EXHIBIT 10.105

                              INDENTURE OF TRUST

                         Dated as of November 16, 1995

                          READING & BATES DRILLING CO.

                                    - and -

                        READING & BATES EXPLORATION CO.,
                         as Joint and Several Borrowers

                                    - and -

                           WILMINGTON TRUST COMPANY,
                              as Indenture Trustee

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

                               TABLE OF CONTENTS
                                                                        Page

INDENTURE OF TRUST  . . . . . . . . . . . . . . . . . . . . . . . . . . .  
RECITALS OF THE BORROWER  . . . . . . . . . . . . . . . . . . . . . . . .   
GRANTING CLAUSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   

ARTICLE 1
      DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION . . . . . .  

Section 101 Definitions . . . . . . . . . . . . . . . . . . . . . . . . .  
Section 102 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . .   
Section 103 Waiver of Notice  . . . . . . . . . . . . . . . . . . . . . .   
Section 104 Effect of Headings; Table of Contents . . . . . . . . . . . .   
Section 105 Severability Clause; Further Assurances . . . . . . . . . . .   
Section 106 Governing Law; Jurisdiction . . . . . . . . . . . . . . . . .   
Section 107 Appointment of Process Agent  . . . . . . . . . . . . . . . .   
Section 108 Counterparts  . . . . . . . . . . . . . . . . . . . . . . . .   
Section 109 Survival  . . . . . . . . . . . . . . . . . . . . . . . . . .   
Section 110 No Transfer in Violation of Shipping Act  . . . . . . . . . .   
Section 111 Monies of Indenture Trustee
   Received by Borrower . . . . . . . . . . . . . . . . . . . . . . . . .  
Section 112 Binding Effect  . . . . . . . . . . . . . . . . . . . . . . .   

ARTICLE 2
      REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BORROWER . . . . .  

Section 201 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  

(a)   Organization and Existence  . . . . . . . . . . . . . . . . . . . .  
(b)   Power and Authority . . . . . . . . . . . . . . . . . . . . . . .    
(c)   Due Authorization, Execution and Enforceability . . . . . . . . .    
(d)   No Violations . . . . . . . . . . . . . . . . . . . . . . . . . .    
(e)   Liens and Security Interests  . . . . . . . . . . . . . . . . . .    
(f)   Notices of Defaults . . . . . . . . . . . . . . . . . . . . . . .    

ARTICLE 3
      REMEDIES UPON AN EVENT OF DEFAULT . . . . . . . . . . . . . . . .   

Section 301 Remedies  . . . . . . . . . . . . . . . . . . . . . . . . .   
Section 302 Suits for Enforcement by Indenture Trustee  . . . . . . . .    
Section 303 Indenture Trustee's Enforcement of Claims . . . . . . . . .    
Section 304 Application of Monies Collected After Default . . . . . . .    
Section 305 Rights and Remedies Cumulative  . . . . . . . . . . . . . .    
Section 306 Delay or Omission Not Waiver  . . . . . . . . . . . . . . .    
Section 307 Discontinuance of Enforcement Proceedings . . . . . . . . .    
Section 308 Control by the Majority Lenders . . . . . . . . . . . . . .    
Section 309 Undertaking for Costs . . . . . . . . . . . . . . . . . . .    
Section 310 Waiver of Demand, etc . . . . . . . . . . . . . . . . . . .    

ARTICLE 4
      THE INDENTURE TRUSTEE . . . . . . . . . . . . . . . . . . . . . .   
Section 401 Certain Duties and Liabilities  . . . . . . . . . . . . . .    
Section 402 Certain Rights of Indenture Trustee . . . . . . . . . . . .    
Section 403 Not Responsible for Recitals  . . . . . . . . . . . . . . .    
Section 404 Money Held in Trust . . . . . . . . . . . . . . . . . . . .   
Section 405 Compensation, Reimbursement and Indemnification . . . . . .    
Section 406 Corporate Indenture Trustee Required; Eligibility . . . . .    
Section 407 Disqualification, Removal or
  Resignation of the Indenture Trustee;
  Successor Indenture Trustees  . . . . . . . . . . . . . . . . . . . .   
Section 408 Co-trustees and Separate Indenture Trustees . . . . . . . .    

ARTICLE 5
      SATISFACTION AND DISCHARGE  . . . . . . . . . . . . . . . . . . .   

Section 501 General . . . . . . . . . . . . . . . . . . . . . . . . . .   
Section 502 Survival of Certain Obligations . . . . . . . . . . . . . .    

ARTICLE 6
      SUPPLEMENTAL INDENTURES . . . . . . . . . . . . . . . . . . . . .   

Section 601 Waivers and Supplemental Indentures With
  Consent of Lenders  . . . . . . . . . . . . . . . . . . . . . . . . .   
Section 602 Execution of Supplemental Indentures  . . . . . . . . . . .
Section 603 Effect of Supplemental Indentures . . . . . . . . . . . . .    

ARTICLE 7
      INSTRUCTIONS OF THE AGENT OR MAJORITY LENDERS . . . . . . . . . .   

Section 701 Instructions of the Agent or Majority Lenders.  . . . . . .   

ARTICLE 8
      LIMITATION OF LIABILITY . . . . . . . . . . . . . . . . . . . . .   

Section 801 Limitation of Liability of Wilmington Trust Company.  . . .   
 

                               INDENTURE OF TRUST

      THIS INDENTURE OF  TRUST (this "Indenture")  dated as  of November  16,
  1995, among (i) READING & BATES  DRILLING CO. ("R&B Drilling") and READING
  & BATES EXPLORATION CO. ("R&B Exploration"), each an Oklahoma corporation,
  as joint and several  borrowers (collectively, the "Borrowers"), and  (ii)
  WILMINGTON  TRUST COMPANY,  a  Delaware  banking corporation,  not  in its
  individual  capacity  but  solely  as  indenture  trustee (the  "Indenture
  Trustee").

                           RECITALS OF THE BORROWERS

     A.    The  Borrowers have  entered into  a  Credit Facility  Agreement,
  dated as of  November 16, 1995 (the  "Credit Agreement"), with the Lenders
  (as defined  in the  Credit Agreement),  Christiania Bank og  Kreditkasse,
  acting through its New York branch, as agent for the Lenders (the "Agent")
  and Reading  & Bates  Corporation,  as guarantor,  pursuant to  which  the
  Lenders  have agreed  to make  available to  the Borrowers (i)  a reducing
  revolving  credit  facility  (the  "Revolving  Credit  Facility")  in  the
  original  principal amount  of  Forty-Five Million  United  States Dollars
  (US$45,000,000.00) evidenced by a secured promissory note of the Borrowers
  (the "Note") and  (ii) a Standby Letter  of Credit Facility  (the "Standby
  Letter of Credit Facility and together with the Revolving Credit Facility,
  the "Credit  Facility") in  an amount  not to  exceed Ten Million  Dollars
  (U.S. $10,000,000.00).

     B.    Pursuant to  the Credit  Agreement, (i) R&B  Drilling is required
  to execute and deliver a first preferred  mortgage on the U.S.  documented
  semi-submersible  drilling unit,  JACK BATES  and (ii) R&B  Exploration is
  required to execute and deliver a first preferred mortgage (together  with
  the  first  preferred  mortgage  on   the  JACK  BATES,  collectively  the
  "Mortgages")  on the U.S. documented  jack-up drilling  unit, D.R. STEWART
  (together with the  JACK BATES, collectively, the "Vessels").   Certain of
  the  Lenders are not citizens of  the United States of  America within the
  meaning  of Section  2 of  the  Shipping Act,  1916,  as amended,  and are
  therefore ineligible to be mortgagees of the Vessels, and the Lenders have
  requested the  Indenture Trustee  to hold, pursuant  to the  terms of this
  Indenture, the Mortgages.

     C.    To secure  their obligations under  the Credit Agreement and  the
  Note, the  Borrowers have  duly authorized the execution  and delivery  of
  this Indenture.

     D.    All things have  been done which are necessary to constitute this
  Indenture a valid security agreement  and contract for the security of the
  obligations  of the Borrowers under  the Credit Facility  and the Note, in
  accordance  with  the terms  of the  Credit Agreement,  the Note  and this
  Indenture.

                                GRANTING CLAUSE
                NOW, THEREFORE, THIS INDENTURE WITNESSETH, that,

     To secure  the  payment of  the  Advances  (as defined  in  the  Credit
  Agreement), the Unpaid Drawings (as defined in the Credit Agreement),  and
  interest thereon  and all  other Indebtedness (as defined  below) and  the
  performance  of  the  covenants  therein  and  herein  contained,  and  in
  consideration  of the  premises  and  of the  Lenders' making  the  Credit
  Facility  available to the  Borrowers, the Borrowers by  these presents do
  grant, sell, convey,  assign, transfer, pledge, set over and  confirm unto
  the Indenture Trustee for the benefit of the Lenders, continuing  security
  interests  in all of their right,  title and interest in  and all benefits
  in,  under and  to all  of the  following, but  as security  only for  the
  payment of the Indebtedness:

      1.   The U.S.  documented vessel  JACK BATES,  as granted  by a  first
           preferred mortgage on the JACK BATES by R&B Drilling;
      2.   The U.S.  documented vessel D.R.  STEWART, as granted  by a first
           preferred mortgage on the D.R. STEWART by R&B Exploration; and
      3.   Proceeds of the foregoing.

     The  Indenture Trustee shall hold the  Mortgages as collateral security
  for the Indebtedness, subject to the terms of this Indenture.

     AND IT  IS HEREBY COVENANTED  AND DECLARED that  the security interests
  granted above are to be held and applied by the Indenture Trustee, subject
  to the further covenants,  conditions and trusts herein set forth, and the
  Borrowers do hereby covenant and  agree to and with the Indenture Trustee,
  for the benefit of the Lenders as follows:

                                   ARTICLE 1
            DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

  Section 101.    Definitions.

     (a)   For  all  purposes   of  this  Indenture,  except   as  otherwise
  expressly  provided herein  or unless  the context otherwise  requires, in
  addition  to the words and expressions defined in the recitals hereto, the
  following terms shall have the following meanings:

     "Actual Knowledge" has the meaning specified in Section 401(h).

     "Business Day"  shall have the  meaning ascribed thereto  in the Credit
  Agreement.

     "Dollars",  "dollars"  or  "$" means  lawful  and  freely  transferable
  currency of the United States.

     "Default Rate"  shall have the  meaning ascribed thereto  in the Credit
  Agreement.

     "Event  of Default"  has  the meaning  ascribed  thereto in  the Credit
  Agreement.

     "Indebtedness"  means  the  Advances,  the   Unpaid  Drawings  and  all
  interest thereon (and interest  on any unpaid interest thereon) and on any
  other sums of money on which interest is stated in the Credit Agreement to
  be  payable), all  expenses, claims,  liabilities, losses,  costs, duties,
  fees and all other sums  of money from time to time owing under the Credit
  Agreement and the Security Documents.

     "Instructions" has the meaning set forth in Section 701.

     "MARAD" means the United States  Department of Transportation, Maritime
  Administration.

     "Officer's  Certificate"   means  (i)  when  used  with  respect  to  a
  Borrower,  a  certificate  signed by  the  president, the  chief executive
  officer,  any vice president, the secretary,  any assistant secretary, the
  treasurer or any  assistant treasurer of such Borrower and (ii)  when used
  with  respect  to  the  Indenture  Trustee,  a  certificate  signed  by  a
  Responsible Officer of the Indenture Trustee.

     "Person"  means   any  individual,   corporation,  partnership,   joint
  venture,  joint-stock  company,  trust,  unincorporated   organization  or
  government or any agency or political subdivision thereof.

     "Responsible  Officer",  when  used  with   respect  to  the  Indenture
  Trustee,   means  any   officer   with  direct   responsibility   for  the
  administration  of  this  Indenture  and  also means,  with  respect  to a
  particular corporate trust  matter, any other officer to whom  such matter
  is  referred  because  of  his  knowledge  of  and  familiarity  with  the
  particular subject. "Responsible  Officer", when  used with  respect to  a
  Borrower, means  the president,  any vice  president, the  secretary,  any
  assistant  secretary,  the treasurer  or any  assistant treasurer  of such
  Borrower  or any  other  officer  or assistant  officer of  such  Borrower
  customarily performing functions similar to those performed by any of  the
  above-designated officers.

     "Security  Documents" shall have  the meaning  ascribed thereto  in the
  Credit Agreement.

     "Supplemental  Indenture"  means  any  indenture supplemental  to  this
  Indenture entered into pursuant to Article 6.

     "United States" means the United States of America.

     (b)   For  purposes  of  this  Indenture,  unless  otherwise  expressly
  provided or  unless the context otherwise, requires, all references herein
  to Articles,  Sections or other  subdivisions, unless otherwise specified,
  refer to the corresponding  Articles, Sections  and other subdivisions  of
  this Indenture,  and the terms "hereof,  "herein", hereby"  hereafter" and
  "herewith" refer to this Indenture.

     (c)   The  terms defined in this Article include  the plural as well as
  the singular.

     (d)   All other  terms used in  this Indenture and not  defined in this
  Indenture which are defined by reference herein to the Credit Agreement or
  other  instruments, have  the  meanings  assigned to  them in  the  Credit
  Agreement or such other instruments.

     (e)   All agreements referred to in this Article  I and in the Recitals
  of this Indenture mean such agreements  as originally executed or, if duly
  amended or supplemented, as so amended or supplemented.

  Section 102.    Notices.

         (a)     All  notices or other  communications required or permitted
  to be made hereunder to the Borrowers, the Indenture Trustee, the Agent or
  the  Lenders  shall be  sufficiently  given  if in  writing  and  made  or
  delivered by hand or by certified or registered mail,  postage prepaid, by
  telex or telecopy, addressed to the particular parties as provided  below,
  or to  such other  addresses as  such parties  may hereafter  specify by a
  written notice  to such other  parties (and with respect to  any notice or
  communication to the Indenture Trustee, with a copy to the Agent):

  Borrowers:                  READING & BATES CORPORATION
                              901 Threadneedle, Suite 200
                              Houston, TX  77079
                              Telefax: (713) 496-0285
                              Attention: Chief Financial Officer


  Indenture Trustee:          WILMINGTON TRUST COMPANY
                              Rodney Square North
                              1100 North Market Street
                              Wilmington, DE 19890-0001
                              Telefax: (302) 651-8882
                              Attention:  Corporate Trust Division

                              With a copy to:

                              Jennifer L. Janss, Esq.
                              Richards, Layton & Finger
                              P.O. Box 551
                              Wilmington, DE 19899


  Notices to the Agent shall be addressed to:

                              CHRISTIANIA BANK OG KREDITKASSE, 
                              New York Branch
                              11 West 42nd Street, 7th Floor
                              New York, NY 10036
                              Telefax: (212) 827-4888
                              Attention: Loan Administration

  Notices to the Lenders shall be addressed as provided on Schedule 1 to the
  Credit Agreement.

  Section 103.    Waiver of Notice.

     Where this Indenture  provides for notice  in any  manner, such  notice
  may be  waived in writing by  the person entitled  to receive such notice,
  either  before or after the event, and such waiver shall be the equivalent
  of such notice.

  Section 104.    Effect of Headings; Table of Contents.                

     The table  of contents, the titles of the  Articles and the headings of
  the Sections and paragraphs are not a part of this Indenture and shall not
  be deemed to affect the meaning or construction of any of its provisions.

  Section 105.    Severability Clause; Further Assurances.

     In  case any provision of this Indenture or any other Security Document
  shall  be invalid,  illegal or unenforceable,  the validity,  legality and
  enforceability of the remaining provisions of this Indenture or any  other
  Security Document shall not in any way be affected or impaired thereby. In
  case this  Indenture or  any  other Security  Document, or  any  provision
  hereof or thereof,  shall be deemed invalid, illegal or  unenforceable, in
  whole or in part, by  reason of any present or future law or  any decision
  of any court having jurisdiction, or if the documents at  any time held by
  the Indenture  Trustee shall  be deemed by  the Indenture  Trustee in  the
  reasonable exercise of  its duties  to be insufficient for  any reason  to
  implement the rights and powers granted to the Indenture Trustee herein or
  any other  Security Document, then, from  time to  time on  demand of  the
  Indenture  Trustee,  the  Borrowers  will  do,  execute,  acknowledge  and
  deliver, or cause  to be done, executed, acknowledged and  delivered, such
  other  and  further assurances  and  documents as  in the  opinion  of the
  Indenture  Trustee may  reasonably be  required to  create or  confirm the
  security interests purported  to be created by the Granting  Clause hereof
  or  to  perfect  the Indenture  Trustee's  security interest  therein,  or
  otherwise  to obtain or maintain  the full benefits  of this Indenture and
  the Mortgages.

  Section 106.    Governing Law; Jurisdiction.

     This  Indenture  shall be  deemed  to  be  a contract  made  under  the
  substantive laws of the  State of New York and  for all purposes shall  be
  construed  in accordance  with the  internal laws  of said  State, without
  reference  to  principles of  conflicts  of law.   This  Indenture  may be
  enforced  in the federal or  state courts in the State of  New York or any
  other  court having jurisdiction. Each of the Borrowers hereby irrevocably
  submits  itself to  the  nonexclusive  jurisdiction of  the  United States
  District Court for the Southern District of New York and the courts of the
  State of New  York located in  the City  and County of New  York for  such
  purpose. In addition thereto, each of the Borrowers irrevocably waives, to
  the fullest  extent permitted by law,  any objection which  it may  now or
  hereafter have to  the laying of the venue  of any such proceeding brought
  in any  such court or  any claim that  any such proceeding brought  in any
  such court has been brought in an inconvenient forum.

  Section 107.    Appointment of Process Agent.

     Each  of the  Borrowers hereby appoints  Prentice Hall Corporation, 500
  Central Avenue, Albany, New York 12206-2290 as its agent to accept service
  of  process in any proceeding  on its behalf in the State  of New York and
  acknowledges that the purpose of this provision is to provide that service
  upon such  firm at its  offices in  Albany, New  York shall have the  same
  effect as  if the respective  Borrower had  been personally served in  the
  State of New York.

  Section 108.    Counterparts.

     This Indenture may be executed  in any number of counterparts,  each of
  which  shall  be  an  original;  but  such   counterparts  shall  together
  constitute but one and the same instrument.

  Section 109.    Survival.

     All  representations,  warranties,  covenants  and  agreements   herein
  contained or  made in  writing in connection with  any Security  Documents
  shall  survive the execution of  this Indenture and shall continue in full
  force  and effect until  the Indebtedness secured hereby  or thereby shall
  have been paid in full,  and the same shall bind and  inure to the benefit
  of  the  respective  successors  and assigns  of  the  Borrowers  and  the
  Indenture Trustee.

  Section 110.    No Transfer in Violation of Shipping Act.

     Notwithstanding any other provision herein  to the contrary, except  to
  the extent  permitted by law,  no sale,  transfer or other disposition  of
  either of the Vessels, or  any interest therein, may be made to any person
  not a citizen of the United States within the meaning of Section 2  of the
  Shipping Act, 1916, as amended, without the  approval of the Secretary  of
  Transportation of the United States or pursuant to an exemption therefrom.

  Section 111.    Monies of Indenture Trustee Received by Borrowers.

     Any monies  which may from time to time  be received by either Borrower
  which should have been paid to the Indenture Trustee hereunder shall be so
  received in trust for the Indenture Trustee, shall not  be commingled with
  other  funds  of such  Borrower  and  shall promptly  be  remitted to  the
  Indenture Trustee.

  Section 112.    Binding Effect.

     All the  covenants, promises,  stipulations and  agreements of each  of
  the Borrowers in this Indenture shall bind each of the Borrowers and their
  respective successors and assigns,  and shall inure to the benefit of  the
  Indenture Trustee and its successors and assigns, whether so expressed  or
  not.   This  Indenture  is for  the  sole benefit  of the  Borrowers,  the
  Indenture Trustee  and the  Lenders and  their  respective successors  and
  assigns, and no other party shall have any right hereunder.

                                   ARTICLE 2
           REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BORROWERS

     Each of the  Borrowers represents and warrants to the Indenture Trustee
  as of the date hereof and covenants with the Indenture Trustee that:

  Section 201.

     (a)   Organization  and  Existence.  Each of  the  Borrowers  was  duly
  organized and is now  validly existing as a corporation under the  laws of
  the State of Oklahoma with power and authority to  conduct its business as
  the  same  is  presently  being  conducted. Each  of  the  Borrowers shall
  maintain such existence so long as this Indenture remains in effect.

     (b)   Power and  Authority. Each  of the  Borrowers had  and has  legal
  power  and  authority to  enter  into  and  carry out  the  terms of  this
  Indenture. 

     (c)   Due Authorization,  Execution and Enforceability.  This Indenture
  has  been duly authorized by all necessary corporate action on the part of
  each of the Borrowers, has been duly executed and delivered by each of the
  Borrowers and constitutes, in accordance with its terms, the legal,  valid
  and  binding  agreements   enforceable  against  each  of  the  respective
  Borrowers,  except  to   the  extent  limited  by  applicable  bankruptcy,
  reorganization,  insolvency,   moratorium  or   other   laws  of   general
  application relating to or  affecting the enforcement of creditors' rights
  as from time to time in effect and general equitable principles.

     (d)   No Violations. The consummation of  the transactions contemplated
  by,  and compliance  by  each of  the  Borrowers with  all the  terms  and
  provisions of, this Indenture  do not and will not violate any  provisions
  of the Certificate of Incorporation or Bylaws of either  of the Borrowers,
  and  will not  result in  a  breach of  the  terms and  provisions of,  or
  constitute a  default under, any agreement or undertaking by either of the
  Borrowers, or of which it or any of its property is bound, or any order of
  any court  or administrative  agency entered in any  proceedings to  which
  either of the Borrowers is  or has been a party or violate  any applicable
  statute, rule or regulation.

      (e)   Liens and Security Interests.

           (1)   The   security   interest   granted   by   this   Indenture
  constitutes, a valid perfected assignment of and security interest in  the
  properties  assigned hereby  having  a  priority over  any  other security
  interests in such property.

           (2)   Except pursuant to this Indenture (or as permitted by  this
  Indenture)  or the Mortgages  (or as permitted by  the Mortgages), neither
  Borrower has assigned, pledged or otherwise granted a security interest in
  or lien  on, and shall  not assign,  pledge or otherwise  grant a security
  interest in or lien on, the whole  or any part of, any rights  assigned by
  the Indenture or the Mortgages.

      (f)   Notices  of  Defaults.  Upon  the  occurrence  of  any  Event  of
  Default, the Borrowers  shall promptly  notify the Indenture  Trustee, the
  Agent and the Lenders by telecopy, confirmed by letter,  unless such Event
  of Default shall have been cured.

                                   ARTICLE 3
                       REMEDIES UPON AN EVENT OF DEFAULT

  Section 301.    Remedies.

      If an  Event of  Default shall  have occurred  and  be continuing,  the
  Indenture Trustee shall be  entitled to, and shall upon receipt of written
  Instructions of the  Agent, without further notice or demand,  enforce and
  exercise all or  any of  its rights and  powers as  a mortgagee  under the
  respective Mortgages at law, in equity or in admiralty.

  Section 302.    Suits for Enforcement by Indenture Trustee.

     Subject to the provisions of Section 308, if an Event of Default  shall
  occur  and be continuing  and the Indenture Trustee  has Actual Knowledge,
  the Indenture Trustee may in its discretion proceed  to protect its rights
  and the rights of the Lenders by such appropriate judicial  proceedings as
  the  Indenture Trustee  shall  deem  most effectual  to protect  any  such
  rights,  or  to protect  any  other  proper right,  power  or  remedy then
  available to the Indenture Trustee under the Mortgages, provided that  the
  Indenture Trustee  shall immediately  thereafter notify the  Agent and the
  Lenders  by  telecopier  of  any action  taken  or  proposed to  be  taken
  hereunder and  shall thereafter  act only in accordance  with the  written
  Instructions of the Agent or the Majority Lenders or either thereof.

  Section 303.    Indenture Trustee's Enforcement of Claims.

     All rights of action and claims under this Indenture may be  prosecuted
  and enforced by the  Indenture Trustee in a proceeding brought in  its own
  name as trustee of an express trust,  and any recovery of judgment  shall,
  after provision for the payment of the reasonable  compensation, expenses,
  disbursements  and  advances  of  the Indenture  Trustee,  its  agents  or
  counsel, be for the benefit of the Lenders.

  Section 304.    Application of Monies Collected After Default.

     Any  monies   collected  by  the  Indenture  Trustee  pursuant  to  any
  enforcement of  any of  its rights hereunder or  under any  other Security
  Document on  account of  the occurrence  of an  Event of  Default shall be
  applied as follows:

            First:      to  the   payment  or   reimbursement   of  all   the
                        reasonable  costs incurred  or made  in the exercise,
                        protection or pursuance by  the Indenture Trustee  of
                        its rights  or  remedies including,  but not  limited
                        to,  the  expenses of  any  sale  or  of any  taking,
                        attorneys'  fees   and  court  costs,  together  with
                        interest thereon at  the Default Rate and  to provide
                        adequate  indemnity to the  Indenture Trustee against
                        security  interests, liens,  charges, encumbrances or
                        rights  claiming  priority   over  or  equal  to  the
                        security   interest   or   liens   held  under   this
                        Indenture;
            Second:     to the payment of interest and fees owing in  respect
                        of  the Credit  Facility,  including all  fees  owing
                        pursuant to Clause 17 thereof;
            Third:      to the  repayment of  principal owing  in respect  of
                        the Advances or Unpaid Drawings;
            Fourth:     to other amounts due under the Credit Agreement;  
            Fifth:      the surplus (if any) shall  be paid to the  Borrowers
                        or to whomsoever else may be entitled thereto.

  Section 305.    Rights and Remedies Cumulative.

     No right  or remedy herein conferred upon  or reserved to the Indenture
  Trustee, the Agent  or any of the Lenders  is intended to be  exclusive of
  any other right or remedy, and every right and remedy shall, to the extent
  permitted by law, be  cumulative and in addition to every other  right and
  remedy given  hereunder, or under  the other Security Documents  or now or
  hereafter  existing  at  law,  in equity,  in  admiralty,  by  statute  or
  otherwise. The assertion or employment of any right or remedy hereunder or
  otherwise shall  not prevent  the concurrent  or  subsequent assertion  or
  employment of another right or remedy hereunder or otherwise.

  Section 306.    Delay or Omission Not Waiver.

     No delay  or omission of the Indenture Trustee,  the Agent or of any of
  the  Lenders to  exercise any right  or remedy accruing upon  any Event of
  Default nor any course of dealings among the Indenture Trustee, the Agent,
  the Lenders  and the Borrowers  shall impair  any such right  or remedy or
  constitute a waiver of any Event of Default or an acquiescence therein nor
  shall any single exercise or partial exercise of any  such right or remedy
  preclude any  other  exercise thereof  or any  exercise  of any  other  or
  further right or remedy; nor shall the acceptance by the Indenture Trustee
  of any security or any payment of any part of the Credit Facility maturing
  after any  Event of  Default  or of  any payment  on account  of any  past
  default  be construed to be a waiver of any right to take advantage of any
  future  Event of  Default or of  any past Event of  Default not completely
  cured thereby.   To the extent  permitted by  law, every  right or  remedy
  given  by this Indenture or any  other Security Document or  by law to the
  Indenture Trustee, the Agent  or any of the Lenders may be  exercised from
  time to time, and as  often and in such order as  may be deemed expedient,
  by the Indenture Trustee, the Agent or the Lenders, as the case may be.

  Section 307.    Discontinuance of Enforcement Proceedings.

     In  case the  Indenture  Trustee shall  have  proceeded to  enforce any
  right,  power or remedy under this Indenture or  under either Mortgage and
  such proceeding shall  have been discontinued or abandoned for  any reason
  or  shall have been  adversely determined to the  Indenture Trustee, then,
  and in every such  case, the Borrowers and the Indenture Trustee  shall be
  restored  to their former  positions and rights hereunder  with respect to
  the property subject or intended to be subject to this Indenture or either
  Mortgage, as the case may be, and  all rights, remedies and powers of  the
  Indenture Trustee shall continue as if no such proceedings had been taken.

  Section 308.    Control by the Majority Lenders.

     Subject to (i) the provisions of Section 309 and (ii)  the requirements
  of Sections 9 and 37  of the Shipping Act, 1916, as amended, the  Agent or
  the Majority Lenders  shall have the right by written Instructions  to the
  Indenture Trustee,  to direct the time, method and place of conducting any
  proceeding  for any remedy  available to the Indenture  Trustee under this
  Indenture or either Mortgage or exercising any trust or power conferred on
  the Indenture Trustee herein or therein, and upon  receipt of such written
  Instructions,  the Indenture Trustee, subject to the provisions of Article
  4, shall take the actions specified in such written Instructions, provided
  that such written instructions shall not be  in conflict with any rule  of
  law or with  this Indenture  or expose the  Indenture Trustee  to personal
  liability.

  Section 309.    Undertaking for Costs.

     The parties  to this  Indenture agree, and  the Lenders  by making  the
  Credit Facility available  shall be deemed to  have agreed, that any court
  may in  its discretion  require, in  any suit  for the  enforcement of any
  right or remedy under this Indenture, or in any suit against the Indenture
  Trustee  for any action taken or  omitted by it as  Indenture Trustee, the
  filing by any party  litigant in such  suit of an  undertaking to pay  the
  costs  of such  suit, and  that such  court may  in its  discretion assess
  reasonable costs, including  reasonable attorneys' fees, against any party
  litigant in such suit, having due regard  to the merits and good faith  of
  the  claims or defenses made by such party litigant; but the provisions of
  this  Section shall  not  apply to  any suit  instituted by  the Indenture
  Trustee,  or to  any  suit  instituted by  the Lenders,  unless  otherwise
  required by law.

  Section 310.    Waiver of Demand, etc.

     Each  Borrower  hereby  expressly waives  demand  and  presentment  for
  payment,  notice  of  nonpayment, protest,  notice  of protest,  notice of
  dishonor, bringing of suit, and diligence in taking any  action to collect
  amounts called for  under this Indenture, the other Security  Documents or
  the Credit Agreement at any time in connection herewith and therewith.

                                   ARTICLE 4
                             THE INDENTURE TRUSTEE

  Section 401.    Certain Duties and Liabilities.

     (a)   The Indenture Trustee undertakes to perform such duties  and only
  such duties  as are  specifically  set forth  in  this Indenture,  and  no
  implied covenants or obligations shall be read into this Indenture against
  the Indenture Trustee.

     (b)   Without limiting the provisions of paragraph (a) of this  Section
  401 or the provisions of Section 308, in any case where  the terms of this
  Indenture or  either Mortgage vest in the Indenture Trustee non-mandatory,
  discretionary authority to take any action or give any consent or approval
  upon the request of either of the Borrowers, the Agent, any of the Lenders
  or otherwise,  the Indenture  Trustee  shall be  required, first  to  give
  notice of such proposed action, approval or consent to the Agent, and upon
  receipt of written Instructions of the Agent, the Indenture Trustee  shall
  act  with respect to such  action, approval or  consent only in accordance
  with such written Instructions.

     (c)   In  case  an   Event  of  Default  shall  have  occurred  and  be
  continuing, the Indenture Trustee  shall (except as otherwise provided  in
  Section  308) exercise such of the rights and  powers vested in it by this
  Indenture, and use the same degree of care and skill in their exercise, as
  a prudent man would exercise or use under the circumstances in the conduct
  of his own affairs.

     (d)   No provision of  this Indenture shall be construed to relieve the
  Indenture Trustee from  liability for its own  gross negligence or its own
  willful  misconduct  or  that  of  its  employees,  agents,  officers  and
  attorneys.

     (e)   Save for the  provisions of paragraph (d)  hereof, the  Indenture
  Trustee shall not be liable with respect to any action taken or omitted to
  be  taken by  it  in accordance  with  Instructions of  the Agent  or  the
  Majority Lenders relating  to the exercise of  any trust, right, remedy or
  power conferred upon the Indenture Trustee under this Indenture or  either
  Mortgage, or exercisable by it hereunder or thereunder.

     (f)   None  of  the  provisions of  this  Indenture  shall require  the
  Indenture Trustee  to expend  or  risk its  own funds  or otherwise  incur
  personal financial liability in the performance of any of its duties or in
  the exercise of any of its rights or powers, if there is reasonable ground
  for  believing  that the  repayment  of such  funds  or  liability is  not
  reasonably assured to it  under the terms of this Indenture or  by special
  agreement of the Agent or the Majority Lenders.

     (g)   Whether or not therein expressly so  provided, every provision of
  this Indenture relating to  the conduct or  affecting the liability of  or
  affording  protection to  the Indenture  Trustee shall  be subject  to the
  provisions of this Section.

     (h)   The  Indenture  Trustee shall  not  be deemed  to  have knowledge
  ("Actual  Knowledge") of the existence  of an Event of  Default unless the
  Indenture Trustee  shall have received telecopied  or other written notice
  of  such  Event  of Default  from  the Agent  or  Majority  Lenders, or  a
  Responsible Officer in the Corporate Trust Office of the Indenture Trustee
  shall have actual knowledge of such Event of Default.

     (i)   The  Indenture  Trustee  shall  promptly, upon  receiving  Actual
  Knowledge of  an Event  of Default,  inform the  Agent and  the Lenders by
  telex or telecopy of such Event of Default.

     (j)   None  of the  provisions  of  this  Indenture shall  require  the
  Indenture Trustee to  review or hold policies of  insurance or to make any
  claims or  take any  other action with  respect to  such insurance  unless
  specifically instructed to do so by the Agent.

  Section 402.    Certain Rights of Indenture Trustee.

     Except as otherwise provided in Section 401:

     (a)   The Indenture Trustee may rely  and shall be protected  in acting
  or refraining from acting upon any  written statement, instrument, notice,
  request, instruction, direction or other paper or document believed by  it
  to be genuine  and to have been signed or presented by the proper party or
  parties;

     (b)   The  Indenture Trustee  may consult with  counsel and the written
  advice  of such  counsel  shall  be full  and complete  authorization  and
  protection  in respect  of  any action  taken, suffered  or omitted  by it
  hereunder  in reliance  thereon  and in  compliance therewith,  absent bad
  faith, negligence  or willful  misconduct  on the  part of  the  Indenture
  Trustee;

     (c)   The Indenture  Trustee shall be under  no obligation  to exercise
  any  of the rights or powers vested in it by this Indenture at the request
  or  direction  of the  Agent  or  the Majority  Lenders  pursuant  to this
  Indenture, unless the Agent or  the Majority Lenders shall have offered to
  the Indenture  Trustee reasonable security or indemnity  against the costs
  and expenses which might be incurred by it in compliance with such request
  or direction; 

     (d)   The  Indenture   Trustee  shall   not  be   bound  to   make  any
  investigation  into  the  facts  or  matters  stated  in   any  statement,
  instrument, notice, request, direction or other paper or document referred
  to in paragraph (a) of this Section;

     (e)   The Indenture Trustee  may execute any  of the  trusts or  powers
  hereunder or perform any duties hereunder either directly or by or through
  agents or attorneys and the Indenture Trustee shall not be responsible for
  the negligence of any attorney or agent appointed by the Indenture Trustee
  with due care; and

     (f)   Should the  Indenture Trustee  receive written Instructions  from
  the Agent or the Majority Lenders which the Indenture Trustee, in its sole
  opinion, believes  to be  conflicting Instructions,  the Indenture Trustee
  shall  have no duty to act thereon, but if indemnified to its satisfaction
  for  any costs,  expenses  or liabilities  it  may  incur, it  shall  seek
  instructions  concerning its  responsibilities  under this  Indenture with
  respect  to such  conflicting  Instructions from  any court  of  competent
  jurisdiction.

  Section 403.    Not Responsible for Recitals.

     The recitals contained herein shall be  taken as the statements of  the
  Borrowers, and  the Indenture Trustee assumes  no responsibility for their
  correctness. The  Indenture Trustee  makes no  representations  as to  the
  validity or sufficiency of this Indenture or either Mortgage.

  Section 404.    Money Held in Trust.

     Any money held by the Indenture Trustee in  trust hereunder need not be
  segregated  from other  funds except to  the extent required by  law.  The
  Indenture Trustee shall  be under no  liability for interest on  any money
  received  by it hereunder  except as otherwise agreed  with the Borrowers.
  Any  payments made by the Indenture Trustee under  this Indenture shall be
  made only from monies held by it in trust hereunder.

  Section 405.    Compensation, Reimbursement and Indemnification.

     The Borrowers jointly  and severally agree, subject  to the  provisions
  of Article 5:

     (a)   To pay  to the  Indenture Trustee  from time  to time  reasonable
  compensation for all services rendered by it hereunder (which compensation
  shall not be limited to any provision of law in regard to the compensation
  of a trustee of an express trust);

     (b)   To  reimburse  the Indenture  Trustee  upon its  request  for all
  reasonable  expenses, disbursements and advances  incurred or  made by the
  Indenture  Trustee in  accordance  with any  provision of  this  Indenture
  (including, without  limitation, reasonable compensation and  expenses and
  disbursements of its agents and counsel and expenses incurred in enforcing
  its rights  or remedies  under  any Security  Document), except  any  such
  expense, disbursement  or advance  as  may be  attributable to  its  gross
  negligence or willful misconduct; and

     (c)   To indemnify  the  Indenture  Trustee, its  directors,  officers,
  employees  and agents for, and to  hold it and them  harmless against, any
  and all  claims, losses,  liabilities or expenses of  any kind  (including
  attorneys' fees)  incurred without gross  negligence or willful misconduct
  on  its  or their  part  and arising  out of  or  in  connection with  the
  acceptance  or  administration of  this  trust,  including  the  costs and
  expenses of defending itself or themselves against any claim of  liability
  in the premises.

     (d)   That  to  secure the  obligations  of  the Borrowers  under  this
  Section 405, the Indenture Trustee shall have  a lien prior to the  rights
  of the Lenders on all money or property held or collected by the Indenture
  Trustee pursuant to this Indenture.

  Section 406.    Corporate Indenture Trustee Required; Eligibility.

     There shall at all  times be a Indenture Trustee  hereunder which shall
  be a bank  or trust  company which (i)  is organized  as a  corporation or
  banking association, and  is doing business under  the laws of the  United
  States  or  any State  thereof,  (ii)  is authorized  under  such  laws to
  exercise corporate trust powers, (iii)  is a citizen of  the United States
  within the  meaning of Section  2 of  the Shipping Act,  1916, as amended,
  (iv)  is  subject  to  supervision or  examination  by  federal  or  state
  authority, (v)  has a combined capital  and surplus (as  set forth  in its
  most recent  published report  of condition) of at  least $50,000,000  and
  (vi) is a trustee approved by the Secretary of Transportation pursuant  to
  Section  9 and,  if applicable, Section  37 of the Shipping  Act, 1916, as
  amended,  and Chapter  313 of  Title 46  of the  United  States Code.  The
  Indenture Trustee hereby  represents and warrants that on the  date hereof
  it complies  with the requirements of  the foregoing  sentence. If at  any
  time the  Indenture Trustee shall cease to be eligible  in accordance with
  the  provisions of this Section, it shall resign immediately in the manner
  and with the effect hereinafter specified in this Article.

  Section 407.   Disqualification, Removal  or Resignation of  the Indenture
  Trustee; Successor Indenture Trustees.

     (a)   If  the Indenture Trustee  ceases at any  time to  be a Indenture
  Trustee approved by MARAD, it promptly will so notify the Agent and resign
  hereunder and cooperate  in all reasonable respects in the  appointment of
  its successor, but shall have no other liability hereunder for loss of its
  status  as an  approved trustee.   The Agent  shall immediately  appoint a
  qualified successor trustee  or shall take the actions provided  for below
  in  the event  a qualified  successor trustee  cannot be  found by  it. In
  addition, the Agent may  in its discretion remove the Indenture Trustee at
  any time, without cause, by causing a written notice of such removal to be
  delivered  to the Indenture  Trustee, the Borrowers and  the Lenders which
  notice  shall state  the  effective date  and the  name  of the  qualified
  successor trustee  selected by  the Agent. No removal  shall be  effective
  unless  a qualified successor trustee  is available and willing to act for
  the  Lenders or  unless the  actions  provided for  below  in the  event a
  qualified  successor trustee  is  not  available to  the Agent  have  been
  initiated. In  the event  of discharge or removal,  the Indenture  Trustee
  shall execute all documents  and take such other  actions as necessary  or
  desirable to the Agent  or the Majority Lenders to transfer the  Indenture
  Trustee's function  of trustee  to the  successor  trustee. The  Indenture
  Trustee's compensation shall  cease as of the effective date  of discharge
  or removal, except those rights of indemnification which shall survive its
  removal. Upon  discharge or removal,  the Indenture Trustee shall,  within
  thirty  days,  furnish the  Agent,  the  Majority  Lenders,  the successor
  trustee  and the Borrowers a  complete accounting of the trust estate, its
  compensation, costs and  expenses as of the  date of discharge or removal.
  Such amount shall be promptly paid by the Borrowers. 

     (b)   (i)   The Indenture Trustee  or any successor thereto  may resign
  at any  time without cause by  giving at least  ninety days  prior written
  notice to  the Agent,  the  Majority Lenders  and to  the Borrowers,  such
  resignation to  be effective  on the  date specified  in such  notice. The
  Agent shall,  prior  to the  date  specified  in such  notice,  appoint  a
  successor  trustee meeting the  requirements of Section 406.  If the Agent
  shall not have  appointed such a qualified successor trustee  within sixty
  days  after such notice, the Indenture  Trustee may apply to  any court of
  competent  jurisdiction to  appoint a  qualified successor trustee  to act
  until  such time, if any, as a  successor shall have been appointed by the
  Agent as herein provided. Any qualified successor trustee so appointed  by
  such court shall immediately and without further act  be superseded by any
  qualified  successor   trustee  appointed   by  the   Agent.  Any  banking
  institution or  trust company becoming a successor trustee hereunder shall
  be  deemed  the  Indenture  Trustee for  all  purposes  hereof,  and  each
  reference herein  to the  Indenture Trustee shall thereafter  be deemed  a
  reference to such banking institution or trust company.

           (ii)  Any successor trustee, whether  appointed by a court or  by
  the Agent as provided in  subparagraph (b) (i), shall  execute and deliver
  to the  predecessor trustee an instrument accepting  such appointment, and
  thereupon such successor trustee, without further act, shall become vested
  with all the estates, properties, rights, powers, duties and trusts of the
  predecessor  trustee  in  the  trust hereunder  with  like  effect  as  if
  originally  named as  the Indenture Trustee  herein; and  such predecessor
  trustee  shall  execute and  deliver  an instrument  transferring to  such
  successor  trustee, upon  the trusts  herein  expressed, all  the estates,
  properties, rights, powers, duties and trusts of such predecessor trustee,
  and such predecessor trustee shall duly assign, transfer, deliver and  pay
  over to such successor  trustee any property or monies or other  things of
  value  then  held  by  such  predecessor trustee  upon  the  trusts herein
  expressed.

            (iii) Any  successor  trustee,  however  appointed,  shall  be  a
  trustee approved by MARAD in accordance with the provisions of Chapter 313
  of Title 46 of the United States Code.

           (iv)  Any bank into  which the Indenture Trustee may be merged or
  converted or with which it may be consolidated, or any bank resulting from
  any merger,  conversion on consolidation  to which  the Indenture  Trustee
  shall be a party,  or any bank to which substantially all  the business of
  the  Indenture Trustee may be  transferred, shall, subject to the terms of
  this Section 407(b), be the Indenture Trustee under this Indenture without
  any further act, provided the successor bank remains qualified.

           (v)   Within   sixty  days   of  the   effective   date  of   its
  resignation, the Indenture Trustee shall provide the Agent a statement and
  accounting as though it had been removed in accordance with Section 407(a)
  hereof.

     (c)   A successor  trustee  shall  be  appointed by  an  instrument  in
  writing which  shall state  the  effective date  on which  said  successor
  trustee shall  become the  Indenture Trustee hereunder and  the holder  of
  this instrument  and the  trust estate, which document  shall contain  the
  executed  acknowledgement of acceptance  by the  successor trustee  of the
  trust, the trust estate and the duties of the  Indenture Trustee as herein
  provided.

     The Indenture  Trustee or  any predecessor  trustee shall duly  assign,
  transfer, deliver  and pay over to any successor trustee  any property and
  monies or things of value  subject to the trust hereunder and  held by the
  Indenture Trustee or  any predecessor trustee, as  the case may be. Should
  any act or further instrument from the Indenture Trustee, any  predecessor
  trustee, or  the Lenders be  required by  any successor  trustee for  more
  fully  and certainly vesting  in and confirming to  such successor trustee
  such estates, properties, rights, remedies and trusts, then on request  by
  such successor  trustee any  and all  such acts  and instruments shall  be
  done, made, executed, acknowledged and delivered by the Indenture Trustee,
  any predecessor trustee, or the Lenders, as the case may be.

     (d)   Should for any  reason the Agent be unable  to locate a qualified
  successor trustee,  then prior  to ceasing to act  as trustee  or becoming
  disqualified to do so the Indenture Trustee shall cooperate with the Agent
  and the Lenders in the following:

           (i)   First,  petition   MARAD  for   approval  of  a   presently
  unqualified  bank  or  trust  company  satisfactory to  the  Agent  or the
  Majority Lenders and willing to act as trustee;

           (ii)  If MARAD  approval cannot  be obtained  for such  available
  unqualified  trustee  then  the  Agent  or the  Majority  Lenders  and the
  Indenture Trustee shall petition the United States District Court for  the
  Southern District of New York for instructions to the Indenture Trustee in
  order that the trust estate may be preserved and to prevent the Agent, the
  Majority Lenders  or the  Indenture Trustee from falling  in violation  of
  law.  To the  extent that such  may be required or  necessary, the parties
  hereto agree that  said Court has jurisdiction for this  purpose; however,
  if, in the interest of  justice, the said Court determines to transfer the
  matter to any other  United States court, the parties hereby agree  to the
  jurisdiction of such  transferee court. Any such petition shall  be served
  upon the parties hereto and MARAD, with a copy mailed to the chief counsel
  of MARAD and the Borrowers. The Indenture Trustee, the Agent, the Majority
  Lenders  and  any   successor  trustee  hereby  agree  to  abide   by  the
  instructions  of the  court issuing  same and  to  all acts,  execute such
  documents and instructions as may be required in connection therewith  and
  all other instruments and documents necessary to preserve the trust estate
  for  the benefit of the Lenders, as beneficiaries,  under the terms hereof
  as well as preserving the adequacy and enforceability of any interest held
  in the trust estate.

  Section 408.    Co-trustees and Separate Indenture Trustees.

     At  any  time   or  times,  for  the  purpose   of  meeting  the  legal
  requirements of any jurisdiction in  which any security may at the time be
  located, the  Borrowers and  the  Indenture Trustee  shall have  power  to
  appoint, and upon the  written request of the Indenture Trustee, the Agent
  or of the Majority Lenders, the Borrowers shall for such purpose join with
  the  Indenture  Trustee  in  execution, delivery  and  performance of  all
  instruments and  agreements necessary  or proper to appoint,  one or  more
  persons approved  by the  Indenture Trustee either to  act as  co-trustee,
  jointly  with the  Indenture  Trustee,  and, if  deemed necessary  by  the
  appointing party, as secured party with respect to all or any part of  the
  security,  or to  act as  separate  trustee and,  if  deemed necessary  as
  aforesaid, as secured party with respect to  any such property, in  either
  case with such powers as may be provided in the instrument of appointment,
  and  to vest  in such  person or  persons in  the capacity  aforesaid, any
  property, title, right or power deemed necessary or desirable, subject  to
  the other provisions of this Section. If the Borrowers do not join in such
  appointment within fifteen days after  the receipt by them of a request so
  to do, or in case  an Event of Default has occurred and is continuing, the
  Indenture Trustee acting alone shall have power to make such appointment.

     Any person appointed  as co-trustee or separate trustee hereunder shall
  satisfy the qualifications prescribed in clauses (i), (iii), (iv) and (vi)
  of Section 406.

     Should any written  instrument from the  Borrowers be  required by  any
  co-trustee or separate  trustee so appointed for more fully  confirming to
  such co-trustee or separate trustee such property, title, right or  power,
  any and all such instruments shall, on request, be executed,  acknowledged
  and delivered by the Borrowers.

     Every co-trustee or  separate trustee shall, to the extent permitted by
  law, but to such extent only, be appointed subject to the following terms,
  namely:

     (a)   All rights, powers,  duties and obligations hereunder  in respect
  of the  custody of  the Security Documents held  by the  Indenture Trustee
  hereunder, shall be exercised solely by the Indenture Trustee.

     (b)   The rights,  powers, duties and  obligations hereby conferred  or
  imposed upon the Indenture  Trustee in respect of  any property covered by
  such appointment  shall be  conferred  or imposed  upon and  exercised  or
  performed by the  Indenture Trustee or by  the Indenture Trustee  and such
  co-trustee  or separate  trustee  jointly,  as shall  be provided  in  the
  instrument appointing such co-trustee or  separate trustee, except to  the
  extent  that under any law or any jurisdiction in which any particular act
  is  to  be  performed,  the Indenture  Trustee  shall  be  incompetent  or
  unqualified to  perform such  act,  in which  event such  rights,  powers,
  duties and obligations shall be exercised and performed by such co-trustee
  or separate trustee.

     (c)   The Indenture  Trustee at any  time, by an  instrument in writing
  executed  by  it,  with  the  concurrence of  the  Borrowers  evidenced by
  separate resolutions  of the  board  of directors  of each  Borrower,  may
  accept the  resignation of  or remove any co-trustee  or separate  trustee
  appointed  under this Section, and, in case an Event of Default shall have
  occurred and  be continuing, the  Indenture Trustee  may act alone in  the
  execution,  delivery and  performance  of all  instruments  and agreements
  necessary or proper to effectuate such resignation or removal. A successor
  to any  co-trustee  or separate  trustee so  resigned  or removed  may  be
  appointed in the manner provided in this Section.

     (d)   No co-trustee or  separate trustee hereunder shall  be personally
  liable by  reason of any act  or omission of the Indenture  Trustee or any
  other such trustee hereunder.

     (e)   Any  notice of instruction delivered to  the Indenture Trustee by
  the Agent or  the Majority Lenders shall be  deemed to have been delivered
  to each such co-trustee and separate trustee.

                                   ARTICLE 5
                           SATISFACTION AND DISCHARGE

  Section 501.    General.

     If  the  Borrowers  shall  pay  or   cause  to  be  paid  all  of   the
  Indebtedness, then  this Indenture  and the liens, estate  and rights  and
  interest hereby and thereby created shall cease, determine and become null
  and  void,  and  the  Indenture  Trustee,  upon  written  request  of  the
  Borrowers,  accompanied  by  an  opinion  of  counsel  acceptable  to  the
  Indenture Trustee,  and at the  cost and  expense of the Borrowers,  shall
  forthwith cause  satisfaction and  discharge of  this Indenture  and shall
  execute and deliver to the Borrowers such instruments as may be necessary,
  duly  acknowledging the satisfaction and  discharge of  this Indenture and
  forthwith the estate,  right, title and interest of the  Indenture Trustee
  in and to  any property held by  it under this  Indenture or under  either
  Mortgage  shall thereupon cease,  determine and become null  and void, and
  the Indenture Trustee shall transfer the same to the Borrowers.

  Section 502.    Survival of Certain Obligations.

     Notwithstanding the satisfaction  and discharge of this  Indenture, (a)
  the liabilities and obligations of the Borrowers to the Indenture  Trustee
  under  Section  405 shall  survive,  and (b)  if a  Borrower's  trustee in
  bankruptcy or any Person under any applicable bankruptcy law shall recover
  all or  part of  the   Indebtedness payable  hereunder from  the Indenture
  Trustee or from any of the Lenders, this Indenture  and all other Security
  Documents  shall be deemed not  to have been  satisfied and discharged but
  shall continue to be in full force and effect to the extent of  the amount
  so recovered.

                                   ARTICLE 6
                            SUPPLEMENTAL INDENTURES

  Section 601.    Waivers  and  Supplemental  Indentures   With  Consent  of
  Lenders.

     This  Indenture may  not be waived,  modified, amended  or supplemented
  without the prior written consent of the Agent or the Majority Lenders.

  Section 602.    Execution of Supplemental Indentures.

     In  executing,  or  accepting  the  additional  trusts  created  by any
  indenture supplemental hereto or  the modifications thereby of the  trusts
  created  by this  Indenture, the  Indenture Trustee  shall be  entitled to
  receive, and (subject to Sections 401 and 601) shall be fully protected in
  relying  upon, an  opinion of counsel  of the  Borrowers stating  that the
  execution  of such  Supplemental Indenture  is authorized or  permitted by
  this  Indenture. The Indenture Trustee may, but shall not be obligated to,
  enter into any  such Supplemental  Indenture which  affects the  Indenture
  Trustee's  own rights,  duties  or  immunities  under  this  Indenture  or
  otherwise.

  Section 603.    Effect of Supplemental Indentures.

     Upon  the  execution   of  any  indenture  supplemental   hereto,  this
  Indenture shall be modified in accordance therewith, and such Supplemental
  Indenture shall form a part of this Indenture for all purposes.

                                   ARTICLE 7
                 INSTRUCTIONS OF THE AGENT OR MAJORITY LENDERS

  Section 701.    Instructions of the Agent or Majority Lenders.

     (a)   Any request,  demand, authorization, direction,  notice, consent,
  waiver of  or other action  required or permitted by this  Indenture to be
  given by the  Agent or the Majority Lenders (sometimes referred  to herein
  as "Instructions")  shall be given  in accordance  with Section 102.   The
  Indenture Trustee and  the Borrowers shall be  entitled to assume that any
  Instructions so given have been duly authorized.  No instructions shall be
  given which are in violation of this Indenture (or the Credit Agreement or
  any of the Security  Documents, as defined in the Credit Agreement)  or in
  violation of any applicable laws. 

     (b)   Unless  and  until  the Indenture  Trustee  shall  have  received
  conflicting  Instructions  from the  Agent  or the  Majority Lenders,  any
  request,  demand,  authorization, direction,  notice,  consent,  waiver or
  other action  by the Agent or  the Majority Lenders  shall bind  the other
  Lenders  in  respect of  anything  done  or suffered  to  be  done  by the
  Indenture Trustee or either Borrower in reliance thereon.

                                   ARTICLE 8
                            LIMITATION OF LIABILITY

  Section 801.    Limitation of Liability of Wilmington Trust Company.

     It is expressly understood  and agreed by the parties  hereto that this
  Indenture is  executed  and delivered  by  Wilmington  Trust  Company  not
  individually but solely as Indenture Trustee and  nothing contained herein
  shall be construed  as creating any liability on Wilmington  Trust Company
  individually, including any covenant either express or implied herein, all
  such liability, if any, being expressly waived by all parties hereto.   

     IN WITNESS  WHEREOF, the parties  hereto have caused  this Indenture to
  be duly executed on the day and year first above written.


                              READING & BATES DRILLING CO.



                              By:  ______________________________
                                    Title:


                              READING & BATES EXPLORATION CO.


                              By:  ________________________________
                                   Title:


                              WILMINGTON   TRUST   COMPANY,   not   in    its
                              individual capacity     but solely as Indenture
                              Trustee  



                              By:  ______________________________
                                    Title:


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

                                ACKNOWLEDGEMENT


  STATE OF NEW YORK           )
                              ) S.S.
  COUNTY OF NEW YORK          )


  On  this  ______  day  of  November, 1995  before  me  personally appeared
  _________________ to  me known who  being by me duly sworn  did depose and
  say   that  he   resides  at   ___________________________,  that   he  is
  __________________  for  READING &  BATES  DRILLING  CO.,  the corporation
  described  in and  which executed  the foregoing  instrument; and  that he
  signed his name thereto  by order of the Board  of Directors of READING  &
  BATES DRILLING CO.

                           __________________________
                                 Notary Public

-----------------------------------------------------------------------------
 
                                ACKNOWLEDGEMENT


  STATE OF NEW YORK           )
                              ) S.S.
  COUNTY OF NEW YORK          )


  On  this  ______  day  of  November, 1995  before  me  personally appeared
  _________________ to  me known who  being by me duly sworn  did depose and
  say   that  he   resides  at   ___________________________,  that   he  is
  __________________ for  READING &  BATES EXPLORATION  CO., the corporation
  described  in and  which executed  the foregoing  instrument; and  that he
  signed his name thereto  by order of the Board  of Directors of READING  &
  BATES EXPLORATION CO.

                           __________________________
                                 Notary Public

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

                                ACKNOWLEDGEMENT

  STATE OF DELAWARE           )
                              ) S.S.
  COUNTY OF NEW CASTLE        )


  On  this  ______  day  of  November, 1995  before  me  personally appeared
  _________________ to  me known who  being by me duly sworn  did depose and
  say   that  he   resides  at   ___________________________,  that   he  is
  __________________ for WILMINGTON TRUST COMPANY, the corporation described
  in and  which executed  the foregoing instrument;  and that  he signed his
  name  thereto by  order of  the  Board of  Directors  of WILMINGTON  TRUST
  COMPANY.

                           __________________________
                                 Notary Public