EXHIBIT 10.164

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                                LOAN AGREEMENT

                         Dated as of December 14, 1996

                                  $38,000,000

                                TRB CORPORATION
                                 as Borrower,


                        READING & BATES (U.K.) LIMITED

                                      and

                            NISSHO IWAI EUROPE PLC
                                   as Lender


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                               TABLE OF CONTENTS

                                                                          Page

Section 1.  Definitions and Accounting Matters  . . . . . . . . . . . . . .  1
      1.01  Certain Defined Terms . . . . . . . . . . . . . . . . . . . . .  1
      1.02  Accounting Terms and Determinations . . . . . . . . . . . . . . 10

Section 2.  Commitment  . . . . . . . . . . . . . . . . . . . . . . . . . . 10
      2.01  Committed Loan  . . . . . . . . . . . . . . . . . . . . . . . . 10
      2.02  Changes of Commitment . . . . . . . . . . . . . . . . . . . . . 10
      2.03  Fees  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
      2.04  Lending Offices . . . . . . . . . . . . . . . . . . . . . . . . 11
      2.05  The Note  . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
      2.06  Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . 11

Section 3.  Borrowings and Payments . . . . . . . . . . . . . . . . . . . . 11
      3.01  Borrowings  . . . . . . . . . . . . . . . . . . . . . . . . . . 11
      3.02  Optional Prepayments. . . . . . . . . . . . . . . . . . . . . . 11
      3.04  Interest  . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
      3.05  Payments  . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
      3.06  Certain Notices . . . . . . . . . . . . . . . . . . . . . . . . 13
      3.07  Set-off; Sharing of Payments  . . . . . . . . . . . . . . . . . 13

Section 4.  Yield Protection and Illegality . . . . . . . . . . . . . . . . 13
      4.01  Additional Costs  . . . . . . . . . . . . . . . . . . . . . . . 13
      4.02  Illegality  . . . . . . . . . . . . . . . . . . . . . . . . . . 14
      4.03  Compensation  . . . . . . . . . . . . . . . . . . . . . . . . . 14
      4.04  Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Section 5.  Conditions Precedent  . . . . . . . . . . . . . . . . . . . . . 15
      5.01  Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Section 6.  Representations and Warranties  . . . . . . . . . . . . . . . . 18
      6.01  Corporate Existence . . . . . . . . . . . . . . . . . . . . . . 18
      6.02  Information; Material Adverse Change  . . . . . . . . . . . . . 19
      6.03  Litigation  . . . . . . . . . . . . . . . . . . . . . . . . . . 19
      6.04  No Breach . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
      6.05  Corporate Action  . . . . . . . . . . . . . . . . . . . . . . . 19
      6.06  Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
      6.07  ERISA and Pension Plans . . . . . . . . . . . . . . . . . . . . 20
      6.08  Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
      6.09  Ownership and Use of Properties . . . . . . . . . . . . . . . . 20
      6.10  Environmental Matters . . . . . . . . . . . . . . . . . . . . . 20

Section 7.  Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
      7.01  Statements  . . . . . . . . . . . . . . . . . . . . . . . . . . 22
      7.02  Taxes and Claims  . . . . . . . . . . . . . . . . . . . . . . . 24
      7.03  Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
      7.04  Maintenance of Existence; Conduct of Business . . . . . . . . . 24
      7.05  Maintenance of and Access to Properties . . . . . . . . . . . . 24
      7.06  Compliance with Applicable Laws . . . . . . . . . . . . . . . . 24
      7.07  Litigation  . . . . . . . . . . . . . . . . . . . . . . . . . . 24
      7.08  Indebtedness  . . . . . . . . . . . . . . . . . . . . . . . . . 25
      7.09  Mergers, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . 25
      7.10  Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
      7.11  Investments . . . . . . . . . . . . . . . . . . . . . . . . . . 25
      7.12  Transactions with Affiliates  . . . . . . . . . . . . . . . . . 25
      7.13  Guarantees  . . . . . . . . . . . . . . . . . . . . . . . . . . 25
      7.14  Further Assurances  . . . . . . . . . . . . . . . . . . . . . . 26
      7.15  Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
      7.16  ERISA and Pension Plan Compliance . . . . . . . . . . . . . . . 26
      7.17  Environmental Matters . . . . . . . . . . . . . . . . . . . . . 26
      7.18  Performance of Transaction Documents  . . . . . . . . . . . . . 27
      7.19  Amendment of Transaction Documents  . . . . . . . . . . . . . . 27
      7.20  Operation of Vessel . . . . . . . . . . . . . . . . . . . . . . 27
      7.21  Sale or Modification of Vessel  . . . . . . . . . . . . . . . . 27
      7.22  Acknowledgment of Charter Assignment  . . . . . . . . . . . . . 27

Section 8.  Defaults  . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
      8.01  Events of Default.    . . . . . . . . . . . . . . . . . . . . . 27
      8.02  Application of Proceeds . . . . . . . . . . . . . . . . . . . . 30

Section 9.  Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . 30
      9.01  Waiver  . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
      9.02  Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
      9.03  Expenses, Etc.  . . . . . . . . . . . . . . . . . . . . . . . . 31
      9.04  Indemnification . . . . . . . . . . . . . . . . . . . . . . . . 31
      9.05  Amendments, Etc.  . . . . . . . . . . . . . . . . . . . . . . . 32
      9.06  Successors and Assigns  . . . . . . . . . . . . . . . . . . . . 32
      9.07  Survival  . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
      9.08  Captions and Final Agreement  . . . . . . . . . . . . . . . . . 33
      9.09  No Usury Intended . . . . . . . . . . . . . . . . . . . . . . . 33
      9.10  Invalidity  . . . . . . . . . . . . . . . . . . . . . . . . . . 34
      9.11  No Consequential Damages  . . . . . . . . . . . . . . . . . . . 34
      9.12  GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL 34
      9.13  Agent for Service of Process  . . . . . . . . . . . . . . . . . 34

Exhibit 2.05            Note
Exhibit 3.01            Drawdown Notice
Exhibit 6.11            Insurance
Exhibit 7.08            Terms of Subordinated Debt
Exhibit A       Form of Comfort Letter
Exhibit B       Form of Opinion of Wayne K. Hillin
Exhibit C       Form of Opinion of Baker & Botts, L.L.P.
Exhibit D       Form of Opinion of Icaza,, Gonzalez-Ruiz & Aleman
Exhibit E       Form of Opinion of Denton Hall
Exhibit F       Form of Opinion of Cayman Islands Counsel
Exhibit G       Form of Opinion of MacFarlanes
Exhibit H       Form of Participation Letter
Exhibit I       Form of Acknowledgment
Exhibit J       Form of Option Agreement
Exhibit K       Form of Ship Mortgage
Exhibit L       Form of Assignment of Charter
Exhibit M       Form of Collateral Assignment
Exhibit N       Form of Amendment to Bareboat Charter Agreement
Exhibit O       Form of Assignment of Insurances
Exhibit P       Form of Debentures

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                                LOAN AGREEMENT


         This  LOAN AGREEMENT  dated as of  December 14,  1996 is  between TRB
HOLDING CORPORATION, a Delaware corporation  (the  Borrower ), READING & BATES
(U.K.) LIMITED, a  limited liability company organized  under the laws  of the
United Kingdom ( Reading  & Bates  (U.K.) ; the Borrower  and Reading &  Bates
(U.K.),  individually,  a  Company   and  collectively,  the  Companies )  and
NISSHO IWAI EUROPE PLC, an English corporation (the  Lender ).

         WHEREAS, the Borrower has  requested the Lender to make  available to
the  Borrower, subject to the terms and  conditions stated herein, a term loan
facility of  $38,000,000 to be  secured by a first  naval mortgage on  the oil
production  vessel  Seillean ,  a vessel  of 50,928  gross tons,  Call Letters
3FPF6  and Registration No. 25519-PEXT and with  the home port of Panama City,
the Republic of Panama (the  Vessel ), all revenue produced by such Vessel and
all rights of the Borrower or its Affiliates (as defined below) in any charter
of the Vessel; and 

         WHEREAS, the  Lender is willing,  upon and subject  to the  terms and
conditions hereof, to make such loan facilities available;

         NOW THEREFORE, the parties hereto agree as follows:

         Section 1.    Definitions and Accounting Matters.

         1.01     Certain Defined Terms.   As used herein, the following terms
shall have the  following meanings (all terms defined in  this Section 1.01 or
in other  provisions  of this  Agreement  in the  singular  to have  the  same
meanings when used in the plural and vice versa):

          Advance  means any advance  to the Borrower comprising a  portion of
the Loan made pursuant to Section 2.01 hereof.

          Affiliate   means, as to any Person, any other Person which directly
or indirectly controls, or is under  common control with, or is controlled by,
such  Person.    As  used  in  this  definition,   control   (including,  with
correlative meanings,   controlled by  and  under common  control with ) shall
mean possession,  directly or  indirectly, of  power  to direct  or cause  the
direction of management or policies  (whether through ownership of  securities
or  partnership or  other  ownership  interests,  by contract  or  otherwise),
provided that, in any event, any Person which owns directly or indirectly more
than 50%  of the securities having  ordinary voting power for  the election of
directors or other  governing body of  a corporation or  more than 50% of  the
partnership or other ownership interests of  any other Person (other than as a
limited  partner  of  such other  Person)  will  be  deemed  to  control  such
corporation or other Person.

          Agreement  means  this Loan Agreement, as the  same may from time to
time be amended or modified in accordance with the terms hereof.

          Applicable Lending Office  means  the lending  office of  the Lender
(or  of an  Affiliate of  the Lender)  below its  name on the  signature pages
hereof or such other office  of the Lender (or of an Affiliate  of the Lender)
as Lender may  from time  to time specify  in writing to  the Borrower as  the
office by which the Loan is to be made and/or issued and maintained.

          Applicable Margin  means 2% per annum. 

          Assignment  and Assumption  Agreement  means the  Novation Agreement
dated  on or about  the Drawdown Date  among the Borrower,  TRB Subsidiary and
RBDC.

          Assignment of  Charter  means  the General Assignments  made by  the
Borrower and  Reading & Bates  (U.K.) in favor of  the Lender, in  the form of
Exhibit L attached hereto or other collateral documents. 

          Assignment of Insurance Proceeds  means the Assignment of Insurances
made by the Companies in favor of  the Lender respecting their interest in the
Vessel, in the form of Exhibit O.

          Availability Period  means  the period  from and including  the date
hereof to but excluding the Commitment Termination Date.

          Bankruptcy Law  means any creditors  right, debtor relief or similar
laws  of  the United  States,  England  or the  Republic  of  Panama or  other
applicable jurisdiction.

          Bareboat Charter  means  the Bareboat Charter Agreement  dated as of
August 30, 1996  between Reading &  Bates (U.K.)  and RBDC  as amended  by the
Bareboat Charter Amendment, as such agreement may be further amended from time
to time in accordance with the terms hereof.

          Bareboat  Charter Amendment   means  the amendment  to the  Bareboat
Charter dated as  of December 14, 1996 between RBDC and  RB (U.K.) in the form
of Exhibit N.

          BP   means  BP  Exploration  Operating Company  Limited,  a  company
organized under the laws of England.

          Britoil   means Britoil PLC, a  company organized under  the laws of
England.

          Britoil (Beta)   means Britoil  (Beta) Limited, a  company organized
under the laws of England.

          Business Day  means any  day other  than a day  on which  commercial
banks are authorized or required to close in New York City or London.

          Capital Lease Obligations  means, as to any Person, the  obligations
of  such Person  to pay  rent or  other  amounts under  a lease  of (or  other
agreement  conveying the  right to  use) real  and/or personal  property which
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP (including Statement of Financial
Accounting  Standards No. 13 of the Financial Accounting Standards Board) and,
for purposes  of this Agreement, the  amount of such obligations  shall be the
capitalized amount thereof, determined in accordance with GAAP (including such
Statement No. 13).

          Cash Flow  means, for any period, all cash received by the Companies
from any Charter  Agreement, including  the Donan Charter  Agreement, and  any
other sources  in respect of its  ownership or operation of  the Vessel during
such  period, less  all  the Borrower s  Operating  Expenses and  Dry  Docking
Expenses for such period.

          Charter Agreement   means the Donan  Charter Agreement or  any other
charter agreement respecting the chartering of Vessel to any other Person.

          Charter  Novation  Agreements    means  collectively,  the  Novation
Agreement dated July 10,  1996 among BP,  Britoil and  Britoil (Beta) and  the
Novation Agreement  dated August 30,  1996 among  Britoil (Beta), Britoil  and
Reading & Bates (U.K.).

          Closing Date   means the  date that this  Agreement is  executed and
delivered.

          Code  means the  Internal Revenue Code  of 1986, as amended,  or any
successor statute and the regulations promulgated thereunder.

          Collateral  Assignment  means  the Collateral Assignment  of Deposit
Account,  Pledge and Security Agreement  made by the Companies, the Lender and
the Lockbox Bank, in the form of Exhibit M attached hereto.

          Comfort Letter   means the letter from Reading & Bates to the Lender
in the form of Exhibit A attached hereto.

          Commitment   means   the  obligation,  subject  to   the  terms  and
conditions of  this Agreement, of  the Lender to make  a loan to  the Borrower
hereunder  up to an aggregate amount equal  to $38,000,000, as such amount may
be reduced pursuant to Section 2.02 hereof.

          Commitment  Termination Date   means  January 31, 1997,  unless  the
Commitment is sooner terminated pursuant to Section 2.02 hereof.

          Debentures  means the Debentures in the form of Exhibit P hereto.

          Default  means an Event of Default or an event which  with notice or
lapse  of time  or  both would,  unless cured  or waived,  become an  Event of
Default.

          Dollars  and  $  means lawful money of the United States of America.

          Donan Charter Agreement  means the Amended Agreement dated March 30,
1995 between  Britoil for itself and  on behalf of the  Donan Participants and
BP,  as modified  pursuant  to the  Charter  Novation Agreements  under  which
Reading & Bates  (U.K.) has assumed the  rights and obligations of  BP, as the
same may from time to time  be further amended or modified in accordance  with
the terms hereof.

          Donan Participants  means Britoil, Conoco (U.K.) Limited, OMV (U.K.)
Limited,  Croft Exploration Limited,  Pict Petroleum plc  and their successors
and assigns as parties  to the Unitisation and Unit  Operating Agreement dated
September 27, 1993, as amended.

          Drawdown  Date  means  the date  of the  drawdown of  the Commitment
which shall occur no later than January 31, 1997.

          Drawdown Notice   means  a  notice of  borrowing  delivered  by  the
Borrower pursuant to Section 3.01 hereof.

          Dry Docking Expense Account   has the meaning assigned to  such term
in the Collateral Assignment.

          Dry Docking Expenses  means a daily accrual of UK 1,829 per day that
the Vessel  is under hire to  cover drydock expenses for  the Vessel; provided
that no Dry Docking Expenses shall be accrued if the aggregate amount of funds
held in the Dry Docking Expense Account exceeds  UK 1,335,356.

          Environmental Loss  means any claim, demand, fine, penalty, cause of
action,  liability, damage,  forfeiture,  judgment or  loss, remediation,  and
other  clean up  costs  and  natural  resource  damages  respecting  Hazardous
Substances  or damage  to  the environment  under  applicable laws  (including
without limitation, reasonable attorneys   fees, defense and settlement costs,
and other reasonable costs and expenses incident thereto).

          ERISA  means the Employee Retirement Income Security Act of 1974, as
amended from time to time.

          ERISA Affiliate  shall mean any corporation which is a member of the
same  controlled group  of corporations as  the Company within  the meaning of
section 414(b)  of the Code, or  any trade or  business which is  under common
control with the Company within the meaning of section 414(c) of the Code.

          Event of Default  has the  meaning assigned to such term  in Section
8.01 hereof.

          Excess Cash  Flow   means,  for any  period, Cash Flow  less Working
Capital.

          GAAP  means United  States generally accepted  accounting principles
as in effect from time to time consistently applied.

          Governmental Approvals  has the meaning specified in Section 6.10(a)
hereof.

          Governmental Authority   means the United States  of America, United
Kingdom,  the Republic  of  Panama,  any  state  thereof,  and  any  political
subdivision  of any  of the  foregoing, including  but not limited  to courts,
departments,    commissions,   boards,    bureaus,    agencies,    or    other
instrumentalities.

          Guaranteed  Obligation    by  any  Person   means  any   obligation,
contingent or  otherwise, of such  Person directly or  indirectly guaranteeing
any  Indebtedness  of any  other Person  or  any other  obligation,  direct or
indirect, contingent or otherwise, of any other Person (a) to  purchase or pay
(or advance or supply funds for  the purchase or payment of) such Indebtedness
(whether  arising  by  virtue  of partnership  arrangements,  by  agreement to
keep-well, to purchase assets, goods, securities or services, to  take-or-pay,
or  to maintain  financial  statement  conditions  or  otherwise,  other  than
agreements to purchase goods at  an arm s length price in the  ordinary course
of business)  or other  obligation  or (b)  entered into  for  the purpose  of
assuring in  any  other  manner  the holder  of  such  Indebtedness  or  other
obligation of  the payment thereof or  to protect such holder  against loss in
respect  thereof (in  whole or  in part);  provided  that the  term Guaranteed
Obligation shall not  include endorsements  for collection or  deposit in  the
ordinary course of business.

          Hazardous Substance   means waste (in any form or combination) which
is any toxic,  caustic or otherwise hazardous  substance, including petroleum,
its  derivatives,   by-products  and   other  hydrocarbons,  regulated   under
applicable environmental statutes.

          Indebtedness    means,  as   to   any  Person   (determined  without
duplication):   (a) indebtedness of such Person for borrowed money (whether by
loan or the issuance and sale of debt securities) or for the deferred purchase
or acquisition price of  property or services, other than accounts payable and
accrued liabilities (other than  for borrowed money) incurred in  the ordinary
course of business of a term no longer than  120 days; (b) obligations of such
Person  in  respect of  letters  of credit  or  similar instruments  issued or
accepted by  banks and other  financial institutions for  the account of  such
Person;  (c) Capital  Lease Obligations  of such  Person; (d)  Operating Lease
Obligations  of such  Person;  (e) obligations  of such  Person  to redeem  or
otherwise retire shares of  capital stock of such Person; (f)  indebtedness of
others of the type described in clause (a), (b), (c), (d) or (e) above secured
by  a Lien  on the  property of  such Person,  whether or  not the  respective
obligation so secured has been assumed by such Person; and (f) indebtedness of
others of the  type described in clause (a),  (b), (c), (d), (e) or  (f) above
which is a Guaranteed Obligation of such Person.

          Indemnity  Matters    shall  mean   any  and  all   actions,  suits,
proceedings (including any investigations,  litigation or inquiries),  claims,
demands and  causes of  action made  or threatened against  a Person,  and, in
connection therewith,  all reasonable  costs, losses, liabilities,  damages or
expenses of any kind or nature whatsoever incurred by such Person.

          Interest Payment Date  means the last day of each Interest Period.

          Interest Period  means the period commencing on the date the Advance
is (a) made or (b) continued, and  ending on the fifteenth (15th) calendar day
in  the next month  thereafter, provided that the  first interest period shall
end on February 15, 1997.  If such fifteenth (15th) day is not a Business day,
the Interest Period shall be extended to the next succeeding Business Day.

          Investments  has the meaning  assigned to such term in  Section 7.11
hereof.

          LIBOR  means, for each Interest Period, the arithmetic mean (rounded
upward, if necessary,  to the nearest  whole multiple  of 1/16 of  1%) of  the
one-month  London  Inter-Bank Offered  Rates  for  deposits  in United  States
Dollars  as quoted  on Reuters  monitor page   LIBO  at  or about  11:00 a.m.,
London time on  the date  that is two  (2) London Business  Days prior to  the
first day of such Interest Period.  If only one such rate appears, LIBOR shall
be  such rate.   If  no such rates  appear, LIBOR  shall be  the rate (rounded
upwards if necessary to the nearest one  sixteenth of one per cent) in respect
of any Interest Period  determined by the Lender on the basis  of the rates at
which deposits in Dollars  are offered by the Reference Bank at or about 11:00
a.m.,  London time, on the day  that is two (2) London  Business Days prior to
the first day of such Interest Period or such other relevant period or at such
date, to prime  banks in London interbank  market for one (1)  month period on
that Interest Payment Date and in amount equal to the outstanding Loan balance
(after giving effect to any Advance) or such other relevant amount outstanding
as of the first day of such Interest Period or such other relevant period.

          Lien   means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the  purposes of this Agreement, any Person shall be deemed to own subject
to  a Lien any asset  which such Person  has acquired or holds  subject to the
interest  of a vendor or lessor  under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset.

          Liquid Investments   means  (a)  certificates  of  deposit  maturing
within 30 days  of the acquisition thereof or demand  deposits, denominated in
Dollars  and, in each  case, issued  by the  Lockbox Bank or  a bank  or trust
company  having combined  capital and  surplus of  at least  $250,000,000, and
having (or the holding  company controlling such institution having)  a short-
term rating of A-2 or better by Standard & Poors Corporation, or P-2 or better
by  Moody s Investor Services, Inc.,  or a substantially  equivalent rating by
any other rating agency satisfactory to the Lender; and (b) obligations issued
or guaranteed by the United  States of America, with maturities not  more than
one year after the date of issue.

          Loan   means  the loan  consisting of  the  Advance provided  for by
Section 2.01 hereof.

          Loan  Documents   means  this  Agreement,  the  Note,  the  Security
Instruments and any modifications, renewals or extensions thereof.

          Lockbox  means the account maintained  at the Lockbox Bank  pursuant
to the Collateral Assignment.

          Lockbox Bank  means  Sanwa Bank  Trust Company of  New York, or  any
other depositary  selected by the Lender  and approved by the  Borrower, which
approval shall not be unreasonably withheld or delayed.

          London Business Day  means any day in which commercial banks are not
authorized or required to close in London, England.

          Maturity Date  means, subject to Section 8.01, February 15, 2002.

          Maximum  Rate   means  the  maximum non-usurious  rate  of  interest
permitted by applicable law, as defined in Section 9.09.

          Minimum Payment  means,  for each  Repayment Date, an  amount to  be
repaid by the Borrower on the Loan on such Repayment Date, that shall be equal
to the sum of: (a) the  principal amount of the Loan outstanding on  the prior
Repayment Date divided by  the number of Repayment Dates  remaining during the
period from and  including such Repayment Date  to and including  the Maturity
Date plus (b)  the accrued and unpaid interest  on the Loan to  such Repayment
Date.

          Monthly  Statement  means, for any month, the bank account statement
for the Lockbox, and a report relating to the Vessel including but not limited
to  the number  of actual Operating  Days of  the Vessel  for such  month, the
status  of operations when  the Vessel is  on-hire and prospectus  of the next
employment of the Vessel when the Vessel is on off-hire;

          Multiemployer Plan   shall mean any  Plan which is  a  multiemployer
plan  (as such term is defined in section 4001(a)(3) of ERISA).

          New York Business Day   means any day in which commercial  banks are
not authorized or required to close in New York, New York.

          NIC  means Nissho Iwai Corporation, a Japanese corporation.

          NIC Parties  means NIC and the Lender.

          Note  has the meaning assigned to such term in Section 2.05 hereof.

          Obligations   means all obligations of the Borrower now or hereafter
existing  under the  Loan Documents,  whether for  principal,  interest, fees,
indemnities, costs, expenses or otherwise.

          Operating  Days   means,  for  any  period,  the  actual  number  of
operating days of the Vessel in that period.

          Operating Expenses  means, for any period, the expenses of operating
the Vessel for  such period  including direct payroll  and employee  benefits,
Vessel  maintenance,  catering,  freight,  other direct  operating  costs  and
general  and  administrative  expenses  as  allocated  in  a  manner  mutually
agreeable to  the Lender  and the  Borrower which  shall be equal  to a  daily
average  in the  aggregate  of  UK 18,209 (or  $30,000  as  determined by  the
currency  of  the Charter  Agreement in  effect during  such period)  for each
Operating Day in such period.

          Operating  Lease  Obligations  shall  mean,  as to  any  Person, the
obligations of such  person to pay rent or other amounts  under a lease of (or
other  agreement conveying  the right  to use)  real and/or  personal property
which obligations are  not required to  be classified and  accounted for as  a
liability for  a capital  lease on a  balance sheet  of such  Person and,  for
purposes  of this  Agreement, the  amount  of such  obligations  shall be  the
discounted present value of the lease  payments, discounted in the same manner
a capital lease would be discounted according to GAAP.

          Option   Agreement   means   the  Option   Agreement  dated   as  of
December 14, 1996 between the Borrower, TRB Subsidiary and  NIC, substantially
in the form of Exhibit J attached hereto. 

          Overdue Interest Rate   means, in  respect of any  principal of,  or
interest  on, the Loan or any  other amount payable by  the Borrower under any
Loan  Document which  is not  paid when  due (whether  at stated  maturity, by
acceleration or otherwise), a rate per  annum during the period commencing  on
the due date  until such amount is paid  in full equal to the sum  of LIBOR in
effect for such period plus 5% per annum.

          Participation Letter  means the  letter from Reading & Bates  to NIC
in the form of Exhibit H attached hereto.

          Partnership  has the  meaning assigned  to such term  in the  Option
Agreement.

          Partnership  Agreement  means  the organizational  agreement entered
into pursuant to the Option Agreement to form the Partnership.

          Permitted  Liens   means  (a)   liens  created  under  the  Security
Instruments or otherwise  in favor of  the Lender; (b)  maritime liens on  the
Vessel incurred and payable in the  ordinary course of business and arising by
operation  of  law  but  which shall  not  exceed  $500,000  in the  aggregate
outstanding at  any time  and none  of which shall  be past  due unless  being
contested in good faith and by  appropriate proceedings and for which adequate
reserves have been established on the books of the Borrower in accordance with
GAAP, provided  provision is then made  to the satisfaction of  the Lender for
the eventual payment  thereof in the event it is found that such is payable by
the  Borrower; (c) liens for taxes, assessments or other governmental charges,
levies or  claims not  at the  time delinquent  or thereafter  payable without
penalty or being  contested in good faith, and for  which adequate reserves in
accordance with  GAAP have been made  for the eventual payment  thereof in the
event it is found that such is payable by the Borrower; (d) liens of carriers,
warehousemen,  mechanics, materialmen,  vendors or  landlords incurred  in the
ordinary course  of business for sums  not overdue or being  contested in good
faith  and by  appropriate  proceedings, provided  provision  is made  to  the
satisfaction  of the Borrower for  which adequate reserves  in accordance with
GAAP  have been made for the eventual payment thereof in the event it is found
that  such  is payable  by the  Borrower;  (e) zoning  restrictions, licenses,
easements,  rights-of-way,  and  other  similar  charges  or  encumbrances  or
restrictions that are not Liens against any interest in the Vessel and further
are not interfering in any material respect with the business  of the Borrower
incurred in the ordinary course of business;

          Person  means an individual,  a corporation, a company,  a voluntary
association,  a partnership,  a  trust, an  unincorporated  organization or  a
government or any agency, instrumentality or political subdivision thereof, or
any other form of entity.

          Plan  means an  employee pension  benefit plan which  is covered  by
Title IV  of ERISA or subject  to the minimum funding  standards under Section
412 of the Code.

          Property   means  any interest  in any  kind  of property  or asset,
whether real, personal or mixed, or tangible or intangible.

          R&B Drilling   means  Reading  & Bates  Drilling  Co.,  an  Oklahoma
corporation.

          R&B  Parties  means Reading & Bates, RBDC, TRB Subsidiary, Reading &
Bates (U.K.) and any other Subsidiary of  Reading & Bates that is a party  to,
an  assignee of, or subcontractor respecting, any Transaction Document, but in
any event not the Borrower.

          Reading &  Bates   means Reading  &  Bates Corporation,  a  Delaware
corporation.

          RBDC  means Reading & Bates Development Co., a Delaware corporation.

          Reference Bank  means Sanwa Bank Limited, London Branch.

          Regulatory Change  means, with respect to the  Lender, any change on
or after  the date of  this Agreement  in United States,  English, Panamanian,
federal, state or foreign laws or regulations  or the adoption or making on or
after  such  date of  any  interpretations,  directives  or  written  requests
applying to  a class of banks  including the Lender or  its Applicable Lending
Office (whether or not having the force of law) of or  under any United States
federal  or state, English, Panamanian or any  foreign, laws or regulations by
any  court   or  governmental   or  monetary   authority   charged  with   the
interpretation or administration thereof.

          Repayment  Date  means subject to Section 8.01, the last day of each
Interest Period.

          Security   Instruments    means,   collectively,    the   Collateral
Assignment,  the  Assignment  of  Charter, the  Debenture,  the  Subordination
Agreement,  the Ship  Mortgage,  the  Assignment  of Insurance  Proceeds,  the
Comfort Letter   and any other agreements which may  be delivered from time to
time to secure the  obligations of the Borrower hereunder, and any amendments,
modifications, renewals or extensions thereof.

          Ship Mortgage   means the  First Naval Mortgage  dated December  14,
1996  made by the Borrower  in favor of the Lender,  as amended or modified in
accordance with this Agreement, in the form of Exhibit K attached hereto.

          Subordination  Agreement  means  the Subordination  and Postponement
Letter dated December 14, 1996, among Reading & Bates (U.K.), R&B Drilling and
the Lender.

          Subsidiary  means, with  respect to any  Person (the  parent ),  any
corporation or  other entity of which  at least a majority  of the outstanding
shares of  stock  or other  ownership interests  having by  the terms  thereof
ordinary voting power  to elect a majority  of the board of  directors of such
corporation  or other  governing body  of such  other entity  (irrespective of
whether  or  not at  the time  stock of  any  other class  or classes  of such
corporation, or another ownership interest of such other entity, shall have or
might have voting power  by reason of the happening of any  contingency) is at
the time directly  or indirectly owned or  controlled by the parent  or one or
more of the Subsidiaries of the parent or by the parent and one or more of the
Subsidiaries of the parent.

          Taxes  means any and  all present or future taxes,  levies, imposts,
deductions,  charges or  withholdings, and  any interest,  penalties or  other
liabilities with respect  thereto, excluding, in  the case of the  Lender, (i)
taxes imposed on its net income and (ii) franchise or similar taxes imposed on
it,  by the  jurisdiction (or  political subdivision  thereof) in which  it is
organized or has an Applicable Lending Office.

          Transaction Documents  mean  collectively, the  Loan Documents,  the
Vessel  Sales Agreement  (and any  guarantee of  any R&B  Parties  obligations
thereunder), the  Option Agreement, the Partnership  Agreement, Assignment and
Assumption Agreement,  the Bareboat Charter, the  Charter Novation Agreements,
any  Charter  Agreement (and  any guarantee  of  any R&B  Parties  obligations
thereunder) and the Donan Charter Agreement.

          TRB  Subsidiary   means  TRB  Subsidiary   Corporation,  a  Delaware
corporation.

          Uniform Commercial  Code  means  the Uniform Commercial  Code as  in
effect in the state or states referred to.

          Vessel  Sales  Agreement   means  the  Agreement  for the  Sale  and
Purchase of OPV   Seillean  dated as  of May 31,  1996 between Britoil  (Beta)
Limited and  RB Drilling Co.,  as novated  under the Novation  Agreement dated
August 30, 1996 among Britoil (Beta), RB Drilling Co. and RBDC, and as further
amended or modified in accordance with this Agreement.

          Working Capital  means,  for any  period, ten percent  (10%) of  the
Cash Flow.

         1.02     Accounting  Terms  and  Determinations.    Unless  otherwise
specified herein, all accounting  terms used herein shall be  interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all  financial statements and certificates and reports as to financial matters
required to be delivered hereunder shall be prepared, in accordance with GAAP.

         Section 2.    Commitment.

         2.01     Committed Loan.  The Lender agrees, on the terms and subject
to the terms and  conditions of this Agreement,  from time to time  during the
Availability  Period,  to make  an  Advance to  the Borrower  in  an aggregate
principal amount up to but not  exceeding the Commitment, as reduced from time
to time pursuant to Section 2.02 hereof.   The Commitment is not revolving  in
nature and the Borrower  may not reborrow under  this Section 2.01 any  amount
that has been previously repaid or prepaid.

         2.02     Changes of Commitment.

         (a)      Mandatory   Reductions.     Unless  earlier   terminated  in
accordance with Section 8.01, the Commitment shall terminate on the Commitment
Termination Date.   All unused portions of the Commitment  not utilized on the
Commitment Termination Date shall be terminated.

         (b)      No Reinstatement.    No  portion   of  the  Commitment  once
terminated or reduced may not be reinstated.

         2.03     Fees.  

         (a)      Management Fee.  The Borrower shall pay on the Drawdown Date
a management fee of 1.75% of the Loan.

         (b)      Commitment Fee.   On the Drawdown  Date, the Borrower  shall
pay to the  Lender a commitment fee  of 0.75% per  annum on the average  daily
maximum  amount of  the Commitment  calculated  from the  Closing Date  to the
Drawdown Date.

         (c)      No Refund  of Fees.  Once  paid, such fees are  fully earned
and non-refundable.

         2.04     Lending Offices.  The  Loan shall be made  and maintained at
the Applicable Lending Office.

         2.05     The Note.  The obligation of the  Borrower to repay the Loan
shall  be  evidenced  by  a  single  Note  of  the  Borrower  (the  Note )  in
substantially  the  form of  Exhibit  2.05  hereto,  dated the  date  of  this
Agreement, payable to the order of  the Lender in a principal amount  equal to
the Commitment, and otherwise duly completed.  The Lender is hereby authorized
by  the Borrower  to  endorse  on the  schedule  (or  a continuation  thereof)
attached to  the Note, to the extent  applicable, the date and  amount for the
Advance made by the Lender to  the Borrower hereunder, and the amount of  each
payment or  prepayment of principal  of such Advance  received by the  Lender,
provided that any failure by the Lender to make any such endorsement shall not
affect the obligations of the Borrower under the Note or  hereunder in respect
of such Advance.   Such  records shall  be deemed  conclusive absent  manifest
error.

         2.06     Use of Proceeds.   The proceeds of the Loan shall be used by
the Borrower to finance its purchase of the Vessel.

         Section 3.    Borrowings and Payments.

         3.01     Borrowings.  The Borrower shall notify the Lender in writing
of   borrowing to be  made hereunder at  least three Business  Days before the
Drawdown Date by delivery of  its Drawdown Notice in the form  of Exhibit 3.01
hereto, appropriately completed.  Subject to the  terms and conditions of this
Agreement,  not later than 1:00  p.m. New York time  on the Drawdown Date, the
Lender shall  make available the  amount of  the Advance as  set forth in  the
Borrower s Drawdown Notice  respecting such  Advance, for the  account of  the
Borrower by transferring funds to,  or for the account of, the Borrower at the
location specified in the Drawdown Notice.

         3.02     Optional Prepayments.   The Borrower shall have the right to
prepay the Loan,  in full but  not in part,  on any  Repayment Date after  the
first anniversary of the  Drawdown Date.  The Borrower shall pay to the Lender
on  the date of  prepayment a  prepayment premium of  two percent (2%)  of the
amount  of the  Loan prepaid.   Such  prepayment shall  be accompanied  by any
amounts payable under Section 4.03.   The Borrower shall notify the  Lender in
writing of such prepayment at least 60 days before the prepayment  date.  Such
notice shall be  irrevocable and the amount specified in  such notice shall be
due  and  payable   on  the   prepayment  date  specified   in  such   notice.
Notwithstanding  anything to the contrary  in this Section  3.02, the Borrower
shall have  the right  and obligation  to prepay  the Loan  in part without  a
prepayment premium or notice, pursuant to the Option Agreement.

         3.03     Repayment of Loan.   Subject to the terms of  this Agreement
(including without limitation Section 8), 

         (a)      The  Borrower shall repay the Loan on each Repayment Date in
an amount equal  to the greater  of (i) Excess  Cash Flow received  during the
month prior  to the  month  of each  Repayment  Date (the   Monthly  Period );
provided that  the first Monthly Period  shall be from the  Closing Date until
January 31, 1997,  and (ii) the Minimum Payment for such Repayment Date.  Each
repayment shall  be applied first to  accrued and unpaid interest  and then to
principal.

         (b)      In  its sole discretion, the Lender may agree to an increase
of  the amount of  Working Capital in the  event that Excess  Cash Flow, as so
reduced, appears that it will be sufficient to repay the Loan in full prior to
the Maturity Date.

         3.04     Interest.

         (a)      The  Borrower shall pay to the Lender interest on the unpaid
principal amount of the Loan for the period commencing on the date the Loan is
made to but excluding  the date the Loan shall be paid in  full, at a rate per
annum equal to the lesser of (i) LIBOR plus the then Applicable Margin or (ii)
the Maximum Rate.

         (b)      Notwithstanding any of the  foregoing, the Borrower will pay
to  the Lender interest  at a rate  per annum equal  to the lesser  of (i) the
applicable Overdue Interest Rate or (ii) the Maximum Rate on any principal of,
or interest  on, the  Loan and on  any other  amount payable  by the  Borrower
hereunder to or for the account of the Lender, which shall not be paid in full
when due (whether at stated maturity, by acceleration or otherwise and whether
the failure  to make such payment  constitutes a Default or  Event of Default,
regardless of the giving  or receipt of notice or the  lapse of any applicable
cure period), for the period commencing on the due date thereof until the same
is paid in full.

         (c)      Accrued and unpaid  interest on  the Loan shall  be due  and
payable on each Repayment Date and otherwise as set forth in Sections 3.02 and
3.03;  provided that interest  payable on the  Loan, or other  amounts payable
hereunder, accruing at the Overdue Interest Rate shall be payable from time to
time on demand of the Lender.

         (d)      Promptly  after  the  determination  of  any  interest  rate
provided for  herein or any  change therein, the  Lender shall use  reasonable
efforts to notify  the Borrower thereof; provided that the Lender s failure to
so  notify the Borrower shall not affect  the Borrower s obligation to pay the
Loan.  

         (e)      Interest  shall be computed  on the basis  of a year  of 360
days for actual  days elapsed (including the first day  but excluding the last
day) occurring in the period  for which such amounts are payable,  unless such
calculation would  exceed the Maximum  Rate, in  which case interest  shall be
calculated on the  per annum basis of a  year of 365 or 366 days,  as the case
may be.

         3.05     Payments.   Except to the extent  otherwise provided herein,
all payments of principal, interest, and other amounts which are to be made by
the  Borrower  hereunder and  under  the Note  shall  be made  in  Dollars, in
immediately  available funds  to  the  Lockbox  and  such  payments  shall  be
disbursed to  the  Lender from  the  Lockbox to  the  Lender s account  number
15012511 at The Chase Manhattan Bank, London Branch, not later than 11:00 a.m.
London time on the date on which such payment shall become due hereunder (each
such  payment received  after such  time on  such due  date  to be  deemed for
purposes  of calculating interest  to have  been made  on the  next succeeding
Business Day).   The amount of such payment shall be  calculated by the Lender
with notice of such amount to be given to the Borrower and the Lockbox Bank at
least four (4) Business Days prior to each Repayment Date.  The failure of the
Lockbox to contain at any time  sufficient funds to make any payment hereunder
shall not discharge  or release  the Borrower  or any  other Person  obligated
therefor from its liability to make such payment on the due date therefor.  If
the  due date of any payment hereunder  or under the Note would otherwise fall
on a day which  is not a Business Day such date shall  be extended to the next
succeeding  Business Day and interest shall be  payable for any payment (other
than interest) so extended for the period of such extension.

         3.06     Certain Notices.   Notices to the Lender  of terminations or
reductions of the Commitment, of borrowings, continuations and  prepayments of
the Loan shall  be irrevocable and shall be effective only  if received by the
Lender  not later than 12:00  noon London time on  the date specified for such
notice.

         3.07     Set-off; Sharing of Payments.  The Borrower agrees  that, in
addition to  (and without limitation of) any right of set-off, counterclaim or
other  right  or remedy  the Lender  may otherwise  have,  the Lender  and its
Affiliates shall be entitled, at its  option, to offset, appropriate and apply
any debt owing to  and any other funds held  in any manner for the  account of
the Borrower  against  any principal  of,  or interest  on,  the Loan  to  the
Borrower  hereunder, or other obligation  of the Borrower  hereunder, which is
not  paid when due (regardless  of whether such  balances are then  due to the
Borrower)  in  which  case it  shall  promptly  notify  the Borrower  thereof,
provided that  the Lender s failure to  give such notice shall  not affect the
validity thereof.

         Section 4.    Yield Protection and Illegality.

         4.01     Additional Costs.

         (a)      The Borrower shall pay  to the Lender from time  to time, on
an after-tax basis, such amounts  as the Lender may determine to  be necessary
to  compensate it  for any  additional costs  incurred by  the Lender,  or any
reduction in any amount  receivable by the Lender hereunder, which  the Lender
determines are attributable to its making or maintaining of the Loan hereunder
or its  obligation  to make  the  Loan hereunder  (such  additional costs  and
reductions  in amounts receivable being herein  called  Additional Costs ), in
each case resulting from any Regulatory Change which:

         (i)      other than changes which affect taxes measured by or imposed
     on the  overall net  income of  the Lender  or of  its Applicable  Lending
     Office for any  of such Loan by the  jurisdiction in which  the Lender has
     its principal  office or such Applicable  Lending Office,  imposes any tax
     with respect to the Loan,  or changes the basis of taxation of any amounts
     payable to  the Lender under this Agreement or the Note  in respect of any
     of such Loan; or

         (ii)     imposes  or modifies any  reserve, special  deposit, capital
     adequacy or  similar rule, regulation,  or treaty requirements  (including
     without  limitation,   any  such  requirement  imposed  by  the  Board  of
     Governors  of  the  Federal  Reserve  System,  the  Bank  of  England, the
     Japanese Central  Bank or  other monetary  authority,  but excluding  with
     respect  to  any  of  such  Loan  any  such  requirements  included in  an
     applicable  reserve requirement)  relating to any extensions  of credit or
     other assets of, or any deposits with or other liabilities of, the  Lender
     (including any of such Loan or any deposits  referred to in the definition
     of  LIBOR  in Section 1.01 hereof); or

         (iii)    imposes any other condition affecting this Agreement (or any
     of such extensions of credit or liabilities).

         (b)      Without limiting  the effect of the  foregoing provisions of
this Section 4.01, in the event that, by reason of any  Regulatory Change, the
Lender either (i)  incurs Additional Costs based on or  measured by the excess
above  a specified  level of  the amount of  a category  of deposits  or other
liabilities of  the Lender which includes  deposits by reference to  which the
interest rate  on the Loan  is determined as  provided in this Agreement  or a
category of  extensions of credit or other assets of the Lender which includes
the Loan  or (ii)  becomes subject  to restrictions  on the  amount of  such a
category of liabilities  or assets which it may  hold, then, if the  Lender so
elects by  notice to the Borrower,  the obligation of  the Lender to  make the
Loan hereunder shall be suspended until the date such Regulatory Change ceases
to be in effect.

         (c)      Determinations and allocations by the Lender for purposes of
this Section  4.01 of  the effect  of any  Regulatory Change on  its costs  of
maintaining its obligations to make  the Loan or of making or  maintaining the
Loan or on amounts receivable by it in respect of Loans, and of the additional
amounts required to compensate the Lender in respect of  any Additional Costs,
shall be  conclusive, provided  that such  determinations and  allocations are
made on  a reasonable basis.   In connection herewith the Lender  shall not be
required to prove that it actually funded the Loan,  in whole or in part, with
matching  deposits  in Dollars  acquired  from  a  prime  bank in  the  London
interbank market.

         4.02     Illegality.   Notwithstanding any  other  provision of  this
Agreement  to the  contrary, in  the event  that it  becomes unlawful  for the
Lender or  its Applicable Lending Office  to (a) honor its  obligation to make
the Loan hereunder,  or (b) maintain the Loan to  the Borrower hereunder, then
the  Lender  shall  promptly notify  the  Borrower  thereof  and the  Lender s
obligation  to make or  maintain the Loan  hereunder shall be  suspended until
such time as the Lender may again make and maintain the Loan to the Borrower.

         4.03     Compensation.    The  Borrower  shall promptly  pay  to  the
Lender, upon the  request of the Lender,  such amount or  amounts as shall  be
sufficient (in  the reasonable opinion of the Lender) to compensate it for any
loss, cost or expense incurred by it as a result of:

         (a)      any payment, prepayment of the Loan made to the Borrower for
any  reason  (including,  without limitation,  the  acceleration  of the  Loan
pursuant to Section  8.01) on a date  other than the  last day of an  Interest
Period for such Loan; or

         (b)      any  failure  by  the  Borrower for  any  reason  (including
without limitation, the failure  of any of the conditions  precedent specified
in Section 5  to be satisfied) to  borrow  an Advance specified  in a Drawdown
Notice delivered to the Lender on the date for such borrowing;

such  compensation  to include,  without limitation,  an  amount equal  to the
excess, if any, of (i) the amount of interest  which would have accrued on the
principal amount so paid, prepaid or not borrowed for the period from the date
of  such payment,  prepayment or  failure  to borrow  to the  last day  of the
Interest Period for such Advance (or, in  the case of a failure to borrow, the
Interest  Period for such  Advance which would  have commenced on  the date of
such failure  to borrow) at the  applicable rate of interest  for such Advance
provided for herein over (ii) the interest component (as reasonably determined
by the  Lender) of the  amount (as  reasonably determined by  the Lender)  the
Lender would  have bid in the  London interbank market for  Dollar deposits of
leading  banks in amounts comparable  to such principal  amount and maturities
comparable to such period. 

         4.04     Taxes.  (a) Any  and all payments by the  Borrower hereunder
shall be  made, in accordance with Section 3.05, free and clear of and without
deduction  or withholding  for any  Taxes,  except to  the extent  required by
applicable law.   If the Borrower shall be required  to deduct or withhold any
Taxes  from or  in respect  of any  sum payable  hereunder to  Lender (i)  the
Borrower  shall make such deductions  or withholding (ii)   the Borrower shall
pay the full  amount deducted or withheld to the  relevant taxing authority or
other governmental authority in  accordance with applicable law and  (iii) the
sum payable  shall be increased by  the amount necessary so  that after making
all  required deductions  or  withholding of  Taxes  (including deductions  or
withholdings  of  Taxes  applicable  to  additional  sums payable  under  this
Section 4.04) the Lender  shall receive an  amount equal to  the sum it  would
have received had no such deductions been made.

         (b)      The  Borrower  agrees to  indemnify  and  hold harmless  the
Lender for any Taxes  imposed on or incurred by  the Lender in respect  of any
sum  payable hereunder to  the Lender (including any  Taxes on amounts payable
under this Section  4.04).  Payment  under this indemnification shall  be made
within 30  days  after  the date  the  Lender makes  written  demand  therefor
describing such Taxes in reasonable detail.

         (c)      As soon as practicable after the date  of any payment by the
Borrower of  Taxes under this  Section 4.04,  the Borrower  shall furnish  the
Lender the original or a certified copy of an official receipt evidencing such
payment, or such other evidence  of payment as may be  reasonably satisfactory
to the Lender.  

         (d)      Lender  shall repay the Borrower  for any Taxes  paid by the
Borrower which the Lender utilizes against its tax liability.

         Section 5.    Conditions Precedent.

         5.01     Advance.  The obligation  of the Lender to make  the Advance
hereunder  is subject  to the  following conditions  precedent, each  of which
shall have been fulfilled to the satisfaction of the Lender:

         (a)      Corporate Action.  The  Lender shall have received certified
copies of the  charter and by-laws of the Borrower, Reading & Bates (U.K.) and
TRB  Subsidiary, all corporate  action taken by the  Borrower, Reading & Bates
(U.K.), TRB  Subsidiary and R&B  Drilling authorizing the  execution, delivery
and performance of the Transaction  Documents to which such Person is  a party
(including, without limitation,  a certificate of  the Borrower setting  forth
the  resolutions  of  its  Board  of  Directors  authorizing the  transactions
contemplated thereby).

         (b)      Incumbency.   Each  of the  Borrower, Reading  & Bates,  TRB
Subsidiary, R&B Drilling, and Reading  & Bates (U.K.) shall have  delivered to
the Lender a certificate in  respect of the name and signature of  each of the
officers (i) who is authorized to sign on its behalf the Transaction Documents
and  (ii) who will,  until  replaced  by  another  officer  or  officers  duly
authorized for that  purpose, act as  its representative for  the purposes  of
signing documents  and giving notices  and other communications  in connection
with  the  Transaction Documents  to which  it  is a  party.   The  Lender may
conclusively rely on  such certificates  until it receives  notice in  writing
from such Person to the contrary.

         (c)      Loan Documents  and Lien Perfection.  The  Lender shall have
received counterparts of this Agreement executed and delivered by or on behalf
of each of  the parties hereto.  The Lender shall have received the Note, duly
completed and  executed.  Each  of Security  Instruments shall have  been duly
executed and delivered, and such other action (including,  without limitation,
filing  of the  Ship Mortgage,  the Assignment  of Charter,  and appropriately
completed  and duly executed Uniform  Commercial Code financing statements and
other documents  in the  State of  Texas, the Republic  of Panama,  the United
Kingdom and  other jurisdictions) as may  be necessary or as  the Lender shall
have reasonably  requested to perfect the security  interests created pursuant
thereto as first priority liens shall have been taken.

         (d)      Lien  Searches.   The  Lender  shall  have received  filings
searches  in  the  name of  Reading  &  Bates  (U.K.)  and the  Borrower,  TRB
Subsidiary  and their respective predecessors in interest during the past five
years (to the extent subject to the Uniform Commercial Code) from English ship
and  companies   registries and  Panamanian  and  U.S. registries  showing  no
filings  of record except  (i) those in  favor of the  Lender, (ii) those with
respect to Permitted  Liens, or (iii) those for which  releases or termination
statements are filed  on or prior (or  immediately subsequent) to the  Closing
Date. 

         (e)      Insurance.   The Borrower and  Reading & Bates  (U.K.) shall
have   delivered  to  the  Lender  a  certificate  of  an  insurer  reasonably
satisfactory to the Lender  listing the coverages maintained by  the Borrower,
which coverages shall be acceptable to  the Lender and stating that the Lender
has been named loss payee  with first priority to receive payments  (except as
otherwise  provided in the Ship Mortgage) in respect of any property insurance
on the Vessel and each of the NIC Parties as an additional insured thereunder.

         (f)      Fees  and Expenses.   The  Borrower shall  have paid  to the
Lender all  amounts due under Sections  2.03 and 9.03 hereof on  or before the
Drawdown Date.

         (g)      Legal Opinions.  The Lender  shall have received the opinion
of (a) Wayne  K. Hillin, counsel to the Borrower, substantially in the form of
Exhibit B attached hereto, (b) Baker  & Botts, L.L.P., counsel to the  Lender,
substantially in the form  of Exhibit C attached hereto,  (c) Icaza, Gonzalez-
Ruiz &  Aleman, Panamanian counsel to the Lender, substantially in the form of
Exhibit D attached  hereto, (d) Denton  Hall, English counsel  to the  Lender,
substantially in the form of Exhibit E attached hereto, and (e) Cayman Islands
counsel, substantially  in the form  of Exhibit  F with any  changes that  are
reasonably satisfactory to the Lender.

         (h)      Environmental Matters Limitation of Liability Legal Opinion.
The Lender  shall have  received the  opinion of  MacFarlanes, counsel to  the
Borrower,  in the  form of  Exhibit  G attached  hereto, with  respect to  the
environmental condition  (including conditions with respect  to oil pollution)
of the properties  of the Borrower and Reading & Bates  (U.K.) in the form and
substance reasonable satisfactory to the Lender.  

         (i)      Evidence  of  Approvals.   The  Lender  shall have  received
evidence in form and substance reasonably satisfactory to the Lender that each
R&B  Party has obtained all orders, consents, approvals and authorizations and
have made  all filings  and  other notifications  (governmental or  otherwise)
required in connection with  this Agreement, or the transactions  contemplated
hereby.

         (j)      Registered Agent.   The Lender shall  have received evidence
of the  agreement by  Prentice-Hall  Corporation System  to act  as agent  for
service of  process in New York on behalf of  the Borrower with respect to the
Transaction Documents to which it is a party and that R&B (U.K.) has agreed to
act  as agent for service  of process in  the United Kingdom on  behalf of the
Borrower with respect to the Transaction Documents to which it is a party.

         (k)      Transaction  Documents.    The  Lender  shall have  received
executed copies  of each of the  Transaction Documents, in form  and substance
reasonably satisfactory to the Lender.

         (l)      No  Material  Adverse Change.    There  shall have  been  no
material adverse change  since December  31, 1995 in  the business,  financial
condition, operations  or properties of  the Borrower,  or the ability  of the
Borrower  or  any  other  R&B  Party  to perform  its  obligations  under  the
Transaction Documents.

         (m)      Britoil  Acknowledgment.    Britoil shall,  to  protect  the
Lender s  Lien  in  the  Donan  Charter  Agreement  and  the  amounts  payable
thereunder,  acknowledge the assignment of such rights under the Assignment of
Charter and agree to direct its  payments under the Donan Charter Agreement to
the Lockbox Account, in the form of Exhibit I attached hereto.

         (n)      Advance.   The advance shall occur no later than January 31,
1997.

         (o)      No  Default.    No  Default  shall  have  occurred   and  be
continuing. 

         (p)      Representations.  The representations and warranties made by
the Companies, and to the best of the Companies  knowledge, of the R&B Parties
and Britoil in each Transaction Document to  which it is a party shall be true
on and as of the date of the making of such Advance in all  material respects,
with the same force and effect  as if made on and  as of such date (except  to
the extent such  representations and  warranties are expressly  limited to  an
earlier date or the Lender may expressly consent in writing to the contrary).

         (q)      No  Violation.  The making of such Advance shall not violate
any law, rule, regulation or order applicable to the Lender or the Borrower.

         (r)      Other Matters.   The Lender shall  have received such  other
documents and assurances relating  to the transactions contemplated hereby  as
the Lender may reasonably request.

         (s)      Bareboat Charter Amendment.   The Lender shall have received
an executed copy of the amendment to the Bareboat Charter Amendment.

         (t)      Comfort Letter  and Participation Letter.   The Lender shall
have received an executed copy of the Comfort Letter and Participation Letter.

         (u)      Partnership Agreement.   The Partnership shall  be formed in
accordance with the terms of the Option Agreement.

         (v)      Excess Cash.  The Companies shall have deposited Excess Cash
for the  period from  the Closing  Date to  the Drawdown  Date in  the Lockbox
Account and the Lender shall have to receive the details of the computation of
such amount.

         (w)      Drawdown  Notice.   The  Borrower  shall  have executed  and
delivered  the Drawdown Notice which  shall constitute a  certification by the
Borrower  to the effect set forth  in the conditions to  the Advance have been
and  will be satisfied  (both as of  the date of  such notice and,  unless the
Borrower otherwise notifies the Lender prior to the date of  such borrowing or
issuance, as of the date of such borrowing or issuance).

         Section 6.    Representations and Warranties.  Each of the  Companies
represents and warrants to the Lender with respect to itself only as follows:

         6.01     Corporate  Existence.   The Borrower:  (a) is  a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware;  (b) has requisite  corporate power, and  has all  material
governmental licenses,  authorizations, consents and  approvals necessary,  to
own its assets  and carry on its  business as now being conducted;  and (c) is
qualified  to do  business in  all jurisdictions  in which  the nature  of the
business  conducted by it makes such qualification necessary and where failure
so to qualify would have a material adverse effect on the financial condition,
prospects,  operations, properties  or  business of  the  Borrower or  on  its
ability to perform its obligations under each Transaction Document to which it
is a party.  Reading & Bates  (U.K.): (a) is a limited liability company, duly
organized, validly  existing and in good  standing under the laws  of England;
(b) has requisite corporate power, and has all material governmental licenses,
authorizations,  consents and approvals necessary, to own its assets and carry
on its business as now being conducted; and (c) is qualified to do business in
all jurisdictions  in which the nature  of the business conducted  by it makes
such qualification  necessary and  where failure  so to  qualify would have  a
material  adverse effect  on the  financial condition,  prospects, operations,
properties or business of Reading & Bates (U.K.) or on its  ability to perform
its obligations under each Transaction Document to which it is a party.

         6.02     Information; Material Adverse Change.  (a) Each Company has,
to its  best knowledge, disclosed to  the Lender in writing any  and all facts
(other  than general  economic or  industry information  not specific  to such
Company)  which are reasonably likely  to materially and  adversely affect the
business,  financial condition,  prospects, operations  or properties  of such
Company or  the  ability of  any  Company or  any  R&B  Party to  perform  its
obligations under each Transaction Documents to which it is a party.

         (b)      Since the execution date of this Agreement there has been no
material  adverse  change in  the  business,  financial condition,  prospects,
operations or properties of either  Company or in its ability or,  to the best
of   the  Companies   knowledge,  any  R&B  Party s  ability  to  perform  its
obligations under each Transaction Document to which it is a party.

         6.03     Litigation.  There is  no litigation, legal,  administrative
or  arbitral proceeding, investigation or  other action of  any nature pending
or,  to the  knowledge of  each Company,  threatened  against such  Company or
affecting  its property which could reasonably be  expected to have a material
adverse effect on the business, financial  condition, prospects, operations or
properties of such Company or on  its ability to perform its obligations under
each Transaction Document to which it is a party.

         6.04     No Breach.    None of  the  execution  and delivery  of  the
Transaction Documents by each Company, the consummation by each Company of the
transactions  therein contemplated, or compliance  by each Company  and to the
best  of  the  Companies   knowledge,  the  R&B  Parties  with the  terms  and
provisions thereof will (a) conflict with or result in a breach of, or require
any consent  not already  obtained under,  (i) the charter or  by-laws of  the
Companies  or  (ii) any  law or  regulation  applicable  to  the Companies  or
(iii) any  order,  writ, injunction  or decree  of  any court  or governmental
authority or  agency  applicable to  the  Companies, or  (iv) the  Transaction
Documents  or any  other  material agreement  or  instrument to  which  either
Company is a party  or by which it is bound or to  which any of its properties
is subject, or (b) constitute a default  under any such material agreement  or
instrument, or (c) (except for the Liens created pursuant to, or permitted by,
this  Agreement  and  the Security  Instruments)  result  in  the creation  or
imposition of any Lien upon any assets  of the Companies pursuant to the terms
of any  such  material agreement  or  instrument.   No  Default hereunder  has
occurred and is continuing.

         6.05     Corporate Action.  Each  Company has all necessary corporate
power and authority to execute, deliver and perform  its obligations under the
Transaction Documents  to which it is a party; and the execution, delivery and
performance by such Person of the Transaction Documents to which it is a party
have  been duly  authorized  by  all  necessary  corporate  action;  and  this
Agreement and the other Transaction Documents to which each Company is a party
have  been  duly  and validly  executed  and  delivered  by  each Company  and
constitute the  legal, valid and  binding obligation of each  Company, in each
case, enforceable in accordance  with its terms, except as  the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization or moratorium
or  other  similar  laws relating  to  the  enforcement  of creditors   rights
generally and  by  general equitable  principles.   The  Security  Instruments
create legal,  valid,  and binding  Liens  in the  Properties intended  to  be
encumbered thereby as  security for the  Obligations and such Liens  have been
perfected, subject only to Permitted Liens.

         6.06     Approvals.   Each Company  has obtained  all authorizations,
approvals and consents of,  and have made all filings and  registrations with,
any court or governmental or regulatory authority or agency  necessary for the
execution,  delivery or  performance  by  each  of  them  of  the  Transaction
Documents  to   which  such  Person  is  a  party,  or  for  the  validity  or
enforceability thereof.
  
         6.07     ERISA and Pension Plans.   No accumulated funding deficiency
(as defined in section 302 of  ERISA and section 412 of the Code),  whether or
not waived, exists with respect to any Plan (other than a Multiemployer Plan).
No  liability to  the  Pension Benefit  Guaranty  Corporation has  been  or is
expected by the Borrower or any ERISA Affiliate to be incurred with respect to
any Plan (other than a Multiemployer Plan) by the Borrower,  any Subsidiary or
any ERISA Affiliate  which is or would be materially  adverse to the business,
condition  (financial  or otherwise)  or operations  of  the Borrower  and its
Subsidiaries taken  as a whole.   Neither the Borrower, any  Subsidiary or any
ERISA  Affiliate has  incurred or  presently expects  to incur  any withdrawal
liability under Title IV of ERISA with respect to any Multiemployer Plan which
is or  would be materially  adverse to  the business, condition  (financial or
otherwise) or  operations  of the  Borrower and  its Subsidiaries  taken as  a
whole.  The execution and delivery of this Agreement and the issuance and sale
of the Notes will be exempt from, or will not involve any transaction which is
subject to, the  prohibitions of section 406 of ERISA and will not involve any
transaction in connection with which a  penalty could be imposed under section
502(i)  of ERISA  or a tax  could be imposed  pursuant to section  4975 of the
Code. 

         6.08     Taxes.  Each  Company has filed  all United States  Federal,
Panamanian and English  income tax returns and all other  material tax returns
which are required to  be filed by it and  has paid all taxes due  pursuant to
such  returns or  pursuant to  any assessment  received by  it, except  to the
extent the same  may be contested as permitted  by Section 7.02 hereof  or any
failure to so  file or pay which  could not reasonably  be expected to have  a
material adverse effect  on the business,  financial condition, operations  or
properties  of such Company or  on the ability of such  Company to perform its
obligations  under each  Transaction Document  to which  it is  a party.   The
charges,  accruals and  reserves on the  books of  each Company  in respect of
taxes and  other governmental charges are,  in the reasonable  opinion of such
Company, adequate.

         6.09     Ownership  and Use of Properties.  Each Company will have on
the date of  the Advance and at all times thereafter good and marketable title
or  ownership  of, or  the  right to  use  pursuant to  enforceable  and valid
agreements  or arrangements, all tangible property, both real and personal and
all franchises,  licenses, copyrights, patents  and know-how, other  than such
property, the failure to own or otherwise hold might reasonably be expected to
have  a  material  adverse  effect  on  the  business,   financial  condition,
operations  or properties of  such Company or  the ability of  such Company to
perform  its obligations  under each  Transaction Document  to  which it  is a
party.  All of the assets and Properties of the Companies which are reasonably
necessary for the operation of their  businesses are in good working condition
and are maintained in accordance with prudent business standards.

         6.10     Environmental Matters. 

         (a)      (i)  Each  Company is,  and to  the  best knowledge  of each
Company,   each  other  R&B  Party  is,  in  compliance  with  all  applicable
environmental  laws  respecting the  Vessel  and the  Donan  Charter Agreement
except for such noncompliance which could not reasonably be expected to have a
material  adverse effect on  the business, financial  condition, operations or
properties or  Vessel of  such  Company, or  the ability  of  each Company  to
perform  its obligations  under each  Transaction Document  to which  it is  a
party, (ii) each Company has, and to the knowledge of such Company, each other
R&B Party has, all decisions, permits, licenses, rulings, consents, agreements
and   other   authorizations   of   any   applicable   Governmental  Authority
(collectively,  the    Governmental  Approvals )   required  to   perform  its
obligations respecting  the Vessel  and any  Charter Agreement, including  the
Donan  Charter  Agreement, (iii)  each Company  and to  the knowledge  of each
Company, each other R&B Party has not, received any written communication from
a Governmental Authority, court or third party that alleges that such  Company
or  such  other R&B  Party  is  not in  full  compliance  with all  applicable
environmental laws  and Governmental Approvals  respecting the Vessel  and the
Donan Charter Agreement  other than such noncompliance which could  not have a
material adverse  effect on the  business, financial condition,  operations or
properties  of such  Company or,  to the  knowledge of  such Company,  any R&B
Party, or  the ability of such  Company to perform its  obligations under each
Transaction Document to which it is a party, (iv) to each Company s knowledge,
there are  no circumstances that  could reasonably  be expected to  prevent or
adversely interfere with such Company s compliance with environmental laws  in
the  future  as  far  as  such  Company  may  reasonably   foresee  and  which
noncompliance  could have a material adverse effect on the business, financial
condition, operations  or properties of such  Company, or the  ability of such
Company  or  any  other R&B  Party  to  perform  its  obligations  under  each
Transaction  Document to which it is  a party and shall  keep the Lender fully
indemnified  at all  times against  all losses,  claims or  demands whatsoever
arising directly or indirectly  from any breach of this  obligation, including
any liability in respect of such matters.

         (b)      To the knowledge of each Company, there are no past, present
or   pending  actions,  activities,   circumstances,  conditions,   events  or
incidents, including,  without limitation,  the release,  emission, discharge,
presence  or disposal  of any  Hazardous Substance,  that could  reasonably be
expected to  form the basis of  any Environmental Loss  against either Company
or,  to the knowledge of each Company, any  other R&B Party which could have a
material adverse effect  on the business,  financial condition, operations  or
properties of either Company or the ability of either Company or any other R&B
Party to  perform its obligations under each  Transaction Document to which it
is a party.

         6.11     Insurance.   Each Company  maintains insurance  described on
Exhibit 6.11 and all such policies are in full force and effect, and no notice
of a  material cancellation or  termination (which has  not been  withdrawn or
revoked) has been received with respect to any such policy.  Such policies are
sufficient  for compliance  with all material  requirements of law  and of all
material agreements to which each Company is a party.

         6.12     Operations.

         The Borrower  has delivered to the Lender a true and complete copy of
each of the executed Transaction Documents.  There have been  no amendments or
modifications  of  such  agreements  (other  than,  after  the  date  of  this
Agreement, amendments or modifications permitted under Section 7.19), no party
to such agreements is in default of the terms thereof and such  agreements are
in full force and effect.  The representations and warranties of each Company,
and to the best knowledge of each Company, the  other R&B Parties contained in
such agreements are true  and correct in all  material respects.   Transaction
Documents currently required for  the ownership, operation and maintenance  of
the  Vessel under  the Charter are  in full  force and effect  in all material
respects.    There are  no material  agreements, instruments  and undertakings
among the Companies and any other R&B Party  relating to the Companies and the
Vessel other than the Transaction Documents.

         Section 7.    Covenants.  Unless the Lender shall  agree otherwise as
contemplated by Section 9.05 hereof, each Company (with respect to all matters
in this Section 7) agrees, so long  as any of the Commitment is in  effect and
until payment  in full  of all the  Loan all  interest thereon  and all  other
amounts payable  by the Borrower  to the  Lender hereunder, to  comply in  all
material respects with the covenants contained in this Section 7.

         7.01     Statements.  The Borrower shall deliver to Lender:

         (a)      as soon as  available and in any event within 120 days after
the end of each  fiscal year of each of  the Borrower and Reading &  Bates the
audited consolidated  statements of operations, stockholders   equity and cash
flow  of the  Borrower and  Reading &  Bates, setting  forth in  each  case in
comparative  form the corresponding figures for the preceding fiscal year, and
accompanied  by  an opinion  on such  statements  of an  independent certified
public  accounting  firm of  recognized  national standing  acceptable  to the
Lender (such  accountants being called herein   Reporting Accountants ), which
opinion  shall state  that such  financial statements  present fairly,  in all
material respects, the financial position of each of the Borrower  and Reading
& Bates as of the end of, and the respective results of operations of  each of
the  Borrower and Reading  & Bates for,  such fiscal year,  in conformity with
GAAP;

         (b)      as soon as available and in any event within 2 Business Days
after  Borrower s receipt  of  the Lockbox  bank  account statement  from  the
Lockbox Bank, the Monthly Statement and a list of all Drydocking Expenses paid
in such month, with copies of all supporting documents, including the invoices
for Drydocking Expenses;

         (c)      promptly following  the delivery thereof to  the Borrower or
to  the Board  of  Directors or  management of  the  Borrower, a  copy of  any
management  letter  or  written   report  by  independent  public  accountants
addressed to the  Board of Directors of the  Borrower or any committee  of any
such board with respect to the financial  condition, operations or business of
the Borrower  (except for  such letters  or reports which  relate only  to tax
planning for the Borrower);

         (d)      promptly after the Borrower knows or has reason to know that
any  Default  has occurred  and  is  continuing,  a  notice of  such  Default,
describing the same in reasonable detail;

         (e)      promptly after  delivery or  receipt thereof, copies  of all
notices or documents given or received by the Borrower pursuant  to any of the
Transaction Documents  concerning (i) any  default or  alleged default  under,
breach or alleged breach of,  or the noncompliance with, any provision  of any
Transaction  Document, (ii)  any prospective  inability to  perform  under any
provision  of any  Transaction Document,  (iii) any  termination or  attempted
termination  of  any  Transaction   Document,  (iv)  any  proposed  amendment,
supplement  or other modification of  any Transaction Document  that under the
Loan Documents requires  the approval of Lender, or (v)  any Force Majeure, in
each case,  which  might reasonably  be expected  to have  a material  adverse
effect on the Borrower;

         (f)      promptly  and in any  event within five  Business Days after
the  existence  of any  of  the  following  conditions,  a certificate  of  an
authorized  officer of the Borrower specifying in reasonable detail the nature
of such  condition and the  Borrower s or other R&B  Party s proposed response
thereto:   (i)  the receipt  by  the Borrower  after  the date  hereof of  any
communication  (written or  oral) from  a Governmental Authority  that alleges
that any  R&B Party is not in compliance with applicable environmental laws or
Governmental  Approvals  which noncompliance  could  have  a material  adverse
effect on the business,  financial condition, operations or properties  of the
Borrower  or the ability of the Borrower or any other R&B Party to perform its
obligations in any material  respect under each Transaction Document  to which
it  is a  party, (ii) the  Borrower shall  obtain actual knowledge  that there
exists  any Environmental  Loss pending  or threatened  against any  other R&B
Party which could  have a material adverse  effect on the business,  financial
condition, operations  or properties of  the Borrower  or the  ability of  the
Borrower  or any other  R&B Party to  perform its obligations  in any material
respect  under each Transaction Document to which  it is a party, or (iii) the
Borrower  obtains  actual knowledge  of  any release,  emission,  discharge or
disposal  of  any  Hazardous  Substance  that could  form  the  basis  of  any
Environmental  Loss against any  other R&B Party  which could  have a material
adverse effect on  the business, financial condition, operations or properties
of  the Borrower  or the ability  of the  Borrower or  any other R&B  Party to
perform  its  obligations  in  any  material  respect under  each  Transaction
Document to  which it  is a party.   The  Borrower will  also maintain at  the
Vessel  and  make  available for  inspection  by  Lender  and  its agents  and
employees,  accurate  and complete  records  of  all investigations,  studies,
sampling  and testing conducted, and  all material remedial  actions taken, by
the Borrower or,  to its knowledge and to the extent obtained by the Borrower,
by  any Governmental  Authority  or  other  Person  in  respect  of  Hazardous
Substances on or affecting the Vessel; 

         (g)      within  30 days  after  the Borrower s  fiscal quarter,  the
quarterly financial statements of the Borrower; and

         (h)      concurrently with the  delivery by a Company  to a charterer
under a  Charter Agreement,  a copy  of any  invoice of  fees  due under  such
Charter Agreement (including the actual operating days in such period, the oil
volume rate for such period, and the tariffs paid for such period);

         (i)      within five Business Days  of its execution, a copy  of each
Charter Agreement; and

         (j)      from  time  to  time  such  other  information  and  reports
regarding  the matters described above  or otherwise concerning  the Vessel or
the financial condition, operations, business or properties of the Borrower as
the Lender may reasonably request.

The Borrower will  furnish to the Lender, at the time it furnishes each set of
financial statements pursuant to paragraph (a) or (b) above, a certificate  of
its chief executive officer or  chief financial officer to the effect  that no
Default has occurred and is continuing (or, if any Default has occurred and is
continuing, describing the  same in reasonable detail and the  action taken by
or proposed to be taken by the Borrower with respect thereto).

         7.02     Taxes and Claims.   Each Company will pay  and discharge all
material taxes, assessments and governmental charges or levies imposed upon it
or upon its income or profits, or upon any property belonging  to it, prior to
the date  on which penalties attach  thereto, and all lawful  claims which, if
unpaid, might become a Lien (other than a Permitted Lien) upon the property of
such Company; provided that such Company shall not be required to pay any such
tax, assessment, charge, levy or claim  which is being contested in good faith
and  by appropriate proceedings if it maintains adequate reserves with respect
thereto.

         7.03     Insurance.    Each  Company  will  maintain  insurance  with
responsible companies, in the amounts and against the risks as is set forth in
Schedule 6.11, which coverage shall be the maximum available in the market.

         7.04     Maintenance of Existence; Conduct of Business.  Each Company
will preserve and  maintain its corporate or other legal  existence and all of
its  material  rights, privileges  and  franchises  necessary for  the  normal
conduct of its business.  Except as permitted by this  Agreement, each Company
will  maintain  in force  and effect  all  permits, licenses,  patents, patent
rights,  trademarks, trademark  rights,  trade names,  trade  name rights  and
copyrights, the release or termination of which would  have a material adverse
effect  on the business, financial condition, operations or properties of each
Company, or on the ability of each Company to perform in any  material respect
its obligations under each Transaction Document to which it is a party.

         7.05     Maintenance of and Access to Properties.       Except   with
respect  to assets permitted to be  disposed of pursuant to Section 7.09, each
Company  will  keep  all  of  its  properties  necessary  in  its  business in
reasonable working order and  condition, ordinary wear and tear  excepted, and
will  permit representatives  of the  Lender during  normal business  hours to
inspect the  Vessel, its other locations  and other properties and  to examine
and make  such extracts and copies from the  books and records of each Company
as they may reasonably request.  

         7.06     Compliance with Applicable Laws.  Each  Company will  comply
with the requirements of all applicable laws, rules, regulations and orders of
any governmental body or regulatory authority, a breach of which  would have a
material adverse  effect on the  business, financial condition,  operations or
properties  of such Company or  on the ability of such  Company to perform its
obligations in any material  respect under each Transaction Document  to which
it  is a  party,  except where  contested  in good  faith  and by  appropriate
proceedings.

         7.07     Litigation.  Each Company will promptly notify the Lender in
writing  (a) of all judgments against  such Company and  (b) of all litigation
and of all proceedings of which it is aware before  any courts, arbitrators or
governmental or regulatory agencies to which any Company or any R&B Party is a
party,  affecting  the Transaction  Documents or  making  claims in  excess of
$500,000 or litigation or proceedings which, individually or in the aggregate,
if  adversely determined  could  reasonably be  expected  to have  a  material
adverse  effect   upon  the  business,  financial   condition,  operations  or
properties of either Company or on the ability of either Company to perform in
any  material respect its obligations under each Transaction Document to which
it is a party.

         7.08     Indebtedness.  The Borrower will not create, incur or suffer
to exist any Indebtedness except:

         (a)      Indebtedness to the Lender hereunder; 

         (b)      other Indebtedness owed to  the R&B Parties so long  as such
     Indebtedness is not to be  repaid prior to  this Loan being paid in  full,
     and such Indebtedness is subordinated on terms no less  favorable than the
     terms set forth on Exhibit 7.08;

         (c)      other Indebtedness incurred  with the prior written  consent
     of the Lender.

         7.09     Mergers, Etc.  Neither Company will be a party to any merger
or consolidation, or sell, lease, assign, transfer or otherwise dispose of any
assets,  or acquire assets from any Person,  other than in the ordinary course
of business, except: 

         (a)      dispositions  of obsolete inventory  or obsolete or worn-out
     equipment; or

         (b)      dispositions  or acquisitions of Investments permitted under
     Section 7.11 hereof.

         7.10     Liens.  The Borrower and RB (U.K.) will not create or suffer
to exist any Lien upon any  of its property or assets, now owned  or hereafter
acquired,  securing  any Indebtedness  or  other  obligation except  Permitted
Liens.

         7.11     Investments.  The Borrower will not make or permit to remain
outstanding  any  advances, loans  or other  extensions  of credit  or capital
contributions (other than prepaid expenses in the ordinary course of business)
to (by means of transfers of property or assets or  otherwise), or purchase or
own any stocks, bonds,  notes, debentures or other securities  of, any Person,
other than itself (all  such transactions being herein called   Investments ),
except (a) Liquid Investments;  and (b) other Investments made  or outstanding
with the  prior written  consent  of the  Lender, which  consent  will not  be
unreasonably withheld or delayed.

         7.12     Transactions with Affiliates.  Except as expressly permitted
by this Agreement, the Borrower will not directly or indirectly:  (a) make any
Investment in an  Affiliate; (b)  transfer, sell, lease,  assign or  otherwise
dispose of any assets or  provide any service to an Affiliate;  (c) merge into
or consolidate  with or purchase or  acquire assets from an  Affiliate; or (d)
enter  into any  other  transaction directly  or  indirectly with  or  for the
benefit  of  an  Affiliate  (including,  without  limitation,  guarantees  and
assumptions of obligations of  an Affiliate) other than under  the Transaction
Documents; provided that the  Borrower may enter into any transaction  with an
Affiliate in the ordinary course of business if the  terms (including, without
limitation, payment terms and monetary  or business consideration) thereof are
no less advantageous to the Borrower as the terms which would be obtained in a
comparable arm s length transaction with a Person not an Affiliate.

         7.13     Guarantees.  The  Borrower will not incur,  assume or permit
to exist any Guaranteed Obligation of the Borrower, except 

         (a)      in favor of the Lender contained in the Loan Documents;

         (b)      Guaranteed  Obligations constituting  Indebtedness permitted
     by Section 7.08 hereof; and 

         (c)      other  Guaranteed Obligations  entered into  with the  prior
     written  consent  of  Lender,  which  consent  will  not  be  unreasonably
     withheld or delayed.

         7.14     Further Assurances.   At any time or  from time to time upon
the request of the Lender, each Company shall execute and deliver (or cause to
be executed and  delivered) such further documents and do  such other acts and
things  as the  Lender may  reasonably request  in order  to effect  fully the
transactions contemplated by of the Transaction Documents.

         7.15     Dividends.  Without the prior written consent of the Lender,
the  Borrower will  not  declare  or pay  any  dividend, purchase,  redeem  or
otherwise acquire for  value any  of its stock  now or hereafter  outstanding,
return any capital to its stockholders, or make any distribution of its assets
to its stockholders.

         7.16     ERISA and  Pension Plan Compliance.   The Borrower covenants
that it will not nor permit any Subsidiary to:

         (a)      terminate  or  withdraw  from  any  Plan  resulting  in  the
     incurrence  of any  material liability  to  the Pension  Benefit  Guaranty
     Corporation;

         (b)      engage in or permit  any Person to engage in  any prohibited
     transaction (as defined  in Section 4975 of  the Code) involving any  Plan
     (other than  a Multiemployer Plan) which would subject the Borrower or any
     Subsidiary to any material tax, penalty or other liability.

         (c)      incur or  suffer to  exist any material  accumulated funding
     deficiency (as defined  in Section 302  of ERISA  and section  412 of  the
     Code),  whether  or  not  waived,  involving   any  Plan  (other  than   a
     Multiemployer Plan); or

         (d)      allow  or  suffer to  exist  any  risk  or  condition  which
     presents a  risk of incurring a material liability to  the Pension Benefit
     Guaranty Corporation.

         7.17     Environmental Matters.  Except for violations, or situations
requiring remedial action, which  would not have a material  adverse effect on
the Vessel or the  business, financial condition, operations or  properties of
the Companies  or on the ability of each Company to perform its obligations in
any material respect under each  Transaction Document to which it is  a party,
no  Company will  cause or permit  any Property to  be in violation  of, or do
anything or permit anything to be done which will subject any such Property to
any  remedial  obligations under  any  applicable  international, national  or
European  laws  (including  the  common  law)  or  liability  under   industry
agreements.  Each Company will establish  and implement such procedures as may
be reasonably necessary to, on a reasonably periodic basis, determine whether,
and assure that except for acts  or omissions which would not have a  material
adverse  effect on the Vessel or the business, financial condition, operations
or properties of such Company or on  the ability of such Company to perform in
all material respects its obligations under each Transaction Document to which
it is a party, each company shall not release, discharge,  permit or cause the
escape or  disposal of Hazardous  Substances in  a manner which  may form  the
basis  of a future  claim, violation or  Environmental Loss, demand  or action
seeking  remedial  action  of any  site,  location,  body  of water  including
international  or  national, coastal  and inland  waters  or cause  damages to
personal property  or personal injury,  disease or  death, which would  have a
material adverse effect on  the Vessel or the operation,  financial condition,
operating  results or  business prospects of  each Company  or the  ability to
perform its obligations under each Transaction Document.

         7.18     Performance of  Transaction Documents.   Each  Company shall
perform all of its obligations under each Transaction Document to  which it is
a  party or by which  it or its  assets is bound except  where such failure to
perform is  not reasonably expected to  have a material adverse  effect on the
business, financial condition, operations or properties of such Company or the
ability  of such  Company to  perform its  obligations under  each Transaction
Document to which it is a party.

         7.19     Amendment  of  Transaction  Documents.   Without  the  prior
written consent of the  Lender, neither Company shall (a)  cancel or terminate
or  agree to or permit  any amendment, supplementation,  or other modification
of, any Transaction  Document, (b) waive timely  performance or observance  by
any Person  (other than Lender) of  any term or provision  of such Transaction
Document,  (c) exercise any options or  remedies, make any elections under, or
give  any  consent under,  any such  Transaction  Document, (d)  compromise or
settle any claim against any R&B Party (other than Lender), (e) enter into any
additional  Charter or other Transaction  Documents, in each  of the foregoing
cases, unless such  action or inaction  is not reasonably  expected to have  a
material adverse  effect on the  business, financial condition,  operations or
properties  of such  Company or  the ability  of such  Company to  perform its
obligations under each Transaction Document to which it is a party.

         7.20     Operation of Vessel. Neither Company nor its affiliates will
take  any action   that will  cause the  Vessel to  be operated in  the United
States, Mexican or Canadian waters.

         7.21     Sale or  Modification of  Vessel.   The Companies shall  not
sell,  transfer  or otherwise  encumber, the  Vessel  or any  interest therein
without the  prior written consent of  the Lender, other than  pursuant to the
Option  Agreement,  or in  the case  of  any Lien,  a  Permitted Lien  or upon
prepayment of the Loan in accordance with Section 3.02.  Neither Company shall
modify  the Vessel  in  any material  respect  without sixty  (60)  days prior
written notice to the Lender.

         7.22     Acknowledgment of Charter Assignment.   Each charterer under
each Charter  Agreement shall, to  protect the  Lender s Lien  in the  Charter
Agreement and  the amounts payable  thereunder, acknowledge the  assignment of
such rights under the Assignment  of Charter and agree to direct  its payments
under such Charter Agreement to the Lockbox Account.

         Section 8.    Defaults.

         8.01     Events of Default.   If one or more  of the following events
(herein called  Events of Default ) shall occur and be continuing:

         (a)      default in the payment  of any Obligation when due  and such
default shall continue for two Business Days thereafter (a  Nonpayment ); or

         (b)      any Company shall default in the payment when due (including
any  applicable  grace  period)  of  any  principal  of  or  interest  on  any
Indebtedness having an  outstanding principal amount,  individually or in  the
aggregate,  of at  least $500,000  (other than  the Loan  or any  other amount
payable hereunder); or any event or condition shall occur which results in the
acceleration of the maturity of any such Indebtedness or enables (or, with the
giving  of notice or  lapse of time or  both, would enable)  the holder of any
such Indebtedness or  any Person acting on such holder s  behalf to accelerate
the maturity thereof; or

         (c)      any representation or warranty made or deemed made by any R&
B Party  herein or in any Transaction Document, or in any certificate or other
document furnished to the Lender pursuant to the provisions of any Transaction
Document, shall prove to have been false or misleading in any material respect
as  of  the  time  made or  furnished  and  such  representation  and warranty
continues to be false and misleading in any material respect; or

         (d)      either Company shall default in any material  respect in the
performance of any  of its obligations  or breach any  of its covenants  under
clause (d) of Section 7.01, or any of its obligations in Sections 7.04 or 7.08
through 7.22; Reading & Bates  (U.K.) shall default in the performance  of any
of its obligations  under the Donan Charter Agreement  or the Bareboat Charter
Agreement; either TRB Subsidiary or the Borrower shall default in any material
respect  in the  performance of  any of  its obligations  or duties  under the
Option Agreement;  or any R&B Party  shall default in any  material respect in
the  performance of any of  its obligations or breach  any of its covenants in
any Transaction Document,  and such  default shall continue  unremedied for  a
period  of 30  days after  notice thereof  to the Borrower  by the  Lender; or
either Company shall default in any material respect in the performance of any
of its  other obligations  or breach any  of its  other covenants in  any Loan
Document,  and such default shall continue unremedied  for a period of 30 days
after the  earlier of  (i) the date  the Borrower was  required to  notify the
Lender of such Default  pursuant to Section 7.01(d) or (ii) notice  thereof to
the Borrower by the Lender; or

         (e)      the Borrower or  any R&B  Party shall admit  in writing  its
inability to, or  be unable or  be deemed for  the purposes of  any law to  be
unable to, pay its debts generally as such debts become due; or

         (f)      the Borrower or any R&B Party shall (i) apply for or consent
to the appointment of, or the  taking of possession by, a receiver, custodian,
trustee  or liquidator  of itself  or  of all  or  a substantial  part of  its
property, (ii)  make a general  assignment for the  benefit of  its creditors,
(iii) commence a voluntary case under  any Bankruptcy Law (as now or hereafter
in effect), (iv) file a  petition seeking to take  advantage of any other  law
relating to bankruptcy, insolvency, reorganization, winding-up, or composition
or readjustment of  debts, (v) fail to controvert in  a timely and appropriate
manner,  or  acquiesce in  writing to,  any petition  filed  against it  in an
involuntary case  under any  Bankruptcy  Law, or  (vi) take  any corporate  or
partnership action for the purpose of effecting any of the foregoing; or

         (g)      (i) a  proceeding or  case shall  be commenced, without  the
application  or consent  of  the Borrower  or any  R&B Party  in any  court of
competent  jurisdiction,   seeking   (x)  its   liquidation,   reorganization,
dissolution  or winding-up, or the  composition or readjustment  of its debts,
(y)   the  appointment   of  a   trustee,  receiver,   custodian,  liquidator,
administrative receiver, administrator or the like of such Person or of all or
any  substantial part of  its assets, or  (z) similar relief in  respect of it
under any law relating  to bankruptcy, insolvency, reorganization, winding-up,
or composition  or adjustment  of  debts, and  such proceeding  or case  shall
continue  undismissed, or an order,  judgment or decree  approving or ordering
any of the foregoing shall be entered and continue unstayed and in effect, for
a period of 90 days; or (ii) an  order for relief against the Borrower or  any
R&B Party shall be entered in an involuntary case under any Bankruptcy Law; or

         (h)      a final judgment or judgments for the payment of money shall
be rendered by a court or courts against the Borrower in excess of $500,000 in
the  aggregate  which is  not covered  by  insurance, subject  to  a customary
deductible, and  the same shall not  be discharged (or provision  shall not be
made  for  such discharge),  or  a  stay of  execution  thereof  shall not  be
procured, within 45 days from the date of entry thereof, or the Borrower shall
not,  within said  period  of 45  days,  or such  longer  period during  which
execution of the same shall  have been stayed, appeal therefrom and  cause the
execution thereof to be stayed during such appeal; or

         (i)      any of  Transaction Documents  shall be terminated  prior to
the end of its stated term, or shall  cease to be in full force and effect and
valid,  binding and  enforceable in  accordance with  its terms,  for whatever
reason (other than by prepayment or with the consent of the Lender pursuant to
Section 9.05); or 

         (j)      Reading &Bates  shall fail to hold,  directly or indirectly,
at least  100%  of the outstanding shares of  voting stock of the  Borrower or
the Borrower  fails to hold  at least 90% of  the partnership interest  in the
Partnership; or

         (k)      any Transaction Document shall cease, for any reason,  to be
in  full force and  effect (other  than in accordance  with its  terms) or any
party thereto (other  than (i) the Lender  or (ii) an Affiliate  of the Lender
not  acting  in good  faith)  shall  so assert  in  writing;  or any  Security
Instrument  shall cease  to be  effective to  grant a  Lien on  the collateral
described therein with the priority purported to be created thereby;

         (l)      any  R&B Party  shall  be in  default  under or  shall  have
breached any Transaction Document to which it is a party  and any grace period
provided for therein with respect to  such default or breach shall have lapsed
and  such  default would  reasonably be  expected to  have a  material adverse
effect on the business,  financial condition, operations or properties  of the
Borrower or  the ability  of the  Borrower or  any R&B  Party  to perform  its
obligations under each Transaction Document to which it is a party; or

         (m)      any Person presents a petition for the winding-up of any R&B
Party (other than  one which is  frivolous or vexatious)  and the same is  not
withdrawn, dismissed or discharged within 7 Business Days; or

         (n)      any person presents a petition for the administration of any
R&B Party; or

         (o)      any order for the administration of any R&B Party is made or
an order is made or  a resolution is passed (other than for the  purposes of a
reconstruction or amalgamation previously  approved in writing by the  Lender)
for the winding-up of such R&B Party; or

         (p)      any Governmental  Authority or  any Person acting  under any
Governmental  Authority shall have  commenced any proceedings  (i) to condemn,
seize  or appropriate  all or any  substantial part  of the Vessel  or (ii) to
displace the management of the Borrower or to curtail the Borrower s authority
to conduct its business; provided that no action of any Governmental Authority
or  any  other  Person described  in  clause  (ii)  of  this subsection  shall
constitute an  Event of  Default unless  and until (x)  the Lender  shall have
determined,  in their  sole discretion,  that  such action  has had,  or could
reasonably  be expected  to have, a  material adverse effect  on the business,
financial condition, operations or  properties of the Borrower or  the ability
of  the Borrower  or  any R&B  Party  to perform  its  obligations under  each
Transaction Document to which it  is a party and (y) Borrower shall  have been
given notice of such determination;

THEREUPON:   the Lender may  (a) declare the  Commitment terminated (whereupon
the  Commitment shall be terminated)  and/or (b) declare  the principal amount
then  outstanding of  and the  accrued  and unpaid  interest on  the Loan  and
commitment fees  and all other amounts payable hereunder and under the Note to
be  forthwith due  and payable,  whereupon  such amounts  shall be  and become
immediately due  and payable,  without notice (including,  without limitation,
notice of  intent  to accelerate  and  notice of  acceleration),  presentment,
demand,  protest or  other formalities of  any kind,  all of  which are hereby
expressly waived by  the Borrower and (c) proceed to  enforce its rights under
the Security Instruments or otherwise available at law or in  equity; provided
that  in the  case of  the occurrence of  an Event  of Default  referred to in
clauses (f) or (g) of this Section 8.01, the Commitment shall be automatically
terminated  and the  principal  amount then  outstanding  of and  the  accrued
interest  on the  Loan and fees  and all  other amounts  payable hereunder and
under  the Note  shall  be and  become automatically  and immediately  due and
payable,  without notice (including,  without limitation, notice  of intent to
accelerate and notice  of acceleration), presentment, demand, protest or other
formalities  of any  kind, all  of which  are hereby  expressly waived  by the
Borrower.
 
         8.02     Application  of  Proceeds.    All  proceeds  received  after
maturity  of the Note, whether  by acceleration or  otherwise shall be applied
first  to reimbursement of reasonable expenses and indemnities provided for in
this Agreement and the Security Instruments;  second to fees and other amounts
owing under  this Agreement or the Loan Documents; third to accrued and unpaid
interest on the Note; fourth to principal outstanding on the Note; and, to the
extent of any  excess to be paid  to the Borrower or as  otherwise required by
any court of competent jurisdiction.

         Section 9.    Miscellaneous.

         9.01     Waiver.  No  failure on the  part of the Lender  to exercise
and no delay  in exercising,  and no course  of dealing with  respect to,  any
right, power  or privilege under any  Loan Document shall operate  as a waiver
thereof,  nor shall  any single  or partial  exercise of  any right,  power or
privilege thereunder preclude  any other  or further exercise  thereof or  the
exercise of any other right, power or privilege.  The remedies provided in the
Loan Documents are cumulative  and not exclusive  of any remedies provided  by
law.

         9.02     Notices.  All notices  and other communications provided for
herein (including,  without limitation, any  modifications of,  or waivers  or
consents under, this  Agreement) shall be  given or made by  telex, telegraph,
telecopy, cable or other writing and telexed, telecopied, telegraphed, cabled,
delivered or sent by  certified or registered mail, return  receipt requested,
to the  intended recipient at  the  Address  for Notices  specified  below its
name on the signature pages hereof; or, as to any party, at such other address
as shall  be designated  by such  party in a  notice to  the Borrower  and the
Lender given  in  accordance with  this  Section 9.02.    Except as  otherwise
provided in  this Agreement, all such  communications shall be  deemed to have
been  duly given  when  transmitted  by  telex  or  telecopier  (with  receipt
confirmed by  telex or telecopier), sent  by the telegraph or  cable office or
personally delivered or, in the case of a mailed notice, upon receipt, in each
case given or addressed as aforesaid.

         9.03     Expenses, Etc.  The Borrower, without duplication, agrees to
pay or reimburse the Lender for paying:  (a)  the reasonable fees and expenses
of counsel to the Lender in connection with (i) the preparation, execution and
delivery  of this Agreement (including  the Exhibits hereto)  and the Security
Instruments  and the  making of the  Loan, however  such fee  shall not exceed
$131,000, and (ii) any modification, supplement  or waiver of any of the terms
of this Agreement, or any other Transaction Document; (b) all reasonable costs
and expenses of the Lender (including reasonable counsels  fees) in connection
with the enforcement of this Agreement, or any other Transaction Document; (c)
all  transfer,  stamp,  documentary  or other  similar  taxes,  assessments or
charges levied  by any governmental  or revenue authority  in respect of  this
Agreement, or any other Transaction Document or any other document referred to
herein or therein;  and (d) all costs, expenses, taxes,  assessments and other
charges incurred in  connection with  any filing,  registration, recording  or
perfection  of any  security interest  contemplated by  this Agreement  or any
other Transaction Document referred to herein or therein.

         9.04     Indemnification.  The Borrower shall 

         (a)      indemnify the  Lender and each of their  Affiliates and each
of their officers,  directors, employees, representatives,  agents, attorneys,
accountants  and  experts ( Indemnified  Parties )  from,  hold each  of  them
harmless against and  promptly upon demand  pay or reimburse each of them  for
the Indemnity Matters which may be  incurred by or asserted against or involve
any of them (whether  or not any of them  is designated a party thereto)  as a
result of, arising  out of or in any way related to (i) any actual or proposed
use by the Borrower of the  proceeds of the Loan, (ii) the execution, delivery
and performance of this Agreement  and the other Transaction Documents  by the
R&B Parties thereto,  (iii) the operations  of the business  of the  Borrower,
(iv) the failure of  the Borrower or  any other R&B Party  to comply with  the
terms  of any  Transaction Documents,  including this  Agreement, or  with any
applicable governmental requirement, (v) any  inaccuracy of any representation
or any breach of any warranty of  the Borrower set forth in this Agreement  or
the  other Transaction Documents, or  (vi) any other aspect  of this Agreement
and the  Transaction Documents, including, without  limitation, the reasonable
fees and disbursements of  counsel and all other reasonable  expenses incurred
in  connection with investigating, defending  or preparing to  defend any such
action,   suit,  proceeding  (including   any  investigations,  litigation  or
inquiries) or claim and including  all Indemnity Matters arising by  reason of
the  ordinary negligence of any Indemnified Party, but excluding therefrom all
Indemnity  Matters arising  by  reason  of  the  gross  negligence  or  wilful
misconduct of any Indemnified Party; and

         (b)      indemnify  and   hold  harmless   from  time  to   time  the
Indemnified Parties from and against any and all losses, claims, cost recovery
actions,  administrative orders  or  proceedings, damages  and liabilities  to
which  any  such Person  may become  subject (i)  under any  environmental law
described in  Section 6.10  hereof applicable  to the Borrower  or any  of its
Properties,  including  without  limitation,  the  treatment  or  disposal  of
Hazardous Substances  on any of its Properties, (ii) as a result of the breach
or  non-compliance by  the Borrower  with any  environmental law  described in
Section 6.10 hereof applicable to the Borrower, (iii) due to past ownership by
the  Borrower of  any  of  its Properties  or  past  activity  on any  of  its
Properties or past activity on any of its Properties which,  though lawful and
fully permissible  at the time,  could result in  present liability, (iv)  the
presence, use, release, storage, treatment or disposal of Hazardous Substances
on or at any of  the Properties owned or operated by the Borrower,  or (v) any
other  environmental,  health  or safety  condition  in  connection  with this
Agreement,  the Note or any other Transaction Documents, provided, however, no
indemnity  shall be  afforded under  this  Section 9.04(b)  in respect  of any
Property for any  occurrence arising from the acts or  omissions of the Lender
during the period  after which  such Person, its  successors or assigns  shall
have obtained possession  of such Property (whether by foreclosure  or deed in
lieu of foreclosure, as mortgagee-in-possession or otherwise).

         (c)      The  Borrower s  obligations under  this  Section 9.04 shall
survive any  termination of  this Agreement  and the payment  of the  Note and
shall continue thereafter in full force and effect.

         (d)      The Borrower  shall pay any  amounts due under  this Section
9.04  within thirty (30) days of the receipt by the Borrower of written notice
of the amount due.

         9.05     Amendments, Etc.  No amendment or waiver of any provision of
this Agreement or the Note,  nor any consent to any departure  by the Borrower
therefrom, shall in any event be effective unless the same shall be agreed  or
consented to  in writing by the  Lender and the Borrower,  which consent shall
not be unreasonably delayed or withheld, and each such waiver or consent shall
be effective  only in the specific  instance and for the  specific purpose for
which given.

         9.06     Successors and Assigns.

         (a)      This  Agreement shall  be  binding  upon  and inure  to  the
benefit of the  parties hereto  and their respective  successors and  assigns,
except that the Borrower may not assign its rights or obligations hereunder or
under the Note  without the prior written  consent of the Lender.   Lender may
not  assign  its rights  or obligations  hereunder  without the  prior written
consent of the Borrower (except as otherwise provided in subparagraphs (b) and
(c) below).

         (b)      The Lender may assign to one or more assignees  that are the
Lender s Affiliates all or a portion of its rights and  obligations under this
Agreement.  The Lender shall give the Borrower prompt notice thereof.  

         (c)      The Lender  may transfer, grant or  assign participations in
all  or any part of its interests hereunder pursuant to this subsection to any
Person that is an Affiliate of the Lender.  The Lender shall give the Borrower
prompt notice thereof. 

         (d)      The  Lender  may  furnish  any  information  concerning  the
Borrower in its  possession from time  to time  to assignees and  participants
(including prospective assignees and participants).

         9.07     Survival.   The obligations  of the Borrower  under Sections
4.01, 4.03, 4.04, 9.03 and 9.04 hereof shall survive the repayment of the Loan
and the termination of the  Commitment.  The other obligations of  the parties
to this Agreement  not previously accrued  under the terms  of this  Agreement
shall  terminate  upon  repayment of  the  Loan  and  the termination  of  the
Commitment.

         9.08     Captions and Final Agreement.  Captions and section headings
appearing herein are included solely for convenience of reference  and are not
intended  to affect  the interpretation  of any  provision of  this Agreement.
This Agreement, together with the other written agreements and papers executed
herewith in  connection with  this Agreement, represents  the final  agreement
among  the parties  hereto with respect  to the  subject matter  hereof.  This
Agreement  and  such writings  supersede  all  prior proposals,  negotiations,
agreements and understandings  related to such  subject matter.   Each of  the
Borrower and the Lender hereby represents and warrants that it  is not relying
on  any statement, representation, warranty, covenant or agreement of any kind
except for  those set forth in this Agreement and  such other documents.  This
Agreement may  be executed in any  number of counterparts, all  of which taken
together shall constitute  one and the same instrument and  any of the parties
hereto may execute this Agreement by signing any such counterpart.

         9.09     No Usury  Intended.   Notwithstanding any provision  of this
Agreement or  the Transaction Documents, if  at any time the  rate of interest
contracted for, charged or  received on any Advance  or the Loan or  any other
amount  payable  as  interest in  connection  with  the  Transaction Documents
exceeds  the maximum  non-usurious  interest rate  permissible for  commercial
borrowers  under applicable law ( Maximum Rate ), the rate of interest charged
hereunder shall be limited to the Maximum Rate.  In such event, if the rate of
interest chargeable under this  Agreement or the Transaction Documents  on any
Advance or the  Loan or any other amount at any time is subsequently less than
the Maximum Rate, the  principal amount of such Advance or the Loan shall bear
interest  at  the Maximum  Rate until  the total  amount  of interest  paid or
accrued hereunder equals the amount of interest which would have  been paid or
accrued hereunder if the stated rates  of interest set forth in this Agreement
had at all  times been in effect.   In the event, upon payment in  full of all
amounts payable hereunder, the total amount of interest paid or  accrued under
the terms  of this  Agreement or  the Transaction Documents  is less  than the
total amount of interest which would have been paid or accrued if the rates of
interest set  forth in this Agreement had, at  all times, been in effect, then
the Borrower  shall, to  the extent  permitted by applicable  law, pay  to the
Lender an amount equal  to the difference  between (a) the  lesser of (i)  the
amount of interest which  it would have been charged if  the Maximum Rate had,
at all times,  been in effect or (ii) the amount  of interest which would have
accrued on the  Advance or the Loan to  the Borrower if the rates  of interest
set forth in this Agreement had at all times been in effect and (b) the amount
of  interest actually  paid or  accrued  on such  Advance or  Loan under  this
Agreement.    In the  event  the Lender  ever  receives, collects,  charges or
applies as interest any sum in excess of the Maximum Rate,  such excess amount
shall be applied to the reduction  of the principal balance of the Loan  or to
other amounts  (other  than interest)  payable  hereunder or  the  Transaction
Documents,  and if no such principal is  then outstanding, such excess or part
thereof remaining shall be paid to the Borrower.

         9.10     Invalidity.    In the  event that  any  one or  more  of the
provisions  contained in  the  Note,  this Agreement,  or  in  any other  Loan
Document shall, for any reason,  be held invalid, illegal or unenforceable  in
any respect, such  invalidity, illegality or unenforceability shall not affect
any other provision of the Note, this Agreement or any other Loan Document.

         9.11     No Consequential Damages.   Except as specifically  provided
for  herein to  the contrary,  neither the  Borrower nor  the Lender  shall be
liable  to the other for  any consequential, incidental,  indirect or punitive
damages of any kind or character, including, but not limited to,  loss of use,
loss of  profit, loss  of  revenue, loss  of  product or  production,  whether
arising  under  the Loan  Documents  or as  a  result  of, relating  to  or in
connection  with,  the   transactions  contemplated   hereby  (the    Excluded
Damages ), and no claim for  Excluded Damages shall be made by the Borrower or
the   Lender  against  the   other  Person,   whether  based   on  negligence,
seaworthiness,  breach  of  warranty,  breach of  agreement,  statute,  strict
liability or otherwise.

         9.12     GOVERNING  LAW; SUBMISSION  TO JURISDICTION; WAIVER  OF JURY
TRIAL.

         (a)      THIS  AGREEMENT  AND THE  NOTE  SHALL  BE  GOVERNED  BY  AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.

         (b)      THE  BORROWER   AND  R&B   (U.K.)  HEREBY  SUBMITS   TO  THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK  AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY
AND THE UNITED KINGDOM FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING  TO  THIS AGREEMENT  OR THE  TRANSACTIONS  CONTEMPLATED HEREBY.   THE
BORROWER  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 SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

         (c)      EACH OF  THE BORROWER,  R&B (U.K.),  AND  THE LENDER  HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN  ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE  TRANSACTIONS CONTEMPLATED
HEREBY.

         9.13     Agent for Service of Process.  The  Borrower and R&B  (U.K.)
hereby irrevocably designate The Prentice-Hall Corporation Systems, Inc., with
offices  at 500  Central  Avenue, Albany,  New  York 12206-2290,  as agent  to
receive for and on behalf of the Borrower service  of process in New York.  In
the event that The  Prentice-Hall Corporation Systems, Inc. resigns  or ceases
to  serve  as the  Borrower s or  R&B (U.K.) s  agent  for service  of process
hereunder,  the  Borrower and  R&B (U.K.)  agrees  forthwith (a)  to designate
another agent for service of process in the State of New York and (b)  to give
prompt written  notice to the  Lender of the name  and address of  such agent.
The Lender agrees to cause  a copy of such process served on such  agent to be
promptly forwarded  to the Borrower  and R&B (U.K.)  at its address  set forth
underneath its signature below, and the Borrower and R&B (U.K.) agree that the
failure of the  Borrower and R&B (U.K.) to receive such  copy shall not impair
or  affect in  any way  the validity  of  such service  of process  or of  any
judgment based thereon.  The Borrower and R&B (U.K.) agree that the failure of
its agent for  service of process to  give any notice  of any such service  of
process to the Borrower and R&B (U.K.) shall not impair or affect the validity
of such service or of any judgment based thereon.   If, despite the foregoing,
there is for  any reason no agent for  service of process of the  Borrower and
R&B (U.K.)  available to be served,  then the Borrower and  R&B (U.K.) further
irrevocably consent  to the service of  process by the mailing  thereof by the
Lender by registered or certified mail,  postage prepaid, to the Borrower  and
R&B (U.K.) at its address listed on the signature pages hereof.  Nothing 



                   (Remainder of Page Intentionally Deleted)


in  this Section 9.13  shall affect  the right  of the  Lender to  serve legal
process in any other manner permitted by law or affect the right of the Lender
to bring any action or proceeding against the Borrower and R&B (U.K.) or their
property in the courts of any other jurisdiction.

         IN  WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the day and year first above written.

                             TRB HOLDING CORPORATION.
                                 as Borrower


                             By:                                              
                                  T.W. Nagle
                                  Executive   Vice  President
                                  Finance and Administration

                             Address for Notices:

                             901 Threadneedle, Suite 200
                             Houston, Texas 77079
                             Attention:  T.W. Nagle, Executive Vice President
                             Finance and Administration

                             Telecopy Number (281) 496-0285

                             With copies to:

                             Wayne K. Hillin
                             901 Threadneedle, Suite 200
                             Houston, Texas 77079

                             Telecopy Number: (281) 496-0285


                             READING & BATES (U.K.) LIMITED


                             By:                                              
                                   T.W. Nagle
                                   Authorized Agent



                             Address for Notices:

                             901 Threadneedle, Suite 200
                             Houston, Texas 77079
                             Attention:  T.W. Nagle, Executive Vice President
                             Finance and Administration

                             Telecopy Number (281) 496-0285


                             NISSHO IWAI EUROPE PLC,
                                 as Lender


                             By:                                              
                                   H. Iwano
                                   Attorney-in-Fact


                             Address for Notices:

                             Bastion House
                             140 London Wall
                             London
                             EC2Y 5JT
                             United Kingdom
                             Attention: Manager of Marine Department

                             Telecopy Number:  011-4471-588-0391

                             With a copy to:

                             Nissho Iwai Corporation
                             4-5, Akasaka 2-chome
                             Minato-ku, Tokyo 107, Japan
                             Attention:  Manager, Marine Project Section 2
                             Marine & Offshore Engineering Department

                             Telecopy Number:  011-813-3588-4547

                             and

                             Baker & Botts, L.L.P.
                             One Shell Plaza
                             Houston, Texas  77002
                             Attention:  Stephen Krebs

                             Telecopy Number:  (713) 229-1522

                             Address for Applicable Lending Office:

                             See Address for Notices



                                                                  EXHIBIT 2.05


                                 Form of Note


                                     NOTE


$38,000,000.00                                              New York, New York
                                                         ______________, 199__


         FOR VALUE  RECEIVED, TRB Holding Corporation,  a Delaware corporation
(together with its successors, the  Borrower ), hereby promises to pay  to the
order of  Nissho Iwai  Europe PLC  (the   Lender ), by  disbursement from  the
Lockbox maintained  at the  principal office of  Sanwa Bank Limited,  New York
Branch, New York, New York,  the principal sum of $38,000,000 (or  such lesser
amount  as shall equal the aggregate unpaid  principal amount of the Loan made
by the Lender to the Borrower under the Loan  Agreement referred to below), in
lawful money  of the  United States of  America and  in immediately  available
funds,  on  the dates  and  in  the principal  amounts  provided  in the  Loan
Agreement (as  defined below),  and to  pay interest  on the unpaid  principal
amount of  each Advance,  at such  office, in  like money and  funds, for  the
period commencing on the date of such Advance until such Advance shall be paid
in  full,  at the  rates  per annum  and  on the  dates  provided in  the Loan
Agreement.  

         The Lender  is hereby authorized  by the  Borrower to endorse  on the
schedules (or a  continuation thereof) attached to  this Note, the amount  and
date  of each  Advance made  by  the Lender  to the  Borrower  under the  Loan
Agreement, and the amount and date  of each payment or prepayment of principal
of such Loan received by the  Lender, provided that any failure by  the Lender
to make any such endorsement shall not affect the obligations  of the Borrower
under the Loan Agreement or under this Note in respect of such Advance.

         This Note is the Note referred to in that certain  Loan Agreement (as
modified and  supplemented  and  in  effect  from  time  to  time,  the   Loan
Agreement )  dated as  of December 14,  1996 between  the Borrower,  Reading &
Bates (U.K.) Limited and the Lender, and evidences the Loan made by the Lender
thereunder.  Capitalized terms used in this  Note have the respective meanings
assigned to them in the Loan Agreement.

         The Loan Agreement provides  for the acceleration of the  maturity of
this  Note upon the  occurrence of certain  events and for  prepayments of the
Loan upon the terms and conditions specified therein.

         The Loan Agreement further provides that this Note is secured  by the
Security Instruments, as defined therein, covering the collateral described in
such Security Instruments.

         This Note shall be  governed by and construed in accordance  with the
laws of the State of New York.


                             TRB HOLDING CORPORATION



                             By:                                              
                             Name:                                            
                             Title:                                           



                ADVANCE AND PAYMENTS OF PRINCIPAL AND INTEREST


                            Amount of    Amount of
                            Principal     Interest      Unpaid
  Borrowing   Amount of      Paid or      Paid or     Principal    Notation 
     Date        Loan        Prepaid      Prepaid      Balance      Made By




                                                                  Exhibit 3.01

                                     FORM
                                      OF
                                DRAWDOWN NOTICE


Nissho Iwai Europe Plc (the "Lender")
Bastion House
140 London Wall
London EC2Y 5JT
England

Attention:  Manager of Marine Department

Dear Sirs:

         Reference is made to the Loan Agreement dated as of December 14, 1996
(the  "Loan Agreement"),  between  TRB Holding  Corporation (the  "Borrower"),
Reading & Bates (U.K.) Limited and  the Lender.  Capitalized terms used herein
and not otherwise defined herein  have the meanings assigned to such  terms in
the Loan Agreement.

         The Borrower, hereby requests a borrowing under the Loan Agreement in
the aggregate principal amount of $38,000,000 (the "Proposed Borrowing").

         Please  make the  proceeds  of the  Proposed  Borrowing available  to
Account No. _____________ at ________________________________________.  

         By each of the delivery of this Drawdown Notice and the acceptance of
the Advance  made by  the  Lender in  response to  this  Drawdown Notice,  the
Borrower  represents  and  warrants  that  the  conditions  to  the  Borrowing
specified in  the Loan  Agreement  have been  satisfied  with respect  to  the
Proposed Borrowing.

                                 Very truly yours,

                                 TRB HOLDING CORPORATION


                                 By:                                    
                                 Name:                                  
                                 Title:                                       


cc:  Nissho Iwai American Corporation
     Suite 800, Three Riverway
     Houston, Texas 77056
     Attention:  H. Kawaguchi
                                 EXHIBIT 6.11 

                             COMPANIES  INSURANCE

As specified  in Exhibit  6.11,  the Companies  shall maintain  the  following
insurance coverage:  


1.  Workmen's Compensation and Employers' Liability Insurance

    All of the Companies   employees shall  be covered for statutory  benefits
    as  set forth  and required  by applicable  law  in  the Vessel s  area of
    operation or such other  jurisdiction under which the Companies may become
    obligated  to pay  benefits.   Employers' Liability  insurance,  including
    appropriate  maritime coverage covering  all employees,  shall be provided
    with minimum primary policy  limits as required by  applicable statute, or
    U.S. $1 million per occurrence, whichever is greater.

2.  Comprehensive General Liability 

    Insurance  coverage shall  be  provided  for  liability arising  from  all
    operations  of the  Companies.    The policy  shall  include coverage  for
    premises and  operations, independent  contractors, completed  operations,
    and  contractual liability  (or their  equivalents).   Insurance  coverage
    shall also be provided  for all owned, hired, and nonowned vehicles.   The
    minimum primary  policy  limits shall be U.S.  $1 million single limit per
    occurrence under  the General  Liability policies.   Automobile  Liability
    insurance shall  have  minimum policy  limits  of  U.S. $1,000,000  single
    limit per occurrence, or such greater amount as required by law.

3.  Protection and Indemnity (Marine Liability) Insurance

    Full form  marine protection and indemnity  insurance, including, but  not
    limited  to, sudden  and accidental  pollution liability  and  contractual
    liability coverage or equivalent  insurance with such club  or under forms
    of  policies  approved  by  the  Lender.  Such  protection  and  indemnity
    insurance shall be  maintained in the  broadest forms  generally available
    in the  United States market,  shall be in  an amount  not less  than that
    carried   by  experienced  and   responsible  companies   engaged  in  the
    production of petroleum,  shall include a cross-liability endorsement  and
    shall be  placed through  independent brokers  of recognized  standing and
    with first-class  underwriters reasonably  acceptable to the  Lender.   No
    hull  and machinery  or protection  and indemnity  insurance shall provide
    for a deductible amount  in excess of $500,000  with respect to the Vessel
    without the prior written consent of the Lender.

4.  Excess Liability

    The Companies shall carry  Excess Liability Insurance in  amounts not less
    than $200  million each  occurrence in  addition to  and in excess  of all
    primary  Liability  Coverages  carried  by  Companies,  including but  not
    limited to  insurance required  under Paragraphs  1 and  2 (oil  pollution
    sublimit $90 million per Paragraph 6).

5.  Marine Physical Damage, Including Hull and Machinery

    All risk Marine  and hull and  machinery shall  be provided  with a  limit
    equal to  that normally carried by  experienced and responsible  companies
    engaged in offshore drilling,  but shall not  be less than the greater  of
    (a)  $105,000,000;  or (b)  the  fair market  sale  value of  the  Vessel.
    Coverage shall include collision liability and navigation limits  adequate
    for the Vessel's trade.

6.  Oil Pollution Insurance

    Oil pollution  insurance coverage  issued by  the Vessel's  P & I  Club or
    equivalent  coverage in  the amount  of not less  than US  $90,000,000 per
    occurrence,   unless   additional  insurance   or   proof   of   financial
    responsibility of  a greater  amount shall  be required by  a governmental
    authority,  in which case  such greater amount shall  be obtained and kept
    in full force and  effect by the Companies.  The Companies shall  maintain
    insurance,  if   available,  covering   similar  oil   removal  risks   or
    liabilities  and civil  or criminal  penalties  incident thereto  and  not
    attributable  to  the action  or inaction  of  the Lender  under any  law,
    regulation or judicial decision  of any of the United States of America or
    foreign  jurisdiction or  jurisdictions  or political  subdivision thereof
    applicable  to the Vessel  or its operations to  the extent such insurance
    is  requested  in writing  by the  Lender and  recommended by  a reputable
    independent marine insurance  broker as insurance which other  responsible
    tanker  owners carry  for their benefit  and the benefit  of their lenders
    and which  it would be imprudent  not to carry for  the protection of  the
    Companies and  the Lender  in view of  the nature  of the  Vessel and  the
    Vessel's  operations.   Applicable  when  the Vessel  is  attached to  the
    wellhead,  fixed  entry  coverage  issued  by  the  Vessel s P&I  Club  or
    equivalent coverage  in  an  amount  of  not less  than  $400,000,000  per
    occurrence.   Applicable  when the Vessel  is acting as  a shuttle tanker,
    mutual  entry coverage  issued  by  the Vessel s  P&I  Club or  equivalent
    coverage in an amount of not less than $500,000,000 per occurrence.

7.  War, Political Risk, Confiscation and Expropriation Insurance

    If  and  to  the  extent that  the  Vessel  is  operated  outside  of  the
    territorial  waters  and/or  the Outer  Continental  Shelf  of  the United
    States (and in addition  to any coverage required  by the Lender  for such
    operations under  the Loan Documents),  War, Political Risk,  Confiscation
    and  Expropriation Insurance shall be provided for the Vessel with a limit
    equal to the value insured under Paragraph 5 above. 

8.  Other Losses

    Losses not  covered by  the above  stated policies because  of deductibles
    and  policy limits stated above  shall be borne according to the liability
    and indemnity provisions of the Loan Documents.

9.  NIC Parties as Additional Insured

    All coverages  and other  insurance policies  carried by the  Companies or
    that the Companies are  required at any  time to maintain pursuant to  the
    Loan Documents shall name  NIC Parties as additional  insureds (other than
    the protection and indemnity  and oil  pollution coverages extended by  UK
    P&I   Club,  foreign   workers   compensation  and   employer s  liability
    coverage) and loss payee for all risks and losses as provided in the  Loan
    Agreement and the Assignment of Insurance Proceeds.

10. Reporting Requirements

    (a) On each anniversary  of the Closing  Date, and each  time there is  a
        reduction or material change in the insurance coverage carried on the
        Vessel, the Companies  will furnish to  the Lender a  detailed report
        signed by  independent  marine  insurance brokers  (who  may  be  the
        insurance brokers regularly employed by the Companies  ) appointed by
        the Companies and reasonably acceptable to the Lender, describing the
        insurance  policies  then  carried  and  maintained  on  the   Vessel
        (including the  names of the underwriters, the  types of risk covered
        by such  polices, the  amount insured  thereunder and  the expiration
        date thereof)  and stating  that  in the  opinion of  said  insurance
        brokers such insurance  is adequate and reasonable  for protection of
        the Lender,  is in compliance with  the terms of Section  6.11 and is
        comparable with  that  carried  by  other  responsible  operators  of
        similar production vessels.   The Companies  will cause such  firm to
        agree  to  advise  the Lender  promptly  of  any  lapse  of any  such
        insurance  by expiration,  failure to renew  or otherwise  and of any
        default in payment of any premium and of any other act or omission on
        the part of the Companies of  which it has knowledge and which might,
        in its opinion,  invalidate or render  unenforceable, in whole  or in
        part, any insurance  on the Vessel.   The Companies shall also  cause
        such firm to agree to mark its records and to use its best efforts to
        advise  the  Lender, at  least ten  (10) business  days prior  to the
        expiration  date  of  any  insurance  carried  pursuant to  the  Loan
        Agreement, that such insurance has been renewed or replaced  with new
        insurance which complies with  the provisions of the  Loan Agreement,
        and  such  advice shall  be in  the same  detail  in respect  of such
        renewed  or  replacement  insurance  as is  required  in  respect  of
        insurance described in the aforesaid reports.

    (b) Copies  of all  insurance  policies required  to be  maintained under
        Section 6.11  of the  Loan Agreement  or certificates evidencing  the
        coverage thereof, shall be  delivered to and held by the  Lender, and
        so long as the Loan Agreement remains  in effect, the Companies shall
        deliver  to the  Lender  not  later  than January 31  of  each  year,
        commencing January 31, 1998, a schedule certified  to be correct by a
        responsible  officer  setting  forth all  insurance  in  force as  of
        January 1  of  that year  including  but not  limited  to  the policy
        numbers, the name  and address of  the insurers,  the amount of  each
        policy, and the expiry date of each policy.

    (c) In  the event the Vessel suffers  serious damage reasonably estimated
        at the time to  cost more than $500,000  to repair or to  require the
        Vessel be withdrawn from service and placed in drydock to effect such
        repairs  immediately,  the  Companies  shall  notify  the  Lender  by
        telegram within twenty-four  (24) hours  after the  event shall  have
        come to its knowledge and in such event the Lender shall have come to
        its knowledge  and in such event  the Lender shall have  the right to
        have an  independent survey of the damage  at the Companies s expense
        and if such survey  be requested the Companies shall lend  all needed
        assistance.

11. Additional Provisions

    All policies (other than  the protection  and indemnity and oil  pollution
    coverages extended by UK  P&I Club  and the foreign workers   compensation
    and   employers   liabilitly  coverages)   shall  include  the  following:
    (i) breach  of warranty  protection  to  the NIC  Parties, (ii) waiver  of
    subrogation clause,  (iii) at least [10]  [30] (or 7,  in the  case of war
    risk)   days   prior   written   notice  of   cancellation   or   material
    modification,  and (iv) provide that the interests of the Lender under the
    insurance  policy shall not be  impaired in any  way by  any change in the
    title of ownership  of the Vessel or by any omission or neglect  or by the
    performance of  any act  in violation  of any  terms or conditions  of the
    policy  or because  of any  false statement concerning  the policy  or the
    subject  thereof by  the  insured  or the  insured s employees,  agents or
    representatives  whether occurring  before  or  after the  date hereof  or
    whether  before or  after any loss.   The insurance  (other than pollution
    coverage extended  by UK  P&I Club  and the foreign  workers  compensation
    and employers  liabilitly coverages)  shall be primary,  without right  of
    contribution  from any  other insurance  which may be  carried by  the NIC
    Parties, and (other than  the protection  and indemnity and oil  pollution
    coverages extended  by the UK  P&I Club) contain  a waiver  of set  off of
    premiums against claims proceeds  and provide for no  recourse for premium
    payments  by the NIC Parties.   Each of  the Companies  agree that it will
    not do  any act, nor  voluntarily suffer  nor permit  any act to  be done,
    whereby  any insurance  required  hereunder  shall or  may  be  suspended,
    impaired or defeated and  will not suffer nor permit the Vessel to  engage
    in any voyage, nor  to carry any cargo not permitted under the policies of
    insurance in  effect, without  first covering  such Vessel with  insurance
    reasonably satisfactory in all respects, including  the amount thereof, to
    the Lender for such voyage or the carriage of such cargo.

                                                                  EXHIBIT 7.08


                       FORM OF SUBORDINATION PROVISIONS


     Subordination.

     (a)     The   indebtedness  ("Subordinated   Debt")  evidenced   by  this
instrument is  subordinate and junior in  right of payment to  all Senior Debt
(as  defined  in subdivision  (b))  of the  Companies to  the  extent provided
herein.

     (b)     For  all  purposes of  these  subordination  provisions the  term
"Senior Debt"  shall mean all principal  of and premium, if  any, and interest
and expenses under  the Loan Agreement, dated  as of December 14, 1996,  among
the  Companies  and  Nissho Iwai  Europe  Plc  ( NIEP ),  and  (ii) all  other
indebtedness of  the Companies or  any Subsidiary  for borrowed money.     The
Senior Debt shall continue to be Senior  Debt and entitled to the benefits  of
these subordination provisions irrespective of any amendment, modification  or
waiver  of any term of  the Senior Debt or extension  or renewal of the Senior
Debt.

     (c)     No direct or indirect payment (in cash, property or securities or
by setoff  or otherwise)  shall be  made on  account of  the  principal of  or
premium, if any,  or interest on any  Subordinated Debt, or as a  sinking fund
for  the  Subordinated Debt,  or  in respect  of  any  redemption, retirement,
purchase or other acquisition of any of the Subordinated Debt until the Senior
Debt shall be paid in full in cash. 

     (d)   In the event of:

         (i)    any   insolvency,   bankruptcy,    receivership,  liquidation,
     reorganization,  readjustment,  composition or  other  similar  proceeding
     relating to the Companies, its creditors as such or its property,

         (ii)   any  proceeding  for  the  liquidation,  dissolution or  other
     winding-up  of  the Companies,  voluntary or  involuntary, whether  or not
     involving insolvency or bankruptcy proceedings,

         (iii)  any   assignment   by   the  Companies  for   the  benefit  of
     creditors,

         (iv)   any   other   marshalling  of  the assets of the Companies, or

         (v)    any acceleration of any Senior Debt,

all Senior Debt  (including any interest  thereon accruing  at the legal  rate
after  the commencement  of any such  proceedings and  any additional interest
that would have accrued thereon but for  the commencement of such proceedings)
shall first be  paid in full  before any payment  or distribution, whether  in
cash, securities  or  other property,  shall  be made  to  any holder  of  any
Subordinated Debt on account of any Subordinated Debt. 

     (e)    So  long  as any Senior Debt  remains outstanding, the  holders of
the Subordinated Debt or  any trustee or other representative acting  on their
behalf  may not  declare all  or any  part of  the Subordinated  Debt  due and
payable prior  to maturity, and the  holders of Subordinated Debt  may take no
further  action  to declare  such  Subordinated Debt  due and  payable,  or to
enforce obligations  in respect of such Subordinated  Debt, including, without
limitation, the exercise of any other remedy. 

     (f)    If  any payment or distribution of any character  or any security,
whether in cash, securities or other property, shall be received by any holder
of Subordinated  Debt in contravention of  any of the terms  hereof and before
all the Senior Debt shall have been paid in full, such payment or distribution
or security  shall be received in trust for the  benefit of, and shall be paid
over or delivered  and transferred to, the  holders of the Senior  Debt at the
time outstanding in  accordance with the  priorities then existing  among such
holders for application to the payment of all Senior Debt remaining unpaid, to
the extent necessary to pay all such Senior Debt in full.  In the event of the
failure of any holder of any  Subordinated Debt to endorse or assign any  such
payment,  distribution  or security,  each  holder of  Senior  Debt  is hereby
irrevocably authorized to endorse or assign the same.

     (g)    No  present  or   future  holder  of  any  Senior  Debt  shall  be
prejudiced in the right  to enforce subordination of Subordinated Debt  by any
act or failure  to act on the part of the Companies.  Nothing contained herein
shall impair, as  between the Companies  and the  holder of this  Subordinated
Debt,  the  obligation of  the  Companies  to pay  to  the  holder hereof  the
principal hereof and interest hereon as and when the same shall become due and
payable in accordance with the terms hereof.  

     (h)    Upon  the  payment in  full of  all Senior  Debt,  the holders  of
Subordinated Debt shall be subrogated  to all rights of any holders  of Senior
Debt to receive any further payments or distributions applicable to the Senior
Debt  until the Subordinated Debt  shall have been paid in  full, and, for the
purposes of  such subrogation,  no  payment or  distribution received  by  the
holders of  Senior Debt  of cash,  securities or other  property to  which the
holders of the  Subordinated Debt would  have been  entitled except for  these
subordination  provisions shall, as  between the  Companies and  its creditors
other than  the holders of  Senior Debt, on the  one hand, and  the holders of
Subordinated Debt, on the other, be deemed to  be a payment or distribution by
the Companies to or on account of Senior Debt.

     (i)     No  Subordinate  Debt  may  be   secured  or  subject  to  credit
enhancement.  

     (j)    The provisions  in  sections (a) through  (i) above  shall not  be
amended or  modified and no term  or provision hereof shall  be waived without
the express prior written consent of the holders of Senior Debt.

     (k)    The  holders of this  Subordinated Debt hereby  (i) undertake  and
agree to execute,  verify, and  deliver and  file proofs  of claim,  consents,
assignments or  other instruments which any  holder of Senior Debt  may at any
time  reasonably require in  order to provide  and realize upon  any rights or
claims  pertaining  to  the  Subordinated   Debt  held  by  such  subordinated
noteholder and  to effectuate the full benefit  of the subordination contained
herein  and (ii) authorizes each holder of Senior Debt to take any action made
in good faith  as may be necessary or appropriate  to effect the subordination
provided for herein and  appoints each holder of Senior Debt  his attorney-in-
fact for such purposes.

     (l)    Any  holder of Senior Debt may  extend, renew, modify or amend the
terms of  Senior Debt or any  security therefor and release,  sell or exchange
such security and otherwise deal freely with the Companies or any affiliate to
the  same extent as could any person, all  without notice to or consent of the
holders  of  Subordinated  Debt  and without  affecting  the  liabilities  and
obligations  of the  holders of Subordinated  Debt pursuant  to the provisions
hereof.


                                                                     Exhibit A


                            [Draft Comfort Letter]

                                                              January __, 1997



Nissho Iwai Corporation
Nissho Iwai Europe PLC
c/o Nissho Iwai Europe PLC

Bastion House 
140 London Wall 
London 
EC2Y 5JT 
United Kingdom

     Re: The Loan Agreement between  TRB Holding Corporation ( TRBH ), Reading
         &  Bates (U.K.)  Limited ( R&B (U.K.) )  and Nissho  Iwai Europe PLC,
         dated as  of December 14, 1996 (the   Loan Agreement ; terms used and
         not  defined herein,  shall have  the meanings  assigned in  the Loan

         Agreement)

Gentlemen:

         This letter is provided to  you in order to induce you  to enter into
the  above-referenced  Loan  Agreement  and  other  documents  in   connection
therewith.  

         It  is the intention of Reading &  Bates Corporation (a) that it will
continue  its ownership interest in TRBH, TRB Subsidiary Corporation ( TRBS ),

R& B (U.K.), and Reading & Bates Drilling Co. (collectively,  the  Companies )
as each  is currently held, (b)  that the Companies will  continue to maintain
their  corporate existence  and remain  financially viable,  and (c)  that the
TRBH, TRBS and  the partnership or partnerships to be  created pursuant to the
Option Agreement (the   Partnership ) will perform their obligations under the
Loan Agreement and the Option Agreement dated December 14, 1996  between TRBH,
TRBS and Nissho  Iwai Corporation (the   Option Agreement ) and  the documents
entered into  in connection therewith.    Reading & Bates Corporation intends,
to the  extent necessary, to  continue to fund or  cause to be  funded working
capital to  the TRBH,  TRBS and  the Partnership by  means of  an intercompany
revolving  credit  facility(ies)  in  order  to  allow  TRBH,  TRBS   and  the
Partnership to continue to meet any shortage of daily operating  expenses, any
lay-up  costs  during stacked  periods  and any  conversion  or  upgrade costs
necessary for a new charter contract, as well as minimum debt service required
under the Loan Agreement. 

         Reading & Bates Corporation intends  to cause (a) each of  TRBH, TRBS
and the Partnership  to perform its  obligations, if any,  under each  Charter
Agreement  and the  Bareboat Charter,  (b) R&B (U.K.)  to continue  performing
their obligations  under the Amended  Agreement dated March 30,  1995, between
Britoil  PLC  and  BP  Exploration  Operating  Company  Limited,  as  amended,
supplemented  and  novated by  Novation  Agreements  dated  July 10, 1996  and
August 30, 1996 pursuant to which R&B (U.K.) has assumed thereunder all of the
rights,  duties and  obligations of Britoil  (Beta) Limited  and the documents
executed in  connection therewith  and (c)  Reading &  Bates  Drilling Co.  to
perform its obligations under the Subordination Agreement.

                             Sincerely,

                             READING & BATES CORPORATION




                             By:_______________________________
                             Name:_____________________________
                             Title:______________________________


                                                                     Exhibit B


                        [Opinion of Borrower s Counsel]



                                                            December ___, 1996

Nissho Iwai Europe PLC
c/o Baker & Botts, L.L.P.
3000 One Shell Plaza

910 Louisiana
Houston, Texas 77002

Ladies and Gentlemen:

I  am  General  Counsel  to  Reading &  Bates  Development  Co.,   a  Delaware
corporation  (the  "Borrower"),  Reading  & Bates  (U.K.)  Limited,  a company
organized under  the laws  of the United  Kingdom ("Reading &  Bates (U.K.)"),
Reading & Bates Corporation, a  Delaware corporation ( Reading &  Bates Co. ),
and Reading  &Bates Drilling Co., an Oklahoma  corporation ("RB Drilling"; the

Borrower,  Reading & Bates  (U.K.),  Reading  &  Bates Co.  and  RB  Drilling,
collectively, the "Companies"), in connection with the execution and  delivery
of  the Loan Agreement  dated as of  December 14, 1996  (the  Loan Agreement )
between the Borrower, RB  Drilling and you, pursuant to which  you have made a
loan to  the Borrower in order for the  Borrower to finance the oil production
vessel   Seillean , Gross Register  Tons (GRT): 50,928.00,  Net Register Tons:
15,278.00,  Length:  236.47 meters,  Width: 37  meters,  Depth: 19.80  meters,
Permanent  Navigation  Patent No.  23272-96,  Radio Call  Letters:  3FPF6, and
Registration  No. 25519-PEXT,  and with  the  home port  of  Panama City,  the
Republic  of Panama  (the  Vessel ).  This opinion  is being furnished  to you
pursuant  to Section  5.01(g) of  the Loan  Agreement.  Capitalized  terms not
otherwise  defined herein  have the  meanings  ascribed to  them  in the  Loan
Agreement.

In this  connection and as a  basis for the opinions  hereinafter expressed, I
have examined executed originals of the following documents:

     (1) the Loan Agreement;

     (2) the Note;

     (3) the Bareboat Charter;

     (4) the Donan Charter Agreement;

     (5) the Collateral Assignment;

     (6) the Assignment of Charter;

     (7) the Ship Mortgage;

     (8) the Option Agreement;

     (9) the Comfort Letter;

     (10) the Assignment of Insurance Proceeds;

     (11) the financing statements  (the "Financing  Statements")  executed by
the Charterer in  connection with the Collateral  Assignment, in favor  of the
owner as the secured party;

     (12) the Subordination Agreement; and

     (13) the Debentures.

(collectively referred to as the "Documents").

As General Counsel to the Companies, I am familiar with the relevant corporate
proceedings and have  examined such documents and records of the Companies and
have  obtained such  other information as  I have  deemed necessary  to form a
basis for the opinions expressed below.

Based upon the foregoing and having regard to the legal  considerations I deem
relevant, and  subject to  the  assumptions, limitations,  qualifications  and
exceptions set forth herein, it is my opinion that:

1.  Each  of  the  Companies  is  a  corporation  duly organized  and  validly
    existing  in  good  standing   under  the  laws  of   the  state  of   its
    incorporation  and has the  corporate power  and authority  (i) to  own or
    lease and operate its properties and carry on  its business as carried  on
    at the  date hereof, and (ii)  to execute and  deliver, and to  consummate
    the transactions contemplated by, the Documents to which it is a party.

2.  Each of  such  Companies  has  taken  all necessary  corporate  action  to
    authorize  the execution  and  delivery  of, and  the consummation  of the
    transactions contemplated  by, each  of the  Documents to  which  it is  a
    party.  Such execution  and delivery, and consummation of the transactions
    contemplated by the Documents,  will not (i) result in a violation of each
    such Company's certificate of  incorporation or bylaws, or to my knowledge
    any law, order or  governmental regulation to which  each such Company  is
    subject,  (ii) result  in  a  violation of  or constitute  a breach  of or
    default under  any agreement or  order binding upon  and material  to such
    Company,  or (iii)  violate  any  requirement of  law  applicable to  such
    Company.  Each of the Documents to which  each of the Companies is a party
    has  been  duly  authorized,   executed  and  delivered  by  each  of  the
    Companies.

3.  Each of the Documents  constitutes the legal, valid and binding obligation
    of each of the Companies a party thereto. 

4.  If, notwithstanding the choice  of New  York law contained therein,  Texas
    law were applied to the Documents, each of  the Documents would constitute
    the legal, valid and binding obligations of each  of the Companies a party
    thereto.

5.  The execution and delivery  of, and  the consummation of the  transactions
    by, each of the Companies of the Documents to  which it is a party  do not
    require, with respect to  any of such Companies,  the consent or  approval
    of  any regulatory authority or governmental body of  the United States or
    the State  of Texas  (except for the  filings referred to  herein) or  any
    regulatory  authority or  governmental  authority  in connection  with any
    application of the General Corporation Law of the State of Delaware.

6.  No consent or approval of the U. S.  Department of Transportation Maritime
    Administration,  the United  States  Coast  Guard  ("USCG") or  any  other
    entity  having jurisdiction over  the Vessel  or any  of the  Companies is
    required  to consummate  the  transactions  contemplated under  or by  the
    Documents.

7.  The Financing  Statements are in  the proper form  for filing  pursuant to
    the Uniform Commercial Code in effect in the  State of Texas (the  "UCC"),
    and  upon filing  with  the  Secretary of  State  of the  State  of  Texas
    pursuant to  the UCC, will  perfect your security  interest in  all right,
    title and interest of  the applicable  debtor in the collateral  described
    in such Financing Statements.

8.  No  action, suit or proceeding is pending or,  to my knowledge, threatened
    against any of the Companies before or by any court, arbitration panel  or
    administrative agency which, if  adversely determined, could reasonably be
    expected  to result  in  a material  adverse  change  in  the business  or
    condition of  any of the Companies  or prevent any  of the Companies  from
    performing any of its obligations under the Documents.

My  opinions   are  subject   to  the  following   additional  qualifications,
limitations and assumptions:


     (i)     the effect of applicable bankruptcy,  insolvency, reorganization,
             moratorium, fraudulent  transfer  or  conveyance  or  other  laws
             affecting   creditors'   rights   generally   and   the   general
             principles   of  equity  (regardless  of whether  considered in a
             proceeding in  equity or at law);

     (ii)    the  due  organization  and  existence  of  all  parties  to  the
             Documents other than the Companies;

     (iii)   the  legal right  and the  corporate power  and authority  of all
             parties to  the Documents (other than  the Companies) to  execute
             and deliver, and to  consummate the transactions contemplated by,
             the Documents to which they are parties;

     (iv)    the due authorization, execution and delivery of the Documents by
             all parties to the Documents (other than the Companies);

     (v)     certain  remedial,  waiver  and other provisions of the Documents
             are or  may  be unenforceable in whole or in part under Texas law
             or the law of the  United  States,  but  the  inclusion  of  such
             provisions will not make  the  rights and  remedies  provided for
             in  such  Documents, taken  as  a  whole,   inadequate   for  the
             practical realization of the rights and benefits provided thereby;

     (vi)    no opinion is  expressed as to  the enforceability  of choice  of
             law, choice of jurisdiction and forum selection clauses contained
             in the Documents; and

     (vii)   (a)  you will  comply  with usury  laws  which may  apply to  the
             provisions  of the  Loan  Agreement or  other  Documents,  (b) in
             connection   therewith   you   will   take   into   account   any
             consideration, in  whatsoever form, which could  constitute or be
             deemed to  constitute interest under Texas  law, (c) there  is no
             other  consideration  paid or  to  be  paid by  the  Borrower  in
             connection with  the  Loan Agreement  other than  that  reflected
             therein, and (d)  Alamo Lumber Company  v. Gold,  661 S.W.2d  926
             (Tex.  1984)  would not  be  extended  and/or  applicable to  the
             transactions described in the Loan Agreement and other Documents.

With respect  to my  opinions set  forth above about  the corporate  power and
authority, and  due authorization, execution and delivery  of the Documents, I
have   relied  on  certificates   of  public   authorities  in   the  relevant
jurisdictions of incorporation, corporate documents relating to the  formation
and  maintenance  of each  of  such  Companies prepared  by  counsel in  those
jurisdictions, and practices  and procedures that I have  customarily followed
(and believe to be proper) in acting as General Counsel to such Companies.

I express opinions on the matters set forth herein only insofar as they relate
to the  laws of the  State of  Texas and  the State of  Oklahoma, the  General
Corporation  Law  of  the  State  of  Delaware,  and  applicable  federal laws
(including maritime laws) of the United States.

The  opinions expressed herein are rendered solely  for the benefit of you and
your counsel and may not  be relied upon or  used by any other person  without
our prior written consent.

                       Very truly yours



                       Wayne K. Hillin
                       Senior Vice President
                       and General Counsel



                                                                    Exhibit C

                      [Opinion of Baker & Botts, L.L.P.]



                                                            December ___, 1996


Nissho Iwai Europe PLC
c/o Baker & Botts, L.L.P.

3000 One Shell Plaza
910 Louisiana
Houston, Texas 77002

Ladies and Gentlemen:

         We  acted as  your  counsel  in  connection with  the  execution  and
delivery  of the  Loan Agreement  dated  as of  December 14,  1996 (the   Loan
Agreement )  between  TRB Holding  Corporation,  a  Delaware corporation  (the
"Borrower"),  Reading &  Bates (U.K.) Limited,  a company  organized under the
laws of  the United Kingdom ("Reading  & Bates (U.K.)"), and  you, pursuant to
which  you  have made  loans to  the  Borrower in  order  for the  Borrower to
refinance the  oil production  vessel  "Seillean", a  vessel of  50,928  gross
registered tons,  Call Letters 3FPF6 and Registration  No. 25519-PEXT and with
the  home  port of  Panama  City,  the  Republic  of  Panama  (the  "Vessel").
Capitalized terms  not otherwise defined herein have  the meanings assigned to
them in the Loan Agreement. 

         In  this  connection and  as  a basis  for  the  opinions hereinafter
expressed, we have examined executed originals of the following documents:


     (1) the Loan Agreement;

     (2) the Note;

     (3) the Option Agreement; and

     (4) the Assignment of Insurance Proceeds;

(collectively referred to as the "Documents").


         In  rendering the  opinions  expressed below,  we have  assumed, with
respect to the Documents that:

     (a) the  Documents  constitute  legal,  valid,  binding  and  enforceable
         obligations of, all of the parties  to such documents other than  the
         Borrower,  Reading & Bates  (U.K.) and TRB  Subsidiary Corporation, a
         Delaware corporation ("TRB Subsidiary"; the Borrower, Reading & Bates
         (U.K.) and TRB Subsidiary, collectively, the "Loan Parties");

     (b) the  Documents have  been  duly  authorized  by and  have  been  duly
         executed and  delivered by  each of  the parties  thereto,  and   all
         signatories to the Documents have been duly authorized; and

     (c) all  of the  other parties  to the  Documents are duly  organized and
         validly  existing  and  have  the  power  and  authority  (corporate,
         partnership,  regulatory,   fiduciary,  contractual  and   other)  to
         execute, deliver and perform such documents.


         Based upon the foregoing and  subject to the assumptions, exclusions,
limitations and  qualifications set  forth below, we  are of the  opinion that
each of the  Documents constitutes the legal, valid and binding obligations of
the Loan Party thereto, enforceable against such Person in accordance with its
terms, except  as may  be limited  by bankruptcy, insolvency,  reorganization,
fraudulent transfer, moratorium or other similar laws relating to or affecting
the  rights of  creditors  generally,  and  by general  principles  of  equity
(regardless  of whether  considered in  a  proceeding in  equity  or at  law),
including,  without limitation,  (i) the possible  unavailability of  specific
performance,   injunctive  relief   or   any  other   equitable  remedy,   and
(ii) concepts of materiality, reasonableness, good faith and fair dealing.

         The foregoing  opinions are  subject  to the  following  assumptions,
exclusions, limitations and qualifications:

     (a) We express no opinion as to  the enforceability of (i) any  provision
         purporting to establish any  evidentiary standard or to  waive either
         illegality as a defense to the performance of contract obligations or
         any other defense  to such performance which  cannot, as a  matter of

         law, be effectively  waived; (ii) any  provision purporting to  waive
         notice; (iii) any severability provision or, to the extent purporting
         to  protect  any  person  from  the  consequences  of  such  person's
         negligence  or  misconduct, any  indemnity  provisions;  or (iv)  any
         provision purporting  to irrevocably appoint any  person as attorney-
         in-fact for any Obligor.

     (b) We express  no opinion with respect  to title to any  property or the
         perfection or priority of any Lien created under the Documents.  


         The foregoing opinions  are limited in  all respects to  the existing
laws of the State of New York, and the federal laws of the United States, each
as in effect on the date hereof, and no opinion is expressed  herein as to any
matters  governed by  the laws  of any  other jurisdiction.   We  undertake no
obligation or responsibility  to update or  supplement our opinions  set forth
herein in response to subsequent changes in the law or future events affecting
any transaction contemplated by any Document.

         This opinion  letter is,  pursuant  to Section  5.01(g) of  the  Loan
Agreement and may not be relied upon by any other person.


                                 Very truly yours,


SK
                                                                     Exhibit D


                             _____________, 1997  



Nissho Iwai Europe plc


                                 RE: Seillean


Ladies and Gentlemen:

         We have  acted as your special Panamanian  counsel in connection with
the transactions contemplated  by Loan Agreement dated as of December 14, 1996
(the  Loan Agreement ), among TRB Holding Corporation, a Delaware corporation,
Reading & Bates (U.K.) Limited, an English limited liability company, and you.
  Capitalized terms used  herein and not  otherwise defined herein  shall have
the meanings assigned thereto in the Loan Agreement.


         In issuing  this opinion, we have examined  drafts or executed copies
of the following documents (the  Transaction Documents ):

         (a)      the Loan Agreement;

         (b)      the Ship Mortgage; and 

         (c)      the Assignment of Charter.

We have also examined provisions of Panamanian laws and regulations as we have
deemed relevant.

         In issuing this opinion, we have  assumed the following:  (i) the due
organization,  existence  and good  standing  of  all of  the  parties to  the
Transaction  Documents and the  sufficiency of their  individual, corporate or
limited liability  company, as  the case  may be, capacity  to enter  into, be
bound by and  perform their respective rights and obligations under such deeds
or contracts;  (ii) the taking of  all necessary corporate or  other action by
all of the parties  to the Transaction Documents  to enter into said deeds  or
contracts and to  be bound thereby in  accordance with their  respective terms
other than  such corporate actions required  by the laws of  Panama; (iii) the
conformity of all material terms with  the original executed documents of  all
documents submitted to us as drafts or copies; and (iv) the genuineness of all
signatures  not  placed before  us  or  recognized to  be  authentic before  a
Panamanian Notary Public or ultimately before a Panamanian Consul.

         Based on the foregoing, we are of the following opinions:

         1.       The  vessel  Seillean   is  registered in  the  name of  TRB
Holding Corporation.

         2.       The Ship  Mortgage, the Assignment  of Charter and  the Loan
Agreement, are valid binding and enforceable as between the parties thereto in
accordance  with their  respective terms,  subject to  limitations imposed  by
bankruptcy,  insolvency, reorganization  or  other  laws affecting  creditors 
rights generally.

         3.       The Ship Mortgage has been preliminary registered the Panama
Public Registry, (Microfilm) Mercantile  Section, at Microjacket  ___________,
Frame _____, since  __________________, 1997.  As a result of said preliminary
registration, the Ship Mortgage constitutes a first naval mortgage lien on the
Vessel  fully effective  against  third  parties  and, except  as  hereinafter
provided, having priority  over all other liens  or privileges on  the Vessel,
and it shall continue to constitute such a first naval mortgage lien as of the
date of preliminary  registration so long  as the Ship  Mortgage is filed  for
definite  registration  within six  months  of the  said  date  of preliminary
registration and the definite registration is completed.

         By statute, the following liens or privileges have priority  over the
naval mortgage:

         (a)      Amounts due the Panamanian government  for the Annual Tax of
                  the Vessel;

         (b)      Court costs  incurred in  the  common interest  of  maritime
                  creditors;

         (c)      Expenses, indemnities and wages for aid and salvage due from
                  the last voyage; 

         (d)      Wages, compensations and indemnities of the master and  crew
                  due from the last voyage;

         (e)      Wages  and stipends  due  to stevedores  and other  wharfers
                  engaged directly by the owner, agent or master of the vessel
                  for  the  loading  and unloading  of  the  vessel upon  last
                  arrival;

         (f)      Compensation   for   damages  incurred   through   fault  or
                  negligence; and 

         (g)      Contributions to general average.

         4.       Except  for the  aforesaid definite  registrations  the Ship
Mortgage, there are no  further registrations, recordings, filings  or similar
procedure necessary or  desirable in the Republic of Panama in connection with
the  Transaction  Documents in  order  to create,  perfect  or  preserve their
respective validity or enforceability.

         5.       No   consents,   licenses,  approvals,   authorizations   or
exemptions of any governmental or other regulatory authority, bureau or agency
of the Republic of Panama are required for or in connection with  the validity
or enforceability of the Transaction Documents.

         6.       No  payments, deductions  or withholdings  must be  made for
taxes in the  Republic of Panama in respect to  compliance with or enforcement
of the Transaction Documents.

         7.       Except for any preliminary and definite registration fees of
the Ship Mortgage,, which  have already been paid,  and except that if any  of
the Transaction Documents  are to be  used in  evidence in the  courts of  the
Republic of Panama, stamp taxes  at the rate of US$0.10 for each  US$100.00 of
face value must  be adhered thereto,  there are no  stamps or registration  or
similar taxes, fees or charges payable  in respect of the execution,  delivery
of enforcement  of the Ship Mortgage.  With regards  to the Ship Mortgage, the
amounts  paid in  notarial paper for  their respective  protocolization and in
registration  fees would be  deducted from the  applicable stamp tax.   In any
event,  such  stamp  taxes  are  not  due  unless  and  until  the  respective
Transaction Document is used in evidence as indicated in this paragraph.

         8.       The choice of  New York Law, English law, and of the Federal
Laws  of the United States, as  the case may be, to  govern the Loan Agreement
and the Assignment  of Charter, respectively, constitute a valid choice of law
and should be recognized by the courts of the Republic of Panama.

         9.       Under the law of the Republic of Panama, the  perfection and
effect  of  perfection of  the  Lender s  security interest  and  lien in  the
Charters and  Rents (as such terms  are defined in the  Assignment of Charter)
shall be governed  by the law of  the State of  New York and the  jurisdiction
under which the Charters and Rents are created.

         We are attorneys  qualified to practice law  only in the  Republic of
Panama.   Accordingly we express  no opinion with respect  to the laws  of any
other jurisdiction.

                             Yours truly,


                                                                     Exhibit E

                             January __, 1997  


Nissho Iwai Europe plc


                                 RE: Seillean


Ladies and Gentlemen:

         We have acted  as your special English counsel in connection with the
transactions contemplated by Loan Agreement dated as of December 14, 1996 (the
Loan Agreement),   among  TRB  Holding  Corporation, a  Delaware  corporation,
Reading & Bates (U.K.) Limited, an English limited liability company, and you.
Capitalized  terms  used  herein and not  otherwise defined herein  shall have
the meanings assigned thereto in the Loan Agreement.


         In issuing  this opinion, we have examined  drafts or executed copies
of the following documents (the  Transaction Documents ):

         (a)      the Loan Agreement;

         (b)      the Ship Mortgage;  

         (c)      the Assignment of Charter; and

         (d)      the Debentures


We have  also examined provisions of  English laws and regulations  as we have
deemed relevant.

         In issuing  this opinion, we have assumed the following:  (i) the due
organization,  existence  and good  standing  of  all of  the  parties to  the
Transaction Documents and  the sufficiency of  their individual, corporate  or
limited liability  company, as the  case may  be, capacity to  enter into,  be
bound by and  perform their respective rights and obligations under such deeds
or contracts;  (ii) the taking of  all necessary corporate or  other action by
all of  the parties to the  Transaction Documents to enter into  said deeds or
contracts and to  be bound thereby in  accordance with their  respective terms
other  than  such  corporate  actions  required  by  English  law;  (iii)  the
conformity of all material terms with  the original executed documents of  all
documents submitted to us as drafts or copies; and (iv) the genuineness of all
signatures.

         Based on the foregoing, we are of the following opinions:

         1.       The Assignment  of Charter  and  the Debentures  are  valid,
binding and  enforceable against  the Borrower and  Reading Bates (U.K.).   If
notwithstanding the  express choice  of law contained  therein, the  following
documents  were to  be construed  in  accordance with  English  law, the  Ship
Mortgage and the Loan Agreement, are valid, binding and enforceable as between
the  parties thereto  in  accordance  with  their respective  terms,  but  the
enforceability thereof  may be subject  to limitations imposed  by bankruptcy,
insolvency,  reorganization   or  other  laws   affecting  creditors    rights
generally.

         2.       There are no further  registrations, recordings, filings  or
similar procedure  necessary or desirable in the  United Kingdom in connection
with the Transaction Documents in order  to create, perfect or preserve  their
respective validity or enforceability.

         3.       No   consents,   licenses,  approvals,   authorizations   or
exemptions of any governmental or other regulatory authority, bureau or agency
of the United  Kingdom are required for or in connection  with the validity or
enforceability of the Transaction Documents.

         4.       No  payments, deductions  or withholdings  must be  made for
taxes in  the United Kingdom in  respect to compliance with  or enforcement of
the Transaction Documents.

         5.       The choice of New York Law  and Panamanian law, as the  case
may  be, to  govern the  Loan Agreement  and the Ship  Mortgages respectively,
constitute a valid choice of law and should be recognized by the courts of the
United Kingdom. 

         6.       Under  the law  of the  United  Kingdom, the  perfection and
effect  of  perfection of  the  Lender s  security interest  and  lien in  the
Earnings  (as  such terms are defined in  the Assignment of Charter)  shall be
governed  by  the law  of the  United Kingdom.    Upon [describe  actions] the
Lender s security interest and lien in the Earnings shall be perfected.

         7.       Under the law  of the United Kingdom, you, as a leader under
the  transactions  contemplated  by  the  Loan shall  not  be  liable  for the
pollution and  other liabilities  of the Borrower  or Reading &  Bates (U.K.).
Under  the law  of  the United  Kingdom,  NIC as  a [limited  partner]  in the
Partnership, shall not  be liable for the  pollution and other  liabilities of
the Partnership, the Borrower or Reading & Bates (U.K.).


                             Yours truly,



                                                                     Exhibit F


                             January __, 1997  


Nissho Iwai Corporation
4-5, Akasaka 2-chome
Minato-Ku, Tokyo 107
Japan


Nissho Iwai Europe Plc
Bastion House
140 London Wall
London
EC2Y 5JT

Reading & Bates Corporation
901 Threadneedle, Suite 200
Houston, Texas 77079


Ladies and Gentlemen:

         We have acted  as your special  Cayman Islands counsel  in connection
with the creation  of RB FPSO L.P., a Cayman  Islands limited partnership (the
Partnership),  and  the  Partnership's   Limited  Partnership  Agreement  (the
Partnership Agreement)  and  the  transactions   contemplated by (a)  the Loan
Agreement dated as of December 14,  1996 (the  Loan Agreement ), among  Nissho
Iwai  Europe  Plc  (the    Lender ),  TRB  Holding  Corporation,   a  Delaware
corporation ( TRBH ),  Reading  & Bates  (U.K.)  Limited, an  English  limited
liability  company  ( RBUK ),  as  amended  by  the  First  Amendment  to Loan
Agreement dated  as of  January  ___, 1997,  and Nissho  Iwai  Europe PLC,  an
English corporation,  and (b)  the Option  Agreement (the   Option Agreement )
dated as  of December  14, 1996,   among TRBH,  TRB Subsidiary  Corporation, a
Delaware   corporation  ( TRBS ),   and  Nissho   Iwai  Corporation   ( NIC ).
Capitalized terms used  herein and not otherwise defined herein shall have the
meanings assigned thereto in the Loan Agreement.

         In issuing  this opinion, we have examined  drafts or executed copies
of the following documents (the  Transaction Documents ):


     (a) the Loan Agreement; 

     (b) the Option Agreement; 

     (c) the Partnership Agreement;

     (d) the Bill of Sales made by TRBH and TRBS in favor of the Partnership;

     (e) the Bareboat Charter; 

     (f) the Amendment to Bareboat Charter;

     (g) the Ship Mortgage  as amended by the  First Amendment to  First Naval
         Mortgage dated as of __________, 1997;   and the Second Amendment  to
         First Naval Mortgage dated as of ____________, 1997;

     (h) the Novation Agreement dated as of January __, 1997 among TRBH, TRBS,
         the Partnership and RBUK.

         The foregoing  documents are herein  referred to as  the  Transaction
Documents. 

We have also examined provisions of the Cayman Islands laws and regulations as
we have deemed relevant.

         In  issuing this  opinion, we  have assumed  the following:   (i) the
conformity of all material terms with  the original executed documents of  all
documents submitted to us as drafts or copies; and (ii) the genuineness of all
signatures.

         Based on the foregoing, we are of the following opinions:

         1.       The Partnership is duly formed and  validly existing in good
standing under the laws of  the Cayman Islands.  The Partnership  Agreement is
the valid,  binding and enforceable obligation  of each of TRBH,  TRBS and the
Partnership. 

         2.       TRBH  is duly  qualified and in  good standing  as a foreign
corporation in the Cayman Islands.

         3.       The  Transaction Documents  to  which the  Partnership is  a
party have  been duly  authorized, executed  and delivered  on  behalf of  the
Partnership.

         4.       The Option Agreement creates  a valid and enforceable option
in favor  of NIC to  purchase TRBS   10% limited partnership  interest in  the
Partnership.

         5.       There are  no registrations, recordings,  filings or similar
procedure necessary  or desirable under Cayman Islands  law in connection with
the Transaction Documents.

         6.       The execution  and delivery by the  Partnership, TRBH, TRBS,
RBUK, NIC  or the Lender of the  Transaction Document to which  it is a party,
and the  performance of  its obligations thereunder  do not conflict  with, or
result  in a breach of the terms, conditions or provisions of, or constitute a
default under, or result in any violation of, or result in the creation of any
Lien upon  any of  the properties or  assets of  such Obligor pursuant  to, or
require any authorization, consent, approval, exception or other action  by or
notice to  or filing  with any court,  administrative or governmental  body or
other Person pursuant to (a) any Cayman Islands statute, rule or regulation or
(b) the Partnership Agreement.

          7.       There  are  no  taxes,  fees  or other governmental charges
payable  under  Cayman  Islands  law  in  connection  with  the   transactions
contemplated by the Transaction Document.

          8.       Under  the  law  of  Cayman  Islands, no limited partner in
the Partnership shall be liable or  otherwise obligated for the pollution  and
other liabilities or  obligations of the  Partnership, the general  partner of
the Partnership or RBUK.


                                    Very truly yours,



                                                                     Exhibit H

                        [Letterhead of Reading & Bates]


                                                             December __, 1996


Nissho Iwai Corporation ( Nissho Iwai )
4-5, Akasaka 2-chome, Minato-ku
Tokyo 107 Japan

      Re:   The Loan  Agreement dated  as  of December  14, 1996  between  TRB
            Holding  Corporation, Reading  & Bates  (U.K.) Limited  and Nissho
            Iwai Europe PLC ( NIEP ) (the  Loan Agreement )

Ladies and Gentlemen:

            In order to induce NIEP to enter into the Loan  Agreement, Reading
& Bates agrees  that  Nissho Iwai will have  a first refusal right to  arrange
future financing facilities as and when needed for upgrading and conversion of
the Seillean.  Nissho Iwai  will be given five business days to  elect to make
the proposed financing  on terms which  are substantially equivalent  to those
proposed or more favorable to  Reading & Bates.  In addition,  Reading & Bates
agrees that Nissho Iwai shall be given opportunities to be involved in trading
transactions  for any  future upgrading and  conversion work  on the Seillean,
including the opportunity to provide materials, supplies and services.  Nissho
Iwai will  be given a reasonable time to elect  to be involved in the proposed
trading transaction  on  terms which  are  substantially equivalent  to  those
proposed or more favorable to Reading & Bates.

                                          Sincerely,

                                          READING & BATES CORPORATION



                               OPTION AGREEMENT

            OPTION  AGREEMENT (this   Agreement )  dated as  of December  ___,
1996,   among  RB Drilling  Co., an  Oklahoma corporation ( RB  Drilling ) and
Nissho Iwai Corporation, a Japanese corporation (the  NIC );

                             W I T N E S S E T H:


      WHEREAS,  NISSHO IWAI EUROPE PLC, an English corporation (the  Lender ),
has made  loans (the  Loan )  to READING & BATES  DEVELOPMENT CO.,  a Delaware
corporation  (the  Borrower ),  pursuant to  the  Loan Agreement  dated as  of
December ___,  1996 between the Lender and the Borrower (such agreement, as it
may  be  amended,  restated,  supplemented,  extended,  renewed  or  otherwise
modified from time to time, being the  Loan Agreement );

      WHEREAS, the  Borrower and  RB Drilling  have agreed  to form a  limited
partnership (the   Partnership ) in a  jurisdiction mutually agreeable  to the
Lender,  RB Drilling and  the Borrower  soon after  the execution of  the Loan
Agreement;

      WHEREAS, the Borrower has agreed to contribute that certain vessel known
as  Seillean ,  Gross  Register  Tons (GRT):  50,928.00,  Net  Register  Tons:
15,278.00,  Length: 236.47  meters,  Width: 37  meters,  Depth: 19.80  meters,
Permanent  Navigation Patent  No. 23272-96,  Radio Call  Letters: 3FPF6,   and
Registration No.  25519-PEXT, and  with  the home  port  of Panama  City,  the
Republic  of Panama  (the   Vessel ),  to the  Partnership  as the  Borrower's
initial capital  contribution which  shall entitle  the Borrower  to a  ninety
percent  (90%)  general partnership  interest  in the  Partnership,  and which
Vessel shall be encumbered only by the mortgage lien of the Lender; 

      WHEREAS,  RB  Drilling has  agreed  to contribute  Four  Million Dollars
($4,000,000)  to the  Partnership  as its  initial capital  contribution which
shall entitle RB Drilling to a ten percent (10%) limited  partnership interest
in the Partnership;

      WHEREAS, as a condition precedent  to the Lender making the Loan  to the
Borrower, RB Drilling has granted to NIC  an option to purchase RB  Drilling s
ten percent (10%) limited partnership interest in the Partnership; 

      NOW,  THEREFORE,  in  consideration  of  the  premises  and  the  mutual
covenants and  promises  herein contained  and  for other  good  and  valuable
consideration,  the receipt,  adequacy  and sufficiency  of  which are  hereby
acknowledged, RB Drilling and NIC hereby agree as follows:

1.    Definitions.  For purposes of  this Agreement, the following terms shall
have the meanings set forth below:

             Authorized CAPEX shall mean  the aggregate amount, on  the Option
Closing Date, of capital  expenditures determined in accordance with  GAAP (a)
incurred by the Partnership on the  Vessel during the Option Period, (b) which
are within the  definition of a capital expenditure attached hereto as Exhibit
A, and (c) less  $__________ per year (prorated  based on a 365-day year)  for
the Option Period.


             GAAP   means  generally  accepted  accounting principles  in  the
United States of America, consistently applied.

             Option Closing Date  shall mean the date specified in the  Option
Exercise Notice as the date on which NIC shall exercise the option.

             Option Period   shall mean the period of time between the date of
this Agreement and the Option Closing Date.

             Reimburseable CAPEX  shall mean the  book value of all Authorized
CAPEX on the Option Closing Date.  In no event shall Reimburseable CAPEX  be a
negative number.

2.    Option.

            (a)         Grant of Option.  Subject to the terms  and conditions
of  this Agreement, NIC shall have the  right and option (the  Option ) at any
time during the  term of this  Agreement, but not  the obligation (unless  and
until NIC has delivered  to RB Drilling written  notice of intent to  exercise
the option (the   Option Exercise  Notice )), to purchase  and accept from  RB
Drilling a ten percent (10%)  limited partnership interest in the  Partnership
(the  Option Interest ).

            (b)         Option  Exercise Price.    The  purchase price  of  RB
Drilling s ten percent  (10%) interest  in the Partnership  (the  Full  Option
Interest ) to be paid on the Option Closing Date by  NIC, upon the exercise of
the Option by NIC  pursuant to, and in  accordance with, Section 2(c) of  this
Agreement,  shall be an amount  equal to Four  Million Two Hundred Twenty-Five
Thousand  Dollars ($4,225,000) plus  ten percent (10%)  of Reimbursable CAPEX.
In its sole  discretion, NIC may purchase  less than the Full  Option Interest
(the  Diluted Option Interest ) by paying on the Option Closing Date, upon the
exercise of  the Option by  NIC pursuant to,  and in accordance  with, Section
2(c) of  this Agreement, an amount  equal to Four Million  Two Hundred Twenty-
Five Thousand Dollars  ($4,225,000) (the  Diluted Option Price ).   The amount
of  the Diluted Option  Interest shall be determined  by dividing Four Million
(4,000,000) by  the aggregate of Forty Million  (40,000,000) plus Reimbursable
CAPEX. 

            (c)         Exercise of Option. The Option may be exercised by NIC
at any  time prior to  December ___, 1999.   NIC shall exercise  the Option by
delivering the Option Exercise Notice to RB Drilling at least thirty (30) days
prior to the  Option Closing Date, stating that NIC  is exercising the Option,
subject to the  terms and conditions of this Agreement,  to acquire the Option
Interest or the Diluted Option Interest on the Option Closing Date.

            (d)         Instrument of Transfer.  RB Drilling shall execute and
deliver to NIC an assignment of the Option Interest on the Option Closing Date
in substantially the form of the Assignment attached hereto as Exhibit B.

            (e)         Repayment of Loan.  RB Drilling hereby agrees that all
monies paid by NIC to purchase the Option Interest may be paid by NIC directly
to the Lender for the purpose of repaying the Loan.

3.    Transfer  of Interests.  As long as  this Agreement is in effect NIC may
assign or transfer any portion of the Option Interest to any affiliate.


4.    Miscellaneous Provisions.

            (a)         Notices.   All notices, claims,  requests, demands and
other  communications hereunder shall  be in writing  and shall  be duly given
(including  telegraphic,  telex or  telecopy  communication) and  telegraphed,
telexed,  telecopied,  delivered   by  hand,  sent  by  prepaid  certified  or
registered mail or by overnight courier and addressed as follows:

                i)      If to NIC:


                        Nissho Iwai Corporation
                        4-5, Akasaka 2-chome, Minato-ku,
                        Tokyo 107 Japan
                        Telecopy No.: 81-3-3588-4547

                ii)     If to RB Drilling:

                        RB Drilling Co.
                                                      

                                                      

                        Telecopy No.:                 

or  such other addresses as the person to  whom notice is to be given may have
previously furnished to  the other parties hereto in writing in the manner set
forth  above.  Any notice or other  communication shall be deemed to have been
given, made  and received (i) except  as set forth  in clauses (ii)  and (iii)
below,  upon  receipt, (ii)  in  the case  of  a facsimile  transmission, upon
transmission thereof by the sender and issuance by the transmitting machine of
a confirmation slip indicating that the number of pages included in the notice
have been  transmitted without error  or (iii) in  the case  of a telex,  upon
receipt  of  an  answer back.    In  the case  of  notices  sent  by facsimile
transmission or telex, the  sender shall contemporaneously mail a  copy of the
notice to the addressee at the  address provided above.  However, such mailing
shall  in no  way alter  the time at  which the  facsimile notice  or telex is
deemed received.

            (b)         Waiver.   The waiver by any  party of a breach  of any
provision  of this  Agreement shall  not be  deemed a  continuing waiver  or a
waiver of  any subsequent breach, whether of the  same or of another provision
hereof.

            (c)         Headings.   The  headings  of  the  sections  of  this
Agreement  are  inserted  for convenience only and do not constitute a part of
this Agreement.

            (d)         Severability  of Provisions.  Any  provision  of  this
Agreement  which  is illegal,  invalid,  prohibited  or unenforceable  in  any
jurisdiction shall, as  to such jurisdiction, be ineffective to  the extent of
such   illegality,   invalidity,  prohibition   or   unenforceability  without
invalidating  or  impairing  the remaining  provisions  hereof,  and  any such
illegality, invalidity, prohibition  or unenforceability shall not  effect the
legality,   validity  or  enforceability  of   such  provision  in  any  other
jurisdiction.

            (e)         Survival.      The  covenants,   representations   and
warranties  of  the parties  hereto  contained  in this  Agreement  or in  any
schedule  or  document  delivered  pursuant  to  or in  connection  with  this
Agreement shall survive the  purchases and sales and  assumptions contemplated
hereby.

            (f)         Counterparts.   This Agreement may  be executed in two
or more counterparts, each  of which shall be  deemed an original, but all  of
which together shall constitute one and the same instrument.

            (g)         Successors and Assigns.  This Agreement shall inure to

the benefit of, and be  binding upon, the parties hereto and  their respective
successors and assigns.

            (h)         Term.   The term of this  Agreement shall be three (3)
years from the date of this Agreement.

            (i)         Governing Law.  This  Agreement shall be governed  by,
and construed and enforced  in accordance with, the  laws of the State of  New
York without giving effect to any conflicts of law provisions of such laws.

            IN WITNESS WHEREOF,  the parties  hereto have  duly executed  this
Agreement on the date first above written.

                                          RB DRILLING CO.



                                          By:                                 
                                          Name:                               
                                          Title:                              

                                          NISSHO IWAI CORPORATION


                                          By:                                 
                                          Name:                               

                                          Title:                              


                                                                     Exhibit N


                    AMENDMENT TO BAREBOAT CHARTER AGREEMENT


            This Amendment to Bareboat Charter Agreement (this  Amendment ) is
made  as of December 14, 1996, by  and between Reading & Bates (U.K.) Limited,
an English  limited liability  company with  its registered  office at  Harmon
House, 1 George  Street, Uxbridge, Middlesex,  UB8 1QQ ( Charterer ),  and TRB
Holding  Corporation,  a  Delaware  corporation, with  its  principal  offices
located at 901 Threadneedle, Suite 200, Houston, Texas 77079 U.S.A. ( Owner ).

                                   RECITALS

      1.    Owner is the sole owner of the whole of that  certain vessel known
as   Seillean ,  Gross Register  Tons  (GRT):  50,928.00; Net  Register  Tons:
15,278.00, Length:  236.47  meters, Width:  37  meters, Depth:  19.80  meters,
Permanent Navigation  Patent No.  23272-96, Radio  Call Letters:  3FPF6,   and
Registration No.  25519-PEXT,  and with  the  home port  of Panama  City,  the
Republic of Panama (the  Vessel ); and

      2.    Britoil PLC,  a company  organized under  the laws  of the  United
Kingdom  ( Britoil ), for itself and  on behalf of  the Donan Participants, as
defined therein,  and BP  Exploration  Operating Company  Limited, an  English
limited liability  company ( BP ) entered  into  that Amended  Agreement dated
March 30, 1995, as amended, supplemented and novated by the Novation Agreement
dated  July 10, 1996 among Britoil, BP  and Britoil (Beta) Limited, an English
limited liability company ( Britoil (Beta) ) (the  Amended Agreement ); and 

      3.    Charterer has assumed all of the rights, duties and obligations of
Britoil   (Beta) to the  Amended Agreement pursuant to  the Novation Agreement
dated August 30, 1996 among Britoil, Britoil (Beta) and Charterer  (the  Donan
Charter Agreement ); and


      4.    Owner bareboat chartered  the Vessel to Charterer pursuant  to the
Bareboat Charter Agreement between  Charterer and the Owner, dated  August 30,
1996 (the   Original  Bareboat Charter ),  in  order  to permit  Charterer  to
operate the  vessel and  to fulfill  its obligations  under the  Donan Charter
Agreement; and 

      5.    Owner,   Charterer  and  Nissho   Iwai  Europe   PLC,  an  English
corporation  (the  "Lender")  entered  into  the  Loan  Agreement  (the   Loan
Agreement ) dated as of December 14, 1996 whereby Lender agreed to  lend Owner
certain sums (the  Loans ) to be secured by the Vessel and all rights of Owner
therein; and

      6.    Owner and Charterer  have agreed  to amend  the Original  Bareboat
Charter in  order to allow  Charterer and Owner  to perform their  obligations
under the Loan Agreement (the Original Bareboat Charter, as amended hereby, is
hereinafter referred to as the  Bareboat Charter Agreement ).  

            NOW  THEREFORE,  in consideration  of the  mutual  promises herein
contained and for other valuable consideration, the receipt and sufficiency of
which  are hereby  acknowledged, the  parties hereto  agree that  the Bareboat
Charter Agreement shall be and hereby is amended as follows:  

            Section 1.   Definitions.  Capitalized  terms used herein  and not
otherwise  defined herein  shall have the  meaning set  forth in  the Original
Bareboat Charter.  

            Section  2.   Amendments to  the Original  Bareboat Charter.   The
Original Bareboat  Charter is  hereby amended as  follows effective as  of the
date hereof:  

      1.    Section 4. Charter Hire of the Original Bareboat Charter is hereby
amended by deleting  such section in  its entirety and  replacing it with  the
following:

                               4.  CHARTER HIRE

      A.    AMOUNT

            The  Charter Hire  payable  pursuant to  this  Agreement, for  any
            period, shall be determined on a monthly basis by subtracting from
            all revenues earned by Charterer in  connection with the ownership
            or  operation  of  the  Vessel  during  such  period,  the sum  of
            Predetermined  Expenses  during  such  period.       Predetermined
            Expenses  for  any  period  shall consist  in  their  entirety  of
            UK 18,209 per day for operating expenses during such period.    If
            the  results of  the  proceeding  subtraction  are  positive,  the
            positive  amount so  determined shall be  Charter Hire  payable by
            Charterer  to Owner in accordance  with Article 4B  below.  If the
            results of  the proceeding subtraction are  negative, the negative
            amount so determined  shall be carried over to the next period and
            netted with the revenues from such future  period.  Charterer will
            be reimbursed  for Dry Docking  Expenses as  provided in the  Loan
            Agreement and the Collateral Assignment.

      B.    PAYMENT

            Charterer  and Owner  shall cause  the charterer  under the  Donan
            Charter  Agreement  to  make  all   payments  under  such  charter
            agreement directly to the Lockbox  Account (as defined in the Loan
            Agreement) so long as the Loan Agreement is in effect.  The amount
            of Predetermined Expenses shall be disbursed to Charterer from the
            Lockbox  Account in  accordance with  the terms of  the Collateral
            Assignment (as defined in the Loan Agreement).

      2.    Sections  (A) and  (B) of  Exhibit   C  to  the Original  Bareboat
Charter are hereby deleted in their entirety. 

      3.    Section 9.  Owner Restrictions,  Part B, of the Original  Bareboat
Charter is hereby amended by deleting Part B, in its entirety and replacing it
with the following:

            B.  Owner  agrees  that it  shall  not  further mortgage  or
      otherwise encumber  the Vessel at any time during the term hereof,
      except as contemplated in the Loan Agreement.

      4.    The Original  Bareboat Charter  is  hereby amended  by adding  the
following new subsection E. to Section 21:

            E.  All sums payable by Charterer hereunder shall  be paid free of
      and without any rights of counterclaim or set  off and without deducting
      or withholding on any ground whatsoever.

      5.    The  Original Bareboat  Charter  is hereby  amended by  adding the
following new Section 24. Loan Agreement Controlling:

                        24.  LOAN AGREEMENT CONTROLLING

      To  the extent that any provision of  this Agreement is in conflict with
      any  provision of the Loan Agreement,  the Loan Agreement shall control.
      Nothing herein is intended to prevent the parties hereto from performing
      their obligations, duties and covenants under the Loan Agreement.

            Section 3.     Consents.   Charterer  hereby  consents to  Owner s
mortgage, sale  and  transfer of  the  Vessel and  Owner s  assignment of  the
Bareboat Charter Agreement, all as contemplated in the Transaction Documents.


            Section 4.    Original Contract Remains Effective.  Except for the
amendments to the Original Bareboat Charter set forth in Section 2 hereof, the
Original Bareboat Charter remains in full force and effect.


            IN WITNESS WHEREOF, the parties have executed this Amendment as of
the date first above written.

                                    READING & BATES (U.K.) LIMITED


                                    By:                                       

                                    Name:                                     
                                    Title:                                    


                                    TRB HOLDING CORPORATION


                                    By:                                       
                                    Name:                                     

                                    Title: