<PAGE>
                     FLOATING STORAGE AND OFFLOADING SYSTEM
                                BAREBOAT CHARTER
                                    BETWEEN
                            WATERTIGHT SHIPPING B.V.
                                   AS LESSOR
                                      AND
                       THAIPO LIMITED, THAI ROMO LIMITED,
               PALANG SOPHON LIMITED AND B8/32 PARTNERS LIMITED,
                                  AS CHARTERER
                          DATED AS OF AUGUST 24, 1998
<PAGE>
                               TABLE OF CONTENTS
 
<TABLE>
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                                                                                                                     PAGE
                                                                                                                   ---------
<C>        <S>                                                                                                     <C>
       1.  TRANSPORTATION, INSTALLATION AND COMMISSIONING OF THE FSO.............................................          1
       2.  FSO TO BE CHARTERED...................................................................................          2
       3.  SERVICE...............................................................................................          2
       4.  DURATION OF CHARTER...................................................................................          2
       5.  [INTENTIONALLY OMITTED]...............................................................................          3
       6.  REPRESENTATIONS AND WARRANTIES........................................................................          3
       7.  MAINTENANCE AND OPERATION.............................................................................          5
       8.  INSPECTION............................................................................................          7
       9.  COMPENSATION..........................................................................................          7
      10.  CHANGE IN LAW.........................................................................................         11
      11.  TAXES.................................................................................................         11
      12.  CONFLICTS OF INTEREST.................................................................................         11
      13.  LIENS AGAINST THE FSO.................................................................................         11
      14.  INVENTORY.............................................................................................         13
      15.  GAS SALES AGREEMENT...................................................................................         13
      16.  DOWNTIME..............................................................................................         13
      17.  INSURANCE.............................................................................................         14
      18.  INDEMNITY.............................................................................................         18
      19.  NON-WAIVER OF DEFAULTS................................................................................         21
      20.  FORCE MAJEURE.........................................................................................         22
      21.  LAW AND ARBITRATION...................................................................................         23
      22.  NOTICES...............................................................................................         23
      23.  PURCHASE OPTION.......................................................................................         24
      24.  GUARANTY..............................................................................................         26
      25.  REDELIVERY OF FSO.....................................................................................         27
      26.  REQUISITION...........................................................................................         28
      27.  GENERAL AND PARTICULAR AVERAGE........................................................................         28
      28.  SALVAGE...............................................................................................         28
      29.  AUDIT.................................................................................................         29
      30.  DEFAULT...............................................................................................         29
      31.  REMEDIES..............................................................................................         29
      32.  MISCELLANEOUS.........................................................................................         32
</TABLE>
 
<TABLE>
<S>            <C>
Appendix A     TECHNICAL DESCRIPTION AND SPECIFICATIONS
Appendix B-1   FORM OF LESSOR PARENT COMPANY GUARANTY AND INDEMNITY
Appendix B-2   FORM OF PERFORMANCE GUARANTY
Appendix C-1   PURCHASE PRICE
Appendix C-2   PURCHASE PRICE
Appendix D-1   INITIAL PERFORMANCE TESTS
Appendix D-2   FINAL PERFORMANCE TESTS
Appendix E     QUIET ENJOYMENT LETTER
</TABLE>
 
                                       i
<PAGE>
                     FLOATING STORAGE AND OFFLOADING SYSTEM
                                BAREBOAT CHARTER
 
    This Bareboat Charter (this "Agreement"), made and entered into as of August
24, 1998, by and among Watertight Shipping B.V., a company organized under the
laws of The Netherlands ("Lessor"), and Thaipo Limited, a company organized
under the laws of the Kingdom of Thailand ("Thaipo"), Thai Romo Limited, a
company organized under the laws of the Kingdom of Thailand ("Thai Romo"),
Palang Sophon Limited, a company organized under the laws of the Kingdom of
Thailand ("Palang"), and B8/32 Partners Limited, a company organized under the
laws of the Kingdom of Thailand ("B8/32" and, together with Thaipo, Thai Romo
and Palang, the "Charterer").
 
                              W I T N E S S E T H
 
      WHEREAS, the Petroleum Concession Agreement No. 1/2q534/36, dated August
1, 1991, covering block B8/32 offshore Thailand was awarded by the Ministry of
Industry to Maersk Oil (Thailand) Ltd., Thaipo and Thai Romo, and Supplementary
Petroleum Concession No. 1 to Petroleum Concession No. 1/2534/36, dated March 6,
1992, permitted The Sophonpanich Co., Ltd., to enter into Petroleum Concession
No. 1/2534/36 (collectively, the "Concession Agreement");
 
      WHEREAS Thaipo, Thai Romo, Palang (formerly known as Sophon Thai Gulf
Limited which was successor in interest to The Sophonpanich Co. Ltd.) and B8/32
(formerly known as Maersk Oil (Thailand) Ltd.) are currently the concessionaires
under the Concession Agreement in that portion of the concession known as the
Benchamas Field;
 
      WHEREAS, Charterer desires to charter from Lessor on a bareboat basis a
Floating Storage and Offloading System known as the "Benchamas Explorer" (the
"FSO"), for use in the Benchamas Field, Thailand;
 
      NOW, THEREFORE, in consideration of the mutual covenants herein contained,
Lessor and Charterer agree as follows:
 
1.    TRANSPORTATION, INSTALLATION AND COMMISSIONING OF THE FSO.
 
     Lessor shall be responsible for delivery (the "Delivery") of the FSO to
     Charterer in international waters in the vicinity of Thailand (the
     "Delivery Site") as evidenced by a certificate of delivery issued by Lessor
     and countersigned by Charterer. Prior to Delivery, Lessor shall be fully
     responsible for and assume all risks with respect to the FSO. Charterer has
     hired an operator ("Operator") pursuant to an Operating Agreement (the
     "Operating Agreement") to operate the FSO commencing with Delivery.
     Operator shall be responsible for completing all work to be performed in
     respect of the FSO from Delivery until Field Acceptance, as herein defined,
     has occurred, including completing all construction work, transporting the
     FSO from the Delivery Site to the site in the Benchamas Field designated by
     Charterer (the "Offshore Site"), hooking-up the FSO on its anchoring system
     and completing all Performance Tests, as herein defined. Operator shall
     also be responsible for commissioning the FSO.
 
2.    FSO TO BE CHARTERED.
 
     Charterer hereby agrees to bareboat charter the FSO as described in
     APPENDIX A and its inventory from Lessor, for the period and upon the terms
     and conditions stated herein. Lessor represents, undertakes and warrants
     that at the time of Delivery the FSO shall comply with the requirements of
     the Technical Specifications set forth in APPENDIX A hereto (the "Technical
     Specifications") and shall be properly documented and classed as ABS A1
     Floating Storage and Offloading System, with no recommendations affecting
     class and as per the particulars of APPENDIX A. At the time of Delivery,
     the FSO shall be seaworthy and in every respect ready in hull, machinery
     and equipment for service hereunder.
 
                                       1
<PAGE>
3.    SERVICE.
 
     Charterer shall have the full use of the FSO at the Offshore Site and,
     subject to Lessor's approval, not to be unreasonably withheld or delayed,
     at any other place in the world where its operation is not prohibited by
     applicable law and/or regulations excluding, however, the United States of
     America and its territories. Charterer may subcontract to identified
     subcontractors certain of its obligations hereunder, including, but not
     limited to, those relating to the operation, maintenance and repair of the
     FSO. However, such subcontracts shall not relieve Charterer of such
     obligations, except to the extent that such obligations are subcontracted
     to a party acceptable to Lessor.
 
4.    DURATION OF CHARTER.
 
4.1.   The term (the "Initial Term") of this Agreement shall commence upon
     Delivery. The Initial Term shall end upon a date ten (10) years after the
     Hire Commencement Date (as defined in Article 9.1.).
 
4.2.   Neither Field Acceptance (as defined in the Operating Agreement) nor
     Final Acceptance (as defined in the Operating Agreement) by Charterer shall
     be construed as a waiver or discharge of any of the representations,
     warranties or undertakings of Lessor in or with respect to this Agreement
     or the FSO.
 
4.3.   Upon the expiration of the Initial Term, (a) Charterer shall have the
     option to terminate this Agreement, extend this Agreement on an annual
     basis at hire to be agreed upon by Lessor and Charterer, or purchase the
     FSO pursuant to Article 23. and (b) the Performance Guaranty shall be
     promptly returned to the issuer thereof. If Charterer is considering
     extending this Agreement, it shall give revocable notice of its desire to
     extend this Agreement at least 360 days prior to the expiration of the
     Initial Term. Upon the giving of such notice, Charterer and Lessor shall
     negotiate in good faith in an effort to reach agreement prior to 180 days
     prior to the end of the Initial Term on a Total Bareboat Rate for the term
     for which Charterer desires to extend this Agreement. In addition,
     Charterer shall have the option to purchase the FSO pursuant to Article 23.
     by irrevocable notice to Lessor at least 180 days prior to the end of the
     Initial Term. If no agreement on a Total Bareboat Rate for an extended term
     is timely reached and if no notice of an election to purchase the FSO is
     timely given, Charterer shall be deemed to have exercised its option to
     terminate this Agreement as of the end of the Initial Term.
 
5.    [INTENTIONALLY OMITTED].
 
6.    REPRESENTATIONS AND WARRANTIES.
 
6.1.   Lessor represents and warrants to Charterer that:
 
     (a) Lessor is a corporation duly organized and in good standing under the
        laws of The Netherlands; has all requisite corporate power and all
        material governmental licenses, authorizations, consents and approvals
        necessary to own its assets and carry on its business as now being or as
        proposed to be conducted; and is qualified to do business and is in good
        standing in all jurisdictions in which the nature of the business
        conducted by it makes such qualification necessary and where failure so
        to qualify could be reasonably expected to have a material adverse
        effect on its business.
 
     (b) Lessor has all necessary corporate power and authority to execute,
        deliver and perform its obligations under this Agreement; the execution,
        delivery and performance by Lessor of this Agreement have been duly
        authorized by all necessary corporate action on its part; and this
        Agreement has been duly and validly executed and delivered by Lessor and
        constitutes its legal, valid and binding obligation, enforceable against
        Lessor in accordance with its terms except to the extent such
        enforceability may be limited by (i) bankruptcy, insolvency,
        reorganization, moratorium or similar laws of general applicability
        affecting the enforcement of creditor's
 
                                       2
<PAGE>
        rights and (ii) the application of general principles of equity
        (regardless of whether such enforceability is considered in a proceeding
        in equity or at law).
 
     (c) The execution and delivery of this Agreement and the consummation of
        the transactions herein contemplated will not conflict with or result in
        a breach of the articles of association of Lessor or any applicable law
        or regulation or any material agreement or instrument to which Lessor is
        a party or by which it is bound or to which it is subject or constitute
        a default under any such material agreement or instrument.
 
     (d) All authorizations, approvals and consents of, and filings or
        registrations with, any governmental or regulatory authority or agency,
        as are at the date of Delivery necessary for the execution, delivery or
        performance by Lessor of this Agreement and for the legality, validity,
        or enforceability hereof, will have been obtained at such date and
        thereafter will be maintained until the expiration or termination of
        this Agreement.
 
     (e) Lessor is a "tax resident" as such term is defined in the
        Netherlands-Thailand tax treaty. Lessor covenants that neither Lessor
        nor any agent acting on its behalf in connection with the performance of
        Lessor's obligations under this Agreement has, or during the term of the
        Agreement will have, a permanent establishment in Thailand.
 
6.2.   Charterer represents and warrants to Lessor that:
 
     (a) Each of the companies comprising Charterer is duly organized and in
        good standing under the laws of the Kingdom of Thailand; has all
        requisite power and all material governmental licenses, authorizations,
        consents and approvals necessary to own its assets and carry on its
        business as now being or as proposed to be conducted; and is qualified
        to do business and is in good standing in all jurisdictions in which the
        nature of the business conducted by it makes such qualification
        necessary and where failure so to qualify could be reasonably expected
        to have a material adverse effect on its business.
 
     (b) Each of the companies comprising Charterer has all necessary power and
        authority to execute, deliver and perform its obligations under this
        Agreement; the execution, delivery and performance by each of the
        companies comprising Charterer of this Agreement have been duly
        authorized by all necessary action on its part; and this Agreement has
        been duly and validly executed and delivered by each of the companies
        comprising Charterer and constitutes its legal, valid and binding
        obligation, enforceable against each of the companies comprising
        Charterer in accordance with its terms except to the extent such
        enforceability may be limited by (i) bankruptcy, insolvency,
        reorganization, moratorium or similar laws of general applicability
        affecting the enforcement of creditor's rights and (ii) the application
        of general principles of equity (regardless of whether such
        enforceability is considered in a proceeding in equity or at law).
 
     (c) The execution and delivery of this Agreement and the consummation of
        the transactions herein contemplated will not conflict with or result in
        a breach of the organizational documents of each of the companies
        comprising Charterer or any applicable law or regulation or any material
        agreement or instrument to which any of the companies comprising
        Charterer is a party or by which it is bound or to which it is subject
        or constitute a default under any such material agreement or instrument.
 
     (d) All authorizations, approvals and consents of, and filings or
        registrations with, any governmental or regulatory authority or agency,
        as are at the date of Delivery necessary for the execution, delivery or
        performance by Charterer of this Agreement and for the legality,
        validity, or enforceability hereof, will have been obtained at such date
        and thereafter will be maintained until the expiration or termination of
        this Agreement.
 
                                       3
<PAGE>
6.3.   OTHER THAN AS SPECIFICALLY STATED IN THIS AGREEMENT NO PARTY SHALL BE
     DEEMED TO HAVE MADE ANY REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR
     IMPLIED, INCLUDING, WITHOUT LIMITATION, AS TO THE TITLE, SEAWORTHINESS,
     MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR USE OF THE FSO OR
     ANY PART THEREOF.
 
7.    MAINTENANCE AND OPERATION.
 
7.1.   Lessor agrees that the FSO shall, from the date of Delivery and until
     termination of this Agreement in accordance with its terms, be in the full
     possession and at the absolute disposal for all purposes of Charterer and
     under Charterer's complete control in every respect. Subject to Lessor's
     obligations pursuant to Article 7.3. to cause the FSO to meet and maintain
     requirements of the American Bureau of Shipping ("ABS"), Charterer shall
     maintain the FSO in a good state of repair. In addition, Charterer shall
     maintain the FSO in efficient operating condition and in accordance with
     good commercial maintenance practice, and shall keep the FSO (subject to
     Article 7.3.) with valid, unexpired classification of the class as
     indicated in Article 2., free of recommendations and notations affecting
     class. Charterer shall furnish Lessor with one duplicate original or
     certified true copy of all class and flag certificates issued or notated
     during the duration of the charter upon their issuance or notation. Lessor
     shall keep all Thai, Panamanian (Panama being hereinafter referred to as
     the "Country of Registry") and other required certificates valid,
     up-to-date and in full force at all times. Charterer shall maintain the
     following maintenance reports, records, surveys and documents: Planned
     Maintenance System, Continuous Survey of Machinery and such other reports,
     records, surveys and documents as Lessor shall reasonably specify in
     writing. Charterer shall provide copies of such documents to Lessor upon
     Lessor's request. Lessor shall provide Charterer and Operator with all
     authorizations which Charterer may reasonably require in order to
     accomplish the actions required or permitted to Charterer under this
     Article 7.
 
7.2.   Charterer shall take immediate steps to have all necessary repairs done
     within a reasonable time.
 
7.3.   Provided that the FSO is located at the Offshore Site, in the event of
     any improvement, structural changes or new equipment becoming necessary for
     the continued operation of the FSO by reason of new class requirements or
     compulsory legislation or in order to maintain the FSO in compliance with
     the Technical Specifications, then Lessor shall carry out such work at its
     expense.
 
7.4.   Charterer shall establish and maintain financial security of
     responsibility in respect of oil or other pollution damage as required by
     any government or other division or authority thereof, to enable the FSO,
     without penalty or charge, lawfully to enter and remain at the Offshore
     Site in performance of this Agreement or in the case of removal of the FSO
     to another site as may be permitted by the terms hereof, at such other
     site. Charterer shall make and maintain all arrangements by bond or
     otherwise as may be necessary to satisfy such requirements at Charterer's
     sole expense.
 
7.5.   Charterer shall at its own expense and by its own procurement, except as
     stated to the contrary elsewhere, man, victual, operate, supply, fuel and
     repair the FSO whenever required during the duration of this Agreement and
     shall pay all charges and expenses of every kind and nature whatsoever
     incidental to its use and operation of the FSO under this Agreement. The
     master of the FSO (the "Master"), officers, crew and production personnel
     of the FSO shall be the servants of Operator for all purposes whatsoever.
 
7.6.   Charterer shall comply with the regulations of the Country of Registry
     and, to the extent applicable, the Kingdom of Thailand or any other
     jurisdiction within which the FSO is operating. Charterer will cause the
     FSO to comply at all times with all applicable laws, treaties and
     conventions and with all rules and regulations issued thereunder and to
     have on board, when required thereby, valid certificates showing compliance
     therewith.
 
                                       4
<PAGE>
7.7.   During the duration of this Agreement the FSO shall retain her present
     name and shall remain under and fly the flag of the Country of Registry,
     provided, however, that Charterer shall have the right to paint the FSO in
     its own colors, install and display its funnel insignia and fly its own
     house flag. Any change in such painting or change in such funnel insignia
     shall be for Charterer's account.
 
7.8.   (a)  Subject to Article 7.4. and Lessor's approval, which shall not be
     unreasonably withheld or delayed, Charterer shall have the right to add
     additional equipment, modify existing equipment or connect additional
     production facilities. Any such additions or modifications, including the
     installation thereof, shall be at the sole risk and expense of Charterer.
     Such additions, modifications and connections so installed shall, without
     necessity of further act, become part of the FSO and the property of
     Lessor; PROVIDED, HOWEVER, that so long as no Event of Default caused by
     Charterer (as defined in Article 30.) shall have occurred and be
     continuing, any such additions, modifications and connections not installed
     as replacements for property included on board the FSO on the date of Field
     Acceptance may be removed (so long as such removal can be accomplished
     without damage to the FSO) by Charterer, at its own expense and risk, at
     any time during, or at the expiration of, the Initial Term or any extension
     term upon reasonable prior notice, whereupon such equipment shall, without
     necessity of further act, become the property of Charterer.
 
     (b)  Charterer may, in the ordinary course of maintenance, repair or
     overhaul of the FSO, remove any item of property constituting a part of the
     FSO; PROVIDED, HOWEVER, that such item is replaced as promptly as possible
     by an item of property which is free and clear of all liens, encumbrances
     and rights of others and is in as good operating condition, is as seaworthy
     and has a value and utility at least equal to the item of property being
     replaced. Any item of property removed from the FSO as provided in the
     preceding sentence shall remain the property of Lessor until replaced in
     accordance with the terms of such sentence, but shall then, without further
     act, become the property of Charterer. Any such replacement item of
     property shall, without further act, become the property of Lessor and be
     deemed part of the FSO as defined herein for all purposes hereof.
 
     (c)  In the event that the FSO is relocated from the Offshore Site pursuant
     to Article 3. (but not as a result of any failure of the FSO to perform in
     accordance with the Technical Specifications at the Offshore Site or as a
     result of any required maintenance), Charterer shall be responsible for all
     costs of removal and installation and any design changes or equipment
     necessary for the FSO to perform in accordance with the Technical
     Specifications at its relocated site.
 
7.9.   Charterer shall have the use of all items of inventory, equipment and
     spares being part of or on board the FSO on the date of Delivery, which
     Lessor undertakes to provide at its expense. Such inventory will be
     specified pursuant to Article 14. At Redelivery, Charterer shall replace
     all items of inventory, equipment and spares so that the inventory at
     Redelivery equals the items of inventory, equipment and spares on board the
     FSO on the date of Delivery, or shall pay the Lessor a mutually agreeable
     price for any unreplaced items of inventory.
 
8.    INSPECTION.
 
8.1.   Lessor shall have the right at any reasonable time to inspect or survey
     the FSO itself or to instruct a duly authorized third-party surveyor to
     carry out such survey on its behalf to ascertain the condition of the FSO,
     and to satisfy itself that the FSO is being properly repaired, maintained
     and operated. Such inspections and surveys shall be at Lessor's risk and
     for Lessor's account. Charterer shall provide, free of charge to Lessor,
     upon reasonable request by Lessor, transportation from the shore base to
     the FSO and vice versa on its regular flights and, to the extent available,
     accommodations, catering and communication on board for such inspectors or
     surveyors.
 
8.2.   Charterer shall also permit Lessor to inspect the FSO's log books
     whenever requested and shall promptly furnish Lessor with full information
     regarding any material casualties or other accidents or damage to or caused
     by the FSO.
 
                                       5
<PAGE>
9.    COMPENSATION.
 
9.1.   As full compensation for the performance by Lessor of its obligations
     under this Agreement, Charterer shall pay Lessor a hire ("Hire"). Hire
     shall accrue in accordance with this Article 9. commencing at 0001 hours
     local time at the Offshore Site on the date ("Hire Commencement Date") on
     later of (a) Field Acceptance, and (b) the earlier of (i) May 15, 1999 or
     (ii) the date on which crude oil is stored on the FSO.
 
     Except as otherwise provided herein, Hire shall continue to accrue until
     the date when the FSO is redelivered to Lessor under the terms of this
     Agreement. Hire for the ten (10) years after the Hire Commencement Date
     shall be paid at the rate of Twenty-Three Thousand Three Hundred and Thirty
     Dollars (US $23,330) per day, (the "Total Bareboat Rate"), except as
     otherwise specifically provided herein, no other compensation or
     reimbursement shall be due to Lessor for the performance of its obligations
     hereunder.
 
     Except as provided below, with respect to all Hire and all other amounts
     payable by Charterer hereunder, the maximum liability of Thaipo shall be
     limited to 31.66667% of such Hire and other amounts, the maximum liability
     of Thai Romo shall be limited to 31.66667% of such Hire and other amounts,
     the maximum liability of Palang shall be limited to 5.00000% of such Hire
     and other amounts, and the maximum liability of B8/32 shall be limited to
     31.666666% of such Hire and other amounts (each such percentage being
     referred to herein as the "Concessionaire Percentage"). Notwithstanding a
     member's Concessionaire Percentage, any member of Charterer shall have the
     right to pay Hire and other amounts on behalf of any other member of
     Charterer.
 
     The Concessionaire Percentages are intended to be the same as the
     percentage interest of each member of the Charterer under the Concession
     Agreement. If (i) any member of Charterer shall increase its percentage
     interest under the Concession Agreement or (ii) any member of Charterer
     shall assign any of its interest under the Concession Agreement to an
     entity that is not a member of Charterer, the Field Operator shall promptly
     notify Lessor of such change. Upon Lessor's receipt of notice from the
     Field Operator certifying an increase in percentage interest under the
     Concession Agreement or an assignment of an interest under the Concession
     Agreement, the Concessionaire Percentage for each member of Charterer shall
     be adjusted appropriately with respect to the maximum liability for Hire
     and other amounts that shall become payable on or after the date of such
     notice but such adjustment shall not affect the percentage liability of a
     member of Charterer for any Hire and all other amounts payable prior to the
     date of such notice. Notwithstanding the foregoing limitation of liability,
     the obligation of Charterer to pay Hire and all other amounts hereunder is
     absolute and unconditional to the extent set forth in this Agreement and
     Lessor shall have the remedies provided in Article 31.2. for any failure to
     pay Hire and all other amounts hereunder. If any member of Charterer shall
     assign any of its interest under the Concession Agreement to an entity that
     is not a member of Charterer, the assignee of such interest under the
     Concession Agreement shall at the time of such assignment be deemed to have
     a Concessionaire Percentage and to be a member of Charterer for all
     purposes of this Agreement as if such assignee had been an original
     signatory to this Agreement. If any member of Charterer assigns all of its
     interest under the Concession Agreement and provided that no Event of
     Default of Charterer (as defined in Article 30.) with respect to such
     assignor has occurred and is continuing, such member of Charterer shall be
     without further act released from any and all obligations under this
     Agreement which arise or accrue after the date of such assignment. Upon any
     change in Concession Percentages, Lessor, Charterer and each present and
     former member of Charterer agree to execute such additional documents and
     releases as may be requested to evidence the foregoing provisions
     including, without limitation, the assignee's agreement to be bound by the
     terms of this Agreement.
 
9.2.   Payment of Hire shall be made monthly in advance, without any discount,
     adjustment, set off or deduction, except as specifically set forth in this
     Article 9. or otherwise in this Agreement. Lessor
 
                                       6
<PAGE>
     shall provide invoices to Charterer covering each payment of Hire at least
     ten (10) days before due. Payment of Hire shall be made to such account or
     accounts with such first class bank as Lessor shall designate in writing.
     Lessor shall not change such designations without Charterer's consent,
     which consent shall not be unreasonably withheld.
 
     The first and second payment of Hire shall be paid in same day funds before
     the close of business at the place of payment on the fifth business day of
     the calendar month beginning after the Hire Commencement Date. Except as
     otherwise provided in this Agreement, subsequent payments of Hire shall be
     paid in same day funds at the place of payment on the fifth business day of
     each applicable calendar month during the Initial Term or an extended term
     ("Hire Payment Date"). Hire shall accrue on a daily basis; provided that
     Hire for any periods that constitute less than a calendar day shall be a
     pro rata portion of Hire for such calendar day. If a Hire Payment Date
     falls on a day which is not a banking day at the place of payment, payment
     shall instead be made on the next succeeding day that is a banking day at
     such place, without interest. Any Hire paid but not earned shall be
     refunded on the next Hire Payment Date (or as otherwise provided under this
     Agreement) to Charterer by Lessor.
 
9.3.   Upon request by Charterer, Lessor shall promptly pay to Charterer, or at
     the option of Charterer, at any time following an Event of Default by
     Lessor hereunder or a default under the Lessor Parent Company Guaranty,
     Charterer shall be entitled to deduct from the payments of Hire:
 
     (a) actual or reasonably estimated disbursements, if any, for Lessor's
        account;
 
     (b) any advances to Lessor's affiliates, contractors, subcontractors, or
        agents for expenses or disbursements for Lessor's account;
 
     (c) any previous overpayment of Hire, including payments made with respect
        to agreed periods of Downtime; PROVIDED, HOWEVER, that with respect to
        periods of Downtime that have not been agreed, Charterer shall not
        withhold Hire with respect thereto but that Hire paid with respect to
        such Downtime shall accrue interest at the rate of twelve percent (12%)
        per annum, compounded monthly, until agreed or settled through
        arbitration, whereupon Charterer may withhold such overpayment plus
        accrued interest through the date that Charterer recoups such Hire and
        interest;
 
     (d) any sums due in respect of Lessor's failure to meet Lessor's
        performance undertakings under this Agreement; and
 
     (e) any other sums or credits to which Charterer is entitled under this
        Agreement.
 
     If a deduction is made based on an estimate, the next Hire payment shall be
     adjusted, if necessary, to reflect any difference between such estimate and
     the actual amount of deduction that Charterer is able to verify. All
     deductions from Hire shall be verified by Charterer by production of
     vouchers or supporting documentation corresponding to the deductions within
     thirty (30) days after the applicable Hire Payment Date.
 
9.4.   Notwithstanding anything contained in this Article 9. to the contrary, if
     when a payment of Hire is due hereunder, Charterer reasonably expects to
     redeliver the FSO before the next Hire Payment Date, Hire shall be paid
     prorated to the estimated date of Redelivery (as defined), and from which
     estimate Charterer may deduct amounts due or reasonably expected to come
     due to Charterer from Lessor for (i) disbursements on Lessor's behalf or
     charges for Lessor's account pursuant to any provision hereof including
     Article 9.3. and (ii) bunkers on board at Redelivery. Promptly after
     Redelivery, any overpayment shall be refunded by Lessor, or any
     underpayment made good by Charterer.
 
9.5.   (a)  Should the FSO become an actual total loss, Hire shall cease at the
     time of its loss or, if such time is unknown, at the time from which the
     FSO was last heard. Should the FSO become a total
 
                                       7
<PAGE>
     loss of any other kind, if approved in writing by Charterer in accordance
     with sub-clause (d) below, including, without limitation, a constructive,
     compromised, agreed or arranged total loss (a "constructive total loss"),
     Hire shall cease at the time of the casualty resulting in such loss. Within
     ninety (90) days after Hire has ceased under this Article 9.5., all monies
     owing to Charterer under the provisions of this Agreement at the time Hire
     ceases under this Article 9.5. shall be paid to Charterer, and likewise
     Lessor shall be paid the net amount of all sums due from Charterer. If the
     FSO shall have been missing for at least forty-eight (48) hours when a
     payment of Hire would otherwise be due, such payment shall be postponed
     until the safety of the FSO is ascertained.
 
     (b)  Should the FSO become an actual total loss or a constructive total
     loss (i) for reasons other than negligence or willful misconduct of Lessor
     Group (as defined in Article 18.) and (ii) in circumstances where no Event
     of Default by Lessor or its affiliates, its Guarantor or the Operator (a
     "Lessor Party") has occurred and is continuing, this Agreement shall be
     deemed to be terminated as of the date on which the obligation to pay Hire
     ceases in accordance with Article 9.5.(a) without prejudice to (A) the
     payment obligations of Lessor and Charterer as described in Article 9.5.(a)
     and (B) any other provisions which would otherwise survive termination of
     this Agreement which, for the avoidance of doubt, does not include any
     obligation to rebuild the FSO or procure a new FSO.
 
     (c)  Should the FSO become an actual total loss or a constructive total
     loss either (i) for reasons where the gross negligence or willful
     misconduct of a member of Lessor Group is a contributing factor; PROVIDED,
     THAT, no member of Charterer Group is either grossly negligent or guilty of
     willful misconduct in connection with such loss, or (ii) in circumstances
     where an Event of Default by a Lessor Party has occurred and is continuing,
     then, irrespective of such total loss, Charterer shall have the remedies
     set out in Article 31. hereof.
 
     (d)  Lessor and its affiliates shall not be entitled to (i) claim under
     this Agreement or (ii) reach agreement with the insurers on the hull
     policies taken out by Lessor and its affiliates that, in either case, the
     FSO constitutes a total loss of any kind other than an actual total loss
     without the prior written approval of Charterer.
 
     (e)  An actual total loss or a constructive total loss will not constitute
     in and of itself an Event of Default and, provided that there are no unpaid
     claims which have been asserted by Charterer, the Performance Guaranty
     shall promptly be returned to the issuer thereof.
 
9.6.   In the event Charterer fails to make any payment (including without
     limitation any payment of Hire) due and owing to Lessor under this
     Agreement, Lessor shall so notify Charterer. If Charterer fails to pay
     amounts due and owing within five (5) business days after receipt of such
     notice, Charterer shall pay to Lessor, in addition to all other amounts
     then due and owing, a late fee at a rate equal to one-month LIBOR plus two
     percent (2%) on the amounts then due and owing for the period commencing on
     the date that such payment was due until paid without prejudice to any
     other remedies under this Agreement.
 
9.7.   All payments of Hire and other amounts due hereunder from one party to
     the other shall be made in United States Dollars by interbank transfer.
     Except as otherwise provided herein, all sums due by one party to the other
     shall be paid within 30 days of receipt of invoice.
 
10.   CHANGE IN LAW.
 
     The Total Bareboat Rate is based on the tax laws of Thailand and The
     Netherlands as of the date of this Agreement and Lessor's qualification as
     a Netherlands corporation entitled to protection under The
     Netherlands-Thailand tax treaty. In the event there are any changes in (i)
     tax laws of The Netherlands or their interpretation, or (ii) Lessor's
     qualification as a "tax resident" (as defined in the Netherlands-Thailand
     tax treaty) of The Netherlands which affect the cost to Lessor of
     chartering the FSO, such additional costs shall be for Lessor's account and
     Lessor shall hold
 
                                       8
<PAGE>
     Charterer harmless from the consequences thereof. In the event there are
     any changes in tax laws in Thailand (including The Netherlands-Thailand tax
     treaty) or their interpretation which affect the cost to Lessor of
     chartering the FSO which cannot be remedied by reasonable actions on
     Lessor's part, such additional costs shall be for Charterer's account and
     Hire shall be adjusted accordingly.
 
11.   TAXES.
 
     Subject to the provisions of Article 10. regarding changes in existing tax
     laws or the interpretation thereof, all taxes (including income and
     withholding taxes) which are due with respect to the payment of the Total
     Bareboat Rate pursuant to this Agreement shall be paid by Lessor or
     reimbursed to Charterer by Lessor, except that Thailand value added taxes
     ("VAT"), other Thailand sales/use taxes and Thailand customs and import
     duties applicable to the FSO, shall be paid by Charterer or reimbursed to
     Lessor by Charterer. Charterer or its designee shall work together with
     Operator to ensure the importation of the FSO in the most cost efficient
     manner and, if necessary, Charterer or its designee shall be designated as
     the importer of the FSO. The party ultimately designated as the importer of
     the FSO shall be responsible for customs clearance and obtaining import
     licenses on the FSO.
 
12.   CONFLICTS OF INTEREST.
 
     Neither Lessor, its affiliates nor any of its subcontractors shall pay any
     fee, commission, rebate or other thing of value to, or for the benefit of,
     any employee of Charterer, its principals or any of its or their
     affiliates, nor shall Lessor or its affiliates do business with any company
     knowing that the results thereof might benefit an employee of the
     Charterer, its principals or any of its or their affiliates.
 
13.   LIENS AGAINST THE FSO.
 
13.1.  (a) Neither Lessor, Charterer nor the Master nor any other person shall
           have any right, power or authority to create, incur or permit to
           exist upon the FSO any lien, charge or encumbrance other than
           Permitted Encumbrances.
 
     (b) Lessor shall fasten to the FSO in a conspicuous place and maintain
        during the term of this Agreement a notice reading as follows:
 
                               NOTICE OF CHARTER
 
           This Vessel is mortgaged to               , and is under
           charter to Thaipo Limited, Thai Romo Limited, Palang
           Sophon Limited and B8/32 Partners Limited. With the
           exception of such mortgage, neither the Lessor, any
           affiliate of the Lessor, Charterer, any subcharterer, the
           master of this Vessel, nor any other person has the right,
           power or authority to create, incur or permit to be placed
           or imposed upon this Vessel, or its profits, any lien
           whatsoever, other than liens for master's and crew's wages
           or salvage.
 
     (c) Lessor warrants that it has not created and covenants that it will not
        create or permit to exist any Owner Encumbrance other than Permitted
        Encumbrances. Furthermore, Lessor shall indemnify, hold harmless and
        defend Charterer against any loss which Charterer may sustain by reason
        of, any Owner Encumbrances and/or Permitted Encumbrances (other than
        those set forth in Articles 13.1.(d)(i) and 13.1.(d)(ii) hereof).
 
     (d) "Permitted Encumbrances" shall mean (i) the rights of Charterer under
        this Agreement, (ii) the rights of Lessor under this Agreement, (iii)
        during the Initial Term or any extended term, liens for current master's
        and crew's wages and salvage, (iv) the rights of the Lessor Group under
        any lease consented to by Charterer in writing and a Lessor Group's
        mortgage of the FSO and security assignments in favor of certain lending
        institutions ("Lenders"), provided
 
                                       9
<PAGE>
        Charterer shall have received a Quiet Enjoyment Letter in the form
        attached hereto as APPENDIX E, and (v) liens arising in tort; and
        "Permitted Encumbrance" shall mean any of the foregoing.
 
     (e) "Owner Encumbrances" shall mean any liens, security interests or
        encumbrances resulting from voluntary or involuntary action by Lessor
        Group taken without the prior written approval of Charterer and not
        taken as the result of an Event of Default by Charterer.
 
13.2.  Charterer agrees that if a libel or a complaint in admiralty (for
     purposes of this Article 13.2. called a "claim") shall be filed against the
     FSO, or if the FSO shall be otherwise levied upon or taken into custody or
     detained or sequestered by virtue of proceedings in any court or tribunal
     or by any government or other authority because of any claim (excluding a
     claim arising by the action or inaction of Lessor, the Lessor Group or any
     of their affiliates), Charterer shall at its own expense within 15 days
     thereafter cause the FSO to be released and each such claim to be
     discharged (except to the extent that the same shall be contested by
     Charterer in good faith by appropriate proceedings and there exists at the
     time no Charterer Event of Default). Charterer agrees forthwith to notify
     Lessor by telegram or facsimile, confirmed by letter, of each such claim
     involving amounts in excess of US $500,000 and of the release and discharge
     of each such claim. Charterer agrees to advise in writing at least once in
     each three-month period as to the status and merits of all such claims not
     released and discharged within 15 days as provided above, which either are
     not bonded or affect the ability of Charterer to use the FSO in the
     ordinary course of its business. Charterer agrees to indemnify, hold
     harmless and defend Lessor against any loss which Lessor may sustain by
     reason of any liens, security interests or encumbrances resulting from
     voluntary action by Charterer Group taken without the prior written
     approval of Lessor and not taken as the result of an Event of Default by
     Lessor.
 
14.   INVENTORY.
 
     A complete inventory of the FSO's entire outfit, equipment (including
     vessel equipment and supplies, cabin, crew and galley equipment),
     furniture, furnishings, appliances, spare and replacement parts and all
     unbroached consumable stores, fuel and lubricants onboard shall be jointly
     taken within thirty (30) days following Field Acceptance by representatives
     of Lessor and Charterer or by an independent outside firm as may be
     mutually agreed upon. A similar inventory shall be taken and mutually
     agreed upon at the time of Redelivery.
 
15.   GAS SALES AGREEMENT.
 
     Charterer and Lessor recognize that compliance with the terms of the gas
     sales agreement governing the Block B8/32 Concession will be required by
     the parties thereto, and Lessor and Charterer will generally cooperate in
     facilitating such compliance by the parties thereto.
 
16.   DOWNTIME.
 
16.1.  Downtime shall mean any calendar day or part thereof on which the FSO is
     unable to:
 
     (a) load and deliver into its storage tanks the lesser of (i) 50,000
        barrels of liquids or (ii) the amount of liquids that Charterer, its
        affiliates and designees are capable of delivering to the FSO, as
        determined in good faith by Charterer on the basis of demonstrated
        measured data;
 
     (b) store and keep at a minimum of 135 degrees Fahrenheit or such lower
        temperature as Charterer shall request at least 1,000,000 barrels of
        Crude Oil in its storage tanks; and
 
     (c) offload into offtake tankers the oil stored on the FSO at a minimum
        sustained rate of 24,000 barrels per hour or such lesser rate as the
        offtake tanker is warranted to accept or which Charterer has ordered to
        be pumped into the offtake tanker; PROVIDED, THAT, the FSO shall not
 
                                       10
<PAGE>
        be required to sustain such rates in the event of adverse weather
        conditions as specified in the Terminal Regulations Manual, as defined
        in the Operating Agreement.
 
16.2.  Downtime shall occur notwithstanding the fact that maintenance or repairs
     are occurring, but excluding those resulting from Charterer's (but not
     Operator's) gross negligence or willful misconduct. Downtime shall not
     occur during the period that Charterer is adding or modifying equipment or
     connecting additional facilities pursuant to Article 7.8.(a) hereof.
 
16.3.  Downtime shall be deemed not to occur during an event which is a Force
     Majeure event hereunder.
 
16.4.  A Downtime Damages Period shall mean any calendar day, or a portion
     thereof beginning after Field Acceptance in which Downtime occurs. During
     any Downtime Damages Period resulting from the Downtime under Articles
     16.1.(a) and (b) above, Charterer shall not be obligated to pay Lessor the
     Total Bareboat Rate in respect of any Downtime which occurs. Downtime under
     Articles 16.1.(a) and (b) shall be calculated on an hourly basis with any
     Downtime rounded to the nearest whole hour. A Downtime Damages Period under
     Article 16.1.(c) above shall mean any calendar day or a portion thereof
     during which Downtime under Article 16.1.(c) has caused an offtake tanker
     to incur demurrage. As a result of a Downtime Damages Period under Article
     16.1.(c), Charterer shall be entitled to deduct any demurrage incurred
     during such Downtime Damages Period up to an amount not to exceed US
     $30,880 per day from the Total Bareboat Rate; PROVIDED, THAT, Charterer
     shall not deduct any demurrage if the amount of demurrage incurred during
     any single offloading does not exceed US $5,000. Charterer shall as soon as
     reasonably practicable notify Lessor of the occurrence of, and its estimate
     of the total amount of Downtime incurred. The Total Bareboat Rate, as
     invoiced on a monthly basis, shall be credited with any undisputed Downtime
     occurring during the prior month in accordance with Article 9.3.
 
17.   INSURANCE.
 
17.1.  Lessor shall maintain or cause to be maintained in force during the term
     of this Agreement the following insurance coverages:
 
     (a) Hull and Machinery and Increased Value Insurance on the FSO in an
        amount not less than the estimated replacement value of the FSO on the
        London Institute Hull Clauses, or equivalent, including 3/4 Collision
        Liability coverage and be endorsed to Charterer as an additional insured
        and loss payee as its interest may appear during the term of this
        Agreement.
 
     (b) Protection and Indemnity Insurance on the FSO in an amount not less
        than US $100,000,000, subject to the rules of a Protection and Indemnity
        Club who are members of the International Group of P & I Clubs. The P &
        I entry to include 1/4 Collision Liability coverage and removal of
        debris. The P & I entry shall be endorsed to name the Charterer Group
        (as defined in Article 18.1.) as covered under the P & I insurance for
        misdirected arrow exposures (i.e., Rule 23 of London Steamship P & I
        Club Rule Book).
 
     (c) Supplemental Protection and Indemnity Insurance in an amount not less
        than US $100,000,000 (and in the case of Article 17.1.(g), not less than
        US $300,000,000) in favor of the Charterer Group and covering the
        Charterer Group in any circumstance in which misdirected arrow coverage
        is unavailable to any member of the Charterer Group as a result of an
        act or omission of any member of the Lessor Group (as defined in Article
        18.1.) or any other person.
 
     (d) Workmen's Compensation and Employer's Liability Insurance (in an amount
        not less than US $1,000,000) covering Lessor Group's employees for
        statutory benefits as set out and required by local law in the area of
        operation or any area in which Lessor Group may become legally obligated
        to pay benefits.
 
                                       11
<PAGE>
     (e) Comprehensive General Liability and Automobile Liability Insurance
        covering premises and operations, independent contractors and
        contractual liability, as well as all owned, hired and non-owned
        vehicles. Minimum policy limits for personal injury and property damage
        shall be:
 
          (i) Comprehensive General Liability: US $1,000,000 single limit per
              occurrence;
 
          (ii) Automobile Liability: US $1,000,000 single limit per occurrence
               or such greater amount as required by applicable law.
 
     (f) Excess Liability, in an amount not less than US $25,000,000, excess of:
 
          (i) Employer's or Maritime Employer's Liability Insurance
 
          (ii) Comprehensive General Liability Insurance; and
 
         (iii) Automobile Liability Insurance.
 
     (g) Pollution Insurance for the FSO of US $300,000,000 per occurrence,
        subject to market availability. Lessor shall promptly notify Charterer
        if market availability results in Pollution Insurance of less than
        $300,000,000. For purposes of this Article 17.1.(g) only, "FSO" shall
        mean the portion of the FSO from and including the import flange on the
        single point mooring system to and including the export hose string up
        to the import flange of the offtake tanker.
 
17.2.  All insurance pursuant to Article 17.1. shall include the waiver by the
     insurers of all rights of subrogation against the Charterer Group and also
     a clause specifying that the insurers shall file no claims whatsoever
     against the Charterer Group, and shall not exercise against the Charterer
     Group any right of counterclaim or setoff in respect of any liability of
     Lessor. Charterer Group shall be included as additional insureds under all
     insurance policies (other than Articles 17.1.(b), 17.1.(d), 17.1.(f)(i) and
     17.1.(g)). Coverage under all insurance to be carried by Lessor shall be
     primary insurance and exclusive of any other insurance. In addition, all
     such insurance (other than Article 17.1.(b), 17.1.(d), 17.1.(f)(i) and
     17.1.(g)) shall include a clause (i) requiring that each insurer promptly
     notify the Charterer in writing at the address to which notices are to be
     given to Charterer pursuant to Article 22. of any occurrence, including,
     without limitation, non-payment of premiums, which threatens to invalidate
     or render such insurance unenforceable, or result in its lapse,
     cancellation or reduction, in whole or in part, (ii) providing that any
     such lapse, cancellation or reduction shall not be effective as to the
     Charterer Group until fourteen (14) Days (seven (7) Days in the case of war
     risks) after receipt by Charterer of the notice referred to in (i) above,
     (iii) expressly providing that all of the provisions thereof, except the
     agreed values and the limits of the liability of the insurer under such
     policies, shall operate in the same manner as if there were a separate
     policy covering each insured and (iv) provide that in respect of the
     Charterer Group and each other indemnified party, such insurance shall not
     be invalidated by any action or inaction by a member of Lessor Group or
     other person or entity and shall insure the interest of the Charterer Group
     and any other indemnified party regardless of any breach or violation by a
     member of Lessor Group or any other person or entity of any representation,
     warranty, declaration or condition contained in such policy.
 
     Before commencing performance of this Agreement, Lessor shall furnish
     Charterer with either policies or brokers' letters satisfactory to them
     demonstrating compliance with this Article 17. Lessor shall, whenever so
     requested by Charterer, produce the insurance policies, the receipts
     evidencing payment of the current premiums, and documentation certified by
     the insurers as to the coverage and value of the policies.
 
17.3.  Charterer shall maintain or cause to be maintained in force during the
     term of this Agreement the following insurance coverages:
 
                                       12
<PAGE>
     (a) Workman's Compensation and Employer's Liability Insurance (in an amount
        not less than US$1,000,000) covering Charterer Group's employees for
        statutory benefits as set out and required by local law in the area of
        operation or area in which Charterer Group may become legally obligated
        to pay benefits.
 
     (b) Comprehensive General Liability and Automobile Liability Insurance
        covering premises and operations, independent contractors and
        contractual liability, as well as all owned, hired and non-owned
        vehicles. Minimum policy limits for personal injury and property damage
        shall be:
 
          (i) Comprehensive General Liability: US $1,000,000 single limit per
              occurrence; and
 
          (ii) Automobile Liability: US $1,000,000 single limit per occurrence
               or such greater amount as required by applicable law.
 
     (c) Excess Liability, in an amount not less than US $25,000,000, excess of:
 
          (i) Employer's or Maritime Employer's Liability Insurance
 
          (ii) Comprehensive General Liability Insurance; and
 
         (iii) Automobile Liability Insurance.
 
     (d) Seepage and Pollution Insurance on normal industry terms for the
        reservoir, oil field installations and the flexible risers for US
        $50,000,000 per occurrence.
 
17.4.  All insurance pursuant to Article 17.3. shall include the waiver by the
     insurers of all rights of subrogation against the Lessor Group and also a
     clause specifying that the insurers shall file no claims whatsoever against
     the Lessor Group, and shall not exercise against the Lessor Group any right
     of counterclaim or setoff in respect of any liability of Charterer. Lessor
     Group shall be included as additional insureds under all insurance policies
     (other than Article 17.3.(a)). Coverage under all insurance to be carried
     by Charterer shall be primary insurance and exclusive of any other
     insurance. In addition, all such insurance shall include a clause (i)
     requiring that each insurer promptly notify Lessor in writing at the
     address to which notices are to be given to Lessor pursuant to Article 22.
     of any occurrence, including, without limitation, non-payment of premiums,
     which threatens to invalidate or render such insurance unenforceable, or
     result in its lapse, cancellation or reduction, in whole or in part, (ii)
     providing that any such lapse, cancellation or reduction shall not be
     effective as to the Lessor Group until fourteen (14) Days (seven (7) Days
     in the case of war risks) after receipt by Lessor of the notice referred to
     in (i) above, (iii) expressly providing that all of the provisions thereof,
     except the agreed values and the limits of the liability of the insurer
     under such policies, shall operate in the same manner as if there were a
     separate policy covering each insured and (iv) provide that in respect of
     the Lessor Group and each other indemnified party, such insurance shall not
     be invalidated by any action or inaction by a member of Charterer Group or
     other person or entity and shall insure the interest of the Lessor Group
     and any other indemnified party regardless of any breach or violation by a
     member of Charterer Group or any other person or entity of any
     representation, warranty, declaration or condition contained in such
     policy.
 
     Before commencing performance of this Agreement, Charterer shall furnish
     Lessor with either policies or brokers' letters satisfactory to them
     demonstrating compliance with this Article 17. Charterer shall, whenever so
     requested by Lessor, produce the insurance policies, the receipts
     evidencing payment of the current premiums, and documentation certified by
     the insurers as to the coverage and value of the policies.
 
17.5.  Except as specifically provided above in this Article 17., Lessor shall
     establish, and Charterer shall approve, insurance values, amounts,
     coverages and deductibles on forms and with insurers which are compatible
     and consistent with the standards of prudent owners and operators of
     vessels of similar type, size, age, location and activity as the FSO. Hull
     and machinery insurance shall be
 
                                       13
<PAGE>
     written on Institute Time Clauses - Hulls (1/10/83), Norwegian Hull Form or
     American Institute Hull Clauses (2nd June 1977). Charterer reserves the
     right to reject a specific insurance company for reasonable cause.
 
17.6.  Notwithstanding anything else in this Article or elsewhere in this
     Agreement to the contrary, if a party or its affiliate fails to obtain the
     insurance which it has agreed to provide herein, or such insurance lapses
     or is terminated, such event shall constitute an immediate Event of Default
     under Article 30. by such party, and the other party, in addition to other
     remedies available to it under Article 31., shall have the immediate right,
     without notice or demand to the defaulting party, to obtain the insurance
     required pursuant to this Article which shall give rise to an immediate
     right of setoff for any expenses incurred, as a deduction from Hire
     payable, by drawing upon the Performance Guaranty, or as an additional
     payment due hereunder, as applicable.
 
17.7.  The fact that the insurance policies required under this Article 17. have
     been taken out shall not be deemed to relieve either party in whole or in
     part of any of its obligations and responsibilities to the other party
     under this Agreement or to any third party, including its indemnification
     obligations under Article 18., nor does either party warrant to the other
     that such policies are adequate to indemnify it against any such risk, and
     the indemnifying party shall therefore be responsible for taking out, at
     its sole expense, such further or other policies as it considers necessary
     or prudent for its protection.
 
17.8.  Each party shall bear all deductibles, franchises or self-insured
     retentions applicable to insurance taken out by such party.
 
17.9.  Each party shall give the other prompt notice of any claim with respect
     of any of the insurance policies referred to in this Article, accompanied
     by full details of the incident giving rise to such claim and shall afford
     each other all such assistance as may be required, or reasonably requested,
     for the preparation and negotiation of any insurance claims hereunder.
 
18.   INDEMNITY.
 
18.1.  Lessor shall protect, defend, indemnify and hold harmless Charterer and
     its affiliates, associates, co-venturers, co-venturers' subsidiaries and
     affiliates, and subcontractors at all levels and their respective
     shareholders, officers, employees and agents (hereinafter all such
     companies and persons called "Charterer Group") from and against any loss,
     damage, claim, expense, suit or liability (including attorneys' fees and
     legal costs) arising out of, or in any way related to, the injury, illness
     or death or property loss or damage (including to the FSO) sustained by
     Lessor, its affiliates, associates, co-venturers, subcontractors at all
     levels, sub-suppliers, lenders and their respective shareholders, officers
     and employees and agents and the Master and crew of the FSO (hereinafter
     all such persons and companies called "Lessor Group") howsoever caused or
     arising and regardless of a member of Charterer Group's or of any third
     party's (i) sole, concurrent, active or passive negligence, (ii) a defect
     in its property or equipment and (iii) liability or limitation thereof
     under any applicable statute of law or theory including strict liability.
 
18.2.  Charterer shall protect, defend, indemnify and hold harmless Lessor Group
     from and against any loss, damage, claim, expense, suit or liability
     (including attorneys' fees and legal costs) arising out of, or in any way
     related to the injury, illness or death or property loss or damage
     (including oil and gas reservoirs, pipelines and platforms in which
     Charterer Group has an interest, but excluding the FSO) sustained by
     Charterer Group howsoever caused or arising and regardless of a member of
     Lessor Group's or of any third party's (i) sole, concurrent, active or
     passive negligence, (ii) a defect in its property or equipment and (iii)
     liability or limitation thereof under any applicable statute of law or
     theory including strict liability.
 
18.3.  Subject to the provisions of Articles 18.5., 18.6. and 18.9., Lessor
     agrees to indemnify, defend and save Charterer Group harmless from and
     against any and all losses, claims, demands, liabilities,
 
                                       14
<PAGE>
     damages, suits or actions in rem or otherwise (including expenses and
     attorneys' fees) for loss or damage to or injury, illness or death of,
     third parties regardless of any right that may be afforded to any member of
     Lessor Group to claim limitation of liability under any applicable law,
     statute or convention with respect to claims by third parties (which shall
     exclude Charterer Group and Lessor Group) to the extent, and only to the
     extent, such losses, claims, demands, liabilities, damages, suits or
     actions arise out of Lessor Group's sole or concurrent active negligence;
     PROVIDED, FURTHER, that to the extent that any loss, claim, demand,
     liability, damage, suit or action brought by any third party arises in part
     out of Charterer Group's concurrent active negligence, Lessor shall
     indemnify, defend and save Charterer Group harmless from and against such
     loss, claim, demand, liability, damage, suit or action in the proportion to
     which the collective concurrent active negligence of all members of the
     Lessor Group bears to the total collective concurrent active negligence of
     all members of both the Lessor Group and the Charterer Group.
 
18.4.  Subject to the provisions of Articles 18.5., 18.6. and 18.9., Charterer
     agrees to indemnify, defend and save Lessor Group harmless from and against
     any and all losses, claims, demands, liabilities, damages, suits or actions
     in rem or otherwise (including expenses and attorneys' fees) for loss or
     damage to or injury, illness or death of third parties regardless of any
     right that may be afforded to any member of Charterer Group to claim
     limitation of liability under any applicable law, statute or convention
     with respect to claims by third parties (which shall exclude Charterer
     Group and Lessor Group) to the extent, and only to the extent, such losses,
     claims, demands, liabilities, damages, suits or actions arise out of
     Charterer Group's sole or concurrent active negligence; PROVIDED, FURTHER,
     that to the extent that any loss, claim, demand, liability, damage, suit or
     action brought by any third party arises in part out of Lessor Group's
     concurrent active negligence, Charterer shall indemnify, defend and save
     Lessor Group harmless from and against such loss, claim, demand, liability,
     damage, suit or action in the proportion to which the collective concurrent
     active negligence of all members of the Charterer Group bears to the total
     collective concurrent active negligence of all members of both the Lessor
     Group and the Charterer Group.
 
18.5.  (a)  From and after Field Acceptance, Charterer agrees to indemnify,
     defend and save Lessor Group harmless from and against any and all losses,
     claims, demands, liabilities, damages, costs, expenses, penalties and/or
     fines, suits or actions in rem or otherwise (including expenses and
     attorneys' fees) for loss or damage to Lessor Group arising out of seepage
     or pollution of crude oil and gas from reservoirs, pipelines, platforms and
     other property related thereto (excluding the FSO) owned or leased by
     Charterer Group while such property is in Charterer Group's custody and
     control, including cost of cleanup of same.
 
     (b)  With respect to seepage or pollution from the FSO, Charterer shall
     conduct cleanup operations and Lessor shall provide all reasonable
     assistance; ultimate financial responsibility for the cost of such cleanup
     will be borne by Lessor Group as provided in Article 18.6.(a). If Charterer
     causes crude oil or gas located on the FSO to be insured, Charterer shall
     cause Lessor Group to be named as co-insureds in such policy as their
     interests may appear.
 
18.6.  (a)  Notwithstanding Article 18.5., Lessor shall be solely responsible
     for and shall indemnify, defend and save Charterer Group harmless from and
     against any and all losses, claims, demands, liabilities, damages, costs,
     expenses, penalties and/or fines, suits or actions in rem or otherwise
     (including expenses and attorneys' fees) for loss or damage to Charterer
     Group arising from or caused by any seepage or pollution originating under
     or above the surface of the water from (i) spills of crude oil, gas, fuels,
     bunkers, slop tanks, lubricants, motor oils, pipe dope, paints, solvents,
     ballast, bilge, garbage and sewage in Lessor Group's possession or control
     (including the FSO) and (ii) any property or equipment (including the FSO)
     owned, leased or provided by the Lessor Group including costs of cleanup of
     same.
 
                                       15
<PAGE>
     (b)  Notwithstanding Article 18.5., Charterer shall be solely responsible
     for and shall indemnify, defend and save Lessor Group harmless from and
     against any and all losses, claims, demands, liabilities, damages, costs,
     expenses, penalties and/or fines, suits or actions in rem or otherwise
     (including expenses and attorneys' fees) for loss or damage to Lessor Group
     arising from or caused by any pollution originating under or above the
     surface of the water from (i) spills of fuels, bunkers, slop tanks,
     lubricants, motor oils, pipe dope, paints, solvents, ballast, bilge,
     garbage and sewage in Charterer Group's possession or control (other than
     FSO) and (ii) any property or equipment owned, leased or provided by the
     Charterer Group (other than the FSO) including costs of cleanup of same.
 
18.7.  Except as provided in Articles 18.3. and 18.4., all excuses from
     liability for one party and all indemnities given by one party to the other
     party or to the other party's Group pursuant to this Agreement shall apply
     regardless of the sole negligence or gross negligence or breach of duty or
     strict liability of the parties to be indemnified but shall not apply in
     the case of willful misconduct.
 
18.8.  As used herein, "affiliate" shall mean any company or legal entity which
     (i) controls either directly or indirectly a party hereto, or (ii) which is
     itself effectively controlled directly or indirectly by such party, or
     (iii) is directly or indirectly effectively controlled by a company or
     entity which directly or indirectly controls such party. "Control" means
     the right, whether by voting or otherwise, to appoint a director of the
     company concerned. "FSO," as used herein, shall include the FSO, the swivel
     and risers down to the outlet flange from the PLEM, and the export hoses up
     to and including the output flange on such hoses.
 
18.9.  In no event shall either party's Group be liable for any loss of
     production, loss of oil or gas, loss of revenue or profit, loss of
     commercial advantage, demurrage, or any consequential or indirect losses or
     damages suffered by the other party's Group as a result of any act or
     omission or negligence, unseaworthiness of the FSO or otherwise. This
     Article shall not be construed as a limitation upon the third party
     indemnification provisions of this Agreement.
 
18.10. The provisions of this Article 18. are intended to specifically allocate
       certain liabilities between the parties hereto in the events described in
       this Article 18 but shall not be interpreted to waive or excuse
       performance by any party of its representations, warranties and covenants
       set forth in this Agreement.
 
18.11. (a)  For the purposes of this Article 18.11., the term "Indemnitee" will
       refer to the person or persons indemnified or entitled (or claiming to be
       entitled) to be indemnified pursuant to the provisions of this Agreement;
       and the term "Indemnitor" will refer to the person having the obligation
       to indemnify pursuant to such provision.
 
     (b)  An Indemnitee will promptly give the Indemnitor notice of any matter
     that an Indemnitee has determined has given or could give rise to a right
     of indemnification under this Agreement, stating the amount of the loss,
     claim, demand, liability, damages, cost, expense, penalty and/or fine, suit
     or action in rem or otherwise (the "Claim") if known, and method of
     computation thereof, all with reasonable particularity, and stating with
     particularity the nature of such matter. Failure to provide such notice
     will not affect the right of the Indemnitee to indemnification except to
     the extent such failure will have resulted in liability to the Indemnitor
     that could have been avoided had such notice been provided promptly.
 
     (c)  The obligations and liabilities of an Indemnitor under this Agreement
     with respect to Claims of any third party that are subject to the
     indemnification provided for in this Article 18. ("Third Party Claims")
     will be governed by the following additional terms and conditions: if an
     Indemnitee receives notice of any Third Party Claim, the Indemnitee will
     give the Indemnitor notice of such Third Party Claim pursuant to clause (b)
     above, and the Indemnitor may, at its option, assume and control the
     defense of such Third Party Claim at the Indemnitor's expense and through
     counsel of
 
                                       16
<PAGE>
     the Indemnitor's choice that is reasonably acceptable to the Indemnitee. In
     the event the Indemnitor assumes the defense against any such Third Party
     Claim as provided above, the Indemnitee will have the right to participate
     at its own expense in the defense of such asserted liability, will
     cooperate with the Indemnitor in such defense and make available on a
     reasonable basis to the Indemnitor all witnesses, pertinent records,
     materials and information in its possession or under its control relating
     thereto as is reasonably required by the Indemnitor. In the event the
     Indemnitor does not elect to assume the defense against any such Third
     Party Claim, the Indemnitor will pay all reasonable costs and expenses of
     such defense as incurred and will cooperate with the Indemnitee (and be
     entitled to participate) in such defense and make available on a reasonable
     basis all such witnesses, records, materials and information in its
     possession or under its control relating thereto as is reasonably required
     by the Indemnitee. Except for the settlement of a Third Party Claim that
     involves the payment of money only and for which the Indemnitee is totally
     indemnified by the Indemnitor, no Third Party Claim may be settled without
     the prior written consent of the Indemnitee, which consent will not
     unreasonably be withheld or action with respect thereto unduly delayed. No
     Indemnitee shall be entitled to any indemnification under this Agreement
     from the Indemnitor for any Third Party Claim that it settles without the
     prior written consent of the Indemnitor in each instance.
 
19.   NON-WAIVER OF DEFAULTS.
 
19.1.  Any failure by either party at any time, or from time to time, to enforce
     or require the strict keeping and performance of any of the terms or
     conditions of this Agreement, or to exercise a right hereunder, shall not
     constitute a waiver of such terms or conditions.
 
20.   FORCE MAJEURE.
 
20.1.  Any loss or damage or delay in, or failure of performance of either party
     shall not constitute default hereunder or give rise to any claims for
     damages if and to the extent that such loss, damage, delay or failure is
     caused by "Force Majeure."
 
20.2.  In this Agreement "Force Majeure" shall denote any event the happening of
     which could not be prevented even though a person against whom it happened
     or threatened to happen were to take such appropriate care as might be
     expected of a Reasonable and Prudent Operator, as hereinafter defined.
     "Reasonable and Prudent Operator" when used to describe the standard of
     care to be exercised by a party in performing its obligations means the
     degree of diligence and prudence and foresight reasonably and ordinarily
     exercised by experienced operators engaged in the same line of business
     under the same or similar circumstances and conditions and when used to
     determine the action that would be required of a party means the action an
     experienced commercial operator engaged in the same line of business under
     the same or similar circumstances and conditions would take in the exercise
     of such due diligence, prudence and foresight. Notwithstanding Article
     20.1., Force Majeure shall not release either party from any obligation to
     give a notice or make any payment (including, in particular, any payment of
     Hire) under this Agreement except where the making of a payment is
     prevented by a Force Majeure event affecting the transfer of monies by the
     payor. Any payments which are so prevented from being made by reason of
     Force Majeure shall, upon the cessation of the Force Majeure event, be made
     as soon as practicable thereafter in addition to any other amounts which
     may then be payable by such party under this Agreement.
 
20.3.  Events which may, subject to Article 20.2., be considered Force Majeure
     events shall include but not be limited to acts of government, strikes,
     lock-outs, acts of public enemy, wars whether declared or undeclared,
     blockades, insurrection, riots, epidemics, landslides, lightning,
     earthquakes, fires, storms, floods, washouts, civil disturbances,
     explosions, breakage or accident to machinery or lines of pipe, freezing of
     wells or lines of pipe, partial or entire failure of wells, inability to
     obtain necessary materials or supplies due to changes in laws and
     regulations and material changes in the obligations of the concessionaire
     under the Concession Agreement, as herein defined, imposed
 
                                       17
<PAGE>
     unilaterally by the Government of Thailand and inability of PTT to accept
     delivery of gas delivered to PTT under the Gas Sales Agreement where such
     inability constitutes an event of Force Majeure under the Gas Sales
     Agreement which has been declared.
 
20.4.  A party claiming relief on account of Force Majeure shall:
 
     (a) as soon as practicable give notice to the other party of the happening
        said to constitute Force Majeure, such notice to include full
        information about the circumstances and a statement of the steps and
        time believed necessary to remedy the failure but neither party shall be
        obligated to settle or prevent any strike or other industrial action
        except on terms which, in its sole judgment, are acceptable to it; and
 
     (b) proceed as a Reasonable and Prudent Operator at its own expense to
        remedy the failure as rapidly as possible.
 
21.   LAW AND ARBITRATION.
 
21.1.  This Agreement shall be construed and governed in accordance with the
     maritime law of the United States of America and, to the extent such law is
     inapplicable, with the laws of the State of New York excluding any conflict
     of law rules. In connection with the interpretation of any exhibit hereto,
     the choice of law of this Agreement shall prevail.
 
21.2.  Any dispute arising under or in connection with this Agreement shall be
     settled by arbitration in New York City under the rules of the American
     Arbitration Association. The party requesting arbitration shall serve upon
     the other party a written demand for arbitration with the name and address
     of the arbitrator appointed by it, and such other party shall, within ten
     (10) days thereafter, appoint an arbitrator, and the two arbitrators so
     named, if they can agree, shall appoint a third. If the two arbitrators
     cannot agree, a third arbitrator shall be appointed by the American
     Arbitration Association. The decision or award of any two arbitrators shall
     be final and binding upon the parties. In no event shall any dispute or
     consolidated group of disputes be determined by more than three
     arbitrators. Should the party upon whom the demand for arbitration is
     served fail or refuse to appoint an arbitrator within ten (10) days, the
     single arbitrator shall have the right to decide alone, and his decision or
     award shall be final and binding upon the parties. The arbitrator(s) shall
     have the discretion to impose the cost of the arbitration proceedings,
     including reasonable attorney's fees upon the losing party, or divide it
     between the parties on any terms which may appear just; PROVIDED, HOWEVER,
     that in no event may the arbitrator(s) award any punitive, special or
     exemplary damages.
 
21.3.  Judgment upon the arbitration award rendered may be entered in any Court
     having either personal or in rem jurisdiction, or application may be made
     to such Court for a judicial acceptance of the award and an Order of
     Enforcement, as the case may be. In this regard, Lessor and Charterer
     hereby submit to the jurisdiction of the federal and state courts located
     in Houston, Harris County, Texas.
 
22.   NOTICES.
 
22.1.  Notices or other communications required to be given by either party
     pursuant to this Agreement shall be written in English and delivered
     personally or sent by mail or by facsimile to the address of the other
     party set forth in Article 22.2. below, or to such other address as may
     from time to time be designated by the other party through notification of
     such party. The dates on which notices shall be deemed to have been
     effectively given shall be determined as follows:
 
     22.1.1  Notices given by personal delivery shall be deemed effectively
             given on the date of personal delivery;
 
                                       18
<PAGE>
     22.1.2  Notices given by mail shall be deemed effectively given on the
             seventh day after the date mailed (as indicated by the postmark) by
             registered airmail, postage prepaid, or the third day after
             delivery to an internationally recognized courier service;
 
     22.1.3  Notices given by facsimile shall be deemed effectively given on the
             first business day following the date of transmission, as indicated
             on the document in question.
 
22.2.  Except as otherwise provided in Article 22.1., the parties shall give all
     notices and send all invoices and communications under this Agreement to:
 
     22.2.1  If to Lessor:
            Watertight Shipping B.V.
            Einstein Building
            Kabelweg 21
            1014 BA Amsterdam
            The Netherlands
            Attention: Mr. Jacob Sajet
            Fax: 31-20-684-7552
 
     22.2.2  If to the Charterer:
            Thaipo Limited
            Thai Romo Limited
            Palang Sophon Limited
            B8/32 Partners Limited
            18th Floor, B.B. Building
            54 Soi Asoke, Sukhumvit 21 Rd.
            Kwaeng Klongtoey Nua, Khet Klontoey
            Bangkok 10110, Thailand
            Attn: Resident Manager
            (662) 260-7151 (phone)
            (662) 260-7150 (fax)
 
     22.2.3  All references in this Agreement to a Business Day shall refer to a
             day other than Saturdays and Sundays or other days on which banks
             in New York City and Bangkok are required or authorized to be
             closed for business.
 
23.   PURCHASE OPTION.
 
23.1.  Provided that an Event of Default by Charterer under Article 30. of this
     Agreement is not existing, Charterer shall have the right to exercise an
     option (the "Purchase Option") to purchase the FSO (including its on-board
     spare parts) from the Lessor free from all encumbrances (except
     encumbrances created by Charterer),
 
     (a) at the expiration of the Initial Term for a price of Twelve Million Six
        Hundred Twenty-Eight Thousand Dollars (US $12,628,000.00); or
 
     (b) at any time during the Initial Term at a price to be determined by
        reference to APPENDIX C-1, or
 
     (c) at any time during the Initial Term, if an Event of Default by Lessor
        has occurred under Article 30. of this Agreement and Charterer has
        elected, pursuant to Article 31.1.(b) hereof to exercise this Purchase
        Option for a price determined by reference to APPENDIX C-2; or
 
     (d) if, in the opinion of Charterer (and, if requested by Lessor, in the
        opinion of Charterer's outside counsel), such purchase is required by
        relevant governmental authorities pursuant to
 
                                       19
<PAGE>
        applicable laws, rules, regulations or agreements with such governmental
        authorities, for a price determined by reference to APPENDIX C-1.
 
23.2.  Lessor agrees that if Charterer exercises any option pursuant to this
     Article 23. to purchase the FSO, Lessor will on or before the scheduled
     closing of such purchase cause all liens with respect to the FSO (except
     liens caused by the Charterer Group) to be lifted.
 
23.3.  Except with respect to Article 23.1.(c), in the event that Charterer
     exercises its Purchase Option, such purchase price shall be reduced by any
     amounts due from Lessor under this Agreement which have been mutually
     agreed or determined pursuant to the terms of Article 21. at the time of
     such purchase.
 
23.4.  If Charterer is exercising its Purchase Option pursuant to Article
     23.1.(a), (b) or (c) above, Charterer shall provide notice of its intent to
     do so in accordance with the relevant provisions of this Agreement. If
     Charterer is exercising its Purchase Option pursuant to Article 23.1.(d)
     above, Charterer shall provide notice of its intent to do so at the
     earliest reasonable practicable opportunity.
 
23.5.  In the event the Purchase Option is exercised, unless agreed otherwise
     between Charterer and Lessor, Lessor shall sell the FSO and Charterer shall
     purchase the FSO "as is," safely afloat, at the time and place of
     redelivery of the FSO pursuant to Article 25., at which time:
 
     (a) Lessor shall deliver to Charterer:
 
          (i) A certificate signed by a duly authorized executive of Lessor to
              the effect that the FSO is free from all encumbrances (except
              encumbrances created by Charterer),
 
          (ii) A certificate signed by the appropriate government official of
               the Country of Registry showing Lessor as the sole owner of the
               FSO and no liens of record other than encumbrances to be
               satisfied out of the FSO's sales proceeds,
 
         (iii) A legal bill of sale for the FSO free from all encumbrances and
               maritime liens and any other debts whatsoever, duly notorially
               attested and legalized by the appropriate authority and a letter
               of undertaking to provide for the deletion of the FSO from the
               Panamanian registry of vessels within thirty (30) days of the
               date of delivery of the FSO to Charterer,
 
          (iv) Copies of class and trading certificates (where relevant to its
               class) for the FSO valid at the time of delivery,
 
          (v) All government approvals necessary to transfer the FSO to
              Charterer and, if requested by Charterer, to delete the FSO from
              registry in the Country of Registry and any country claiming
              jurisdiction over Lessor's power to sell the FSO,
 
          (vi) Copies of all log books, classification certificates, manuals and
               other documents in the Lessor's possession or control arising out
               of or related in any way to the FSO's design, engineering,
               construction, operation and maintenance, and
 
         (vii) Physical possession of the FSO.
 
     (b) On delivery, Charterer shall pay the purchase price to Lessor or its
        designee by transfer to Lessor's account then designated for receipt of
        Hire payments. Payment of any Thailand sales, VAT or other taxes
        attributable the sale shall be the responsibility of Charterer. At the
        time of delivery, if there are no unpaid claims which have been asserted
        hereunder, Charterer shall promptly return the Performance Guaranty to
        the issuer thereof.
 
     (c) Each party shall deliver to the other party such additional
        documentation or take such additional action as such other party may
        reasonably request or as may be customary at the time with respect to
        the sale of vessels registered in the Country of Registry and which is
        not in
 
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<PAGE>
        conflict with the provisions of this Agreement, provided that Lessor
        shall not be required to arrange or pay for a dry-docking or inspection
        of the FSO for purposes of said sale and purchase.
 
24.   GUARANTY.
 
24.1.  Lessor has delivered to Charterer a Guaranty and Indemnity Agreement
     ("Lessor Parent Company Guaranty") in the form of APPENDIX B-1 hereto,
     executed by its ultimate corporate parent, Omni Offshore Holdings, Limited,
     a company organized under the laws of Liberia, guaranteeing the performance
     by Lessor of its obligations hereunder.
 
24.2.  Upon Delivery, Lessor or its designee shall provide to Charterer, at
     Lessor's sole expense, an irrevocable and unconditional letter of credit in
     favor of Charterer in the amount of Five Million Dollars (US $5,000,000) to
     guarantee the due, proper and full performance by Lessor of its obligations
     under this Agreement (the "Performance Guaranty"). The Performance Guaranty
     shall be (i) executed on a form attached hereto as APPENDIX B-2 with such
     modifications as are acceptable to Charterer, (ii) issued by a bank
     acceptable to Charterer, and (iii) valid and available to Charterer until a
     date not less than ninety (90) days after the end of the Initial Term;
     PROVIDED, HOWEVER, that the term of the Performance Guaranty shall
     initially be for a period of one (1) year, but shall be continually renewed
     and extended, each renewal and extension to be for a period of one year if,
     as of ten (10) days prior to the expiration of the initial term of the
     Performance Guaranty, or any renewal or extension thereof, the term of the
     Performance Guaranty is less than ninety (90) days more than the Initial
     Term. In addition to any other rights Charterer may have to draw upon the
     Performance Guaranty, Charterer shall have the immediate right to draw upon
     the Performance Guaranty in full prior to its expiration if (i) Lessor has
     not timely renewed and extended the Performance Guaranty in accordance with
     the immediately preceding sentence or (ii) Lessor attempts to terminate the
     Performance Guaranty prior to ninety (90) days after the expiration of the
     Initial Term; PROVIDED, HOWEVER, that if Lessor subsequently delivers a new
     Performance Guaranty and there is no other existing Event of Default by
     Lessor, Charterer shall promptly pay to Lessor any amounts drawn by
     Charterer pursuant to this sentence. In the event that Lessor or its
     Guarantor or its or their subcontractors fail to comply with any of their
     obligations under this Agreement and Charterer, as a result, shall have the
     right at any time under this Agreement either to (i) be reimbursed or
     indemnified by Lessor or its Guarantor for any loss or expenditure incurred
     by Charterer or (2) receive any contractual damages (including liquidated
     damages) from Lessor, then Charterer shall have the right to draw on the
     Performance Guaranty on its first demand and thereafter from time to time
     in such amount as needed to satisfy such obligation of Lessor or its
     Guarantor to Charterer. In the event of a draw on the Performance Guaranty,
     other than a draw in connection with the termination of the Agreement,
     Lessor shall, within ten (10) Business Days from the date of such draw,
     restore the Performance Guaranty to Five Million Dollars (US $5,000,000).
     Any draw on the Performance Guaranty shall be effected by the member of the
     Charterer that is at the time such draw the field operator pursuant to the
     Concession Agreement (the "Field Operator").
 
25.   REDELIVERY OF FSO.
 
     The FSO shall at the expiration or termination or as provided in Article
     31.2.(b) of this Agreement (unless lost or a constructive total loss or
     under requisition or purchased by Charterer) be redelivered to Lessor at
     the Offshore Site (the "Redelivery"), as is - where is, in accordance with
     the following conditions. The FSO shall be redelivered to Lessor properly
     documented and in class with no recommendations, fair wear and tear not
     affecting class excepted. Charterer shall have discharged substantially all
     free crude oil (other than tank bottoms) from the FSO. Any expenses of
     degassing or demucking upon Redelivery shall be borne by Lessor. The FSO
     shall upon Redelivery have her class certificates valid. Charterer will
     render the FSO available to Lessor at the time of
 
                                       21
<PAGE>
     Redelivery for survey, inspection, testing and inventory check at Lessor's
     expense. Charterer at its expense shall meet its Redelivery obligations and
     the charter period shall be extended for the period necessary to make any
     deficiencies good. During any such period the compensation payable under
     Article 9. before Redelivery shall not be so payable provided Charterer's
     obligations herein are met promptly and expeditiously. Prior to and during
     the Redelivery of the FSO, Charterer shall provide such reasonable
     assistance to Lessor as Lessor requests in order to effect taking
     Redelivery of the FSO, including but not limited to temporary office
     facilities onshore and transportation from Charterer's shore base to the
     FSO and vice versa for Lessor's personnel and supplies as is reasonable
     under the circumstances. On Redelivery, Lessor shall be free (i) to cut and
     either remove or abandon the anchor chains, the risers, buoyancy tanks and
     the control umbilicals (but so as to leave no hazard to shipping and to
     avoid damage to Charterer's wells, wellheads, pipelines, PLEM or other
     equipment) and to remove the FSO from the Offshore Site but without having
     any obligation to remove subsurface equipment or materials including piling
     or any other obligation to clear the Offshore Site and (ii) to remove any
     free crude oil not previously removed by Charterer at Charterer's expense.
 
26.   REQUISITION.
 
26.1.  If the FSO is seized, expropriated, confiscated, nationalized or
     requisitioned by any authority (other than the government, or any
     department, commission or agency thereof, of the Country of Registry,
     whether a legally constituted governmental authority or otherwise), and
     such seizure, expropriation, confiscation, nationalization or requisition
     has continued for a period of at least 30 consecutive days, this Agreement,
     at the option of Charterer, may continue in force or may be terminated at
     any time during the period of seizure, expropriation, confiscation,
     nationalization or requisition, provided that in the event Charterer elects
     to terminate, notice shall be given to Lessor by Charterer and
     compensation, as specified in Article 9., shall cease as of the date
     occurring 30 days prior to the date of notice of termination and the FSO
     shall be deemed to have been Redelivered to Lessor by Charterer. If
     Charterer has previously paid any or all of such compensation in respect of
     such 30 day period, Lessor shall promptly refund such amount to Charterer.
 
26.2.  In the event the FSO is seized, expropriated, confiscated, nationalized
     or requisitioned (collectively, an "Expropriation") by the government, or
     any department, commission or agency thereof, of the Country of Registry,
     whether a legally constituted governmental authority or otherwise, this
     Agreement shall be deemed terminated and compensation, as specified in
     Article 9.1., shall cease as of the date of Expropriation and the FSO shall
     be deemed to have been redelivered to Lessor by Charterer; PROVIDED, THAT,
     the provisions of this Article 26.2. with respect to termination of this
     Agreement shall not become applicable until the earlier of (a) one (1)
     month after such Expropriation or (b) the date that Lessor and, if
     applicable, Charterer have agreed that the FSO cannot be released from such
     Expropriation.
 
26.3.  In the event any seizure, expropriation, confiscation, nationalization or
     requisition of the FSO occurs, Lessor shall use its best efforts to arrange
     the release of the FSO therefrom (including, without limitation, changing
     the Country of Registry of the FSO) and shall afford Charterer the
     opportunity to join in any such action.
 
27.   GENERAL AND PARTICULAR AVERAGE.
 
     General average if any shall be adjusted according to the York-Antwerp
     Rules 1994 or any subsequent modification thereof current at the time of
     the casualty.
 
28.   SALVAGE.
 
     All salvage and towage shall be for Lessor's benefit and the cost of
     repairing damage occasioned thereby shall be borne by Lessor.
 
                                       22
<PAGE>
29.   AUDIT.
 
     Lessor shall maintain its records which pertain to Articles 9. and 11.
     hereof in accordance with generally accepted international accounting
     principles and will keep copies of all applicable documents, forms and
     third-party invoices, etc., and will permit Charterer to inspect such
     records at any time upon request during regular business hours.
 
30.   DEFAULT.
 
     The following events by either party hereto or any guarantor ("Guarantor")
     under the Lessor Parent Company Guaranty shall constitute an Event of
     Default:
 
     (a) failure to observe any material covenant, condition or agreement to be
        performed or observed by said party hereunder or any Guarantor under the
        Lessor Parent Guaranty; or
 
     (b) any representation or warranty made herewith or pursuant hereto or
        pursuant to the Lessor Parent Company Guaranty shall prove to be
        incorrect at any time in any material respect; or
 
     (c) said party or Guarantor shall become insolvent or bankrupt or consent
        to the appointment of a trustee or receiver, or a trustee or receiver
        shall be appointed for said party or for a substantial part of its
        property without its consent and shall not be dismissed for a period of
        thirty (30) days, or bankruptcy, reorganization or insolvency
        proceedings shall be instituted by or against said party and, if
        instituted against said party, shall not be dismissed for a period of
        thirty (30) days, and at any time thereafter so long as the same shall
        be continuing; PROVIDED, THAT, in any such case, no other Guarantor has
        agreed within such thirty (30) day period to accept and fulfill the
        obligations of such insolvent, reorganizing or bankrupt party or
        Guarantor; or
 
     (d) A Force Majeure Event shall have occurred preventing payment by
        Charterer of amounts due hereunder and such failure to pay continues
        unremedied for a period of 60 consecutive days.
 
31.   REMEDIES.
 
31.1.  Upon the occurrence of an Event of Default of Lessor or its affiliate and
     at any time thereafter so long as the same shall be continuing, Charterer
     may, at its option, upon ninety (90) days' (or in the case of a failure to
     maintain or renew the full amount of the Performance Guaranty, two (2)
     Business Days') notice thereof to Lessor, declare this Agreement to be in
     default; and, at any time thereafter, so long as Lessor shall not have
     remedied or have commenced and at all times thereafter diligently acted to
     remedy all outstanding Events of Default, Charterer may:
 
     (a) terminate this Agreement, compensation as specified in Article 9.1.
        shall cease as of the date of termination and Charterer shall redeliver
        the FSO to Lessor as if the FSO were being redelivered pursuant to
        Article 25. hereof; or
 
     (b) exercise its right to exercise the Purchase Option at a price to be
        determined by reference to APPENDIX C-2 (offsetting any damages which
        have been established at the time of such purchase against the purchase
        price of the FSO to the extent provided below) and terminate
        compensation under Article 9.1.
 
     In either case, Charterer shall also have the additional right to draw upon
     the Performance Guaranty as provided in Article 24.2.
 
     If Charterer exercises its Purchase Option under sub-clause (b) above, it
     will not offset any damages against the price set forth in APPENDIX C-2
     except to the extent that (i) no additional drawings under the Performance
     Guaranty are available, and (ii) Charterer's damages exceed the difference
     between the amount set forth in APPENDIX C-1 minus the amount set forth in
     APPENDIX C-2 as of the date of purchase of the FSO; PROVIDED, HOWEVER, that
     the foregoing limitation on offset of
 
                                       23
<PAGE>
     damages shall not in any manner limit or diminish Charterer's claim for
     damages under this Agreement, the Performance Guaranty or the Lessor Parent
     Guaranty.
 
     In addition to all other remedies available at law or in contract (and
     otherwise permitted by this Agreement), Lessor shall be liable for any and
     all damages to Charterer resulting from termination of this Agreement and
     for all legal fees and any other costs and expenses whatsoever incurred by
     Charterer by reason of the occurrence of any Event of Default or by reason
     of the exercise by Charterer of any remedy hereunder, including, without
     limitation, any costs and expenses incurred by Charterer in connection with
     Redelivery of the FSO. Notwithstanding the remedies available to Charterer
     under this Article 31., the provisions of Article 18.9. shall apply so as
     to limit the damages of Charterer, PROVIDED that if Lessor shall breach its
     obligation other than for reasons wholly outside its control to sell the
     FSO to Charterer if Charterer exercises its Purchase Option under
     sub-clause (b) above, Lessor shall be liable to the Charterer for direct
     damages to Charterer arising from such breach. Charterer must use
     reasonable efforts to mitigate its damages.
 
31.2.  Upon the occurrence of an Event of Default of Charterer (provided that
     such Event of Default did not arise out of or result from actions, or
     omissions to act, of Operator under the Operating Agreement) and at any
     time thereafter so long as the same shall be continuing, Lessor may, at its
     option, upon ninety (90) days' notice (or, in the case of an Event of
     Default based on a failure to pay money when due (including a failure by
     reason of Force Majeure), thirty (30) days' notice) thereof to Charterer,
     declare this Agreement to be in default; and, at any time thereafter, so
     long as Charterer shall not have remedied or (except as to an Event of
     Default based on a failure to pay money when due) have commenced and at all
     times thereafter diligently acted to remedy all outstanding Events of
     Default, Lessor may do, and Charterer shall comply with, one or more of the
     following, as Lessor in its sole discretion shall so elect, to the extent
     permitted by, and subject to compliance with any mandatory requirements of
     applicable law then in effect:
 
     (a) Lessor may terminate this Agreement.
 
     (b) Upon written demand, Lessor may cause Charterer to, and Charterer
        hereby agrees that it will, redeliver the FSO to Lessor within a
        reasonable period of time not to exceed 45 days and in the same manner
        and in the same condition as if the FSO were being redelivered pursuant
        to Article 25. hereof; or Lessor or its agent, at Lessor's option, may,
        but shall be under no obligation to, retake the FSO irrespective of
        whether Charterer or any other person may be in possession of the FSO,
        upon 24 hours prior notice but without prior demand and without legal
        process, and for that purpose Lessor or its agent may take possession
        thereof.
 
     (c) Lessor or its agent may sell the FSO at public or private sale, with
        notice to Charterer, or otherwise may dispose of, hold, use, operate,
        charter (whether for a period greater or less than the balance of what
        would have been the charter period for the FSO in the absence of the
        termination of Charterer's rights to the FSO) to others or keep idle,
        all on such terms and conditions and at such place or places as Lessor
        may determine.
 
     Notwithstanding the foregoing, in the event of an Event of Default by
     Charterer under Article 30., the Event of Default of Charterer shall be
     deemed to be cured for all purposes if any member of Charterer which has
     not caused the Event of Default of Charterer pursuant to Article 30. shall
     increase its respective Concessionaire Percentage so that the
     Concessionaire Percentages of all members of Charterer which have not
     caused the Event of Default of Charterer pursuant to Article 30. shall
     total 100% and no amounts are due and owing by Charterer under this
     Agreement.
 
     In addition, Charterer shall be liable for and shall pay to Lessor within
     thirty days after Lessor takes redelivery or possession of the FSO a lump
     sum equal to the discounted present value (discounted at an annually
     compounded percentage rate of twelve percent (12%) per annum) of any and
     all remaining Hire payable during the Initial Term, as well as the actual
     amount of all legal fees and
 
                                       24
<PAGE>
     any other costs and expenses whatsoever incurred by Lessor by reason of the
     occurrence of any Event of Default of Charterer or by reason of the
     exercise by Lessor of any remedy hereunder, including, without limitation,
     any costs and expenses incurred by Lessor in connection with the Redelivery
     or retaking of the FSO. Lessor must use reasonable efforts to mitigate its
     damages and shall apply any amounts received from the sale or re-charter
     (for a period equal to the remainder of the term of this Agreement) of the
     FSO (after deducting Lessor's direct out-of-pocket expenses of making the
     FSO ready for sale or re-charter) to reduce the amount of any charter hire
     and other amounts payable by Charterer to Lessor pursuant to the last
     paragraph of this Article 31.2.
 
31.3.  Each party's remedies referred to in this Article 31. are intended to be
     the exclusive remedies of such party under this Agreement; PROVIDED,
     HOWEVER, that either party may enforce performance of these remedies by all
     legal or equitable means.
 
31.4.  No express or implied waiver by either party of any Event of Default
     shall be in any way, or be construed to be, a waiver of any further or
     subsequent Event of Default.
 
32.   MISCELLANEOUS.
 
32.1.  (a) All terms and conditions of this Agreement shall be binding upon and
           shall inure to the benefit of the parties hereto and their respective
           successors and permitted assigns. Any purported assignment in
           contravention of Article 9.1. or this Article 32. shall be null and
           void.
 
     (b) Charterer shall be entitled to assign its rights, duties and
        obligations hereunder to an affiliate without the consent of Lessor;
        PROVIDED, THAT, such assignment shall not relieve Charterer for any of
        its obligations under this Agreement.
 
     (c) Any member of Charterer shall be entitled to pledge and/or assign its
        rights under this Agreement by way of security to any lending
        institution providing financing for the transactions contemplated hereby
        or related to the development of the concession or a collateral agent on
        their behalf provided that any such pledge or assignment does not
        release the assignor of the assignor's obligations hereunder, from any
        of their respective obligations to the Lessor.
 
     (d) Charterer shall not subcharter the FSO to any party including an
        affiliate without the prior written consent of Lessor such consent not
        to be unreasonably withheld.
 
     Save as specifically provided above and in Articles 9.1. and 13.1.(d),
     neither party hereto shall be entitled to assign any rights or obligations
     under this Agreement without the prior consent of the other party, not to
     be unreasonably withheld. Charterer shall maintain a written record that
     identifies Lessor as the person entitled to payments under this Agreement.
     In the event of a permitted assignment by Lessor of any of its rights under
     this Agreement, such assignment will be reflected on the record maintained
     by Charterer.
 
32.2.  This Agreement may be executed in one or more counterparts, all of which,
     taken together, shall constitute one original document.
 
32.3.  Except as specifically provided herein to the contrary, each party hereto
     intends that this Agreement shall not benefit or create any right or cause
     of action to any person other than parties hereto or their permitted
     assignees.
 
32.4.  This Agreement may be amended or modified and any condition herein
     specified may be waived by mutual consent of the parties by a written
     instrument executed on behalf of the parties.
 
32.5.  The captions contained in this Agreement are for convenience of reference
     only and do not form a part of this Agreement and shall not affect the
     interpretation hereof.
 
32.6.  If any provision of this Agreement is held to be illegal, invalid or
     unenforceable under present or future law effective during the term hereof,
     such provision shall be fully severable. This Agreement
 
                                       25
<PAGE>
     shall be construed and enforced as if such illegal, invalid or
     unenforceable provision had never comprised a part hereof and the remaining
     portions hereof shall remain in full force and effect and shall not be
     effected by the illegal, invalid or unenforceable provision or by its
     severance herefrom. Furthermore, in lieu of such illegal, invalid or
     unenforceable provision there shall be added automatically as part of this
     Agreement a provision as similar in terms to such illegal, invalid or
     unenforceable provision as may be possible and be legal, valid and
     enforceable.
 
32.7.  Each of the parties hereto intends this Agreement will be treated as a
     lease of the FSO from Lessor to Charterer. Neither Charterer, Lessor, nor
     any of their respective affiliates will take any action nor file any
     document with any governmental authority including, without limitation, any
     tax return, which is inconsistent with such characterization of this
     Agreement as a lease.
 
32.8.  Termination of this Agreement, regardless of cause, shall not relieve
     either party of its respective obligations and limitations arising from or
     incident to this Agreement prior to its termination including, without
     limitation, each parties indemnification obligations hereunder.
 
                                       26
<PAGE>
      IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
in duplicate as of the day, month and year just written above.
 
  LESSOR:                              CHARTERER:
 
  Watertight Shipping B.V.             Thaipo Limited
 
       /s/ JACOB SAJET                      /s/ STEPHEN R. BRUNNER
       ------------------------------       ------------------------------
       Name: Jacob Sajet                    Name: Stephen R. Brunner
       Title: Managing Director             Title: Director
  By:                                  By:
 
                                       Thai Romo Limited
 
                                            /s/ DAVID CHAVENSON
                                            ------------------------------
                                            Name: David Chavenson
                                            Title: Managing Director
                                       By:
 
                                       Palang Sophon Limited
 
                                            /s/ CHARN SOPHONPANICH
                                            ------------------------------
                                            Name: Charn Sophonpanich
                                            Title: Director
                                       By:
 
                                            /s/ SIRITAS
                                            PRAESERT-MANUKITCH
                                            ------------------------------
                                            Name: Siritas
                                            Praesert-Manukitch
                                            Title: Director
                                       By:
 
                                       B8/32 Partners Limited
 
                                            /s/ DAVID CHAVENSON
                                            ------------------------------
                                            Name: David Chavenson
                                            Title: Director
                                       By:
 
                                            /s/ JEFFREY SEVERIN
                                            ------------------------------
                                            Name: Jeffrey Severin
                                            Title: Director
                                       By:
 
                                            /s/ SIRITAS
                                            PRAESERT-MANUKITCH
                                            ------------------------------
                                            Name: Siritas
                                            Praesert-Manukitch
                                            Title: Director
                                       By:
 
                                       27