amount insured thereby, and
                                    policy franchises or deductible averages
                                    shall not exceed the sum of $50,000.00 as to
                                    each loss covered by hull insurance and
                                    $50,000.00 as to each loss covered by P. &
                                    I. insurance. Excess liability, increased
                                    value, disbursements and other forms of
                                    total loss insurance, in such amounts as
                                    marine underwriters may allow, may be
                                    carried as part of the total amount of the
                                    hull insurance required hereunder.

                           (vii)    The Borrower shall select its own insurance
                                    brokers (unless such brokers are
                                    unsatisfactory to the Required Noteholders)
                                    and all such insurance shall be effected by
                                    the Borrower through such brokers on policy
                                    forms acceptable to, and in companies in
                                    good standing and satisfactory to, the
                                    Required Noteholders.

                           (viii)   Except for such deductibles permitted by
                                    Section 7.1(f)(vi), the Borrower shall not
                                    self-insure any of such risks. The
                                    Borrower's hull policies (including any war
                                    and political risk coverage) and its
                                    liability policies shall each name the
                                    Noteholders and the Trustee as a named
                                    assured and the Trustee as sole loss payee.
                                    Each of such policies shall be written by
                                    reputable insurers and be reasonably
                                    acceptable to the Required Noteholders and
                                    shall provide that neither the Trustee nor
                                    any Noteholder shall have any responsibility
                                    for payment of premium and that it shall not
                                    terminate without at least thirty (30) days'
                                    (or such fewer days, if any, in the case of
                                    cancellation pursuant to any war and related
                                    risk termination clauses contained in such
                                    policies) advance written notice to the
                                    Trustee and the Noteholders.

                           (ix)     All insurance and the policies evidencing
                                    the same shall by their terms be taken out
                                    in the joint names of the Borrower and the
                                    Trustee and shall by their terms be payable
                                    to the Trustee. Such amounts shall be
                                    applied as described in Section 2.4(d)
                                    hereof. The Borrower pays the amount of the
                                    deductible.

                           (x)      The Borrower warrants that it will maintain
                                    all such insurance unimpaired by any act,
                                    and that it will not be guilty of or permit
                                    any act of omission or commission which will
                                    in any way invalidate, void or suspend any
                                    insurance herein provided to be maintained.
                                    Each policy of insurance required to be
                                    maintained by the Borrower hereunder shall
                                    be endorsed with the undertaking of the
                                    insurance company or underwriters issuing
                                    such policy to the effect that such policy
                                    shall not lapse, expire, terminate or be
                                    canceled for any reason whatsoever, or be
                                    modified in any material respect, without at
                                    least thirty (30) days prior written notice
                                    to the Trustee and the Noteholders. The
                                    Borrower shall, within a



                                       30
<PAGE>

                                    reasonable period of time, pay for any loss
                                    of or damage to a Vessel by any cause
                                    whatsoever, and shall discharge or obtain
                                    the release of any third party claims
                                    whatsoever not covered by insurance or for
                                    which no reimbursement or incomplete
                                    reimbursement is secured from the insurance.
                                    Such policies shall not provide for or
                                    purport to provide for any recourse against
                                    the Trustee or the Noteholders for payment
                                    of club calls, assessments or advances.

                  (g)      Insurance Certificate. On or before May 1 in each
                           year, commencing May 1, 2002, a certificate of
                           insurance signed by an independent marine insurance
                           broker retained by the Borrower and acceptable to the
                           Required Noteholders (i) listing the policies of
                           insurance outstanding and in force on such date in
                           respect of the Vessels and the Borrower and its
                           Subsidiaries as of such date, the names of the
                           companies issuing such insurance, the amounts and
                           expiration dates of such insurance and the risks
                           covered thereby, and (ii) stating that attached to
                           such certificate are true, correct and complete
                           copies of all policies of insurance referred to
                           therein or of certificates of the issuers of such
                           policies or their agents evidencing the existence of
                           such policies, and that such insurance complies with
                           the requirements contained in Section 7.1(f) of this
                           Agreement. If such certificate does not reflect
                           coverage that is required by the other Credit
                           Documents, any failure by the Trustee or any
                           Noteholder to object thereto shall in no event
                           constitute a waiver of the requirements of this
                           Agreement or the Credit Documents.

                  (h)      Other Information. Promptly, and in any event within
                           five Business Days, after the Borrower obtains
                           knowledge of any of the following, the Borrower shall
                           provide the Noteholders with written notice in
                           reasonable detail of:

                           (i)      any pending or threatened material
                                    Environmental Claim against the Borrower or
                                    any of its Subsidiaries or any property
                                    owned or operated by the Borrower or any of
                                    its Subsidiaries;

                           (ii)     any condition or occurrence on any property
                                    owned or operated by the Borrower or any of
                                    its Subsidiaries that results in material
                                    noncompliance with any Environmental Law;

                           (iii)    the taking of any material remedial action
                                    in response to the actual or alleged
                                    presence of any Hazardous Material on any
                                    property owned or operated by the Borrower
                                    or any of its Subsidiaries other than in the
                                    ordinary course of business;

                           (iv)     the occurrence of any Default or Event of
                                    Default;



                                       31
<PAGE>

                           (v)      any litigation or governmental proceeding
                                    affecting the Borrower or any of its
                                    Subsidiaries or any Affiliates of the
                                    Borrower that might reasonably be expected
                                    to result in a Material Adverse Effect;

                           (vi)     any circumstance that has had or reasonably
                                    threatens a Material Adverse Effect,
                                    including, without limitation, the
                                    revocation, change, modification or
                                    reconsideration of any license, consent or
                                    approval which has had or reasonably
                                    threatens a Material Adverse Effect;

                           (vii)    any investigation of the Borrower or any of
                                    its Subsidiaries or any operations of the
                                    Borrower or any of its Subsidiaries for a
                                    violation of any applicable law or any
                                    material contract, agreement, license or
                                    permit;

                           (viii)   promptly after the filing or receiving
                                    thereof, copies of all material reports and
                                    notices with respect to the Vessels which
                                    the Borrower or any of its Subsidiaries
                                    files with the United States Coast Guard or
                                    the United States Maritime Administration or
                                    which the Borrower or any of its
                                    Subsidiaries receives from either of the
                                    foregoing entities; and

                           (ix)     with reasonable promptness, such other
                                    information as any Noteholder or the Trustee
                                    on behalf of the Noteholders may reasonably
                                    request.

                  (i)      Noteholder Inspection Rights. Upon reasonable notice
                           from any Noteholder, the Borrower shall permit such
                           Noteholder (and such Persons as such Noteholder may
                           reasonably designate) during normal business hours at
                           such entity's sole expense unless a Default or Event
                           of Default shall have occurred and be continuing, in
                           which event at the Borrower's expense, to visit and
                           inspect any of the properties of the Borrower, to
                           examine all of its books and records, to make copies
                           and extracts therefrom, verify the computation of any
                           Excess Cash Flow, and to discuss its affairs,
                           finances and accounts with its officers and
                           independent public accountants (and by this provision
                           the Borrower authorizes such accountants to discuss
                           with the Noteholders (and such Persons as such
                           Noteholder may reasonably designate) the affairs,
                           finances and accounts of the Borrower), all as often,
                           and to such extent, as may be reasonably requested.

                  (j)      Conduct of Business. The Borrower shall not and shall
                           not permit any of its Subsidiaries to directly or
                           indirectly engage in any line of business other than
                           (i) the Marine Business as in effect on the Effective
                           Date or (ii) any other line of business that is
                           approved in writing by the Required Noteholders.



                                       32
<PAGE>

                  (k)      Other Agreements. The Borrower shall not and shall
                           not permit any of its Subsidiaries to enter into any
                           agreement (other than the Operative Documents)
                           expressly and directly prohibiting the creation or
                           assumption of any Lien upon its properties, revenues
                           or assets, whether now owned or hereafter acquired,
                           or prohibiting or restricting the ability of the
                           Borrower from amending or otherwise modifying any
                           Operative Document.

                  (l)      Change of Flag. Without the consent of the Required
                           Noteholders, the Borrower shall not, and shall not
                           permit any of its Subsidiaries to, change the
                           registry and flag of any Vessel to any jurisdiction
                           other than the United States of America.

                  (m)      Restrictions on Charterers of Vessels. The Borrower
                           shall not, and shall not permit any of its
                           Subsidiaries to, bareboat or demise charter any
                           Vessel for operation in the coastwise trade to any
                           Person that is not a citizen of the United States
                           within the meaning of Section 2 of the Shipping Act
                           of 1916, as amended, for the purpose of operating in
                           the coastwise trade of the United States. The
                           Borrower shall, and shall cause each of its
                           Subsidiaries to, remain a citizen within the meaning
                           of Section 2 of the Shipping Act of 1916, as amended,
                           for the purposes of operating the Vessels in
                           coastwise trade of the United States.

                  (n)      Restrictions on Fundamental Changes and Issuance of
                           Additional Equity. The Borrower shall not, nor permit
                           any of its Subsidiaries to, reorganize, merge or
                           consolidate with any Person (other than a merger of a
                           Wholly Owned Subsidiary of the Borrower with the
                           Borrower pursuant to which the Borrower is the
                           surviving entity) or become a party to any merger or
                           consolidation with, or purchase or otherwise acquire
                           all or substantially all of the assets or any of the
                           stock of, any other Person (other than a Wholly Owned
                           Subsidiary of the Borrower), or sell or transfer all
                           or substantially all of its or any of its
                           Subsidiaries' assets or any stock of any of its
                           Subsidiaries. The Borrower shall not issue any
                           additional equity or options, warrants or other
                           rights to acquire any of the Borrower's Capital Stock
                           to any Person other than to the Noteholders.

                  (o)      Liens. The Borrower shall not and shall not permit
                           any of its Subsidiaries to create, incur, assume or
                           suffer to exist any Lien of any kind on any Property
                           of the Borrower or any of its Subsidiaries, except
                           the following (collectively, the "Permitted Liens"):

                           (i)      Intentionally Omitted.

                           (ii)     Liens arising in the ordinary course of
                                    business of the Borrower and its
                                    Subsidiaries by operation of law, deposits,
                                    pledges or other Liens in connection with
                                    workers' compensation, unemployment
                                    insurance, old age benefits, social security
                                    obligations, taxes, assessments, public or
                                    statutory obligations or other similar



                                       33
<PAGE>

                                    charges, pledges or other Liens in
                                    connection with (or to obtain letters of
                                    credit in connection with) bids,
                                    performance, return-of-money or payment
                                    bonds, contracts or leases to which the
                                    Borrower is a party or other deposits
                                    required to be made in the ordinary course
                                    of business; provided that in each case the
                                    obligation secured is not for Indebtedness
                                    for borrowed money and is not overdue or, if
                                    overdue, is being contested in good faith by
                                    appropriate proceedings and reserves in
                                    conformity with GAAP have been provided
                                    therefor;

                           (iii)    for Property other than the Vessels,
                                    mechanics', worker's, materialmen's,
                                    landlords', carriers' or other similar Liens
                                    arising in the ordinary course of business
                                    (or deposits to obtain the release of such
                                    Liens) related to obligations not overdue
                                    for more than thirty (30) days, or, if so
                                    overdue, that are being contested in good
                                    faith by appropriate proceedings and
                                    reserves in conformity with GAAP have been
                                    provided therefor; provided in each case,
                                    that such Lien or claim is not prior to or
                                    on a parity with or which might impair the
                                    Lien of the applicable Security Document and
                                    which does not involve any risk of seizure
                                    or sale of any such Property;

                           (iv)     Liens for Taxes which are being contested in
                                    good faith by appropriate proceedings and
                                    reserves in conformity with GAAP have been
                                    provided therefor;

                           (v)      Liens arising out of judgments or awards
                                    against the Borrower or in connection with
                                    surety or appeal bonds or the like in
                                    connection with bonding such judgments or
                                    awards, the time for appeal from which or
                                    petition for rehearing of which shall not
                                    have expired or for which the Borrower shall
                                    be prosecuting an appeal or proceeding for
                                    review, and for which it shall have obtained
                                    (within thirty (30) days with respect to a
                                    judgment or award rendered in the United
                                    States a stay of execution or the like
                                    pending such appeal or proceeding for
                                    review; provided that the aggregate amount
                                    of uninsured or underinsured liabilities
                                    (including interest, costs, fees and
                                    penalties, if any) of the Borrower secured
                                    by such Liens shall not exceed $100,000 at
                                    any one time outstanding;

                           (vi)     rights reserved to or vested in any
                                    municipality or governmental, statutory or
                                    public authority by the terms of any right,
                                    power, franchise, grant, license or permit,
                                    or by any provision of law, to terminate
                                    such right, power, franchise, grant, license
                                    or permit or to purchase, condemn,
                                    expropriate or recapture or to designate a
                                    purchaser of any of the property of a
                                    Person;

                           (vii)    Liens created by the Operative Documents;



                                       34
<PAGE>

                           (viii)   with respect to the Vessels, Liens (a) for
                                    crew's wages (1) for fifteen (15) days after
                                    the termination of a voyage, or (2) which
                                    shall then be contested in good faith by
                                    appropriate action promptly initiated and
                                    diligently conducted, if such reserve as
                                    shall be required by GAAP shall have been
                                    made therefor, (b) for general average (1)
                                    which are unclaimed, (2) for fifteen (15)
                                    days after having been claimed, (3) which
                                    are covered by insurance, or (4) which shall
                                    then be contested in good faith by
                                    appropriate action promptly initiated and
                                    diligently conducted, if such reserve as
                                    shall be required by GAAP shall have been
                                    made therefor, (c) for salvage, whether
                                    voluntary or contract, (1) which are
                                    unclaimed, (2) for fifteen (15) days after
                                    having been claimed, (3) which are covered
                                    by insurance, or (4) which shall then be
                                    contested in good faith by appropriate
                                    action promptly initiated and diligently
                                    conducted, if such reserve as shall be
                                    required by GAAP shall have been made
                                    therefor, (d) otherwise incident to the then
                                    current operations of the Vessels, for the
                                    wages that are not past due of a stevedore
                                    when employed directly by Borrower, or the
                                    operator, master or agent of any Vessel, and
                                    (e) for repairs or with respect to any
                                    changes made in any Vessel (1) which are
                                    unclaimed, (2) for fifteen (15) days after
                                    having been claimed, (3) which are covered
                                    by insurance, or (4) which shall then be
                                    contested in good faith by appropriate
                                    action promptly initiated and diligently
                                    conducted, if such reserve as shall be
                                    required by GAAP shall have been made
                                    therefor; provided in each case, that such
                                    Lien or claim does not involve any risk of
                                    seizure or sale of any Vessel; and

                           (ix)     Liens in existence on the Effective Date
                                    approved by the Required Lenders.

                  (p)      Indebtedness. The Borrower shall not and shall not
                           permit any Subsidiary to, incur, assume or suffer to
                           exist any Indebtedness, except the following
                           (collectively, the "Permitted Indebtedness"):

                           (i)      Indebtedness to the Noteholders under the
                                    Credit Documents;

                           (ii)     after the Revolving Credit Termination Date,
                                    a Revolving Credit Facility or letter of
                                    credit facility in an aggregate principal
                                    amount not to exceed $4,000,000 at any time
                                    outstanding; and

                           (iii)    other unsecured Indebtedness permitted in
                                    writing by the Required Noteholders.



                                       35
<PAGE>

                  (q)      Use of Property and Facilities; Environmental Laws.
                           The Borrower shall and shall cause each of its
                           Subsidiaries to, comply in all material respects with
                           all Environmental Laws applicable to or affecting the
                           properties or business operations of the Borrower or
                           any of its Subsidiaries, where the failure to comply
                           is reasonably likely to have a Material Adverse
                           Effect.

                  (r)      Advances, Investments and Loans; No Subsidiaries. The
                           Borrower shall not and shall not permit any of its
                           Subsidiaries to, lend money or make advances to any
                           Person, guarantee any obligations of any Person or
                           purchase or acquire any stock, indebtedness,
                           obligations or securities of, or any other interest
                           in, or make any capital contribution to, any other
                           Person (any of the foregoing, an "Investment") except
                           those permitted in the Company Investment Guideline
                           as stipulated in Section 8.10 of the LLC Agreement
                           and the Borrower shall not acquire or permit to exist
                           any Subsidiary without the consent of the Required
                           Noteholders.

                  (s)      Modifications of Organizational Documents and
                           Operative Documents.

                           (i)      The Borrower shall not amend, modify or
                                    change in any way adverse to the interests
                                    of the Noteholders, its limited liability
                                    company certificate, organizational
                                    agreement or other corporate governance
                                    documents.

                           (ii)     The Borrower shall not and shall not permit
                                    any of its Subsidiaries to, after the date
                                    hereof, enter into, or amend or modify, any
                                    Operative Document to which it is a party
                                    without the prior written consent of the
                                    Required Noteholders.

                  (t)      Transfers of Assets. The Borrower shall not and shall
                           not permit any of its Subsidiaries to, sell or
                           otherwise transfer any asset except:

                           (i)      the retirement or replacement in the
                                    ordinary course of business of equipment
                                    (other than Vessels) that is worn out,
                                    obsolete or no longer useful in the
                                    Borrower's business if the proceeds thereof
                                    are applied to replace such asset or to
                                    repay the Notes;

                           (ii)     any Investment permitted by Section 7.1(r);

                           (iii)    the Liens permitted by Section 7.1(o);

                           (iv)     any Asset Sale for cash where the
                                    consideration involved is equal to or less
                                    than $2 million or any series of Asset Sales
                                    within a Fiscal Year where the aggregate
                                    consideration involved is equal to or less
                                    than $2 million, in either case, including
                                    contingent liabilities only to the extent
                                    required to be reflected on the balance
                                    sheet of the Company in accordance with GAAP
                                    on a consolidated basis;



                                       36
<PAGE>

                           (v)      payments on Indebtedness permitted to be
                                    incurred or exist under this Agreement and
                                    other payments made in the ordinary course
                                    of business and otherwise in compliance with
                                    the terms of the Credit Documents; and

                           (vi)     any transfer permitted by Section 7.1(n).

                  (u)      Capital Expenditures. The Borrower shall not and
                           shall not permit any of its Subsidiaries to, make any
                           or incur liability for any Capital Expenditures
                           (excluding Member-Indemnified Expenditures) and
                           Acquisition Expenditures that exceed $4 million in
                           the aggregate for each Fiscal Year or $150,000 per
                           individual expenditure or group of related
                           expenditures.

                  (v)      Transactions with Affiliates. Except as permitted
                           pursuant to Section 8.09 of the LLC Agreement or
                           otherwise specifically permitted herein, the Borrower
                           shall not and shall not permit any of its
                           Subsidiaries to, enter into or engage in any
                           transaction or arrangement or series of related
                           transactions or arrangements, including, without
                           limitation, the purchase from, sale to or exchange of
                           property with, or the rendering of any service by or
                           for, any Affiliate; provided that each such permitted
                           transaction shall be an Arm's Length Transaction.

                  (w)      Operating Lease. The Borrower shall not enter into
                           any operating lease if the aggregate amount payable
                           in any 12-month period on all operating leases
                           exceeds $100,000.

                  (x)      Compliance with Laws. Without limiting any of the
                           other covenants of the Borrower in this Article VII,
                           the Borrower shall and shall cause its Subsidiaries
                           to, conduct its business, and otherwise be, in
                           compliance with all applicable laws, regulations,
                           ordinances and orders of any Governmental
                           Authorities, except where the failure to comply
                           therewith is not reasonably likely to have a Material
                           Adverse Effect.

                  (y)      Classification of Vessels. The Borrower shall and
                           shall cause each of its Subsidiaries to, maintain
                           each Vessel that is acquired on the Effective Date
                           that is so classified and each other Vessel that it
                           elects thereafter to have classified such that at all
                           times each such Vessel ("Classified Vessels") shall
                           remain in class with the American Bureau of Shipping
                           or a similar classification society, to the extent
                           such Vessel as a result of its operations is required
                           to be in class. Each Classified Vessel shall be in
                           compliance with the requirements of the American
                           Bureau of Shipping or any other similar
                           classification society, for the highest
                           classification for vessels of like age and type at
                           all times and upon request of the Required
                           Noteholders, the Borrower shall promptly provide to
                           the Noteholders a copy of a certificate duly issued
                           by the American Bureau of Shipping or other
                           classification society, to the effect that the
                           Classified Vessels have been given the highest
                           classification and rating for vessels of the same age



                                       37
<PAGE>

                           and type free of all recommendations and notations of
                           such classification society affecting class.

                  (z)      Separate Legal Existence of the Borrower and its
                           Subsidiaries. The Borrower shall and shall cause each
                           of its Subsidiaries to, maintain their respective
                           financial and other records and books of account
                           separate from those of any other Person, and shall
                           maintain and cause its Subsidiaries to maintain their
                           respective assets in a manner that facilitates their
                           identification and segregation from those of any
                           other Person. The Borrower shall observe and shall
                           cause its Subsidiaries to observe all requisite
                           corporate formalities in their respective business
                           affairs, and shall not commingle or permit any of its
                           Subsidiaries to, commingle their respective funds or
                           other assets with those of any other Person or
                           maintain joint bank accounts with any other Person.

                  (aa)     Non Discrimination or Adverse Transaction. The
                           Borrower shall not and shall not permit any of its
                           Subsidiaries to, enter into any contract, agreement
                           or other arrangement with another Person that is less
                           favorable to the Borrower and its Subsidiaries than
                           an Arm's Length Transaction.

                  (bb)     No Management or Other Fees. The Borrower shall not
                           and shall not permit any of its Subsidiaries to, pay
                           any management or similar fees to any Person other
                           than under the Administrative Support Services
                           Agreement.

                                  ARTICLE VIII
                             LIMITATION ON DIVIDENDS

         Section 8.1. Distributions. The Borrower shall not and shall not permit
any of its Subsidiaries to, (i) declare or pay any dividend on, or make any
distribution in respect of, or purchase, redeem, retire or otherwise acquire for
value any equity interest of the Borrower or any Affiliate of the Borrower, or
warrants, rights or options to acquire such equity interest, other than (x)
dividends payable solely in such equity interests (other than preferred or other
redeemable stock), or in warrants, rights or options to acquire such equity
interests and (y) dividends or distributions by a Subsidiary to the Borrower or
to a Wholly Owned Subsidiary of Borrower; (ii) make any principal payment on, or
redeem, repurchase, defease or otherwise acquire or retire for value, prior to
any scheduled principal payment, scheduled sinking fund payment or other stated
maturity, Indebtedness of the Borrower or any of its Subsidiaries which is
subordinated in right of payment to the Notes (collectively, "Distributions"),
except Distributions in cash made after the earlier to occur of (x) the Tier 1
Repayment Date and (y) the Tier 2 & 3 Termination Date, if at the time such
Distributions are paid and after giving effect thereto:

                           (i)      no Default or Event of Default shall have
                                    occurred and be continuing;

                           (ii)     such Distribution shall be made within 15
                                    days after the most recent Payment Date; and



                                       38
<PAGE>

                           (iii)    the aggregate amount of Distributions in any
                                    Fiscal Quarter shall not exceed, while the
                                    (x) Tier 2 Note is outstanding, 25% of the
                                    Excess Cash Flow for the preceding Fiscal
                                    Quarter, and (y) Tier 3 Note is outstanding,
                                    50% of the Excess Cash Flow for the
                                    preceding Fiscal Quarter.

                                   ARTICLE IX

                                BOOKS AND RECORDS

         Section 9.1. Books and Records; Examination. The Borrower shall keep or
cause to be kept such books of account and records with respect to the business
of the Borrower and each of its Subsidiaries in order to be able to prepare
financial statements in accordance with GAAP on a consolidated basis. Each
Noteholder and its duly authorized representatives shall have the right at any
time to examine, or to appoint independent certified public accountants to
examine, but in any event during normal business hours and without unreasonably
interfering with the operation of Borrower's business, the books, records and
accounts of the Borrower and its Subsidiaries, their operations and all other
matters that such Noteholder may wish to examine, including, without limitation,
all documentation relating to actual or proposed transactions with the Borrower,
the Company or any Affiliate thereof. The Borrower's books of account shall be
kept using the method of accounting determined by the Borrower and acceptable to
the Required Noteholders. The Borrower's independent auditors (the "Borrower
Independent Auditors") shall be an independent public accounting firm selected
by the Borrower and approved by the Required Noteholders, and shall initially be
Ernst & Young. The Borrower shall not replace or appoint the Borrower
Independent Auditors without written approval of the Required Noteholders.

         Section 9.2. Financial Statements and Reports.

                  (a)      Unaudited Monthly Financial Statements. (i) The
                           Borrower shall prepare and send to each Noteholder
                           (at the same time) promptly, but in no event later
                           than noon on the 15th Business Day after the last day
                           of each month, unaudited financial statements with
                           respect to the Borrower and its Subsidiaries: a
                           balance sheet, a statement of operations, a statement
                           of cash flows and a statement of changes in members'
                           capital (collectively, "Unaudited Financial
                           Statements") as at the end of and for such month.

                           (ii)     The Borrower shall prepare and send to each
                                    Noteholder promptly, but in no event later
                                    than noon on the 20th Business Day after the
                                    last day of each month, an unaudited
                                    financial summary booklet containing a
                                    breakdown of such operating and financial
                                    information of the Borrower and its
                                    subsidiaries as at the end of and for such
                                    month as any Noteholder shall reasonably
                                    request including a variance analysis with
                                    commentary as compared with the Annual
                                    Budget; provided, however, that each
                                    Noteholder shall be provided with the same
                                    information at the same time as each other
                                    Noteholder.



                                       39
<PAGE>

                  (b)      Annual Budget and Unaudited Quarterly Financial
                           Statements and Forecasts. The Borrower shall prepare
                           and send to each Noteholder (at the same time)
                           promptly, but in no event later than the 30th day
                           after the last day of each Fiscal Quarter, (i)
                           Unaudited Financial Statements as at the end of and
                           for such Fiscal Quarter, (ii) an unaudited statement
                           of the Excess Cash Flow for such Fiscal Quarter and
                           (iii) a twelve month operating budget forecast
                           covering those items set forth in the Annual Budget
                           which shall consist of projections of those financial
                           statements included in the Audited Financial
                           Statements and major projects, setting forth material
                           assumptions and containing reasonable detail.

                  (c)      Audited Annual Financial Statements. (i) Within 75
                           days after the end of each Fiscal Year, the Borrower
                           shall cause (A) an examination to be made, at the
                           expense of the Borrower, by the Borrower Independent
                           Auditors, covering (1) the assets, liabilities and
                           capital of the Borrower and its subsidiaries, and the
                           Borrower's and its subsidiaries' operations during
                           such Fiscal Year, (2) an examination of the
                           Distributions Calculation Statement for such Fiscal
                           Year, and (3) all other matters customarily included
                           in such examinations and (B) to be delivered to each
                           Noteholder (at the same time) a copy of the report of
                           such examination, stating that such examination has
                           been performed in accordance with generally accepted
                           auditing standards, together with the following
                           financial statements with respect to the Borrower and
                           its subsidiaries certified by such accountants as
                           having been prepared in accordance with GAAP on a
                           consolidated basis: a balance sheet, a statement of
                           operations, a statement of cash flows and a statement
                           of changes in members' capital at the end of and for
                           such Fiscal Year (collectively, the "Audited
                           Financial Statements").

                           (ii)     Within 30 days after the Closing Date for
                                    Fiscal Year 2001, and promptly, but in any
                                    event within 30 days after the end of each
                                    Fiscal Year thereafter, the Borrower shall
                                    deliver to the Noteholders a projection of
                                    the Borrower's consolidated balance sheet
                                    and consolidated income, capital and cash
                                    flows for that Fiscal Year showing such
                                    projected budget for each Fiscal Quarter of
                                    the Borrower and its Subsidiaries ending
                                    during such year (the "Annual Budget"), as
                                    approved by the board of managers, setting
                                    forth material assumptions and containing
                                    reasonable detail.

                  (d)      Schedule of Repayment and Distribution. (i)
                           Preliminary Annual Repayment and Distribution
                           Schedule. The Borrower shall prepare and send to each
                           Noteholder (at the same time) promptly, but in no
                           event later than the 75th day after the last day of
                           each Fiscal Year, a schedule showing the respective
                           repayment and/or distribution schedule of the Notes
                           based on the Borrower's estimated Excess Cash Flow
                           for such Fiscal Year.



                                       40
<PAGE>

                           (ii)     Examination. Within 15 days after the date
                                    the Borrower determines its net taxable
                                    income and Excess Cash Flow with respect to
                                    any Fiscal Year, but in no event later than
                                    three months after the end of such Fiscal
                                    Year, the Borrower shall cause (A) an
                                    examination to be made, at the expense of
                                    the Borrower, by the Borrower Independent
                                    Auditors, covering the determination of the
                                    Borrower's taxable income and Excess Cash
                                    Flow with respect to such Fiscal Year and
                                    (B) to be delivered to each Noteholder (at
                                    the same time) a copy of the report of such
                                    examination, stating that such examination
                                    has been performed in accordance with
                                    generally accepting auditing standards.

                  (e)      Presentation; Officer Certificate. Each of the
                           statements and reports delivered pursuant to this
                           Section 9.2 (a) - (c) shall present in comparative
                           form figures for the corresponding period, if any, of
                           the preceding Fiscal Year, all in reasonable detail
                           and satisfactory in form and substance to the
                           Noteholders. Together with the delivery of such
                           financial statements, the Borrower shall deliver a
                           certificate of the chief financial officer of the
                           Borrower setting forth in reasonable detail the
                           calculation used to determine compliance with the
                           Current Ratio and the Fixed Charge Coverage Ratio and
                           stating that the chief financial officer has examined
                           such statements and that such statements fairly
                           present the following:

                           (i)      the financial condition, results of
                                    operations, changes in members' capital and
                                    cash flows of the Borrower and any of its
                                    Subsidiaries in accordance with GAAP on a
                                    consolidated basis; and

                           (ii)     the Excess Cash Flow for the applicable
                                    Fiscal Quarter and whether during such
                                    period a Default or Event of Default exists,
                                    and if such exists, specifying the nature
                                    thereof and what actions the Borrower
                                    intends to take with respect thereto.

                  (f)      Other Information. The Borrower shall prepare and
                           send to each Noteholder (at the same time) promptly
                           such other financial information as a Noteholder
                           shall from time to time reasonably request.

         Section 9.3. Notice of Affiliate Transactions; Annual List.

                  (a)      The Borrower shall notify each Noteholder of any
                           Affiliate Transaction that the Borrower or any of its
                           Subsidiaries is considering entering into or renewing
                           or extending the term thereof (whether pursuant to
                           contractual provisions thereof or otherwise), which
                           notice shall be given, to the extent reasonably
                           possible, sufficiently in advance of the time that
                           the Borrower or such Subsidiary intends to enter
                           into, renew or extend the term of such Affiliate
                           Transaction so as to provide the Noteholders with a
                           reasonable opportunity to examine the documentation
                           related to such Affiliate Transaction.



                                       41
<PAGE>

                  (b)      Within 60 days after the end of each Fiscal Year, the
                           Borrower shall prepare and distribute to each
                           Noteholder a list setting forth a description of each
                           Affiliate Transaction entered into by the Borrower or
                           any of its Subsidiaries during such Fiscal Year and
                           identifying all of the parties to such Affiliate
                           Transactions; provided, however, that if two or more
                           Affiliate Transactions either (i) constitute a series
                           of related transactions or agreements or (ii) are
                           substantially the same type of transaction or
                           agreement, the Borrower need not separately describe
                           each such Affiliate Transaction but instead can
                           describe such related or similar Affiliate
                           Transactions as a group.

                                    ARTICLE X
                                EVENTS OF DEFAULT

         Section 10.1. Events of Default. Any one or more of the following shall
constitute an Event of Default:

                  (a)      The Borrower fails to pay or prepay when due any
                           principal of any Note, other than principal that is
                           paid when due as a Note Increase Payment Amount so
                           long as the initial calculation by the Borrower
                           resulting in the adjustment giving rise to the Note
                           Increase Payment Amount was made in good faith;

                  (b)      The Borrower fails to pay when due any interest on
                           any Note or any fee, expense or other amount payable
                           hereunder and such failure continues for two (2)
                           Business Days thereafter;

                  (c)      The Borrower fails to observe or perform any covenant
                           set forth in Section 7.1(c), (d) or (y) of this
                           Agreement and such failure continues for 15 days or
                           (ii) any Obligor fails to observe or perform any
                           other covenant set forth in this Agreement or any
                           other Operative Document; provided, however, that if
                           any such Default relates to a covenant concerning the
                           Borrower's ability to engage in the coastwise trade
                           of the United States, such Default shall not
                           constitute an Event of Default until such time as any
                           Governmental Authority shall take any action that
                           impedes the Borrower's ability to engage in the
                           coastwise trade of the United States;

                  (d)      Any representation or warranty made herein or in any
                           other Operative Document by the Borrower, any
                           Subsidiary of the Borrower, or the Company proves
                           untrue in any material respect as of the date of the
                           making thereof; provided, however, that if any such
                           Default relates to a representation or warranty
                           relating to the Borrower's ability to engage in the
                           coastwise trade of the United States, such Default
                           shall not constitute an Event of Default until such
                           time as any Governmental Authority shall take any
                           action that impedes the Borrower's ability to engage
                           in the coastwise trade of the United States;



                                       42
<PAGE>

                  (e)      The Company, the Borrower or any of their respective
                           Subsidiaries fails to pay when due (or after any
                           applicable grace period) principal or interest in
                           respect of (i) a Revolving Credit Facility or (ii)
                           any other Indebtedness in an aggregate principal
                           amount of $250,000 or more, or any other event occurs
                           which would permit (i) the lenders under such
                           Revolving Credit Facility or (ii) the holder or
                           beneficiary of any other such Indebtedness, or a
                           trustee therefor, to cause the acceleration of the
                           maturity of any such Indebtedness or any mandatory
                           unscheduled prepayment, purchase, or other early
                           funding thereof;

                  (f)      The Company, the Borrower or any of their respective
                           Subsidiaries (i) has entered involuntarily against it
                           an order for relief under the United States
                           Bankruptcy Code or a comparable action is taken under
                           any bankruptcy or insolvency law of another country
                           or political subdivision of such country, (ii)
                           generally does not pay, or admits its inability
                           generally to pay, its debts as they become due, (iii)
                           makes a general assignment for the benefit of
                           creditors, (iv) applies for, seeks, consents to, or
                           acquiesces in, the appointment of a receiver,
                           custodian, trustee, liquidator or similar official
                           for it or any substantial part of its property under
                           the Bankruptcy Code or under the bankruptcy or
                           insolvency laws of another country or a political
                           subdivision of such country, (v) institutes any
                           proceeding seeking to have entered against it an
                           order for relief under the United States Bankruptcy
                           Code or any comparable law, to adjudicate it
                           insolvent, or seeking dissolution, winding up,
                           liquidation, reorganization, arrangement, adjustment
                           or composition of it or its debts under any law
                           relating to bankruptcy, insolvency or reorganization
                           or relief of debtors or fails to file an answer or
                           other pleading denying the material allegations of or
                           consents to or acquiesces in any such proceeding
                           filed against it, (vi) takes any corporate action in
                           direct furtherance of any matter described in clauses
                           (i)-(v) above, or (vii) fails to contest in good
                           faith any appointment or proceeding described in this
                           Section 10.1(f);

                  (g)      A custodian, receiver, trustee, liquidator or similar
                           official is appointed for the Company, the Borrower
                           or any of their respective Subsidiaries or any
                           substantial part of its property under the Bankruptcy
                           Code or under the bankruptcy or insolvency laws of
                           another country or a political subdivision of such
                           country, or a proceeding described in Section
                           10.1(f)(v) is instituted against the Company, the
                           Borrower or any of their respective Subsidiaries, and
                           such appointment continues undischarged or such
                           proceeding continues undismissed and unstayed for a
                           period of sixty (60) days;

                  (h)      The Company, the Borrower or any of their respective
                           Subsidiaries fails within thirty (30) days with
                           respect to a judgment or an order (or such earlier
                           date as any execution on such judgment or order shall
                           take place) to vacate, pay, bond or otherwise
                           discharge any judgment or order for the payment of
                           money the uninsured portion of which is in excess of
                           $250,000



                                       43
<PAGE>

                           with respect to the Company, the Borrower or such
                           Subsidiary and which is not stayed on appeal or
                           otherwise being appropriately contested in good faith
                           in a manner that stays execution;

                  (i)      The Company, the Borrower, any Subsidiary of the
                           Borrower, or any Person authorized to act on behalf
                           of the Company, the Borrower or any of its
                           Subsidiaries challenges the validity of any Operative
                           Document or the Company, the Borrower's or any of its
                           Subsidiaries' obligations thereunder in any material
                           respect, or any Operative Document ceases, other than
                           in accordance with its terms, to be valid and binding
                           or ceases, in any material respect, other than in
                           accordance with its terms, to give to the Trustee and
                           the Noteholders the Liens, rights, and powers
                           purported to be granted in their favor thereby;

                  (j)      The Company shall fail to directly own one hundred
                           percent (100%) of the Membership Interests of the
                           Borrower; or Gary Chouest fails at all times before
                           his death to own directly or indirectly not less than
                           11.25% of the Membership Interests in the Company;

                  (k)      Any default (as defined in the applicable contract)
                           or event of default (as defined in the applicable
                           contract) by Company, the Borrower, any Subsidiary of
                           the Borrower, or the Beta Noteholder under any of the
                           Operative Documents (other than this Agreement) shall
                           occur and shall be continuing or any of such
                           contracts shall be cancelled, terminated or
                           performance of any material party suspended as a
                           result of such default or event of default;

                  (l)      Any Governmental Authority shall take any action that
                           impedes the Borrower's ability to engage in the
                           coastwise trade of the United States; or

                  (m)      Upon filing the Fleet Mortgage or any Supplement
                           thereto for recordation pursuant to Section 3.2, the
                           Coast Guard's National Vessel Documentation Center is
                           unable to provide satisfactory evidence to the
                           Required Noteholders that the Borrower owns the
                           Vessels covered thereby free and clear of all
                           recorded Liens other than the Fleet Mortgage.

         Section 10.2. Non-Bankruptcy Defaults. When any Event of Default (other
than those described in Section 10.1(f) or (g) with respect to the Borrower) has
occurred and is continuing, (i) the RBF Noteholder, without notice to the
Borrower, may terminate the Revolving Credit Facility and may declare the
outstanding principal of and accrued and unpaid interest on the Revolving Note
to be forthwith due and payable and (ii) the Required Noteholders may, without
notice to the Borrower, declare the outstanding principal of and the accrued and
unpaid interest on the Term Notes and all other Obligations to be forthwith due
and payable and, thereupon, all such outstanding amounts under the applicable
Notes, including both principal of and interest thereon, shall be and become
immediately due and payable, together with all other Obligations, without
further demand, presentment, protest, notice of protest or notice of any kind,
including,



                                       44
<PAGE>

but not limited to, notice of intent to accelerate and notice of acceleration,
each of which is expressly waived by the Borrower.

         Section 10.3. Bankruptcy Defaults. When any Event of Default described
in Section 10.1(f) or (g) has occurred and is continuing with respect to the
Borrower, then the Revolving Credit Facility shall automatically terminate and
all outstanding principal of and accrued and unpaid interest under the Notes and
all other Obligations shall immediately become due and payable, without
presentment, demand, protest, notice of protest or notice of any kind, each of
which is expressly waived by the Borrower.

         Section 10.4. Remedies Upon an Event of Default.

                  (a)      If an Event of Default has occurred and is
                           continuing, the Trustee may, and, the Trustee, if
                           directed in writing by the Required Noteholders,
                           shall, exercise any of the rights or remedies granted
                           to it under the Collateral Trust Agreement or any of
                           the other Operative Documents, in addition to any
                           rights or remedies of such parties set forth in this
                           Agreement.

                  (b)      If an Event of Default has occurred and is
                           continuing, then the Trustee and the Required
                           Noteholders may, and the Trustee, if directed in
                           writing by the Required Noteholders, shall, take all
                           steps necessary or advisable to protect and enforce
                           its rights hereunder, whether by action, suit or
                           proceeding at law or in equity, for the specific
                           performance of any covenant, condition or agreement
                           contained herein, or in aid of the execution of any
                           power herein granted, or for the enforcement of any
                           other appropriate legal or equitable remedy or
                           otherwise as such party shall deem necessary or
                           advisable.

                  (c)      If any Obligor shall fail to make any payment or
                           perform any act required to be made or performed
                           under any Operative Document, the Trustee and the
                           Required Noteholders, without waiving any default or
                           releasing any Obligor from any obligation, may (but
                           shall be under no obligation to unless directed in
                           writing by the Required Noteholders) make such
                           payment and perform such act for the account and at
                           the expense of such Obligor, and may enter upon any
                           of the Properties for such purpose and take all such
                           action thereon as, at the Trustee's or the Required
                           Noteholders' sole discretion, may be necessary or
                           appropriate therefor. All sums so paid by the Trustee
                           and the Required Noteholders and all costs and
                           expenses (including reasonable attorneys' fees and
                           expenses so incurred, together with interest thereon
                           to the extent permitted by law) shall be paid by the
                           applicable Obligor to the Trustee and the Required
                           Noteholders on demand.

                  Notwithstanding Sections 10.2 through 10.4, unless (i) the
Trustee or the Required Noteholders shall have notified the Borrower in writing
within 30 days after the occurrence of any Tier 1 Amortization Default and,
within six months after such Tier 1 Amortization Default, commenced the exercise
of their rights and remedies in respect of such



                                       45
<PAGE>

Default, and (ii) no other Default or Event of Default shall have occurred and
be continuing at the end of such six-month period, then such Tier 1 Amortization
Default shall be deemed waived upon the expiration of such six month period. Any
such deemed waiver shall not affect the rights and remedies of the Noteholders
or the Trustee with respect to any other Default or Event of Default, including
any other Tier 1 Amortization Default.

         Section 10.5. Default Prior to 10-Year Anniversary. Notwithstanding
anything set forth in Section 10.1 to the contrary, upon the occurrence of any
event (an "Extended Cure Default") described in Section 10.1(c), (d) or (k)
(with respect to (k), other than any such event that has resulted in any such
contract being canceled or terminated) during the last six months of the tenth
year following the Closing Date, such event shall not be considered an Event of
Default unless the Required Noteholders have given notice of any such Default
and it is not cured within thirty (30) days after that notice. If the notice of
an Extended Cure Default is given to the Borrower less than thirty (30) days
prior to the Tier 2 & 3 Termination Date, the Tier 2 & 3 Termination Date will
be extended by that number of days necessary to enable the Borrower to have a
full 30-day period in which to cure the subject Extended Cure Default. The date
to which the Tier 2 & 3 Termination Date is extended is the "Tier 2 & 3 Extended
Termination Date."

                                   ARTICLE XI
                                  MISCELLANEOUS

         Section 11.1. Termination and Survival of Obligations. This Agreement
shall terminate when the principal amount of and all accrued interest on the
Notes and all other Obligations shall have been indefeasibly paid or performed
in full or otherwise discharged in accordance with the terms hereof; provided,
however, the rights and remedies of the Noteholders and the Trustee under
Articles III and IV shall survive such termination.

         Section 11.02. Notices. Unless otherwise specified, all notices and
other communications hereunder shall be in writing (including by telecopier or
other facsimile communication), given to the appropriate Person at its address
or telecopy number set forth on the signature pages hereof or at such other
address or telecopy number as such person may specify, and effective when
received at the address specified by such Person. Each party hereto, however,
authorizes the Noteholders and Trustee to act on telephone notices from any
Person the Noteholders in good faith believe to be acting on behalf of the
relevant party and, at the Noteholder's option, to tape record any such
telephone conversation. The Borrower agrees to deliver promptly to the
Noteholders a confirmation of each telephone notice given or received by such
party (signed by an authorized officer of such party). The Noteholders' and
Trustee's records of all such conversations shall be deemed correct absent
manifest error and, if the confirmation of a conversation differs in any
material respect from the action taken by the Noteholders, the records of the
Noteholders shall govern absent manifest error.

         Section 11.3. Payments and Computations. Notwithstanding anything
herein to the contrary, all amounts to be paid or transferred by the Borrower
to, or for the benefit of, the Noteholders or any other Person shall be paid or
transferred to the Noteholders (for the benefit of the Noteholders or any other
Person) without setoff or counter claims of any kind. All amounts to be paid or
deposited hereunder shall be paid or transferred on the day when due in
immediately available Dollars (and, if due from the Borrower, by 11:00 a.m.
(Houston time),



                                       46
<PAGE>

with amounts received after such time being deemed paid on the Business Day
following such receipt). The Borrower shall, to the extent permitted by law, pay
to the Noteholders upon demand, for the account of the applicable Person,
interest on all amounts not paid or transferred by the Borrower when due
hereunder at a rate equal to the Fixed Rate plus 2% per annum, calculated from
the date any such amount became due until the date paid in full. Any payment or
other transfer of funds scheduled to be made on a day that is not a Business Day
shall be made on the next Business Day, and any interest rate accruing on such
amount to be paid or transferred shall continue to accrue to such next Business
Day.

         Section 11.4. Setoff. In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
but for the ratable benefit of Noteholders, upon the occurrence of, and
throughout the continuance of, any Event of Default involving a failure to pay
interest or principal when due and upon expiration of any applicable grace
period, each Noteholder, but for the ratable benefit of the Noteholders, is
hereby authorized by the Borrower at any time or from time to time, to the
extent permitted by law, without notice to the Borrower or any other Person, any
such notice being hereby expressly waived, to set off and to appropriate and to
apply any and all deposits (general or special, including, but not limited to,
Indebtedness evidenced by certificates of deposit, whether matured or unmatured,
but not including trust accounts, and in whatever currency denominated) and any
other Indebtedness, payables, charter payment, contract or other obligation at
any time owing by such Noteholder or that subsequent holder to or for the credit
or the account of the Borrower, whether or not matured, against and on account
of the due and unpaid obligations and liabilities of the Borrower to the
Noteholders or that subsequent holder under the Credit Documents, irrespective
of whether or not that Noteholder or that subsequent holder shall have made any
demand hereunder.

         Section 11.5. Amendments, Waivers and Consents. Any provision of the
Credit Documents may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed (and/or consented to) by (a) the Borrower,
and (b) the Required Noteholders; provided that any increase or reduction in the
interest rate on the Notes and acceleration of the Tier 2 & 3 Termination Date,
a deferral of the payment dates set forth in the proviso to Section 2.4(a), or
any increase or reduction in the portion of Excess Cash Flow to be allocated to
the Term Notes shall require the approval of all Noteholders. Any consent to be
delivered by the Noteholders under the Credit Documents shall not be effective
unless contained in a writing signed by the Required Noteholder, or if,
described in the foregoing proviso, all Noteholders.

         Section 11.6. Waivers. No failure or delay of the Noteholders or the
Trustee in exercising any power, right, privilege or remedy hereunder shall
operate as a waiver thereof, nor (to the fullest extent permitted by applicable
law) shall any single or partial exercise of any such power, right, privilege or
remedy preclude any other or further exercise thereof or the exercise of any
other power, right, privilege or remedy. Any failure to insist upon the strict
performance of any provision hereof or to exercise any option, right, power or
remedy contained herein shall not constitute a waiver or relinquishment thereof
for the future. The Trustee and the Required Noteholders shall be entitled to
injunctive relief in case of the violation or attempted or threatened violation
of any of the provisions hereof by any other party hereto, a decree compelling
performance of any of the provisions hereof or any other remedy allowed by law
or in equity. Any waiver hereof shall be effective only in the specific instance
and for the specific purpose for which such waiver was given. After any waiver,
the Borrower and the Noteholders



                                       47
<PAGE>

shall be restored to their former position and rights and any Default waived
shall be deemed to be cured and not continuing, but no such waiver shall extend
to (or impair any right consequent upon) any subsequent or other Default.

         Section 11.7. Successors and Assigns. This Agreement shall be binding
upon the Borrower and the Noteholders and their respective successors and
assigns, and shall inure to the benefit of the Borrower and the Noteholders and
their respective successors and assigns; provided, however, that the Borrower
may not assign any of its rights or obligations under this Agreement or any
other Credit Document without the written consent of the Required Noteholders.
Assignments by the Noteholders hereunder are subject to the terms and conditions
of Section 11.8 hereof.

         Section 11.8. Participations and Assignments.

                  (a)      Participations. Subject to Section 11.8(c) and (d),
                           the Noteholders may at any time sell to Persons
                           ("Participants") participating interests in any Note
                           owing to the Noteholders, or any other interest of
                           the Noteholders hereunder. The Borrower agrees that
                           if amounts outstanding under this Agreement shall
                           have become due and payable, each Participant shall
                           be deemed to have the right of setoff in respect of
                           its participating interest in amounts owing under
                           this Agreement to the same extent as if the amount of
                           its participating interest were owing directly to it
                           as the Noteholders under this Agreement. The Borrower
                           also agrees that each Participant shall be entitled
                           to the benefits of Sections 4.1, 4.3 and 4.6 with
                           respect to the principal amount of the Notes
                           outstanding from time to time.



                                       48
<PAGE>

                  (b)      Assignments. Subject to Section 11.8(c) and (d), any
                           Noteholder may at any time sell to any Person all or
                           a portion of its interest in the Notes. Upon such
                           execution, delivery and acceptance, from and after
                           the effective date of the transfer, (i) such
                           Noteholder thereunder shall be a party hereto and, to
                           the extent of such assignment, have the rights and
                           obligations of the transferor Noteholder hereunder
                           and (ii) the transferor Noteholder thereunder shall,
                           to the extent provided in such assignment, be
                           released from its obligations under this Agreement
                           (and, in the case of an assignment covering all or
                           the remaining portion of a transferor Noteholder's
                           rights and obligations under this Agreement, such
                           transferor Noteholder shall cease to be a party
                           hereto except as to Sections 4.1, 4.2, 4.3 and 4.5
                           for periods prior to the effective date of such
                           assignment). Such assignment shall be deemed to amend
                           this Agreement to the extent, and only to the extent,
                           necessary to reflect the addition of such transferee
                           and the resulting adjustment of percentages arising
                           from the purchase by such transferee of all or a
                           portion of the rights and obligations of such
                           transferor Noteholder under this Agreement and the
                           other Credit Documents.

                  (c)      Right of First Refusal. (i) If either Noteholder (the
                           "Selling Noteholder") shall desire to sell
                           participating interests in any Note or all or a
                           portion of its interests in any Note pursuant to
                           Section 11.8 (a) or (b) (other than a Transfer by RBF
                           Noteholder pursuant to Section 11.8(f) or a Transfer
                           by Beta Noteholder or the Chouests or any Permitted
                           Beta Noteholder Transferee pursuant to Section
                           11.8(g)), then such Selling Noteholder shall give
                           notice (the "Offer Notice") to the other Noteholder,
                           identifying the proposed Participant or the proposed
                           purchaser from whom it has received a bona fide offer
                           and setting forth the proposed sale price and the
                           other material terms and conditions upon which such
                           Selling Noteholder is proposing to sell participating
                           interests or all or a portion of its interests in the
                           Notes to such Participant or proposed purchaser. Such
                           other Noteholder shall have 60 days from receipt of
                           the Offer Notice to elect, by notice to such Selling
                           Noteholder, to purchase the participating interests
                           or the portion of the Notes offered for sale on the
                           terms and conditions set forth in the Offer Notice
                           (such 60-day period hereinafter referred to as the
                           "Election Period").

                           (i)      If a Noteholder makes such election, the
                                    notice of election shall state a closing
                                    date not later than 90 days after the date
                                    of the Offer Notice. If such Noteholder
                                    breaches its obligation to purchase the
                                    participating interests or interests of the
                                    Selling Noteholder on the same terms and
                                    conditions as those contained in the Offer
                                    Notice after giving notice of its election
                                    to make such purchase (other than where such
                                    breach is due to circumstances beyond such
                                    Noteholder's reasonable control), then, in
                                    addition to all other remedies available,
                                    the Selling Noteholder may, at any time for
                                    a period of 270 days after such default,
                                    sell such the participating



                                       49
<PAGE>

                                    interests or interest in the Notes to any
                                    Person at any price and upon any other
                                    terms.

                           (ii)     If the other Noteholder does not give notice
                                    within the Election Period following the
                                    Offer Notice from the Selling Noteholder
                                    that it (i) elects to purchase the
                                    participating interests or interest in the
                                    Notes of the Selling Noteholder or (ii)
                                    elects to purchase its interest in the Notes
                                    pursuant to the terms and conditions set
                                    forth in the Offer Notice in accordance with
                                    Section 11.08(d), the Selling Noteholder
                                    may, within 120 days after the end of the
                                    Election Period, sell the participating
                                    interests or such interest in the Notes to
                                    the identified purchaser on terms and
                                    conditions no less favorable to the Selling
                                    Noteholder than the terms and conditions set
                                    forth in such Offer Notice. In the event the
                                    Selling Noteholder shall desire to offer its
                                    interest in the Notes for sale on terms and
                                    conditions less favorable to it than those
                                    previously set forth in an Offer Notice, the
                                    procedures set forth in this Section 11.8(c)
                                    must again be initiated and applied with
                                    respect to the terms and conditions as
                                    modified.

                  (d)      Right of Co-Sale. (i) If a Selling Noteholder has
                           delivered an Offer Notice to the other Noteholder
                           pursuant to Section 11.8(c) and the other Noteholder
                           does not give notice during the Election Period that
                           it elects to purchase participating interests or
                           interest in the Note, such other Noteholder (the
                           "Co-Sale Right Holder") shall have the right,
                           exercisable upon notice to the Selling Noteholder
                           within the Election Period, to sell all (but not
                           part) of its interest in the Notes pursuant to the
                           specified terms and conditions set forth in the Offer
                           Notice.

                           (i)      If the Co-Sale Right Holder gives notice
                                    within the Election Period that it elects to
                                    sell all (but not part) of its interest in
                                    the Notes pursuant to the specified terms
                                    and conditions set forth in the Offer
                                    Notice, the Selling Noteholder may, within
                                    120 days after the end of the Election
                                    Period, sell the Noteholder's interest in
                                    the Notes to the identified purchaser on
                                    terms and conditions no less favorable to
                                    the Selling Noteholder than the terms and
                                    conditions set forth in such Offer Notice;
                                    provided that the identified purchaser also
                                    purchases all (but not part) of the Co-Sale
                                    Right Holder's interest in the Notes on the
                                    same terms and conditions as the purchase of
                                    the Selling Noteholder's interests in the
                                    Notes.

                           (ii)     Except for Transfers of membership interests
                                    in Beta to or among Permitted Beta
                                    Noteholder Transferees, no Noteholder may
                                    sell any participation in any of its Notes
                                    or to sell all or a portion of its interest
                                    in the Notes unless such sale also
                                    encompasses the sale of all of the
                                    Membership Interest owned by such
                                    Noteholder.



                                       50
<PAGE>

                  (e)      Certain Actions Constituting a Transfer by Beta
                           Noteholder. A merger, consolidation or similar
                           business combination transaction by Beta Noteholder
                           with another Person, a sale of all or substantially
                           all of the assets of Beta Noteholder to another
                           Person, the Transfer of limited liability company
                           interests in Beta Noteholder by the owner thereof to
                           another Person or the issuance of limited liability
                           company interests by Beta Noteholder shall constitute
                           a Transfer of Beta Noteholder's Note subject to this
                           Section 11.8. This paragraph (e) shall not be deemed
                           to limit actions constituting a Transfer of Beta
                           Noteholder's Note.

                  (f)      Permitted RBF Noteholder Transfers. RBF Noteholder
                           may Transfer all (but not part) of its Notes at any
                           time to R&B Falcon Corporation, a Delaware
                           corporation ("RBF Corporation"), or to any Wholly
                           Owned Subsidiary of RBF Corporation, provided that so
                           long as such Wholly Owned Subsidiary holds such
                           transferred Notes, such Wholly Owned Subsidiary shall
                           remain a Wholly Owned Subsidiary of RBF Corporation
                           or of RBF Noteholder. In the event RBF Noteholder
                           shall be party to a merger, consolidation or similar
                           business combination transaction with a third party
                           or sell all, substantially all or a substantial
                           portion of its assets to a third party, RBF
                           Noteholder may Transfer all (but not part) of its
                           Notes to such third party. Neither the Transfer of
                           the capital stock of RBF Noteholder by the owner
                           thereof to another Person nor the issuance of capital
                           stock by RBF Noteholder shall constitute a Transfer
                           of RBF Noteholder's Note subject to this Section
                           11.8.

                  (g)      Permitted Beta Noteholder Transfers. Beta Noteholder
                           (and any Permitted Beta Noteholder Transferee) may
                           Transfer all or a part of its Note, and the Chouests
                           (and any Permitted Beta Noteholder Transferee) may
                           Transfer all or a part of their membership interest
                           in Beta Noteholder, at any time to a Permitted Beta
                           Noteholder Transferee.

         Section 11.9. Governing Law; Submission to Jurisdiction; Waiver of Jury
Trial.

                  (a)      THIS AGREEMENT AND THE RIGHTS AND DUTIES OF THE
                           PARTIES HERETO, SHALL BE CONSTRUED IN ACCORDANCE WITH
                           AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
                           TEXAS (WITHOUT REGARD TO CONFLICTS OF LAWS
                           PRINCIPLES).

                  (b)      TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
                           THE PARTIES HERETO AGREE THAT ANY LITIGATION BASED
                           HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
                           WITH, THIS AGREEMENT OR ANY OTHER OPERATIVE DOCUMENT,
                           OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
                           STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF
                           THE NOTEHOLDERS OR THE TRUSTEE OR THE BORROWER SHALL
                           BE BROUGHT AND MAINTAINED IN THE



                                       51
<PAGE>

                           DELAWARE CHANCERY COURT; PROVIDED THAT IF THE
                           DELAWARE CHANCERY COURT DOES NOT HAVE JURISDICTION
                           WITH RESPECT TO SUCH MATTER, THE PARTIES HERETO SHALL
                           BE ENTITLED TO ENFORCE SPECIFICALLY THE TERMS AND
                           PROVISIONS OF THIS AGREEMENT IN ANY COURT OF THE
                           UNITED STATES LOCATED IN THE STATES OF DELAWARE,
                           LOUISIANA OR TEXAS, THIS BEING IN ADDITION TO ANY
                           OTHER REMEDY TO WHICH THEY ARE ENTITLED AT LAW OR IN
                           EQUITY. IN ADDITION, EACH OF THE PARTIES HERETO (I)
                           CONSENTS TO SUBMIT ITSELF TO THE PERSONAL
                           JURISDICTION OF THE DELAWARE CHANCERY COURT IN THE
                           EVENT THAT ANY DISPUTE ARISES OUT OF THIS AGREEMENT
                           OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS
                           AGREEMENT; PROVIDED THAT IF THE DELAWARE CHANCERY
                           COURT DOES NOT HAVE JURISDICTION WITH RESPECT TO ANY
                           SUCH DISPUTE, SUCH PARTY CONSENTS TO SUBMIT ITSELF TO
                           THE PERSONAL JURISDICTION OF ANY FEDERAL COURT
                           LOCATED IN THE STATES OF DELAWARE, LOUISIANA OR
                           TEXAS, (II) AGREES TO APPOINT AND MAINTAIN AN AGENT
                           IN THE STATE OF DELAWARE FOR SERVICE OF LEGAL
                           PROCESS, (III) AGREES THAT IT SHALL NOT ATTEMPT TO
                           DENY OR DEFEAT SUCH PERSONAL JURISDICTION BY MOTION
                           OR OTHER REQUEST FOR LEAVE FROM ANY SUCH COURT, (IV)
                           AGREES THAT IT SHALL NOT PLEAD OR CLAIM IN ANY SUCH
                           COURT THAT ANY ACTION RELATING TO THIS AGREEMENT OR
                           ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS
                           AGREEMENT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
                           INCONVENIENT FORUM AND (V) AGREES THAT IT SHALL NOT
                           INITIATE ANY ACTION RELATING TO THIS AGREEMENT OR ANY
                           OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT IN
                           ANY COURT OTHER THAN (1) THE DELAWARE CHANCERY COURT,
                           OR (2) IF THE DELAWARE CHANCERY COURT DOES NOT HAVE
                           JURISDICTION WITH RESPECT TO SUCH ACTION, A FEDERAL
                           COURT SITTING IN THE STATES OF DELAWARE, LOUISIANA OR
                           TEXAS. TO THE EXTENT THAT THE BORROWER HAS OR
                           HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION
                           OF ANY COURT OF THE STATE OF DELAWARE, TEXAS OR
                           LOUISIANA OR FROM ANY LEGAL PROCESS WITH RESPECT TO
                           ANY ACTION COMMENCED IN ANY SUCH COURT (WHETHER
                           THROUGH SERVICE OF NOTICE, ATTACHMENT PRIOR TO
                           JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
                           OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY,
                           THE BORROWER HEREBY IRREVOCABLY WAIVES TO THE FULLEST
                           EXTENT PERMITTED BY APPLICABLE LAW, SUCH IMMUNITY IN



                                       52
<PAGE>

                           RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND
                           THE OTHER CREDIT DOCUMENTS.

                  (c)      TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
                           EACH PARTY HERETO WAIVES ANY RIGHT TO A TRIAL BY JURY
                           IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
                           RIGHTS UNDER THIS AGREEMENT OR ANY OTHER CREDIT
                           DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT
                           OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE
                           DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY
                           BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THIS
                           AGREEMENT OR ANY OTHER CREDIT DOCUMENT, AND AGREES
                           THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED
                           BEFORE A COURT AND NOT BEFORE A JURY.

         Section 11.10. Confidentiality of Agreement. Unless otherwise consented
to by the Noteholders, the Borrower hereby agrees that it will not disclose the
contents of any Operative Document, or any other confidential or proprietary
information furnished by the Noteholders, to any Person other than to the
auditors and attorneys of the Borrower or as required by applicable law.

         Section 11.11. Limitation of Liability. No Person shall make a claim
against the Borrower, the Noteholders or the Trustee (or their Affiliates,
directors, officers, members, managers, employees, attorneys or agents) for any
special, indirect, consequential or punitive damages under any claim for breach
of contract or other theory of liability in connection with the Credit Documents
or the transactions contemplated thereby, and the Borrower (for itself and all
other Persons claiming by or through the Borrower) hereby waives any claim for
any such damages. No member, director, manager, officer, or agent of any Obligor
or Noteholder shall have any liability on the Notes or other Obligations except
to the extent (a) such Person is a party thereto in his individual capacity or
otherwise agrees pursuant to a written agreement wherein such Person expressly
assumes such liability in his individual capacity or (b) of such Person's fraud,
willful misconduct or intentional misapplication of cash or other assets of any
Obligor. Notwithstanding anything to the contrary contained in this Section
11.11, this Section 11.11 shall not affect any obligation of the Obligors and
the Noteholders under the Operative Documents (other than the Notes).

         Section 11.12. Headings; Counterparts. Article and section headings in
this Agreement are for reference only and shall not affect the construction of
this Agreement. This Agreement may be executed by different parties on any
number of counterparts, each of which shall constitute an original and all of
which, taken together, shall constitute one and the same agreement.



                                       53
<PAGE>

         Section 11.13. Cumulative Rights and Severability. To the extent
permitted by applicable law, all rights and remedies of the Noteholders and the
Trustee hereunder shall be cumulative and non-exclusive of any rights or
remedies such Persons have under law or otherwise. Any provision hereof that is
prohibited or unenforceable in any jurisdiction shall, in such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof and without affecting such
provision in any other jurisdiction.

         Section 11.14. Interest Rate Limitation. Each provision in this
Agreement and each other Credit Document is expressly limited so that in no
event whatsoever shall the amount paid, or otherwise agreed to be paid, to any
Noteholder, or charged, contracted for, reserved, taken or received by any
Noteholder, for the use, forbearance or detention of the money to be loaned
under this Agreement or any other Credit Document or otherwise (including any
sums paid as required by any covenant or obligation contained herein or in any
other Credit Document which is for the use, forbearance or detention of such
money), exceed the Highest Lawful Rate, and all amounts owed under this
Agreement and each other Credit Document shall be held to be subject to
reduction so that any and all amounts so paid or agreed to be paid, charged,
contracted for, reserved, taken or received which are for the use, forbearance
or detention of money under this Agreement or such Credit Document shall in no
event exceed the Highest Lawful Rate. Anything in any Note or any other Credit
Document to the contrary notwithstanding, the Borrower shall not be required to
pay unearned interest on any Note and the Borrower shall not be required to pay
interest on the Obligations at a rate in excess of the Highest Lawful Rate, and
if the effective rate of interest which would otherwise be payable under such
Note and such Credit Documents would exceed the Highest Lawful Rate, or if the
holder of such Note shall receive any unearned interest or shall receive monies
that are deemed to constitute interest which would increase the effective rate
of interest payable by the Borrower under such Note and the other Credit
Documents to a rate in excess of the Highest Lawful Rate, then (a) the amount of
interest which would otherwise be payable by the Borrower shall be reduced to
the amount allowed under applicable law and (b) any unearned interest paid by
the Borrower or any interest paid by the Borrower in excess of the Highest
Lawful Rate shall in the first instance be credited on the principal of the
Obligations of the Borrower (or if all such Obligations shall have been paid in
full, refunded to the Borrower). It is further agreed that, without limitation
of the foregoing, all calculations of the rate of interest contracted for,
reserved, taken, charged or received by any Noteholder under the Notes and the
Obligations and under the other Credit Documents are made for the purpose of
determining whether such rate exceeds the Highest Lawful Rate, and shall be
made, to the extent permitted by usury laws applicable to such Noteholder, by
amortizing, prorating and spreading in equal parts during the period of the full
stated term of the Notes and this Agreement and all interest at any time
contracted for, charged or received by such Noteholder in connection therewith.

         Section 11.15. FINAL AGREEMENT OF THE PARTIES. THIS AGREEMENT
(INCLUDING THE SCHEDULES AND EXHIBITS HERETO), THE NOTES, AND THE OTHER CREDIT
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES RELATING TO THE
SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.



                                       54
<PAGE>

         Section 11.16. Certain Excepted Vessels. Notwithstanding anything to
the contrary in this Agreement or in the other Credit Documents, the Borrower
shall not be required to establish or maintain the coastwise trade eligibility
of the Vessels "Atlas," "Goliath," "Caribe Falcon," "Caribe Honor" and "Caribe
Princess;" provided, however, that in the event any such Vessel becomes so
eligible, all obligations, terms and conditions set forth herein and in the
other Credit Documents relating to coastwise trade shall thereafter apply to
such Vessel.





                                       55
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers on and as of the
respective dates set forth opposite their signatures below.

                                             DELTA TOWING, LLC, as the Borrower



         Dated as of December 20, 2001       By: /s/ Gary Chouest
                                                --------------------------------
                                             Name:   Gary Chouest
                                                  ------------------------------
                                             Title:  President
                                                   -----------------------------

                                             Address: 16201 East Main Street
                                                     ---------------------------
                                                      Galliano, LA
                                             -----------------------------------

                                             -----------------------------------

                                             -----------------------------------
                                             Facsimile: (985) 632-2282
                                                       -------------------------
                                             Attention: Gary Chouest
                                                       -------------------------




                                             R&B FALCON DRILLING USA, INC., as a
                                             Noteholder



         Dated as of December 20, 2001       By: /s/ Eric B. Brown
                                                --------------------------------
                                             Name:   Eric B. Brown
                                                  ------------------------------
                                             Title:  Vice President
                                                   -----------------------------

                                             Address: 4 Greenway Plaza
                                                     ---------------------------
                                                      Houston, TX 77046
                                             -----------------------------------

                                             -----------------------------------

                                             -----------------------------------
                                             Facsimile: (713) 232-7600
                                                       -------------------------
                                             Attention: General Counsel
                                                       -------------------------





                                       56
<PAGE>

                                             BETA MARINE SERVICES, L.L.C., as a
                                             Noteholder



         Dated as of December 20, 2001       By: /s/ Gary Chouest
                                                --------------------------------
                                             Name:   Gary Chouest
                                                  ------------------------------
                                             Title:  Member
                                                   -----------------------------

                                             Address: 16201 East Main Street
                                                     ---------------------------
                                                      Galliano, LA
                                             -----------------------------------

                                             -----------------------------------

                                             -----------------------------------
                                             Facsimile: (985) 632-2282
                                                       -------------------------
                                             Attention: Gary Chouest
                                                       -------------------------



         The undersigned, Delta Towing Holdings, LLC, joins in the execution and
delivery of this Revolving Credit and Note Purchase Agreement to acknowledge its
consent and approval to each of the terms and conditions hereof and to
acknowledge that the Obligations now or hereafter arising hereunder constitute
Guaranteed Obligations under and as such term is defined in the Parent Guarantee
and Secured Obligations under and as such term is defined in the Parent Pledge
Agreement.

                                             DELTA TOWING HOLDINGS, LLC, as
                                             Guarantor



         Dated as of December 20, 2001       By: /s/ Gary Chouest
                                                --------------------------------
                                             Name:   Gary Chouest
                                                  ------------------------------
                                             Title:  President
                                                   -----------------------------

                                             Address: 16201 East Main Street
                                                     ---------------------------
                                                      Galliano, LA
                                             -----------------------------------

                                             -----------------------------------

                                             -----------------------------------
                                             Facsimile: (985) 632-2285
                                                       -------------------------
                                             Attention: Gary Chouest
                                                       -------------------------




                                       57
<PAGE>

                                                                    EXHIBIT 2.8A

                                     FORM OF
                                 PROMISSORY NOTE

                                    (TIER 1)

$__________________________                 Dated: _________ __, ____

                  FOR VALUE RECEIVED, the undersigned, ________________ (the
"Borrower"), HEREBY PROMISES TO PAY to the order of _________________ (the
"Noteholder") the principal amount of ________________ Dollars ($________) on or
before the Tier 1 Maturity Date (as such term is defined in the hereinafter
described Note Agreement).

                  The Borrower hereby promises to pay interest on the principal
amount of this Note outstanding from time to time from the date of this Note
until such principal amount is paid in full, at such interest rates, on such
dates and at such times as are specified in the Note Agreement dated as of
____________ __, ____ among _________________________________________ (as the
same may from time to time be amended, modified or supplemented, the "Note
Agreement," and the terms defined therein and not otherwise defined herein being
used herein as therein defined).

                  Both principal and interest on this Note are payable in same
day funds in lawful money of the United States of America to the Noteholder at
the Payment Office, or at such other place as the Noteholder shall designate in
writing to the Borrower in a notice given in accordance with Section 11.02 of
the Note Agreement.

                  This Note is one of the Notes referred to in, and is entitled
to the benefits of, the Note Agreement. The obligations of the Borrower
hereunder are secured by the Security Documents. The Note Agreement, among other
things, contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events, for prepayments on account of principal
hereof prior to the maturity hereof upon the terms and conditions therein
specified, and to the effect that no provision of the Note Agreement or this
Note shall require the payment or permit the collection of interest in excess of
the Highest Lawful Rate.

                  Except for notices specifically provided for in the Note
Agreement, the Borrower and any and all endorsers, guarantors and sureties
severally waive grace, demand, presentment for payment, notice of dishonor or
default or intent to accelerate, protest and notice of protest and diligence in
collecting and bringing of suit against any party hereto, and agree to all
renewals, extensions or partial payments hereon and to any release or
substitution of security herefor, in whole or in part, with or without notice,
before or after maturity.

                  THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.

                                             By:
                                                      --------------------------
                                                      Name:
                                                      Title:



<PAGE>

                                                                    EXHIBIT 2.8B

                                     FORM OF
                                 PROMISSORY NOTE

                                    (TIER 2)

$________________                            Dated: __________ ___, ____

                  FOR VALUE RECEIVED, the undersigned, _________________________
(the "Borrower"), HEREBY PROMISES TO PAY to the order of _______________________
(the "Noteholder") the principal amount of _________________ Dollars
($____________) or any lesser amount as may be permitted by the hereinafter
described Note Agreement, as and when the same becomes due under the terms of
the Note Agreement.

                  The Borrower hereby promises to pay interest on the principal
amount of this Note outstanding from time to time from the date of this Note
until such principal amount is paid in full, at such interest rates, on such
dates and at such times, as are specified in the Note Agreement dated as of
______________ __, ____ among ___________________________________________ (as
the same may from time to time be amended, modified or supplemented, the "Note
Agreement," and the terms defined therein and not otherwise defined herein being
used herein as therein defined).

                  Both principal and interest on this Note are payable in same
day funds in lawful money of the United States of America to the Noteholder at
the Payment Office, or at such other place as the Noteholder shall designate in
writing to the Borrower in a notice given in accordance with Section 11.02 of
the Note Agreement.

                  This Note is one of the Notes referred to in, and is entitled
to the benefits of, the Note Agreement. The obligations of the Borrower
hereunder are secured by the Security Documents. The Note Agreement, among other
things, contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events, for prepayments on account of principal
hereof prior to the maturity hereof upon the terms and conditions therein
specified, and to the effect that no provision of the Note Agreement or this
Note shall require the payment or permit the collection of interest in excess of
the Highest Lawful Rate.

                  Except for notices specifically provided for in the Note
Agreement, the Borrower and any and all endorsers, guarantors and sureties
severally waive grace, demand, presentment for payment, notice of dishonor or
default or intent to accelerate, protest and notice of protest and diligence in
collecting and bringing of suit against any party hereto, and agree to all
renewals, extensions or partial payments hereon and to any release or
substitution of security herefor, in whole or in part, with or without notice,
before or after maturity.

                  THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.


                                             By:
                                                      --------------------------
                                                      Name:
                                                      Title:


<PAGE>

                                                                    EXHIBIT 2.8C

                                     FORM OF
                                 PROMISSORY NOTE
                                    (TIER 3)

$____________________                        Dated: ___________ __, ____

                  FOR VALUE RECEIVED, the undersigned, _________________________
(the "Borrower"), HEREBY PROMISES TO PAY to the order of _______________________
(the "Noteholder") the principal amount of _________________ Dollars
($_____________) or any lesser amount as may be permitted by the hereinafter
described Note Agreement, as and when the same becomes due under the terms of
the Note Agreement.

                  The Borrower hereby promises to pay interest on the principal
amount of this Note outstanding from time to time from the date of this Note
until such principal amount is paid in full, at such interest rates, on such
dates and at such times, as are specified in the Note Agreement dated as of
_____________ __,____ among ___________________________________________ (as the
same may from time to time be amended, modified or supplemented, the "Note
Agreement," and the terms defined therein and not otherwise defined herein being
used herein as therein defined).

                  Both principal and interest on this Note are payable in same
day funds in lawful money of the United States of America to the Noteholder at
the Payment Office, or at such other place as the Noteholder shall designate in
writing to the Borrower in a notice given in accordance with Section 11.02 of
the Note Agreement.

                  This Note is one of the Notes referred to in, and is entitled
to the benefits of, the Note Agreement. The obligations of the Borrower
hereunder are secured by the Security Documents. The Note Agreement, among other
things, contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events, for prepayments on account of principal
hereof prior to the maturity hereof upon the terms and conditions therein
specified, and to the effect that no provision of the Note Agreement or this
Note shall require the payment or permit the collection of interest in excess of
the Highest Lawful Rate.

                  Except for notices specifically provided for in the Note
Agreement, the Borrower and any and all endorsers, guarantors and sureties
severally waive grace, demand, presentment for payment, notice of dishonor or
default or intent to accelerate, protest and notice of protest and diligence in
collecting and bringing of suit against any party hereto, and agree to all
renewals, extensions or partial payments hereon and to any release or
substitution of security herefor, in whole or in part, with or without notice,
before or after maturity.

                  THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.


                                             By:
                                                      --------------------------
                                                      Name:
                                                      Title:


<PAGE>

                                                                    EXHIBIT 2.8D

                                     FORM OF
                                 REVOLVING NOTE


$___________________

                  FOR VALUE RECEIVED, the undersigned, DELTA TOWING, LLC (the
"Borrower"), HEREBY PROMISES TO PAY to the order of R&B FALCON DRILLING USA,
INC. (the "Noteholder") the principal amount of FOUR MILLION DOLLARS
($4,000,000.00) or, if less, such amount as is outstanding hereunder on Revolver
Maturity Date (as defined in the hereinafter described Note Agreement), whether
by acceleration or otherwise as provided in the Note Agreement.

                  The Borrower hereby promises to pay interest on the principal
amount of the Revolving Loans outstanding hereunder from time to time from the
date of each such Revolving Loan until such principal amount is paid in full, at
such interest rates, on such dates and at such times, as are specified in the
Revolving Credit and Note Agreement dated as of _____________ __, 2001 among
Delta Towing, LLC, the Noteholder and Beta Marine Services, L.L.C. (which
agreement amends and restates the Note Agreement among such persons dated
January 30, 2001, as the same may from time to time be further amended,
supplemented, renewed, extended, restated, rearranged or otherwise modified, the
"Note Agreement," and the terms defined therein and not otherwise defined herein
being used herein as therein defined).

                  Both principal and interest on this Note are payable in same
day funds in lawful money of the United States of America to the Noteholder at
the Payment Office, or at such other place as the Noteholder shall designate in
writing to the Borrower in a notice given in accordance with Section 11.02 of
the Note Agreement.

                  This Note is the Revolving Note referred to in, and is
entitled to the benefits of, the Note Agreement. The obligations of the Borrower
hereunder are secured by the Security Documents. The Note Agreement, among other
things, contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events, for prepayments on account of principal
hereof prior to the maturity hereof upon the terms and conditions therein
specified, and to the effect that no provision of the Note Agreement or this
Note shall require the payment or permit the collection of interest in excess of
the Highest Lawful Rate.

                  Except for notices specifically provided for in the Note
Agreement, the Borrower and any and all endorsers, guarantors and sureties
severally waive grace, demand, presentment for payment, notice of dishonor or
default or intent to accelerate, protest and notice of protest and diligence in
collecting and bringing of suit against any party hereto, and agree to all
renewals, extensions or partial payments hereon and to any release or
substitution of security herefor, in whole or in part, with or without notice,
before or after maturity.

                  THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.

                                             DELTA TOWING, LLC


                                             By:
                                                      --------------------------



<PAGE>

                                                                    EXHIBIT 5.2B

                           FORM OF NOTICE OF BORROWING

                                                               ________ __, 200_

R&B Falcon Drilling USA, Inc.
c/o Transocean Sedco Forex Inc.
4 Greenway Plaza
Houston, Texas 77046
Attention: _________


         RE:      Notice of Borrowing under the Revolving Credit and Note
                  Purchase Agreement, dated as of December 20, 2001 (as amended,
                  supplemented or otherwise modified from time to time, the
                  "Credit Agreement"), among the undersigned, R&B Falcon
                  Drilling USA, Inc. and Beta Marine Services, L.L.C.

Dear Sir or Madam:


         This Notice of Borrowing is delivered to you pursuant to Section 5.2(b)
of the Credit Agreement. The undersigned hereby requests a Revolving Loan under
the Credit Agreement, and in that connection sets forth below the terms on which
such Revolving Loan is requested to be made. Capitalized terms used herein and
not otherwise defined herein shall have the meanings assigned to such terms in
the Credit Agreement.

         (A)      Principal Amount(1)                          _________________

         (B)      Date of Borrowing
                  (which must be a Business Day)               _________________

         (C)      Funds are requested to be
                  disbursed to the Borrower at:

                           Bank Name:                          _________________

                           Bank Address:                       _________________

                           Account Number:                     _________________


----------

(1)      Must be in the principal amount of $100,000 or any larger increment of
         $50,000.


                                       1
<PAGE>

         As of the date of the borrowing to which this Notice of Borrowing
relates:

                  (a) both before and after giving effect to such borrowing (i)
         no Default or Event of Default exists, and (ii) the representations and
         warranties of the Borrower contained in the Credit Documents are true
         and correct;

                  (b) the Current Ratio is equal to or greater than 1.00 to 1.00
         for the applicable Twelve-month Period; and

                  (c) the Fixed Charge Coverage Ratio is equal to or greater
         than 1:00 to 1:00 for the applicable Twelve-month Period.



                                    DELTA TOWING, LLC(2)



                                    By:
                                             -----------------------------------
                                             Name:
                                             Title:



----------

(2)      Must be signed by the president, any vice president or the chief
         financial officer of the Borrower.


                                       2