Document:

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                                                                    EXHIBIT 4.34

                                                                  EXECUTION COPY

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                        364-DAY BRIDGE CREDIT AGREEMENT

                                  Dated as of

                                 March 5, 2001

                                     Among

                         TRANSOCEAN SEDCO FOREX INC.,

                          THE LENDERS PARTIES HERETO,

                                SUNTRUST BANK,
                             as Syndication Agent,

                             ABN AMRO BANK, N.V.,
                           as Administrative Agent,

                 WELLS FARGO BANK TEXAS, NATIONAL ASSOCIATION,
                            as Documentation Agent,

                                      And

                            BANK OF AMERICA, N.A.,
                           as Senior Managing Agent

===============================================================================

                            ABN AMRO BANK, N.V. and
                      GOLDMAN SACHS CREDIT PARTNERS L.P.,
                          as Joint Lead Arrangers and
                              Joint Book Runners
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                        364-DAY BRIDGE CREDIT AGREEMENT
                        -------------------------------

     THIS 364-DAY BRIDGE CREDIT AGREEMENT (the "Agreement"), dated as of March
5, 2001, among TRANSOCEAN SEDCO FOREX INC. (the "Borrower"), a Cayman Islands
company, the lenders from time to time parties hereto (each a "Lender" and
collectively, the "Lenders"), SUNTRUST BANK, a Georgia banking corporation
("STB"), as syndication agent for the Lenders (in such capacity, the
"Syndication Agent"), ABN AMRO BANK, N.V., as administrative agent for the
Lenders (in such capacity, the "Administrative Agent"), WELLS FARGO BANK TEXAS,
NATIONAL ASSOCIATION, as documentation agent for the Lenders (in such capacity,
the "Documentation Agent"), BANK OF AMERICA, N.A., as senior managing agent for
the Lenders (in such capacity, the "Senior Managing Agent"), and GOLDMAN SACHS
CREDIT PARTNERS L.P. and ABN AMRO BANK, N.V., as joint lead arrangers and joint
book runners for the credit facility described herein (in such capacities, the
"Joint Lead Arrangers" and "Joint Book Runners").

                                  WITNESSETH:

     WHEREAS, the Borrower has requested that the Lenders establish in its favor
a 364-day bridge revolving credit facility in the aggregate principal amount of
U.S. $1,200,000,000, pursuant to which facility loans would be made to the
Borrower;

     WHEREAS, the Lenders are willing to make such revolving credit facility
available to the Borrower on the terms and subject to the conditions and
requirements hereinafter set forth;

     NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:

ARTICLE 1.  definitions; interpretation.

     Section 1.1.  Definitions.  Unless otherwise defined herein, the following
                   ------------------------------------------------------------
terms shall have the following meanings, which meanings shall be equally
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applicable to both the singular and plural forms of such terms:
--------------------------------------------------------------

     "Adjusted LIBOR" means, for any Borrowing of Eurocurrency Loans for any
Interest Period, a rate per annum determined in accordance with the following
formula:

     Adjusted LIBOR  =   LIBOR Rate for such Interest Period
                         -----------------------------------
                            1.00 - Statutory Reserve Rate

     "Administrative Agent" means ABN AMRO Bank, N.V., acting in its capacity as
administrative agent for the Lenders, and any successor Administrative Agent
appointed hereunder pursuant to Section 9.7; provided, however, that no such
Administrative Agent shall have any duties, responsibilities, or obligations
hereunder in such capacity.

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     "Agreement" means this 364-Day Bridge Credit Agreement, including all
Exhibits and Schedules attached hereto, in each case as the same may be amended,
restated and supplemented from time to time.

     "Applicable Facility Fee Rate" means for any day, at such times as a debt
rating (either express or implied) by S&P or Moody's (or in the event that both
cease the issuance of debt ratings generally, such other ratings agency agreed
to by the Borrower and the Syndication Agent) is in effect on the Borrower's
non-credit enhanced senior unsecured long-term debt, the percentage per annum
set forth opposite such debt rating during the period indicated:

                        Percentage Applicable       Percentage Applicable
                       During First Six Months   After the First Six Months
                      Following Effective Date    Following Effective Date
                      ------------------------   -------------------------
Debt Rating
-----------

A+/A1 or above                  0.060%                       0.110%

A/A2                            0.070%                       0.120%

A-/A3                           0.080%                       0.130%

BBB+/Baa1                       0.100%                       0.150%

BBB/Baa2                        0.125%                       0.175%

BBB-/Baa3 or below              0.175%                       0.225%

If the ratings issued by S&P and Moody's differ (i) by one rating, the higher
rating shall apply to determine the Applicable Facility Fee Rate, (ii) by two
ratings, the rating which falls between them shall apply to determine the
Applicable Facility Fee Rate, or (iii) by more than two ratings, the rating
immediately above the lower of the two ratings shall apply to determine the
Applicable Facility Fee Rate.  The Borrower shall give written notice to the
Syndication Agent of any changes to such ratings, within three (3) Business Days
thereof, and any change to the Applicable Facility Fee Rate shall be effective
on the date of the relevant change.  Notwithstanding the foregoing, if the
Borrower shall at any time fail to have in effect such a debt rating on the
Borrower's non-credit enhanced senior unsecured long-term debt, the Borrower
shall seek and obtain (if not already in effect), within thirty (30) days after
such debt rating first ceases to be in effect, a corporate credit rating or a
bank loan rating from Moody's or S&P, or both, and the Applicable Facility Fee
Rate shall thereafter be based on such ratings in the same manner as provided
herein with respect to the Borrower's senior unsecured long-term debt rating
(with the Applicable Facility Fee Rate in effect prior to the issuance of such
corporate credit rating or bank loan rating being the same as the Applicable
Facility Fee Rate in effect at the time the senior unsecured long-term debt
rating ceases to be in effect).

     "Applicable Margin" means, for any day, at such times as a debt rating
(either express or implied) by S&P or Moody's (or in the event that both cease
the issuance of debt ratings

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generally, such other ratings agency agreed to by the Borrower and the
Syndication Agent) is in effect on the Borrower's non-credit enhanced senior
unsecured long-term debt, the percentage per annum set forth opposite such debt
rating:

     Debt Rating                                  Percentage
     -----------                                  ----------

     A+/A1 or above                               0.190%

     A/A2                                         0.230%

     A-/A3                                        0.320%

     BBB+/Baa1                                    0.475%

     BBB/Baa2                                     0.600%

     BBB-/Baa3 or below                           0.725%

If the ratings issued by S&P and Moody's differ (i) by one rating, the higher
rating shall apply to determine the Applicable Margin, (ii) by two ratings, the
rating which falls between them shall apply to determine the Applicable Margin,
or (iii) by more than two ratings, the rating immediately above the lower of the
two ratings shall apply to determine the Applicable Margin.  The Borrower shall
give written notice to the Syndication Agent of any changes to such ratings,
within three (3) Business Days thereof, and any change to the Applicable Margin
shall be effective on the date of the relevant change.  Notwithstanding the
foregoing, if the Borrower shall at any time fail to have in effect such a debt
rating on the Borrower's non-credit enhanced senior unsecured long-term debt,
the Borrower shall seek and obtain (if not already in effect), within thirty
(30) days after such debt rating first ceases to be in effect, a corporate
credit rating or a bank loan rating from Moody's or S&P, or both, and the
Applicable Margin shall thereafter be based on such ratings in the same manner
as provided herein with respect to the Borrower's senior unsecured long-term
debt rating (with the Applicable Margin in effect prior to the issuance of such
corporate credit rating or bank loan rating being the same as the Applicable
Margin in effect at the time the senior unsecured long-term debt rating ceases
to be in effect).

     "Applicable Utilization Fee Rate" means for any day, at such times as a
debt rating (either express or implied) by S&P or Moody's (or in the event that
both cease the issuance of debt ratings generally, such other ratings agency
agreed to by the Borrower and the Syndication Agent) is in effect on the
Borrower's non-credit enhanced senior unsecured long-term debt, the percentage
per annum set forth opposite such debt rating:

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     Debt Rating                               Percentage
     -----------                               ----------

     A+/A1 or above                            0.075%

     A/A2                                      0.100%

     A-/A3                                     0.100%

     BBB+/Baa1                                 0.125%

     BBB/Baa2                                  0.125%

     BBB-/Baa3 or below                        0.150%

If the ratings issued by S&P and Moody's differ (i) by one rating, the higher
rating shall apply to determine the Applicable Utilization Fee Rate, (ii) by two
ratings, the rating which falls between them shall apply to determine the
Applicable Utilization Fee Rate, or (iii) by more than two ratings, the rating
immediately above the lower of the two ratings shall apply to determine the
Applicable Utilization Fee Rate.  The Borrower shall give written notice to the
Syndication Agent of any changes to such ratings, within three (3) Business Days
thereof, and any change to the Applicable Utilization Fee Rate shall be
effective on the date of the relevant change.  Notwithstanding the foregoing, if
the Borrower shall at any time fail to have in effect such a debt rating on the
Borrower's non-credit enhanced senior unsecured long-term debt, the Borrower
shall seek and obtain (if not already in effect), within thirty (30) days after
such debt rating first ceases to be in effect, a corporate credit rating or a
bank loan rating from Moody's or S&P, or both, and the Applicable Utilization
Fee Rate shall thereafter be based on such ratings in the same manner as
provided herein with respect to the Borrower's senior unsecured long-term debt
rating (with the Applicable Utilization Fee Rate in effect prior to the issuance
of such corporate credit rating or bank loan rating being the same as the
Applicable Utilization Fee Rate in effect at the time the senior unsecured long-
term debt rating ceases to be in effect).

     "Assignment Agreement" means an agreement in substantially the form of
Exhibit 10.10 whereby a Lender conveys part or all of its Commitment and Loans
-------------
to another Person that is, or thereupon becomes, a Lender, or increases its
Commitments and outstanding Loans pursuant to Section 10.10.

     "Base Rate" means for any day the greater of:

          (i)  the fluctuating commercial loan rate announced by the Syndication
Agent from time to time at its Atlanta, Georgia office (or other corresponding
office, in the case of any successor Syndication Agent) as its prime rate or
base rate for U.S. Dollar loans in the United States of America in effect on
such day (which base rate may not be the lowest rate charged by such Lender on
loans to any of its customers), with any change in the Base Rate resulting from
a change in such announced rate to be effective on the date of the relevant
change; and

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          (ii)  the sum of (x) the rate per annum (rounded upwards, if
necessary, to the nearest 1/16th of 1%) equal to the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the next Business Day, provided that (A)
if such day is not a Business Day, the rate on such transactions on the
immediately preceding Business Day as so published on the next Business Day
shall apply, and (B) if no such rate is published on such next Business Day, the
rate for such day shall be the average of the offered rates quoted to the
Syndication Agent by two (2) federal funds brokers of recognized standing on
such day for such transactions as selected by the Syndication Agent, plus (y) a
percentage per annum equal to one-half of one percent ( 1/2%) per annum.

     "Base Rate Loan" means a Loan bearing interest prior to maturity at the
rate specified in Section 2.6(a).

     "Borrower" means Transocean Sedco Forex Inc., a company organized under the
laws of the Cayman Islands, and its successors.

     "Borrowing" means any extension of credit of the same Type made by the
Lenders on the same date by way of Loans having a single Interest Period,
including any Borrowing advanced, continued or converted.  A Borrowing is
"advanced" on the day the Lenders advance funds comprising such Borrowing to the
Borrower, is "continued" on the date a new Interest Period commences for such
Borrowing, and is "converted" when such Borrowing is changed from one Type of
Loan to the other, all as requested by the Borrower pursuant to Section 2.3.

     "Business Day" means any day other than a Saturday or Sunday on which banks
are not authorized or required to close in Atlanta, Georgia or New York, New
York and, if the applicable Business Day relates to the advance or continuation
of, conversion into, or payment on a Eurocurrency Borrowing, on which banks are
dealing in Dollar deposits in the interbank eurodollar market in London,
England.

     "Capitalized Lease Obligations" means, for any Person, the aggregate amount
of such Person's liabilities under all leases of real or personal property (or
any interest therein) which is required to be capitalized on the balance sheet
of such Person as determined in accordance with GAAP.

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

     "Commitment" means, relative to any Lender, such Lender's obligations to
make Loans pursuant to Section 2.1, initially in the amount and percentage set
forth opposite its signature hereto or pursuant to Section 10.10, as such
obligations may be reduced or increased from time to time as expressly provided
pursuant to this Agreement.

     "Commitment Termination Date" means the earliest of (i) March 1, 2002, (ii)
the date on which the Commitments are terminated in full or reduced to zero
pursuant to Section 2.12, and (iii) the occurrence of any Event of Default
described in Section 7.1(f) or (g) with respect to the Borrower or the
occurrence and continuance of any other Event of Default and either (x) the

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declaration of the Loans to be due and payable pursuant to Section 7.2, or (y)
in the absence of such declaration, the giving of written notice by the
Syndication Agent, acting at the direction of the Required Lenders, to the
Borrower pursuant to Section 7.2 that the Commitments have been terminated.

     "Compliance Certificate" means a certificate in the form of Exhibit 6.6.
                                                                 -----------

     "Confidential Information Memorandum" shall mean the Confidential
Information Memorandum of the Borrower dated October 2000, as the same may be
amended, restated and supplemented from time to time and distributed to the
Lenders prior to the Effective Date.

     "Consolidated EBITDA" means, for any period, for the Borrower and its
Subsidiaries, the sum of (a) net income or net loss (before discontinued
operations and income or loss resulting from extraordinary items), plus (b) the
sum of (i) Consolidated Interest Expense, (ii) income tax expense, (iii)
depreciation expense, (iv) amortization expense, and (v) other non-cash charges,
all determined in accordance with GAAP on a consolidated basis for the Borrower
and its Subsidiaries (excluding, in the case of the foregoing clauses (a) and
(b), any net income or net loss and expenses and charges of any SPVs or other
Persons that are not Subsidiaries), plus (c) dividends or distributions received
during such period by the Borrower and its Subsidiaries from SPVs and any other
Persons that are not Subsidiaries.  For purposes of the foregoing, Consolidated
EBITDA for the Borrower and its Subsidiaries shall not include any such amounts
attributable to any Subsidiary or business acquired during such period by the
Borrower or any Subsidiary to the extent such amounts relate to any period prior
to the acquisition thereof.

     "Consolidated Indebtedness" means all Indebtedness of the Borrower and its
Subsidiaries that would be reflected on a consolidated balance sheet of such
Persons prepared in accordance with GAAP.

     "Consolidated Indebtedness to Total Capitalization Ratio" means, at any
time, the ratio of Consolidated Indebtedness at such time to Total
Capitalization at such time.

     "Consolidated Interest Expense" means, for any period, total interest
expense of the Borrower and its Subsidiaries on a consolidated basis for such
period, in connection with Indebtedness, all as determined in accordance with
GAAP, but excluding capitalized interest expense and interest expense
attributable to expected federal income tax settlements.  For purposes of the
foregoing, Consolidated Interest Expense for the Borrower and its Subsidiaries
shall not include any such interest expense attributable to any Subsidiary or
business acquired during such period by the Borrower or any Subsidiary to the
extent such interest expense relates to any period prior to the acquisition
thereof.

     "Consolidated Net Assets" means, as of any date of determination, an amount
equal to the aggregate book value of the assets of the Borrower, its
Subsidiaries and, to the extent of the equity interest of the Borrower and its
Subsidiaries therein, SPVs at such time, minus the current liabilities of the
Borrower and its Subsidiaries, all as determined on a consolidated basis in
accordance with GAAP.

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     "Consolidated Net Worth" means, as of any date of determination,
consolidated shareholders equity of the Borrower and its Subsidiaries determined
in accordance with GAAP (but excluding the effect on shareholders equity of
cumulative foreign exchange translation adjustments).  For purposes of this
definition, SPVs shall be accounted for pursuant to the equity method of
accounting.

     "Controlling Affiliate" means for the Borrower, (i) any other Person that
directly or indirectly through one or more intermediaries controls, or is under
common control with, the Borrower (other than Persons controlled by the
Borrower), and (ii) any other Person owning beneficially or controlling ten
percent (10%) or more of the equity interests in the Borrower.  As used in this
definition, "control" means the power, directly or indirectly, to direct or
cause the direction of management or policies of a Person (through ownership of
voting securities or other equity interests, by contract or otherwise).

     "Credit Documents" means this Agreement, the Notes, and any Subsidiary
Guaranties in effect from time to time.

     "Debt Issuance" means any Indebtedness of the Borrower or any of its
Subsidiaries for borrowed money issued or incurred after the Effective Date,
other than Indebtedness permitted under Sections 6.11(b), (c), (d), (f) and (h)
of this Agreement, or any commercial paper issued by the Borrower or direct
borrowings by the Borrower under commercial paper back-up or liquidity
facilities or other short-term instruments in lieu of commercial paper issuances
(or any refunding or refinancing thereof), or Indebtedness resulting from draws
under letters of credit issued for its account or the account of any of its
Subsidiaries.

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

     "Documentation Agent" shall mean Wells Fargo Bank Texas, National
Association, in its capacity as documentation agent for the Lenders, and any
successor Documentation Agent appointed pursuant to Section 9.7; provided,
however, that no such Documentation Agent shall have any duties,
responsibilities, or obligations hereunder in such capacity.

     "Dollar" and "U.S. Dollar" and the sign "$" mean lawful money of the United
States of America.

     "Effective Date" means the date this Agreement shall become effective as
defined in Section 10.16.

     "Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of non-
compliance or violation, investigations or proceedings relating to any
Environmental Law ("Claims") or any permit issued under any Environmental Law,
including, without limitation, (i) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law, and (ii)
any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery,

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compensation or injunctive relief resulting from Hazardous Materials or arising
from alleged injury or threat of injury to the environment.

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

     "Equity Issuance" means the issuance or sale after the Effective Date by
the Borrower or any of its Subsidiaries of any shares of any class of stock,
options, warrants, or other equity interests, other than (a) present and future
shares of stock, options, or warrants issued to employees, directors, or
consultants of the Borrower or any of its Subsidiaries under any stock option
plan or other benefit or compensation plans or arrangements of the Borrower or
any of its Subsidiaries, (b) stock issued upon the exercise of any such
warrants, options, conversion rights and other rights of the Borrower or any of
its Subsidiaries, (c) shares of any class of stock, warrants, or other equity
interests issued by any Subsidiary of the Borrower solely to the Borrower or any
of its Subsidiaries, (d) the common stock of R&B Falcon issued pursuant to the
initial public offering of R&B Falcon, (e) common stock of the Borrower issued
solely for use as consideration to effect acquisitions permitted under this
Agreement and (f) any option, warrant, conversion or exchange or other right to
any capital stock or right to acquire such capital stock of the Borrower or any
of its Subsidiaries outstanding on the date hereof or issued pursuant to a plan
existing on the date hereof.

     "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

     "Eurocurrency Loan" means a Loan bearing interest before maturity at the
rate specified in Section 2.6(b).

     "Event of Default" means any of the events or circumstances specified in
Section 7.1.

     "Foreign Plan" means any pension, profit sharing, deferred compensation, or
other employee benefit plan, program or arrangement maintained by any foreign
Subsidiary of the Borrower which, under applicable local law, is required to be
funded through a trust or other funding vehicle, but shall not include any
benefit provided by a foreign government or its agencies.

     "GAAP" means generally accepted accounting principles from time to time in
effect as set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
the statements and pronouncements of the Financial Accounting Standards Board or
in such other statements, opinions and pronouncements by such other entity as
may be approved by a significant segment of the U.S. accounting profession.

     "Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising

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<PAGE>

executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.

     "Guarantor" means any Subsidiary of the Borrower required to execute and
deliver a Subsidiary Guaranty hereunder pursuant to Section 6.11, in each case
unless and until the relevant Subsidiary Guaranty is released pursuant to
Section 6.11.

     "Guaranty" by any Person means all contractual obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of
business) of such Person guaranteeing any Indebtedness of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, all obligations incurred through an agreement, contingent or
otherwise, by such Person: (i) to purchase such Indebtedness or to purchase any
property or assets constituting security therefor, primarily for the purpose of
assuring the owner of such Indebtedness of the ability of the primary obligor to
make payment of such Indebtedness; or (ii) to advance or supply funds (x) for
the purchase or payment of such Indebtedness, or (y) to maintain working capital
or other balance sheet condition, or otherwise to advance or make available
funds for the purchase or payment of such Indebtedness, in each case primarily
for the purpose of assuring the owner of such Indebtedness of the ability of the
primary obligor to make payment of such Indebtedness; or (iii) to lease
property, or to purchase securities or other property or services, of the
primary obligor, primarily for the purpose of assuring the owner of such
Indebtedness of the ability of the primary obligor to make payment of such
Indebtedness; or (iv) otherwise to assure the owner of such Indebtedness of the
primary obligor against loss in respect thereof.  For the purpose of all
computations made under this Agreement, the amount of a Guaranty in respect of
any Indebtedness shall be deemed to be equal to the amount that would apply if
such Indebtedness was the direct obligation of such Person rather than the
primary obligor or, if less, the maximum aggregate potential liability of such
Person under the terms of the Guaranty.

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

     "Highest Lawful Rate" means the maximum nonusurious interest rate, if any,
that any time or from time to time may be contracted for, taken, reserved,
charged or received on any Loans, under laws applicable to any of the Lenders
which are presently in effect or, to the extent allowed by applicable law, under
such laws which may hereafter be in effect and which allow a higher maximum
nonusurious interest rate than applicable laws now allow.  Determination of the
rate of interest for the purpose of determining whether any Loans are usurious
under all applicable laws shall be made by amortizing, prorating, allocating,
and spreading, in equal parts during the period of the full stated term of the
Loans, all interest at any time contracted for, taken, reserved, charged or
received from the Borrower in connection with the Loans.

                                       9
<PAGE>

     "Indebtedness" means, for any Person, the following obligations of such
Person, without duplication:  (i) obligations of such Person for borrowed money;
(ii) obligations of such Person representing the deferred purchase price of
property or services other than accounts payable and accrued liabilities arising
in the ordinary course of business and other than amounts which are being
contested in good faith and for which reserves in conformity with GAAP have been
provided; (iii) obligations of such Person evidenced by bonds, notes, bankers
acceptances, debentures or other similar instruments of such Person, or
obligations of such Person arising, whether absolute or contingent, out of
letters of credit issued for such Person's account or pursuant to such Person's
application securing Indebtedness; (iv) obligations of other Persons, whether or
not assumed, secured by Liens (other than Permitted Liens) upon property or
payable out of the proceeds or production from property now or hereafter owned
or acquired by such Person, but only to the extent of such property's fair
market value; (v) Capitalized Lease Obligations of such Person; (vi) obligations
under Interest Rate Protection Agreements, and (vii) obligations of such Person
pursuant to a Guaranty of any of the foregoing obligations of another Person;
provided, however, Indebtedness shall exclude Non-recourse Debt.  For purposes
of this Agreement, the Indebtedness of any Person shall include the Indebtedness
of any partnership or joint venture to the extent such Indebtedness is recourse
to such Person.

     "Interest Coverage Ratio" means, as of the end of any fiscal quarter, the
ratio of (i) Consolidated EBITDA for the four fiscal quarter period then ended,
minus all cash dividends paid to shareholders of the Borrower, or to holders of
preferred shares or other preferred equity interests issued by any Subsidiaries
of the Borrower where such holders are Persons other than the Borrower or any of
its Subsidiaries, during such four fiscal quarter period, and all cash income
taxes paid during such four fiscal quarter period, to (ii) Consolidated Interest
Expense for the four fiscal quarter period then ended.

     "Interest Payment Date" means (a) with respect to any Base Rate Loan, the
last day of each March, June, September and December, and (b) with respect to
any Eurocurrency Loan, the last day of the Interest Period applicable to the
Borrowing of which such Loan is a part and, in the case of a Eurocurrency
Borrowing with an Interest Period of more than three months' duration, each day
prior to the last day of such Interest Period that occurs at intervals of three
months' duration after the first day of such Interest Period.

     "Interest Period" means the period commencing on the date of a Eurocurrency
Borrowing and ending on the numerically corresponding day in the calendar month
that is one, two, three or six months thereafter, as the Borrower may elect.
For purposes hereof, the date of a Borrowing initially shall be the date on
which such Borrowing is made and thereafter shall be the effective date of the
most recent conversion or continuation of such Borrowing.

     "Interest Rate Protection Agreement" shall mean any interest rate swap,
interest rate cap, interest rate collar, or other interest rate hedging
agreement or arrangement designed to protect against fluctuations in interest
rates.

     "Joint Book Runners" shall mean Goldman Sachs Credit Partners L.P. and ABN
AMRO Bank, N.V., in their capacities as joint book runners for the credit
facility provided in this Agreement, and any successor Joint Book Runner
appointed pursuant to Section 9.7; provided,

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however, that the Joint Book Runners shall have no duties, responsibilities, or
obligations hereunder in such capacity.

     "Joint Lead Arrangers" shall mean Goldman Sachs Credit Partners L.P. and
ABN AMRO Bank, N.V., in their capacities as joint lead arrangers for the credit
facility provided in this Agreement, and any successor Joint Lead Arranger
appointed pursuant to Section 9.7; provided, however, that the Joint Lead
Arrangers shall have no duties, responsibilities, or obligations hereunder in
such capacity.

     "Lender" is defined in the preamble.

     "Lending Office" means the branch, office or affiliate of a Lender
specified on the appropriate signature page hereof, or designated pursuant to
Sections 8.4 or 10.10, as the office through which it will make its Loans
hereunder for each type of Loan available hereunder.

     "LIBOR Rate" means, relative to any Interest Period for each Eurocurrency
Borrowing, the rate per annum quoted at or about 11:00 a.m. (London, England
time) two Business Days before the commencement of such Interest Period on that
page of the Reuters, Telerate or Bloombergs reporting service (as then being
used by the Syndication Agent to obtain such interest rate quotes) that displays
British Bankers' Association interest settlement rates for deposits in Dollars,
or if such page or such service shall cease to be available, such other page or
other service (as the case may be) for the purpose of displaying British
Bankers' Association interest settlement rates as reasonably determined by the
Syndication Agent upon advising the Borrower as to the use of any such other
service.  If for any reason any such settlement interest rate for such Interest
Period is not available to the Syndication Agent through any such interest rate
reporting service, then the "LIBOR Rate" with respect to such Eurocurrency
Borrowing will be the rate at which the Syndication Agent is offered deposits in
Dollars of $5,000,000 for a period approximately equal to such Interest Period
in the London interbank market at 10:00 a.m. two Business Days before the
commencement of such Interest Period.

     "Lien" means any interest in any property or asset in favor of a Person
other than the owner of such property or asset and securing an obligation owed
to, or a claim by, such Person, whether such interest is based on the common
law, statute or contract, including, but not limited to, the security interest
lien arising from a mortgage, encumbrance, pledge, conditional sale, security
agreement or trust receipt, or a lease, consignment or bailment for security
purposes.

     "Loan" has the meaning set forth in Section 2.1, which Loan may be
outstanding either as (i) a Base Rate Loan, or (ii) a Eurocurrency Loan, as the
case may be.  "Loans" means two or more of any such Loans.

     "Material Adverse Effect" means a material adverse effect on (i) the
business, assets, operations or condition of the Borrower and its Subsidiaries
taken as a whole, or (ii) the Borrower's ability to perform any of its payment
obligations under the Agreement or the Notes.

     "Maturity Date" means the earlier of (i) March 1, 2002, and (ii) the date
on which the Loans have become due and payable pursuant to Section 7.2 or 7.3.

                                       11
<PAGE>

     "Moody's" means Moody's Investors Service, Inc., or any successor thereto.

     "Net Cash Proceeds" means (a) with respect to any Significant Sale, cash
(freely convertible into Dollars) (including any cash received by way of
deferred payment pursuant to a promissory note or otherwise, or upon liquidation
or conversion of any cash equivalents, but only as and when received) received
in connection with and as consideration therefor, by the Borrower or any of its
Subsidiaries from such Significant Sale, after (i) deduction of Taxes paid or
payable in connection with such transaction, (ii) payment of all reasonable and
customary brokerage commissions and all other fees and expenses related to such
Significant Sale (including, without limitation, reasonable attorneys' fees and
closing costs incurred in connection with such Significant Sale), (iii)
deduction of amounts established by the Borrower or any of its Subsidiaries as a
reserve for liabilities retained by the Borrower or any of its Subsidiaries
after such Significant Sale, which liabilities are associated with the asset or
assets being sold or otherwise retained in connection with such transaction,
including, without limitation, pension and other post-employment benefit
liabilities and liabilities related to environmental matters or against any
indemnification obligations or other retained liabilities or obligations
associated with such Significant Sale, and (iv) deduction for the amount of any
Indebtedness (other than the Obligations) secured by the respective asset or
assets being sold or which is required to be repaid as a result of such
Significant Sale or Permitted Asset Swap; (b) with respect to any Debt Issuance,
cash (freely convertible into Dollars) (including any cash received by way of
deferred payment pursuant to a promissory note or otherwise, or upon liquidation
or conversion of any cash equivalents, but only as and when received) received,
on or after the date of such Indebtedness, by the Borrower or any of its
Subsidiaries from the incurrence of such Indebtedness after (i) payment of all
reasonable attorneys' fees and reasonable and customary underwriting
commissions, closing costs, and other expenses associated with such incurrence
of Indebtedness, (ii) deduction of all deposits, escrow amounts, or other
reserves required to be maintained by the Borrower or any of its Subsidiaries in
connection with such Indebtedness, and (iii) deductions for the amount of any
other Indebtedness (other than the Obligations) that is required to be repaid
concurrently with or otherwise as a result of the incurrence of such
Indebtedness; and (c) with respect to any Equity Issuance, cash (freely
convertible into Dollars) (including any cash received by way of deferred
payment pursuant to a promissory note or otherwise, or upon liquidation or
conversion of any cash equivalents, but only as and when received) received, on
or after the date of such Equity Issuance, by the Borrower or any Subsidiary
from such Equity Issuance, net of reasonable and customary transaction costs and
expenses and taxes and charges.

     "Non-recourse Debt" means with respect to any Person (i) obligations of
such Person against which the obligee has no recourse to such Person except as
to certain named or described present or future assets or interests of such
Person, and (ii) the obligations of SPVs to the extent the obligee thereof has
no recourse to the Borrower or any of its Subsidiaries, except as to certain
specified present or future assets or interests of SPVs.

     "Note" means any of the promissory notes of the Borrower defined in Section
2.8(e).

                                       12
<PAGE>

     "Obligations" means all obligations of the Borrower to pay fees, costs and
expenses hereunder, to pay principal or interest on Loans and to pay any other
obligations to the Syndication Agent or any Lender arising under any Credit
Document.

     "PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.

     "Percentage" means, for each Lender, the percentage of the Commitments
represented by such Lender's Commitment; provided, that, if the Commitments are
terminated, each Lender's Percentage shall be calculated based on its Commitment
in effect immediately before such termination, subject to any assignments by
such Lender of Obligations pursuant to Section 10.10.

     "Performance Guaranties" means all Guaranties of the Borrower or any of its
Subsidiaries delivered in connection with the construction financing of drill
ships, offshore mobile drilling units or offshore drilling rigs for which firm
drilling contracts have been obtained by the Borrower, any of its Subsidiaries
or a SPV.

     "Performance Letters of Credit" means all letters of credit for the account
of the Borrower, any Subsidiary or a SPV issued as support for Non-recourse Debt
or a Performance Guaranty.

     "Permitted Asset Swap" means a substantially contemporaneous purchase or
sale or exchange of property (other than cash or cash equivalents) owned by a
Person that is not an Affiliate of the Borrower for property owned by the
Borrower or any of its Subsidiaries.

     "Permitted Business" has the meaning ascribed to such term in Section 6.8.

     "Permitted Liens" means the Liens permitted as described in Section 6.10.

     "Person" means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization or any other entity or
organization, including a government or any agency or political subdivision
thereof.

     "Plan" means an employee pension benefit plan covered by Title IV of ERISA
or subject to the minimum funding standards under Section 412 of the Code that
is either (i) maintained by the Borrower or any of its Subsidiaries, or (ii)
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
the Borrower or any of its Subsidiaries is then making or accruing an obligation
to make contributions or has within the preceding five (5) plan years made or
had an obligation to make contributions.

     "R&B Falcon" means R&B Falcon Corporation, a Delaware corporation.

     "R&B Falcon Merger" means the stock-for-stock merger of TSF Delaware Inc.,
a wholly owned indirect Subsidiary of the Borrower, with and into R&B Falcon,
with R&B Falcon thereby becoming a wholly owned indirect Subsidiary of the
Borrower.

                                       13
<PAGE>

     "R&B Falcon Merger Agreement" means the Agreement and Plan of Merger dated
as of August 19, 2000, among the Borrower, Transocean Holdings, Inc., TSF
Delaware Inc., and R&B Falcon, as the same may be amended, restated or
supplemented from time to time.

     "Required Lenders" means, at any time, Lenders having Revolving Credit
Obligations and unused Commitments representing more than 50% of the sum of the
total Revolving Credit Obligations and unused Commitments at such time.

     "Revolving Credit" means the credit facility for making Loans described in
Section 2.1.

     "Revolving Credit Commitment Amount" means an amount equal to
$1,200,000,000, as such amount may be reduced from time to time pursuant to the
terms of this Agreement.

     "Revolving Credit Obligations" means the sum of the principal amount of all
Loans outstanding.

     "Sale-Leaseback Transaction" means any arrangement whereby the Borrower or
a Subsidiary shall sell or transfer any property, real or personal, used or
useful in its business, whether now owned or hereafter acquired, and thereafter
rent or lease property that it intends to use for substantially the same purpose
or purposes as the property sold or transferred.

     "Senior Managing Agent" means Bank of America, N.A., in its capacity as
senior managing agent for the Lenders, and any successor Senior Managing Agent
appointed pursuant to Section 9.7; provided, however, that the Senior Managing
Agent shall have no duties, responsibilities, or obligations hereunder in such
capacity.

     "S&P" means Standard & Poor's Ratings Group or any successor thereto.

     "SPV" means any Person that is designated by the Borrower as a SPV,
provided that the Borrower shall not designate as a SPV any Subsidiary that
owns, directly or indirectly, any other Subsidiary that has total assets
(including assets of any Subsidiaries of such other Subsidiary, but excluding
any assets that would be eliminated in consolidation with the Borrower and its
Subsidiaries) which equates to at least five percent (5%) of the Borrower's
Total Assets, or that had net income (including net income of any Subsidiaries
of such other Subsidiary, all before discontinued operations and income or loss
resulting from extraordinary items, all determined in accordance with GAAP, but
excluding revenues and expenses that would be eliminated in consolidation with
the Borrower and its Subsidiaries) during the most recently completed fiscal
year of the Borrower in excess of the greater of (i) $1,000,000, and (ii)
fifteen percent (15%) of the net income (before discontinued operations and
income or loss resulting from extraordinary items) for the Borrower and its
Subsidiaries, all as determined on a consolidated basis in accordance with GAAP
during such fiscal year of the Borrower.  The Borrower may elect to treat any
Subsidiary as a SPV (provided such Subsidiary would otherwise qualify as such),
and may rescind any such prior election, by giving written notice thereof to the
Syndication Agent specifying the name of such Subsidiary or SPV, as the case may
be, and the effective date of such election, which shall be a date within sixty
(60) days after the date such notice is given.  The election to treat a
particular Person as a SPV may only be made once.

                                       14
<PAGE>

     "Significant Sale" means any sale, lease, transfer, or other disposition of
any property (tangible or intangible, including, without limitation, stock or
equity interests in the Borrower's Subsidiaries or any other Persons) of the
Borrower or any of its Subsidiaries, other than (a) sales of inventory or
services in the ordinary course of business; (b) the sale, discount, or transfer
of delinquent accounts receivable in the ordinary course of business for
purposes of collection; (c) sales of immaterial assets for consideration not
less than the fair market value thereof; (d) dispositions of assets that are
obsolete or no longer useful in the business of the Borrower or any of its
Subsidiaries; (e) sales, leases, or other disposition among the Borrower and its
Subsidiaries; (f) disposition of assets pursuant to Permitted Asset Swaps or
permitted by Section 6.14; (g) sales and other dispositions of marketable
securities; and (h) charters of drilling rigs and other equipment in the
ordinary course of business of the Borrower and its Subsidiaries; provided,
however, that the issuance, sale or other disposition of any common stock of R&B
Falcon, whether effected by R&B Falcon or by the Borrower or any of its
Subsidiaries, shall be deemed to be a Significant Sale for all purposes of this
Agreement.

     "Significant Subsidiary" has the meaning ascribed to it under Regulation
S-X promulgated under the Securities Exchange Act of 1934, as amended.

     "Statutory Reserve Rate" means, with respect to any currency, a fraction
(expressed as a decimal), the numerator of which is the number 1 and the
denominator of which is the number 1 minus the aggregate of the maximum reserve,
liquid asset or similar percentages (including any marginal, special, emergency
or supplemental reserves) expressed as a decimal established by any Governmental
Authority of the United States or of the jurisdiction of such currency or any
jurisdiction in which Loans in such currency are made to which banks in such
jurisdiction are subject for any category of deposits or liabilities customarily
used to fund loans in such currency or by reference to which interest rates
applicable to loans in such currency are determined.  Such reserve, liquid asset
or similar percentages shall include those imposed pursuant to Regulation D of
the Board of Governors of the Federal Reserve System.  Eurocurrency Loans shall
be deemed to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under Regulation D or any other applicable law, rule or
regulation.  The Statutory Reserve Rate shall be adjusted automatically on and
as of the effective date of any change in any reserve percentage.

     "Subsidiary" means, for any Person, any other Person (other than, except in
the context of Section 6.6(a), a SPV) of which more than fifty percent (50%) of
the outstanding stock or comparable equity interests having ordinary voting
power for the election of the board of directors of such corporation, any
managers of such limited liability company or similar governing body
(irrespective of whether or not at the time stock or other equity interests of
any other class or classes of such corporation or other entity shall have or
might have voting power by reason of the happening of any contingency), is at
the time directly or indirectly owned by such former Person or by one or more of
its Subsidiaries.

     "Subsidiary Debt Basket Amount" has the meaning ascribed to such term in
Section 6.11(i).

                                       15
<PAGE>

     "Subsidiary Guaranty" means any Guaranty of any Subsidiary delivered
pursuant to Section 6.11(j).

     "Syndication Agent" shall mean SunTrust Bank, acting in its capacity as
syndication agent for the Lenders, and any successor Syndication Agent appointed
hereunder pursuant to Section 9.7.

     "Taxes" has the meaning set forth in Section 5.12.

     "Total Assets" means, as of any date of determination, the aggregate book
value of the assets of the Borrower and its Subsidiaries determined on a
consolidated basis in accordance with GAAP as of such date.

     "Total Capitalization" means, as of any date of determination, the sum of
Consolidated Indebtedness plus Consolidated Net Worth as of such date.

     "Transocean R&B Falcon Joint Proxy Statement" means the joint proxy
statement/prospectus of the Borrower and R&B Falcon dated November 3, 2000, as
the same may be amended or supplemented from time to time.

     "Type", when used in reference to any Loan or Borrowing, refers to whether
the rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to Adjusted LIBOR or the Base Rate.

     "Unfunded Vested Liabilities" means, for any Plan at any time, the amount
(if any) by which the present value of all vested nonforfeitable accrued
benefits under such Plan exceeds the fair market value of all Plan assets
allocable to such benefits, determined as of the then most recent valuation date
for such Plan, but only to the extent that such excess represents a potential
liability of the Borrower or any of its Subsidiaries to the PBGC or such Plan.

     Section 1.2.   Time of Day.  Unless otherwise expressly provided, all
                    -----------
references to time of day in this Agreement and the other Credit Documents shall
be references to New York, New York time.

     Section 1.3.   Accounting Terms; GAAP.  Except as otherwise expressly
                    ----------------------
provided herein, and subject to the provisions of Section 10.19, all terms of an
accounting or financial nature shall be construed in accordance with GAAP, as in
effect from time to time.

ARTICLE 2.  THE CREDIT FACILITIES.

     Section 2.1.   Commitments for Loans.  Subject to the terms and conditions
                    ---------------------
hereof, each Lender severally and not jointly agrees to make one or more loans
(each a "Loan") to the Borrower from time to time before the Commitment
Termination Date on a revolving basis in an aggregate amount not to exceed at
any time outstanding an amount equal to its Commitment, subject to any
reductions thereof pursuant to the terms of this Agreement; provided, however,
that no Lender shall be permitted or required to make any Loan if, after giving
effect thereto, (i)

                                       16
<PAGE>

the aggregate principal amount of the Loans of all Lenders would thereby exceed
the Revolving Credit Commitment Amount then in effect; or (ii) the Revolving
Credit Obligations of such Lender would thereby exceed its Commitment then in
effect. Each Borrowing shall be made ratably from the Lenders in proportion to
their respective Percentages. Loans may be repaid, in whole or in part, and all
or any portion of the principal amount thereof reborrowed, before the Commitment
Termination Date, subject to the terms and conditions hereof. Funding of all
Loans shall be in Dollars.

     Section 2.2.   Types of Loans and Minimum Borrowing Amounts.  Borrowings
                    --------------------------------------------
may be outstanding as either Base Rate Loans or Eurocurrency Loans, as selected
by the Borrower pursuant to Section 2.3. Each Borrowing of Base Rate Loans shall
be in an amount of not less than $1,000,000 and each Borrowing of Eurocurrency
Loans shall be in an amount of not less than $5,000,000 and in an integral
multiple of $100,000.

     Section 2.3.  Manner of Borrowings.
                   --------------------

     (a)  Notice to Syndication Agent.  The Borrower shall give notice to the
          ---------------------------
Syndication Agent by no later than 12:00 p.m. (i) at least three (3) Business
Days before the date on which the Borrower requests the Lenders to advance a
Borrowing of Eurocurrency Loans, and (ii) on the date the Borrower requests the
Lenders to advance a Borrowing of Base Rate Loans, in each case pursuant to a
duly executed borrowing request substantially in the form of Exhibit 2.3 (each a
                                                             -----------
"Borrowing Request"). The Loans included in each Borrowing shall bear interest
initially at the type of rate specified in the Borrowing Request with respect to
such Borrowing. Thereafter, the Borrower may from time to time elect to change
or continue the type of interest rate borne by each Borrowing or, subject to the
minimum amount requirement in Section 2.2 for each outstanding Borrowing, a
portion thereof, as follows: (i) if such Borrowing is of Eurocurrency Loans, the
Borrower may continue part or all of such Borrowing as Eurocurrency Loans for an
Interest Period specified by the Borrower or convert part or all of such
Borrowing into Base Rate Loans on the last day of the Interest Period applicable
thereto, or the Borrower may earlier convert part or all of such Borrowing into
Base Rate Loans so long as it pays the breakage fees and funding losses provided
in Section 2.11; and (ii) if such Borrowing is of Base Rate Loans, the Borrower
may convert all or part of such Borrowing into Eurocurrency Loans for an
Interest Period specified by the Borrower on any Business Day, in each case
pursuant to notices of continuation or conversion as set forth below. The
Borrower may select multiple Interest Periods for the Eurocurrency Loans
constituting any particular Borrowing, provided that at no time shall the number
of different Interest Periods for outstanding Eurocurrency Loans exceed twenty
(20) (it being understood for such purposes that (x) Interest Periods of the
same duration, but commencing on different dates, shall be counted as different
Interest Periods, and (y) all Interest Periods commencing on the same date and
of the same duration and currency shall be counted as one Interest Period
regardless of the number of Borrowings or Loans involved. Notices of the
continuation of Eurocurrency Loans for an additional Interest Period or of the
conversion of part or all of Eurocurrency Loans into Base Rate Loans or of Base
Rate Loans into Eurocurrency Loans must be given by no later than 12:00 p.m. at
least three (3) Business Days before the date of the requested continuation or
conversion. The Borrower shall give such notices concerning the advance,
continuation, or conversion of a Borrowing by telephone or facsimile (which
notice shall be irrevocable once given and, if by telephone, shall be promptly

                                       17
<PAGE>

confirmed in writing) pursuant to a Borrowing Request which shall specify the
date of the requested advance, continuation or conversion (which shall be a
Business Day), the amount of the requested Borrowing, whether such Borrowing is
to be advanced, continued, or converted, the type of Loans to comprise such new,
continued or converted Borrowing and, if such Borrowing is to be comprised of
Eurocurrency Loans, the Interest Period applicable thereto. The Borrower agrees
that the Syndication Agent may rely on any such telephonic or facsimile notice
given by any Person it in good faith believes is an authorized representative of
the Borrower without the necessity of independent investigation and that, if any
such notice by telephone conflicts with any written confirmation, such
telephonic notice shall govern if the Syndication Agent has acted in reliance
thereon.

     (b)  Notice to the Lenders.  The Syndication Agent shall give prompt
          ---------------------
telephonic, telex or facsimile notice to each Lender of any notice received
pursuant to Section 2.3(a) relating to a Borrowing. The Syndication Agent shall
give notice to the Borrower and each Lender by like means of the interest rate
applicable to each Borrowing of Eurocurrency Loans (but, if such notice is given
by telephone, the Syndication Agent shall confirm such rate in writing) promptly
after the Syndication Agent has made such determination.

     (c)  Borrower's Failure to Notify.  If the Borrower fails to give notice
          ----------------------------
pursuant to Section 2.3(a) of the continuation or conversion of any outstanding
principal amount of a Borrowing of Eurocurrency Loans, and has not notified the
Syndication Agent by 12:00 p.m. at least three (3) Business Days before the last
day of the Interest Period for any Borrowing of Eurocurrency Loans that it
intends to repay such Borrowing, the Borrower shall be deemed to have requested
the continuation of such Borrowing as a Eurocurrency Loan with an Interest
Period of one (1) month. Upon the occurrence and during the continuance of any
Event of Default, (i) each Eurocurrency Loan will automatically, on the last day
of the then existing Interest Period therefor, convert into a Base Rate Loan,
and (ii) the obligation of the Lenders to make, continue or convert Loans into
Eurocurrency Loans shall be suspended.

     (d)  Conversion.  If the Borrower shall elect to convert any particular
          ----------
Borrowing from one Type of Loan to the other only in part, then, from and after
the date on which such conversion shall be effective, such particular Borrowing
shall, for all purposes of this Agreement (including, without limitation, for
purposes of subsequent application of this sentence) be deemed to instead
constitute two Borrowings (each originally advanced on the same date as such
particular Borrowing), one comprised of (subject to subsequent conversion in
accordance with this Agreement) Eurocurrency Loans in an aggregate principal
amount equal to the portion of such Borrowing so elected by the Borrower to be
comprised of Eurocurrency Loans and the second comprised of (subject to
subsequent conversion in accordance with this Agreement) Base Rate Loans in an
aggregate principal amount equal to the portion of such particular Borrowing so
elected by the Borrower to be comprised of Base Rate Loans. If the Borrower
shall elect to have multiple Interest Periods apply to any particular Borrowing
comprised of Eurocurrency Loans, then, from and after the date such multiple
Interest Periods commence, such particular Borrowing shall, for all purposes of
this Agreement (including, without limitation, for purposes of subsequent
application of this sentence), be deemed to constitute a number of separate
Borrowings (each originally advanced on the same date as such particular
Borrowing) equal to the number of, and corresponding to, the different Interest
Periods so selected, each such deemed

                                       18
<PAGE>

separate Borrowing corresponding to a particular selected Interest Period
comprised of (subject to subsequent conversion in accordance with this
Agreement) Eurocurrency Loans in an aggregate principal amount equal to the
portion of such particular Borrowing so elected by the Borrower to have such
Interest Period. This Section 2.3(d) shall be applied appropriately in the event
that the Borrower shall make the elections described in the two preceding
sentences at the same time with respect to the same particular Borrowing.

     Section 2.4.   Interest Periods.  As provided in Section 2.3, at the time
                    ----------------
of each request for a Borrowing of Eurocurrency Loans, or for the continuation
or conversion of any Borrowing of Eurocurrency Loans, the Borrower shall select
an Interest Period(s) applicable to such Loans from among the available options
subject to the limitations in Section 2.3; provided, however, that:

          (i)   the Borrower may not select an Interest Period for a Borrowing
     of Loans that extends beyond the Maturity Date;

          (ii)  whenever the last day of any Interest Period would otherwise be
     a day that is not a Business Day, the last day of such Interest Period
     shall either be (i) extended to the next succeeding Business Day, or (ii)
     in the case of Eurocurrency Loans only, reduced to the immediately
     preceding Business Day if the next succeeding Business Day is in the next
     calendar month; and

          (iii) for purposes of determining an Interest Period, a month means a
     period starting on one day in a calendar month and ending on the
     numerically corresponding day in the next calendar month; provided,
     however, that if there is no such numerically corresponding day in the
     month in which an Interest Period is to end or if an Interest Period begins
     on the last Business Day of a calendar month, then in the case of
     Eurocurrency Loans only, such Interest Period shall end on the last
     Business Day of the calendar month in which such Interest Period is to end.

     Section 2.5.   Funding of Loans.
                    ----------------

     (a)  Disbursement of Loans.  Not later than 12:00 p.m. with respect to
          ---------------------
Borrowings of Eurocurrency Loans, and 2:00 p.m. with respect to Base Rate Loans,
on the date of any requested advance of a new Borrowing, each Lender, subject to
all other provisions hereof, shall make available its Loan comprising its
portion of such Borrowing in funds immediately available in Atlanta, Georgia for
the benefit of the Syndication Agent and according to the payment instructions
of the Syndication Agent. The Syndication Agent shall make the proceeds of each
such Borrowing available in immediately available funds to the Borrower (or as
directed in writing by the Borrower) on such date. In the event that any Lender
does not make such amounts available to the Syndication Agent by the time
prescribed above, but such amount is received later that day, such amount may be
credited to the Borrower in the manner described in the preceding sentence on
the next Business Day (with interest on such amount to begin accruing hereunder
on such next Business Day) provided that acceptance by the Borrower of any such
late amount shall not be deemed a waiver by the Borrower of any rights it may
have against such Lender. No Lender shall be responsible to the Borrower for any
failure by another Lender to

                                       19
<PAGE>

fund its portion of a Borrowing, and no such failure by a Lender shall relieve
any other Lender from its obligation, if any, to fund its portion of a
Borrowing.

     (b)  Syndication Agent Reliance on Lender Funding.  Unless the Syndication
          --------------------------------------------
Agent shall have been notified by a Lender before the date on which such Lender
is scheduled to make payment to the Syndication Agent of the proceeds of a Loan
(which notice shall be effective upon receipt) that such Lender does not intend
to make such payment, the Syndication Agent may assume that such Lender has made
such payment when due and in reliance upon such assumption may (but shall not be
required to) make available to the Borrower the proceeds of the Loan to be made
by such Lender and, if any Lender has not in fact made such payment to the
Syndication Agent, such Lender shall, on demand, pay to the Syndication Agent
the amount made available to the Borrower attributable to such Lender together
with interest thereon for each day during the period commencing on the date such
amount was made available to the Borrower and ending on (but excluding) the date
such Lender pays such amount to the Syndication Agent at a rate per annum equal
to the Syndication Agent's cost of funds for such amount. If such amount is not
received from such Lender by the Syndication Agent immediately upon demand, the
Borrower will, on demand, repay to the Syndication Agent the proceeds of the
Loan attributable to such Lender with interest thereon at a rate per annum equal
to the interest rate applicable to the relevant Loan, but the Borrower will in
no event be liable to pay any amounts otherwise due pursuant to Section 2.11 in
respect of such repayment. Nothing in this subsection shall be deemed to relieve
any Lender from any obligation to fund any Loans hereunder or to prejudice any
rights which the Borrower may have against any Lender as a result of any default
by such Lender hereunder.

     Section 2.6.   Applicable Interest Rates.
                    -------------------------

     (a)  Base Rate Loans.  Each Base Rate Loan shall bear interest (computed
          ---------------
on the basis of a 365-day year or 366-day year, as the case may be, and actual
days elapsed excluding the date of repayment) on the unpaid principal amount
thereof from the date such Loan is made until maturity (whether by acceleration
or otherwise) or conversion to a Eurocurrency Revolving Loan, at a rate per
annum equal to the lesser of (i) the Highest Lawful Rate, or (ii) the Base Rate
from time to time in effect. The Borrower agrees to pay such interest on each
Interest Payment Date for such Loan and at maturity (whether by acceleration or
otherwise).

     (b)  Eurocurrency Loans.  Each Eurocurrency Loan shall bear interest
          ------------------
(computed on the basis of a 360-day year and actual days elapsed, excluding the
date of repayment) on the unpaid principal amount thereof from the date such
Loan is made until maturity (whether by acceleration or otherwise) or conversion
to a Base Rate Loan, at a rate per annum equal to the lesser of (i) the Highest
Lawful Rate, or (ii) the sum of Adjusted LIBOR plus the Applicable Margin. The
Borrower agrees to pay such interest on each Interest Payment Date for such Loan
and at maturity (whether by acceleration or otherwise) or conversion to a Base
Rate Loan.

     (c)  Rate Determinations.  The Syndication Agent shall determine each
          -------------------
interest rate applicable to the Loans hereunder insofar as such interest rate
involves a determination of Base Rate, Adjusted LIBOR, or any applicable default
rate pursuant to Section 2.7, and such determination shall be conclusive and
binding except in the case of the Syndication Agent's

                                       20
<PAGE>

manifest error or willful misconduct. The Syndication Agent shall promptly give
notice to the Borrower and each Lender of each determination of Adjusted LIBOR
with respect to each Eurocurrency Loan.

     Section 2.7.   Default Rate.  If any payment of principal on any Loan is
                    ------------
not made when due after the expiration of the grace period therefor provided in
Section 7.1(a) (whether by acceleration or otherwise), such Loan shall bear
interest (computed on the basis of a year of 360, 365 or 366 days, as
applicable, and actual days elapsed) after any such grace period expires until
such principal then due is paid in full, which the Borrower agrees to pay on
demand, at a rate per annum equal to:

     (a)  for any Base Rate Loan, the lesser of (i) the Highest Lawful Rate, or
(ii) the sum of two percent (2%) per annum plus the Base Rate from time to time
in effect (but not less than the Base Rate in effect at the time such payment
was due); and

     (b)  for any Eurocurrency Loan, the lesser of (i) the Highest Lawful Rate,
or (ii) the sum of two percent (2%) per annum plus the rate of interest in
effect thereon at the time of such default until the end of the Interest Period
for such Loan and, thereafter, at a rate per annum equal to the sum of two
percent (2%) per annum plus the Base Rate from time to time in effect (but not
less than the Base Rate in effect at the time such payment was due).

     It is the intention of the Syndication Agent and the Lenders to conform
strictly to usury laws applicable to them. Accordingly, if the transactions
contemplated hereby or any Loan or other Obligation would be usurious as to any
of the Lenders under laws applicable to it (including the laws of the United
States of America and the State of New York or any other jurisdiction whose laws
may be mandatorily applicable to such Lender notwithstanding the other
provisions of this Agreement, the Notes or any other Credit Document), then, in
that event, notwithstanding anything to the contrary in this Agreement, the
Notes or any other Credit Document, it is agreed as follows: (i) the aggregate
of all consideration which constitutes interest under laws applicable to such
Lender that is contracted for, taken, reserved, charged or received by such
Lender under this Agreement, the Notes or any other Credit Document or otherwise
shall under no circumstances exceed the Highest Lawful Rate, and any excess
shall be credited by such Lender on the principal amount of the Loans (or, if
the principal amount of the Loans shall have been paid in full, refunded by such
Lender to the Borrower); and (ii) in the event that the maturity of the Loans is
accelerated by reason of an election of the holder or holders thereof resulting
from any Event of Default hereunder or otherwise, or in the event of any
required or permitted prepayment, then such consideration that constitutes
interest under laws applicable to such Lender may never include more than the
Highest Lawful Rate, and excess interest, if any, provided for in this
Agreement, the Notes, any other Credit Document or otherwise shall be
automatically canceled by such Lender as of the date of such acceleration or
prepayment and, if theretofore paid, shall be credited by such Lender on the
principal amount of the Loans (or if the principal amount of the Loans shall
have been paid in full, refunded by such Lender to the Borrower). To the extent
that the Texas Finance Code, Chapters 302 and 303, are relevant to the
Syndication Agent and the Lenders for the purpose of determining the Highest
Lawful Rate, the Syndication Agent and the Lenders hereby elect to determine the
applicable rate ceiling under such Article by the indicated (weekly) rate
ceiling from time to time in effect,

                                       21
<PAGE>

subject to their right subsequently to change such method in accordance with
applicable law. In the event the Loans are paid in full by the Borrower prior to
the full stated term of the Loans and the interest received from the actual
period of the existence of the Loans exceeds the Highest Lawful Rate, the
Lenders shall refund to the Borrower the amount of the excess or shall credit
the amount of the excess against amounts owing under the Loans and none of the
Syndication Agent or the Lenders shall be subject to any of the penalties
provided by law for contracting for, taking, reserving, charging or receiving
interest in excess of the Highest Lawful Rate. The Texas Finance Code, Chapter
346, which regulates certain revolving credit loan accounts and revolving tri-
party accounts, shall not apply to this Agreement or the Loans.

     Section 2.8.   Repayment of Loans; Evidence of Debt.
                    ------------------------------------

     (a)  Repayment of Loans.  The Borrower hereby promises to pay to the
          ------------------
Syndication Agent, for the account of each Lender, on the Maturity Date the
unpaid principal amount of each Loan then outstanding.

     (b)  Record of Loans by Lenders.  Each Lender shall maintain in
          --------------------------
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from each Loan made by
such Lender, including the amounts of principal and accrued interest payable and
paid to such Lender from time to time hereunder.

     (c)  Record of Loans by Syndication Agent.  The Syndication Agent shall
          ------------------------------------
maintain accounts in which it shall record (i) the amount of each Loan made
hereunder, the Type thereof and the Interest Period applicable thereto, (ii) the
amount of any principal or accrued interest due and payable or to become due and
payable from the Borrower to each Lender hereunder and (iii) the amount of any
sum received by the Syndication Agent hereunder for the account of the Lenders
and each Lender's share thereof.

     (d)  Evidence of Obligations.  The entries made in the accounts maintained
          -----------------------
pursuant to paragraph (b) or (c) of this Section shall be prima facie evidence
                                                          ----- -----
of the existence and amounts of the obligations recorded therein; provided that
                                                                  --------
the failure of any Lender or the Syndication Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.

     (e)  Notes.  The Loans outstanding to the Borrower from each Lender shall,
          -----
at the request of such Lender, be evidenced by promissory notes of the Borrower
payable to such Lender in the form of Exhibit 2.8E (each a "Note"). The Borrower
                                      ------------
agrees to execute and deliver to the Syndication Agent, for the benefit of each
Lender requesting a promissory note as aforesaid, an original of such promissory
note, appropriately completed, to evidence the respective Loans made by such
Lender hereunder, within ten (10) Business Days after the Borrower receives a
written request therefor.

     (f)  Recording of Loans and Payments on Notes.  Each holder of a Note shall
          ----------------------------------------
record on its books and records or on a schedule to its Note (and prior to any
transfer of its Note shall endorse thereon or on schedules forming a part
thereof appropriate notations to evidence) the amount of each Loan outstanding
from it to the Borrower, all payments of principal and interest

                                       22
<PAGE>

and the principal balance from time to time outstanding thereon, the Type of
such Loan and, if a Eurocurrency Loan, the Interest Period and interest rate
applicable thereto. Such record, whether shown on the books and records of a
holder of a Note or on a schedule to its Note, shall be prima facie evidence as
to all such matters; provided, however, that the failure of any holder to record
any of the foregoing or any error in any such record shall not limit or
otherwise affect the obligation of the Borrower to repay all Loans outstanding
to it hereunder together with accrued interest thereon. At the request of any
holder of a Note and upon such holder tendering to the Borrower the Note to be
replaced, the Borrower shall furnish a new Note to such holder to replace any
outstanding Note and at such time the first notation appearing on the schedule
on the reverse side of, or attached to, such new Note shall set forth the
aggregate unpaid principal amount of all Loans, if any, then outstanding
thereon.

     Section 2.9.  Optional Prepayments. The Borrower shall have the privilege
                   --------------------
of prepaying Base Rate Loans without premium or penalty at any time in whole or
at any time and from time to time in part (but, if in part, then in an amount
which is equal to or greater than $1,000,000); provided, however, that the
Borrower shall have given notice of such prepayment to the Syndication Agent no
later than 12:00 p.m. on the date of such prepayment. The Borrower shall have
the privilege of prepaying Eurocurrency Loans (a) without premium or penalty in
whole or in part (but, if in part, then in an amount which is equal to or
greater than $5,000,000 and in an integral multiple of $100,000) only on the
last Business Day of an Interest Period for such Loan, and (b) at any other time
so long as the breakage fees and funding losses provided for in Section 2.11 are
paid; provided, however, that the Borrower shall have given notice of such
prepayment to the Syndication Agent no later than 12:00 p.m. at least three (3)
Business Days before the last Business Day of such Interest Period or the
proposed prepayment date. Any such prepayments shall be made by the payment of
the principal amount to be prepaid and accrued and unpaid interest thereon to
the date of such prepayment.

     Section 2.10. Mandatory Prepayments of Loans.
                   ------------------------------

     (a)  Excess Over Revolving Credit Commitment Amount. In the event and on
          ----------------------------------------------
each occasion that the aggregate principal amount of outstanding Loans exceeds
the Revolving Credit Commitment Amount then in effect, then the Borrower shall
promptly prepay Loans in an aggregate amount sufficient to eliminate such
excess. Immediately upon determining the need to make any such prepayment, the
Borrower shall notify the Syndication Agent of such required prepayment and of
the identity of the particular Loans being prepaid. If the Syndication Agent
shall notify the Borrower that the Syndication Agent has determined that any
prepayment is required under this Section 2.10(a), the Borrower shall make such
prepayment no later than the second Business Day following such notice. Any
mandatory prepayment of Loans pursuant hereto shall not be limited by the notice
provision for prepayments set forth in Section 2.9. Each such prepayment shall
be accompanied by a payment of all accrued and unpaid interest on the Loans
prepaid and any applicable breakage fees and funding losses pursuant to Section
2.11.

     (b)  Mandatory Prepayments from Net Cash Proceeds.  Until such time as the
          --------------------------------------------
Obligations have been repaid in full and the Commitments terminated in full, the
Obligations shall be permanently prepaid (and the Commitments permanently
reduced to the extent required in Section 2.12(b)) in the amounts and upon the
occurrence of any of the following events:

                                       23
<PAGE>

               (i)   Within 10 Business Days after any Debt Issuance or Equity
          Issuance by the Borrower or any of its Subsidiaries with respect to
          which the Net Cash Proceeds received by the Borrower and/or its
          Subsidiaries for such issuance (or when aggregated with the Net Cash
          Proceeds from all other such issuances occurring since the Effective
          Date) exceed $500,000,000, the principal amount outstanding under the
          Obligations shall be permanently prepaid by an amount equal to 100% of
          the Net Cash Proceeds realized by the Borrower and/or such
          Subsidiaries from such Debt Issuance(s) and/or Equity Issuance(s) in
          excess of $500,000,000.

               (ii)  Within 10 Business Days after any Significant Sale with
          respect to which the Net Cash Proceeds received by the Borrower or any
          Subsidiary for such Significant Sale (or when aggregated with the Net
          Cash Proceeds from all other such Significant Sales occurring since
          the Effective Date) exceed $2,000,000,000, the principal amount
          outstanding of the Obligations shall be permanently prepaid by an
          amount equal to 100% of the Net Cash Proceeds realized by the Borrower
          and/or such Subsidiaries from such Significant Sale(s) in excess of
          $2,000,000,000.

               (iii) The Borrower shall provide three (3) Business Days' prior
          written notice to the Syndication Agent of any prepayment of the
          Obligations to be made pursuant to this Section 2.10(b).

     Section 2.11. Breakage Fees. If any Lender incurs any loss, cost or expense
                   -------------
(excluding loss of anticipated profits and other indirect or consequential
damages) by reason of the liquidation or re-employment of deposits or other
funds acquired by such Lender to fund or maintain any Eurocurrency Loan as a
result of any of the following events other than any such occurrence as a result
of a change of circumstance described in Sections 8.1 or 8.2:

     (a)  any payment, prepayment or conversion of any such Loan on a date other
than the last day of its Interest Period (whether by acceleration, mandatory
prepayment or otherwise);

     (b)  any failure to make a principal payment of any such Loan on the due
date therefor; or

     (c)  any failure by the Borrower to borrow, continue or prepay, or convert
to, any such Loan on the date specified in a notice given pursuant to Section
2.3 (other than by reason of a default of such Lender),

then the Borrower shall pay to such Lender such amount as will reimburse such
Lender for such loss, cost or expense.  If any Lender makes such a claim for
compensation, it shall provide to the Borrower a certificate executed by an
officer of such Lender setting forth the amount of such loss, cost or expense in
reasonable detail (including an explanation of the basis for and the computation
of such loss, cost or expense) no later than ninety (90) days after the event
giving rise to the claim for compensation, and the amounts shown on such
certificate shall be prima

                                       24
<PAGE>

facie evidence of such Lender's entitlement thereto. Within ten (10) days of
receipt of such certificate, the Borrower shall pay directly to such Lender such
amount as will compensate such Lender for such loss, cost or expense as provided
herein, unless such Lender has failed to timely give notice to the Borrower of
such claim for compensation as provided herein, in which event the Borrower
shall not have any obligation to pay such claim.

     Section 2.12.  Commitment Terminations.
                    -----------------------

     (a)  Optional Terminations. The Borrower shall have the right at any time
          ---------------------
and from time to time, upon three (3) Business Days' prior and irrevocable
written notice to the Syndication Agent, to terminate or reduce the Commitments
without premium or penalty, in whole or in part, any reduction (i) to be in an
amount not less than $5,000,000 as determined by the Borrower and in integral
multiples of $5,000,000, and (ii) to be allocated ratably among the Lenders in
proportion to their respective Commitments; provided, that the Revolving Credit
Commitment Amount may not be reduced to an amount less than the sum of the
aggregate principal amount of outstanding Loans, after giving effect to payments
on such proposed termination or reduction date. The Syndication Agent shall give
prompt notice to each Lender of any such termination or reduction of the
Commitments. Any termination of Commitments pursuant to this Section 2.12(a) is
permanent and may not be reinstated.

     (b)  Mandatory Reductions.  In the event and on each occasion that a
          --------------------
mandatory prepayment of Loans would be required to be made pursuant to the terms
of Section 2.10(b) (whether or not any Loans are actually outstanding hereunder
at such time), then the Revolving Credit Commitment Amount shall be
automatically reduced by an amount equal to such mandatory prepayment amount
(whether or not any such prepayment is actually made), which reduction shall be
allocated ratably among the Lenders in proportion to their respective
Commitments. The Borrower shall give the Syndication Agent not less than three
(3) Business Days' prior written notice of any Significant Sale, Debt Issuance
or Equity Issuance that will result in any reduction in Commitments pursuant to
this Section 2.12(b). The Syndication Agent shall give prompt written notice to
each Lender of any such reduction of the Commitments. Any reduction of
Commitments pursuant to this Section 2.12(b) is permanent and may not be
reinstated.

ARTICLE 3.  FEES AND PAYMENTS.

     Section 3.1.  Fees.
                   ----

     (a)  Facility Fees. The Borrower agrees to pay to the Syndication Agent
          -------------
for the account of each Lender a facility fee, which shall accrue at the
Applicable Facility Fee Rate on the daily amount of the Commitment of such
Lender (whether used or unused) during the period from and including the
Effective Date to but excluding the date on which such Commitment terminates;
provided that, if such Lender continues to have any Revolving Credit Obligations
after its Commitment terminates, then such facility fee shall continue to accrue
on the daily amount of such Lender's Revolving Credit Obligations from and
including the date on which its Commitment terminates to but excluding the date
on which such Lender ceases to have any Revolving Credit Obligations. Accrued
facility fees shall be payable in arrears on the last

                                       25
<PAGE>

Business Day of March, June, September and December of each year, commencing on
March 30, 2001, and on the date(s) on which the Commitments shall have
terminated and the Lenders shall have no further Revolving Credit Obligations.
All facility fees shall be computed on the basis of a year of 360 days and shall
be payable for the actual number of days elapsed (including the first day but
excluding the last day).

     (b)  Utilization Fees. For any day on which the outstanding principal
          ----------------
amount of the Loans shall be greater than an amount equal to 33% of the total
Commitments (and for any day after the termination of all the Commitments on
which any Loans shall be outstanding if the outstanding principal amount thereof
on the date the Commitments terminated shall have been greater than 33% of the
total Commitments in effect on such date), the Borrower shall pay to the
Syndication Agent for the account of each Lender a utilization fee equal to the
Applicable Utilization Fee Rate multiplied by the aggregate amount of such
Lender's outstanding Loans on such day. Accrued and unpaid utilization fees, if
any, shall be payable in arrears on the last Business Day of each March, June,
September and December and on the date(s) on which the Commitments shall have
terminated and there are no Loans outstanding. All utilization fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).

     (c)  Payment of Fees. All fees payable hereunder shall be paid on the dates
          ---------------
due, in immediately available funds, to the Syndication Agent for distribution,
in the case of facility fees and utilization fees, to the Lenders.

     Section 3.2.  Place and Application of Payments.
                   ---------------------------------

     (a)  All payments of principal of and interest on the Loans and all fees
and other amounts payable by the Borrower under the Credit Documents shall be
made by the Borrower to the Syndication Agent, for the benefit of the Lenders
entitled to such payments, in immediately available funds on the due date
thereof no later than 2:00 p.m. at the office of the Syndication Agent in
Atlanta, Georgia, or such other location as the Syndication Agent may designate
in writing to the Borrower. Any payments received by the Syndication Agent from
the Borrower after the time specified in the preceding sentence shall be deemed
to have been received on the next Business Day. The Syndication Agent will, on
the same day each payment is received or deemed to have been received in
accordance with this Section 3.2, cause to be distributed like funds to each
Lender owed an Obligation for which such payment was received, pro rata based on
the respective amounts of such type of Obligation then owing to each Lender.

     (b)  If any payment received by the Syndication Agent under any Credit
Document is insufficient to pay in full all amounts then due and payable to the
Syndication Agent and the Lenders under the Credit Documents, such payment shall
be distributed by the Syndication Agent and applied by the Syndication Agent and
the Lenders in the order set forth in Section 7.6. In calculating the amount of
Obligations owing each Lender other than for principal and interest on Loans and
fees under Section 3.1, the Syndication Agent shall only be required to include
such other Obligations that Lenders have certified to the Syndication Agent in
writing are due to such Lenders.

                                       26
<PAGE>

     Section 3.3.  Withholding Taxes.
                   -----------------

     (a)  Payments Free of Withholding. Except as otherwise required by law and
          ----------------------------
subject to Section 3.3(b), each payment by the Borrower to any Lender or the
Syndication Agent under this Agreement or any other Credit Document shall be
made without withholding for or on account of any present or future taxes
imposed by or within the jurisdiction in which the Borrower is incorporated, any
jurisdiction from which the Borrower makes any payment, or (in each case) any
political subdivision or taxing authority thereof or therein, excluding, in the
case of each Lender and the Syndication Agent, the following taxes:

          (i)   taxes imposed on, based upon, or measured by such Lender's or
     the Syndication Agent's net income or profits, and branch profits,
     franchise and similar taxes imposed on it;

          (ii)  taxes imposed on such Lender or the Syndication Agent as a
     result of a present or former connection between the taxing jurisdiction
     and such Lender or Syndication Agent, or any affiliate thereof, as the case
     may be, other than a connection resulting solely from the transactions
     contemplated by this Agreement;

          (iii) taxes imposed as a result of the transfer by such Lender or
     Syndication Agent of its interest in this Agreement or any other Credit
     Document or a designation by such Lender or the Syndication Agent (other
     than pursuant to Section 8.3(c)) of a new Lending Office (other than taxes
     imposed as a result of any change in treaty, law or regulation after such
     transfer of such Lender's or the Syndication Agent's interest in this
     Agreement or any other Credit Document or designation of a new Lending
     Office);

          (iv)  taxes imposed by the United States of America (or any political
     subdivision thereof or tax authority therein) upon a Lender or the
     Syndication Agent organized under the laws of a jurisdiction outside of the
     United States, except to the extent that such tax is imposed as a result of
     any change in applicable law, regulation or treaty (other than any addition
     of or change in any "anti-treaty shopping," "limitation of benefits," or
     similar provision applicable to a treaty) after the date hereof, in the
     case of each Lender or the Syndication Agent originally a party hereto or,
     in the case of any Purchasing Lender (as defined in Section 10.10) or the
     Syndication Agent, after the date on which it becomes a Lender or the
     Syndication Agent, as the case may be; or

          (v)  taxes which would not have been imposed but for (a) the failure
     of any Lender or the Syndication Agent, as the case may be, to provide (I)
     the applicable forms prescribed by the Internal Revenue Service, as
     required pursuant to Section 3.3(b), or (II) any other form, certification,
     documentation or proof which is reasonably requested by the Borrower, or
     (b) a determination by a taxing authority or a court of competent
     jurisdiction that a form, certification, documentation or other proof
     provided by such Lender or the Syndication Agent to establish an exemption
     from such tax, assessment or other governmental charge is false;

(all such present or future taxes, excluding only the taxes described in the
preceding clauses (i)

                                       27
<PAGE>

through (v), being hereinafter referred to as "Indemnified Taxes"). If any such
withholding is so required, the Borrower shall make the withholding, pay the
amount withheld to the appropriate governmental authority before penalties
attach thereto or interest accrues thereon and forthwith pay such additional
amount as may be necessary to ensure that the net amount actually received by
each Lender and the Syndication Agent is free and clear of such Indemnified
Taxes (including Indemnified Taxes on such additional amount) and is equal to
the amount that such Lender or the Syndication Agent (as the case may be) would
have received had withholding of any Indemnified Tax not been made. If the
Borrower pays any Indemnified Taxes, or any penalties or interest in connection
therewith, it shall deliver official tax receipts evidencing the payment or
certified copies thereof, or other evidence of payment if such tax receipts have
not yet been received by the Borrower (with such tax receipts to be delivered
within fifteen (15) days after being actually received), to the Lender or the
Syndication Agent on whose account such withholding was made (with a copy to the
Syndication Agent if not the recipient of the original) within fifteen (15) days
of such payment. If the Syndication Agent or any Lender pays any Indemnified
Taxes, or any penalties or interest in connection therewith, the Borrower shall
reimburse the Syndication Agent or that Lender for the payment on demand in the
currency in which such payment was made. Such Lender or the Syndication Agent
shall make written demand on the Borrower for reimbursement hereunder no later
than ninety (90) days after the earlier of (i) the date on which such Lender or
the Syndication Agent makes payment of the Indemnified Taxes, penalties and
interest, and (ii) the date on which the relevant taxing authority or other
governmental authority makes written demand upon such Lender or the Syndication
Agent for payment of the Indemnified Taxes, penalties and interest. Any such
demand shall describe in reasonable detail such Indemnified Taxes, penalties or
interest, including the amount thereof if then known to such Lender or the
Syndication Agent, as the case may be. In the event that such Lender or the
Syndication Agent fails to give the Borrower timely notice as provided herein,
the Borrower shall not have any obligation to pay such claim for reimbursement.

     (b)  U.S. Withholding Tax Exemptions.  Upon the written request of the
          -------------------------------
Borrower or the Syndication Agent, each Lender that is not a United States
person (as such term is defined in Section 7701(a)(30) of the Code) shall submit
to the Borrower and the Syndication Agent, promptly after such request, two duly
completed and signed copies of either Form W-8 BEN or any successor form
(entitling such Lender to a complete exemption from withholding under the Code
on all amounts to be received by such Lender, including fees, pursuant to the
Credit Documents) or Form W-8 ECI or any successor form (relating to all amounts
to be received by such Lender, including fees, pursuant to the Credit Documents)
of the United States Internal Revenue Service, and any other form of the United
States Internal Revenue Service reasonably necessary to accomplish exemption
from withholding obligations or to facilitate the Syndication Agent's
performance under this Agreement. Thereafter and from time to time, each such
Lender shall submit to the Borrower and the Syndication Agent such additional
duly completed and signed copies of such forms (or such successor forms as shall
be adopted from time to time by the relevant United States taxing authorities)
as may be required under then-current United States law or regulations to avoid
United States withholding taxes on payments in respect of all amounts to be
received by such Lender, including fees, pursuant to the Credit Documents. Upon
the request of the Borrower, each Lender that is a United States person shall
submit to the Borrower a certificate to the effect that it is such a United
States person.

                                       28
<PAGE>

     (c)  Inability of Lender to Submit Forms. If any Lender determines in good
          -----------------------------------
faith, as a result of any change in applicable law, regulation or treaty, or in
any official application or interpretation thereof, that (i) it is unable to
submit to the Borrower or the Syndication Agent any form or certificate that
such Lender is obligated to submit pursuant to subsection (b) of this Section
3.3, (ii) it is required to withdraw or cancel any such form or certificate
previously submitted, or (iii) any such form or certificate otherwise becomes
ineffective or inaccurate, such Lender shall promptly notify the Borrower and
the Syndication Agent of such fact, and the Lender shall to that extent not be
obligated to provide any such form or certificate and will be entitled to
withdraw or cancel any affected form or certificate, as applicable.

     (d)  Refund of Taxes. If any Lender or the Syndication Agent receives a
          ---------------
refund of any Indemnified Tax or any tax referred to in Section 10.3 with
respect to which the Borrower has paid any amount pursuant to this Section 3.3
or Section 10.3, such Lender or the Syndication Agent shall pay the amount of
such refund (including any interest received with respect thereto) to the
Borrower within fifteen (15) days after receipt thereof. A Lender or the
Syndication Agent shall provide, at the sole cost and expense of the Borrower,
such assistance as the Borrower may reasonably request in order to obtain such a
refund; provided, however, that neither the Syndication Agent nor any Lender
shall in any event be required to disclose any information to the Borrower with
respect to the overall tax position of the Syndication Agent or such Lender.

ARTICLE 4.  CONDITIONS PRECEDENT.

     Section 4.1.  Initial Borrowing. The obligation of each Lender to advance
                   -----------------
the initial Loans hereunder on or after the Effective Date is subject to
satisfaction of the following conditions precedent:

     (a)  The Syndication Agent shall have received the following all in form
and substance reasonably satisfactory to the Syndication Agent and in sufficient
number of signed counterparts, where applicable, to provide one for each
Lender:

          (i)   Certificates of Officers. Certificates of the Secretary or an
                ------------------------
     Assistant Secretary of the Borrower containing specimen signatures of the
     persons authorized to execute Credit Documents on the Borrower's behalf or
     any other documents provided for herein or therein, together with (x)
     copies of resolutions of the Board of Directors or other appropriate body
     of the Borrower authorizing the execution and delivery of the Credit
     Documents, (y) copies of the Borrower's Memorandum and Articles of
     Association and other publicly filed organizational documents in its
     jurisdiction of organization and bylaws and other governing documents, and
     (z) a certificate of incorporation and good standing from the appropriate
     governing agency of the Borrower's jurisdiction of organization;

          (ii)  Regulatory Filings and Approvals. Copies of all necessary
                --------------------------------
     governmental and third party approvals, registrations, and filings in
     respect of the transactions contemplated by this Agreement;

                                       29
<PAGE>

          (iii) Insurance Certificate.  An insurance certificate dated not more
                ---------------------
     than ten (10) days prior to the Effective Date from the Borrower describing
     in reasonable detail the insurance maintained by the Borrower and its
     Subsidiaries as required by this Agreement;

          (iv)  Opinions of Counsel. The opinions of (x) Baker Botts LLP,
                -------------------
     counsel for the Borrower, in the form of Exhibit 4.1A, (y) William
                                              ------------
     Turcotte, Associate General Counsel of the Borrower, in the form of Exhibit
                                                                         -------
     4.1B, and (z) Walkers, Cayman Islands counsel for the Borrower, in the form
     ----
     of Exhibit 4.1C; and
        ------------

          (v)  Closing Certificate.  Certificate of the President or a Vice
               -------------------
     President of the Borrower as to the satisfaction of all conditions set
     forth in this Section 4.1, including without limitation, consummation of
     the R&B Falcon Merger on substantially the terms as set forth in the R&B
     Falcon Merger Agreement and in the Transocean R&B Falcon Joint Proxy
     Statement.

     (b)  Each of the representations and warranties of the Borrower and its
Subsidiaries set forth herein and in the other Credit Documents shall be true
and correct in all material respects as of the time of such Borrowing, except to
the extent that any such representation or warranty relates solely to an earlier
date, in which case it shall have been true and correct in all material respects
as of such earlier date;

     (c)  No Default or Event of Default shall have occurred and be continuing;

     (d)  There shall be no pending or, to the knowledge of the Borrower,
threatened actions, suits or proceedings at law or in equity or by or before any
governmental authority against or affecting the Borrower or any of its
Subsidiaries or any of their respective businesses, properties or rights which,
if adversely determined, could reasonably be expected to result in a Material
Adverse Effect; and

     (e)  Payment of all fees and all expenses incurred through the Effective
Date then due and owing to the Syndication Agent, the Lenders, and the Arrangers
pursuant to this Agreement and as otherwise agreed in writing by the Borrower.

     Section 4.2. All Borrowings.  The obligation of each Lender to make any
                  --------------
advance of any Loan is subject to satisfaction of the following conditions
precedent (but subject to Sections 2.3(c)):

     (a)  Notices. The Syndication Agent shall have received the Borrowing
          -------
Request required by the first sentence of Section 2.3(a);

     (b)  Warranties True and Correct.  In the case of any advance or Borrowing
          ---------------------------
that increases the aggregate principal amount of Loans outstanding after giving
effect to such advance or Borrowing, each of the representations and warranties
of the Borrower and its Subsidiaries set forth herein and in the other Credit
Documents shall be true and correct in all material respects as of the time of
such advance or Borrowing, except as a result of the

                                       30
<PAGE>

transactions expressly permitted hereunder or thereunder and except to the
extent that any such representation or warranty relates solely to an earlier
date, in which case it shall have been true and correct in all material respects
as of such earlier date;

     (c)  No Default. No Default or Event of Default shall have occurred and be
          ----------
continuing or would occur as a result of such Borrowing; and

     (d)  Regulations U and X. The Borrowing to be made by the Borrower shall
          -------------------
not result in the Borrower or any Lender being in non-compliance with or in
violation of Regulation U or X of the Board of Governors of the Federal Reserve
System.

Each acceptance by the Borrower of an advance of any Loan shall be deemed to be
a representation and warranty by the Borrower on the date of such acceptance,
that all conditions precedent to such Borrowing set forth in this Section 4.2
and in Section 4.1 with respect to the initial Borrowings hereunder have (except
to the extent waived in accordance with the terms hereof) been satisfied or
fulfilled unless the Borrower gives to the Syndication Agent and the Lenders
written notice to the contrary, in which case none of the Lenders shall be
required to fund such Loans unless the Required Lenders shall have previously
waived in writing such non-compliance.

ARTICLE 5.  REPRESENTATIONS AND WARRANTIES.

     The Borrower represents and warrants to each Lender and the Syndication
Agent as follows:

     Section 5.1.  Corporate Organization. The Borrower and each of its material
                   ----------------------
Subsidiaries: (i) is duly organized and existing in good standing under the laws
of the jurisdiction of its organization; (ii) has all necessary company power
and authority to own the property and assets it uses in its business and
otherwise to carry on its present business; and (iii) is duly licensed or
qualified and in good standing in each jurisdiction in which the nature of the
business transacted by it or the nature of the property owned or leased by it
makes such licensing or qualification necessary, except where the failure to be
so licensed or qualified or to be in good standing, as the case may be, would
not have a Material Adverse Effect.

     Section 5.2.  Power and Authority; Validity.  The Borrower has the
                   -----------------------------
organizational power and authority to execute, deliver and carry out the terms
and provisions of the Credit Documents and has taken all necessary company
action to authorize the execution, delivery and performance of such Credit
Documents.  The Borrower has duly executed and delivered each Credit Document
and each such Credit Document constitutes the legal, valid and binding
obligation of the Borrower enforceable against it in accordance with its terms,
subject as to enforcement only to bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and equitable principles.

     Section 5.3.  No Violation. Neither the execution, delivery or performance
                   ------------
by the Borrower of the Credit Documents nor compliance by it with the terms and
provisions thereof, nor the consummation by it of the transactions contemplated
herein or therein, will (i) contravene

                                       31
<PAGE>

in any material respect any applicable provision of any law, statute, rule or
regulation, or any applicable order, writ, injunction or decree of any court or
governmental instrumentality, (ii) conflict with or result in any breach of any
term, covenant, condition or other provision of, or constitute a default under,
or result in the creation or imposition of (or the obligation to create or
impose) any Lien other than any Permitted Lien upon any of the property or
assets of the Borrower or any of its Subsidiaries under, the terms of any
material contractual obligation to which the Borrower or any of its Subsidiaries
is a party or by which they or any of their properties or assets are bound or to
which they may be subject, or (iii) violate or conflict with any provision of
the Memorandum and Articles of Association, charter, articles or certificate of
incorporation, partnership or limited liability company agreement, by-laws, or
other applicable governance documents of the Borrower or any of its
Subsidiaries.

     Section 5.4.  Litigation.  There are no actions, suits, proceedings or
                   ----------
counterclaims (including, without limitation, derivative or injunctive actions)
pending or, to the knowledge of the Borrower, threatened against the Borrower or
any of its Subsidiaries that are reasonably likely to have a Material Adverse
Effect.

     Section 5.5.  Use of Proceeds; Margin Regulations.
                   -----------------------------------

     (a)  Use of Proceeds.  The proceeds of the Loans shall be used to refinance
          ---------------
certain Indebtedness of R&B Falcon and its Subsidiaries after consummation of
the R&B Falcon Merger, either directly or through repayment of commercial paper
issued by the Borrower to refinance such Indebtedness, together with costs
related to such refinancing.

     (b)  Margin Stock. Neither the Borrower nor any of its Subsidiaries is
          ------------
engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock. No proceeds of the Loans or the Letters of Credit will be
used for a purpose which violates Regulations T, U or X of the Board of
Governors of the Federal Reserve System. After application of the proceeds of
the Loans, the issuance of the Letters of Credit, and any acquisitions permitted
hereunder, less than 25% of the assets of each of the Borrower and its
Subsidiaries consists of "margin stock" (as defined in Regulation U of the Board
of Governors of the Federal Reserve System).

     Section 5.6.  Investment Company Act. Neither the Borrower nor any of its
                   ----------------------
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.

     Section 5.7.  Public Utility Holding Company Act. Neither the Borrower nor
                   ----------------------------------
any of its Subsidiaries is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, as amended.

     Section 5.8.  True and Complete Disclosure. All factual information (taken
                   ----------------------------
as a whole) furnished by the Borrower or any of its Subsidiaries in writing to
the Syndication Agent or any Lender in connection with any Credit Document or
the Confidential Information Memorandum or any transaction contemplated therein
did not, as of the date such information was furnished

                                       32
<PAGE>

(or, if such information expressly related to a specific date, as of such
specific date, or, in the case of the Confidential Information Memorandum, as of
October 31, 2000), contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein (taken as a
whole), in light of the circumstances under which such information was
furnished, not misleading, except for such statements, if any, as have been
updated, corrected, supplemented, superseded or modified pursuant to a written
correction or supplement furnished to the Lenders prior to the date of this
Agreement.

     Section 5.9.  Financial Statements.
                   --------------------

     (a)  Borrower Financial Statements.  The financial statements heretofore
          -----------------------------
delivered to the Lenders for the Borrower's fiscal year ending December 31,
1999, and for the Borrower's fiscal quarter and year-to-date period ending
September 30, 2000, have been prepared in accordance with GAAP applied on a
basis consistent, except as otherwise noted therein, with the Borrower's
financial statements for the previous fiscal year. Such annual and quarterly
financial statements fairly present on a consolidated basis the financial
position of the Borrower as of the dates thereof, and the results of operations
for the periods indicated, subject in the case of interim financial statements,
to normal year-end audit adjustments and omission of certain footnotes (as
permitted by the SEC). As of the Effective Date, the Borrower and its
Subsidiaries, considered as a whole, had no material contingent liabilities or
material Indebtedness required under GAAP to be disclosed in a consolidated
balance sheet of the Borrower that were not disclosed in the financial
statements referred to in this Section 5.9 or in the notes thereto or disclosed
in writing to the Syndication Agent (with a request to the Syndication Agent to
distribute such disclosure to the Lenders).

     (b)  R&B Falcon Financial Statements.  The Borrower has heretofore
          -------------------------------
delivered to the Lenders audited financial statements for R&B Falcon and its
Subsidiaries as of the dates and for the periods ended December 31, 1999, and
unaudited financial statements for R&B Falcon and its Subsidiaries as of and for
the nine month period ended September 30, 2000 (the "R&B Falcon Financial
Statements"). To the best of the Borrower's knowledge and belief, the R&B Falcon
Financial Statements (i) have been prepared in accordance with GAAP consistently
applied throughout the periods presented, and (ii) fairly present in all
material respects the combined assets, liabilities, financial position, results
of operations and cash flows of R&B Falcon and its Subsidiaries as of the dates
and for the periods indicated, subject in the case of interim financial
statements to normal year-end audit adjustments and omission of certain
footnotes (as permitted by the Securities and Exchange Commission).

     Section 5.10.  No Material Adverse Change. There has occurred no event or
                    --------------------------
effect that has had or could reasonably be expected to have a Material Adverse
Effect.

     Section 5.11.  Labor Controversies. There are no labor controversies
                    -------------------
pending or, to the best knowledge of the Borrower, threatened against the
Borrower or any of its Subsidiaries that could reasonably be expected to have a
Material Adverse Effect.

     Section 5.12.  Taxes. The Borrower and its Subsidiaries have filed all
                    -----
United States federal income tax returns, and all other material tax returns
required to be filed, whether in the

                                       33
<PAGE>

United States or in any foreign jurisdiction, and have paid all governmental
taxes, rates, assessments, fees, charges and levies (collectively, "Taxes")
shown to be due and payable on such returns or on any assessments made against
Borrower and its Subsidiaries or any of their properties (other than any such
assessments, fees, charges or levies that are not more than ninety (90) days
past due, or which can thereafter be paid without penalty, or which are being
contested in good faith by appropriate proceedings and for which reserves have
been provided in conformity with GAAP, or which the failure to pay could not
reasonably be expected to have a Material Adverse Effect).

     Section 5.13.  ERISA.  With respect to each Plan, the Borrower and its
                    -----
Subsidiaries have fulfilled their obligations under the minimum funding
standards of, and are in compliance in all material respects with, ERISA and
with the Code to the extent applicable to it, and have not incurred any
liability under Title IV of ERISA to the PBGC other than a liability to the PBGC
for premiums under Section 4007 of ERISA, except as described in Schedule 5.13
                                                                 -------------
and in each case with such exceptions as could not reasonably be expected to
have a Material Adverse Effect.  As of the Effective Date, neither the Borrower
nor any of its Subsidiaries has any material contingent liability with respect
to any post-retirement benefits under a welfare plan subject to ERISA, other
than liability for continuation coverage described in Part 6 of Title I of ERISA
and as disclosed in the financial statements of the Borrower for the fiscal
quarter ending September 30, 2000, described in Section 5.9, or any other
liability that could not reasonably be expected to have a Material Adverse
Effect.

     Section 5.14.  Consents. On the Effective Date, all consents and approvals
                    --------
of, and filings and registrations with, and all other actions of, all
governmental agencies, authorities or instrumentalities required to have been
obtained or made by the Borrower in order to obtain the Loans hereunder have
been or will have been obtained or made and are or will be in full force and
effect.

     Section 5.15.  Insurance.  The Borrower and its material Subsidiaries
                    ---------
currently maintain in effect, with responsible insurance companies, insurance
against any loss or damage to all insurable property and assets owned by it,
which insurance is of a character and in or in excess of such amounts as are
customarily maintained by companies similarly situated and operating like
property or assets (subject to self-insured retentions and deductibles), and
insurance with respect to employers' and public and product liability risks
(subject to self-insured retentions and deductibles).

     Section 5.16.  Intellectual Property. The Borrower and its Subsidiaries own
                    ---------------------
or hold valid licenses to use all the patents, trademarks, permits, service
marks, and trade names that are necessary to the operation of the business of
the Borrower and its Subsidiaries as presently conducted, except where the
failure to own, or hold valid licenses to use, such patents, trademarks,
permits, service marks, and trade names could not reasonably be expected to have
a Material Adverse Effect.

     Section 5.17.  Ownership of Property.  The Borrower and its Subsidiaries
                    ---------------------
have good title to or a valid leasehold interest in all of their real property
and good title to, or a valid leasehold interest in, all of their other
property, subject to no Liens except Permitted Liens, except where

                                       34
<PAGE>

the failure to have such title or leasehold interest in such property could not
reasonably be expected to have a Material Adverse Effect.

     Section 5.18.  Compliance with Statutes, Etc.  The Borrower and its
                    ------------------------------
Subsidiaries are in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic and foreign, in respect of the conduct of their businesses and the
ownership of their properties, except for such instances of non-compliance as
could not reasonably be expected to, individually or in the aggregate, have a
Material Adverse Effect.

     Section 5.19.  Environmental Matters.
                    ---------------------

     (a)  Compliance with Environmental Laws.  Except as described in Schedule
          ----------------------------------                          --------
5.19, the Borrower and its Subsidiaries are in compliance with all applicable
----
Environmental Laws and the requirements of any permits issued under such
Environmental Laws, except for such instances of non-compliance as could not
reasonably be expected to have a Material Adverse Effect. To the best knowledge
of the Borrower, there are no pending, past or threatened Environmental Claims
against the Borrower or any of its Subsidiaries on any property owned or
operated by the Borrower or any of its Subsidiaries except as described in
Schedule 5.19 or except as could not reasonably be expected to have a Material
-------------
Adverse Effect. To the best knowledge of the Borrower, there are no conditions
or occurrences on any property owned or operated by the Borrower or any of its
Subsidiaries or on any property adjoining or in the vicinity of any such
property that could reasonably be expected to form the basis of an Environmental
Claim against the Borrower or any of its Subsidiaries or any such property that
individually or in the aggregate could reasonably be expected to have a Material
Adverse Effect.

     (b)  Hazardous Materials.  To the best of the Borrower's knowledge, (i)
          -------------------
Hazardous Materials have not at any time been generated, used, treated or stored
on, or transported to or from, any property owned or operated by the Borrower or
any of its Subsidiaries in a manner that has violated or could reasonably be
expected to violate any Environmental Law, and (ii) Hazardous Materials have not
at any time been released on or from any property owned or operated by the
Borrower or any of its Subsidiaries, in the case of both (i) and (ii), with such
exceptions as could not reasonably be expected to have a Material Adverse
Effect.

     Section 5.20.  Existing Indebtedness.  Schedule 5.20 contains a complete
                    ---------------------   -------------
and accurate list of all Indebtedness outstanding as of the Effective Date, with
respect to the Borrower and its Subsidiaries, in each case in a principal amount
of $20,000,000 or more (other than the Obligations hereunder and Indebtedness
permitted by Section 6.11(b) through (k)) and permitted by Section 6.11(a), in
each case showing the aggregate principal amount thereof, the name of the
respective borrower and any other entity which directly or indirectly guaranteed
such Indebtedness, and the scheduled payments of such Indebtedness.

     Section 5.21.  Existing Liens.  Schedule 5.21 contains a complete and
                    --------------   -------------
accurate list of all Liens outstanding as of the Effective Date, with respect to
the Borrower and its Subsidiaries, in each case where the Indebtedness or other
obligations secured by such Lien is in a principal amount of $20,000,000 or more
(other than the Liens permitted by Section 6.10(b) through (r)),

                                       35
<PAGE>

and permitted by Section 6.10(a), in each case showing the name of the Person
whose assets are subject to such Lien, the aggregate principal amount of the
Indebtedness secured thereby, and a description of the Agreements or other
instruments creating, granting, or otherwise giving rise to such Lien.

ARTICLE 6.  COVENANTS.

     The Borrower covenants and agrees that, so long as any Loan, Note or
Commitment is outstanding hereunder, or any other Obligation is due and payable
hereunder:

     Section 6.1.  Corporate Existence.  Each of the Borrower and its material
                   -------------------
Subsidiaries will preserve and maintain its organizational existence, except (i)
for the dissolution of any material Subsidiaries whose assets are transferred to
the Borrower or any of its Subsidiaries, (ii) where the failure to preserve,
renew or keep in full force and effect the existence of any Subsidiary could not
reasonably be expected to have a Material Adverse Effect, or (iii) as otherwise
expressly permitted in this Agreement.

     Section 6.2.  Maintenance.  Each of the Borrower and its material
                   -----------
Subsidiaries will maintain, preserve and keep its properties and equipment
necessary to the proper conduct of its business in reasonably good repair,
working order and condition (normal wear and tear excepted) and will from time
to time make all reasonably necessary repairs, renewals, replacements, additions
and betterments thereto so that at all times such properties and equipment are
reasonably preserved and maintained, in each case with such exceptions as could
not, individually or in the aggregate, be reasonably expected to have a Material
Adverse Effect; provided, however, that nothing in this Section 6.2 shall
prevent the Borrower or any material Subsidiary from discontinuing the operation
or maintenance of any such properties or equipment if such discontinuance is, in
the judgment of the Borrower or any material Subsidiary, as applicable,
desirable in the conduct of their businesses.

     Section 6.3.  Taxes.  Each of the Borrower and its Subsidiaries will duly
                   -----
pay and discharge all Taxes upon or against it or its properties before
penalties accrue thereon (or, if later, within ninety (90) days of becoming past
due), unless and to the extent that (i) the same is being contested in good
faith and by appropriate proceedings and reserves have been established in
conformity with GAAP, or (ii) the failure to effect such payment or discharge
could not reasonably be expected to have a Material Adverse Effect.

     Section 6.4.  ERISA.  Each of the Borrower and its Subsidiaries will timely
                   -----
pay and discharge all obligations and liabilities arising under ERISA or
otherwise with respect to each Plan of a character which if unpaid or
unperformed might result in the imposition of a material Lien against any
properties or assets of the Borrower or any material Subsidiary and will
promptly notify the Syndication Agent upon an officer of the Borrower becoming
aware thereof, of (i) the occurrence of any reportable event (as defined in
ERISA) relating to a Plan (other than a multi-employer plan, as defined in
ERISA), so long as the event thereunder could reasonably be expected to have a
Material Adverse Effect, other than any such event with respect to which the
PBGC has waived notice by regulation; (ii) receipt of any notice from PBGC of
its intention to seek termination of any Plan or appointment of a trustee
therefor; (iii) Borrower's or any of its

                                       36
<PAGE>

Subsidiaries' intention to terminate or withdraw from any Plan if such
termination or withdrawal would result in liability under Title IV of ERISA,
unless such termination or withdrawal could not reasonably be expected to have a
Material Adverse Effect; and (iv) the receipt by the Borrower or its
Subsidiaries of notice of the occurrence of any event that could reasonably be
expected to result in the incurrence of any liability (other than for benefits),
fine or penalty to the Borrower and/or to the Borrower's Subsidiaries, or any
plan amendment that could reasonably be expected to increase the contingent
liability of the Borrower and its Subsidiaries, taken as a whole, in connection
with any post-retirement benefit under a welfare plan (subject to ERISA), unless
such event or amendment could not reasonably be expected to have a Material
Adverse Effect. The Borrower will also promptly notify the Syndication Agent of
(i) any material contributions to any Foreign Plan that have not been made by
the required due date for such contribution if such default could reasonably be
expected to have a Material Adverse Effect; (ii) any Foreign Plan that is not
funded to the extent required by the law of the jurisdiction whose law governs
such Foreign Plan based on the actuarial assumptions reasonably used at any time
if such underfunding (together with any penalties likely to result) could
reasonably be expected to have a Material Adverse Effect, and (iii) any material
change anticipated to any Foreign Plan that could reasonably be expected to have
a Material Adverse Effect.

     Section 6.5.  Insurance. Each of the Borrower and its material Subsidiaries
                   ---------
will maintain or cause to be maintained, with responsible insurance companies,
insurance against any loss or damage to all insurable property and assets owned
by it, such insurance to be of a character and in or in excess of such amounts
as are customarily maintained by companies similarly situated and operating like
property or assets (subject to self-insured retentions and deductibles) and will
(subject to self-insured retentions and deductibles) maintain or cause to be
maintained insurance with respect to employers' and public and product liability
risks.

     Section 6.6.  Financial Reports and Other Information.
                   ---------------------------------------

     (a)  Periodic Financial Statements and Other Documents.  The Borrower, its
          -------------------------------------------------
Subsidiaries and any SPVs will maintain a system of accounting in such manner as
will enable preparation of financial statements in accordance with GAAP and will
furnish to the Lenders and their respective authorized representatives such
information about the business and financial condition of the Borrower, its
Subsidiaries and any SPVs as any Lender may reasonably request; and, without any
request, will furnish to the Syndication Agent:

          (i)   within sixty (60) days after the end of each of the first three
     (3) fiscal quarters of each fiscal year of the Borrower, the consolidated
     balance sheet of the Borrower and its Subsidiaries as at the end of such
     fiscal quarter and the related consolidated statements of income and
     retained earnings and of cash flows for such fiscal quarter and for the
     portion of the fiscal year ended with the last day of such fiscal quarter,
     all of which shall be in reasonable detail or in the form filed with the
     SEC, and certified by the chief financial officer of the Borrower that they
     fairly present the financial condition of the Borrower and its Subsidiaries
     as of the dates indicated and the results of their operations and changes
     in their cash flows for the periods indicated and that they have been
     prepared in accordance with GAAP, in each case, subject to normal year-end
     audit adjustments and the omission of any footnotes as permitted by the SEC
     (delivery to

                                       37
<PAGE>

     the Syndication Agent of a copy of the Borrower's Form 10-Q filed with the
     SEC (without exhibits) in any event will satisfy the requirements of this
     subsection subject to Section 6.6(b));

          (ii)   within one hundred twenty (120) days after the end of each
     fiscal year of the Borrower, the consolidated balance sheet of the Borrower
     and its Subsidiaries as at the end of such fiscal year and the related
     consolidated statements of income and retained earnings and of cash flows
     for such fiscal year and setting forth consolidated comparative figures as
     of the end of and for the preceding fiscal year, audited by an independent
     nationally-recognized accounting firm and in the form filed with the SEC
     (delivery to the Syndication Agent of a copy of the Borrower's Form 10-K
     filed with the SEC (without exhibits) in any event will satisfy the
     requirements of this subsection subject to Section 6.6(b));

          (iii)  commencing with fiscal year 2001, to the extent actually
     prepared and approved by the Borrower's board of directors, a projection of
     Borrower's consolidated balance sheet and consolidated income, retained
     earnings and cash flows for its current fiscal year showing such projected
     budget for each fiscal quarter of the Borrower ending during such year; and

          (iv)   within ten (10) days after the sending or filing thereof,
     copies of all financial statements, projections, documents and other
     communications that the Borrower sends to its stockholders generally or
     files with the SEC or any similar governmental authority (and is publicly
     available).

The Syndication Agent will forward promptly to the Lenders the information
provided by the Borrower pursuant to (i) through (iv) above.

     (b)  Compliance Certificates.  Each financial statement furnished to the
          -----------------------
Lenders pursuant to subsections (i) and (ii) of Section 6.6(a) shall be (i)
accompanied by additional information setting forth calculations excluding the
effects of any SPVs and containing such calculations for any SPVs as reasonably
requested by the Syndication Agent, and (ii) accompanied by (x) a written
certificate signed by the Borrower's chief financial officer (or other financial
officer of the Borrower), in his or her capacity as such, to the effect that no
Default or Event of Default then exists or, if any such Default or Event of
Default exists as of the date of such certificate, setting forth a description
of such Default or Event of Default and specifying the action, if any, taken by
the Borrower to remedy the same, and (y) a Compliance Certificate in the form of
Exhibit 6.6 showing the Borrower's compliance with certain of the covenants set
-----------
forth herein.

     (c)  Management Letters.  Promptly upon receipt thereof, the Borrower will
          ------------------
provide the Syndication Agent with a copy of each report or "management letter"
submitted to the Borrower by its independent accountants or auditors in
connection with any annual, interim or special audit made by them of the books
and records of the Borrower.

                                       38
<PAGE>

     (d)  Notice of Events Relating to Environmental Laws and Claims.  Promptly
          ----------------------------------------------------------
after any officer of the Borrower obtains knowledge of any of the following, the
Borrower will provide the Syndication Agent with written notice in reasonable
detail of any of the following that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect:

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

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

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

     (e)  Notices of Default, Litigation, Etc.  The Borrower will promptly, and
          -----------------------------------
in any event within five (5) Days, after an officer of the Borrower has
knowledge thereof, give written notice to the Syndication Agent of (who will in
turn provide notice to the Lenders of): (i) the occurrence of any Default or
Event of Default; (ii) any litigation or governmental proceeding of the type
described in Section 5.4; (iii) any circumstance that has had or could
reasonably be expected to have a Material Adverse Effect; (iv) the occurrence of
any event which has resulted in a breach of, or is likely to result in a breach
of, Sections 6.16 or 6.17; and (v) any notice received by it, any Subsidiary or
any SPV from the holder(s) of Indebtedness of the Borrower, any Subsidiary or
any SPV in an amount which, in the aggregate, exceeds $30,000,000, where such
notice states or claims the existence or occurrence of any default or event of
default with respect to such Indebtedness under the terms of any indenture, loan
or credit agreement, debenture, note, or other document evidencing or governing
such Indebtedness.

     Section 6.7.  Lender Inspection Rights.  Upon reasonable notice from the
                   ------------------------
Syndication Agent or any Lender, the Borrower will permit the Syndication Agent
or any Lender (and such Persons as the Syndication Agent or such Lender may
reasonably designate) during normal business hours at such entity's sole expense
unless a Default or Event of Default shall have occurred and be continuing, in
which event at the Borrower's expense, to visit and inspect any of the
properties of the Borrower or any of its Subsidiaries, to examine all of their
books and records, to make copies and extracts therefrom, and to discuss their
respective affairs, finances and accounts with their respective officers and
independent public accountants (and by this provision the Borrower authorizes
such accountants to discuss with the Syndication Agent and any Lender (and such
Persons as the Syndication Agent or such Lender may reasonably designate) the
affairs, finances and accounts of the Borrower and its Subsidiaries), all as
often, and to such extent, as may be reasonably requested. The chief financial
officer of the Borrower and/or his or her designee shall be afforded the
opportunity to be present at any meeting of the Syndication Agent or the Lenders
and such accountants. The Syndication Agent agrees to use

                                       39
<PAGE>

reasonable efforts to minimize, to the extent practicable, the number of
separate requests from the Lenders to exercise their rights under this Section
6.7 and/or Section 6.6 and to coordinate the exercise by the Lenders of such
rights.

     Section 6.8.   Conduct of Business. The Borrower and its Subsidiaries will
                    -------------------
at all times remain primarily engaged in (i) the contract drilling business,
(ii) the provision of services to the energy industry, (iii) other existing
businesses described in the Borrower's current SEC reports and in the
Transocean/R&B Falcon Joint Proxy Statement, or (iv) any related businesses
(each a "Permitted Business").

     Section 6.9.   Restrictions on Fundamental Changes. The Borrower shall not
                    -----------------------------------
merge or consolidate with any other Person, or cause or permit any dissolution
of the Borrower or liquidation of its assets, or sell, transfer or otherwise
dispose of all or substantially all of the Borrower's assets, except that:

     (a)  The Borrower or any of its Subsidiaries may merge into, or consolidate
with, any other Person if upon the consummation of any such merger or
consolidation the Borrower or such Subsidiary is the surviving corporation to
any such merger or consolidation (or the other Person is, or will thereby
become, a Subsidiary of the Borrower); and

     (b)  The Borrower may sell or transfer all or substantially all of its
assets (including stock in its Subsidiaries) to any Person if such Person is a
Subsidiary of the Borrower (or a Person who will contemporaneously therewith
become a Subsidiary of the Borrower);

provided in the case of any transaction described in the preceding clauses (a)
and (b), no Default or Event of Default shall exist immediately prior to, or
after giving effect to, such transaction.

     Section 6.10.  Liens.  The Borrower and its Subsidiaries shall not create,
                    -----
incur, assume or suffer to exist any Lien of any kind on any property or asset
of any kind of the Borrower or any Subsidiary, except the following
(collectively, the "Permitted Liens"):

     (a)  Liens existing on the date hereof (each such Lien, to the extent it
secures Indebtedness or other obligations in an aggregate amount of $20,000,000
or more, being described on Schedule 5.21 attached hereto);
                            -------------

     (b)  Liens arising in the ordinary course of business by operation of law,
deposits, pledges or other Liens in connection with workers' compensation,
unemployment insurance, old age benefits, social security obligations, taxes,
assessments, public or statutory obligations or other similar charges, good
faith deposits, pledges or other Liens in connection with (or to obtain letters
of credit in connection with) bids, performance, return-of-money or payment
bonds, contracts or leases to which the Borrower or its Subsidiaries are parties
or other deposits required to be made in the ordinary course of business;
provided that in each case the obligation secured is not for Indebtedness for
borrowed money and is not overdue or, if overdue, is being contested in good
faith by appropriate proceedings and reserves in conformity with GAAP have been
provided therefor;

                                       40
<PAGE>

     (c)  mechanics', workmen's, materialmen's, landlords', carriers' or other
similar Liens arising in the ordinary course of business (or deposits to obtain
the release of such Liens) related to obligations not overdue for more than
thirty (30) days if such Liens arise with respect to domestic assets and for
more than ninety (90) days if such Liens arise with respect to foreign assets,
or, if so overdue, that are being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP have been provided therefor, or
if such Liens otherwise could not reasonably be expected to have a Material
Adverse Effect;

     (d)  Liens for Taxes not more than ninety (90) days past due or which can
thereafter be paid without penalty or which are being contested in good faith by
appropriate proceedings and reserves in conformity with GAAP have been provided
therefor, or if such Liens otherwise could not reasonably be expected to have a
Material Adverse Effect;

     (e)  Liens imposed by ERISA (or comparable foreign laws) which are being
contested in good faith by appropriate proceedings and reserves in conformity
with GAAP have been provided therefor, or if such Liens otherwise could not
reasonably be expected to have a Material Adverse Effect;

     (f)  Liens arising out of judgments or awards against the Borrower or any
of its Subsidiaries, or in connection with surety or appeal bonds or the like in
connection with bonding such judgments or awards, the time for appeal from which
or petition for rehearing of which shall not have expired or for which the
Borrower or such Subsidiary shall be prosecuting on appeal or proceeding for
review, and for which it shall have obtained (within thirty (30) days with
respect to a judgment or award rendered in the United States or within sixty
(60) days with respect to a judgment or award rendered in a foreign jurisdiction
after entry of such judgment or award or expiration of any previous such stay,
as applicable) a stay of execution or the like pending such appeal or proceeding
for review; provided, that the aggregate amount of uninsured or underinsured
liabilities (net of customary deductibles, and including interest, costs, fees
and penalties, if any) of the Borrower and its Subsidiaries secured by such
Liens shall not exceed $50,000,000 at any one time outstanding;

     (g)  Liens on fixed or capital assets and related inventory and intangible
assets acquired, constructed, improved, altered or repaired by the Borrower or
any Subsidiary; provided that (i) such Liens secure Indebtedness otherwise
permitted by this Agreement, (ii) such Liens and the Indebtedness secured
thereby are incurred prior to or within 365 days after such acquisition or the
later of the completion of such construction, improvement, alteration or repair
or the date of commercial operation of the assets constructed, improved, altered
or repaired, (iii) the Indebtedness secured thereby does not exceed the cost of
acquiring, constructing, improving, altering or repairing such fixed or capital
assets, as the case may be, and (iv) such Lien shall not apply to any other
property or assets of the Borrower or any Subsidiary;

     (h)  Liens securing Interest Rate Protection Agreements or foreign exchange
hedging obligations incurred in the ordinary course of business and not for
speculative purposes;

     (i)  Liens on property existing at the time such property is acquired by
the Borrower or any Subsidiary of the Borrower and not created in contemplation
of such acquisition (or on

                                       41
<PAGE>

repairs, renewals, replacements, additions, accessions and betterments thereto),
and Liens on the assets of any Person at the time such Person becomes a
Subsidiary of the Borrower and not created in contemplation of such Person
becoming a Subsidiary of the Borrower (or on repairs, renewals, replacements,
additions, accessions and betterments thereto;

     (j)  any extension, renewal or replacement (or successive extensions,
renewals or replacements) in whole or in part of any Lien referred to in the
foregoing subsections (a) through (i), provided, however, that the principal
amount of Indebtedness secured thereby does not exceed the principal amount
secured at the time of such extension, renewal or replacement (other than
amounts incurred to pay costs of such extension, renewal or replacement), and
that such extension, renewal or replacement is limited to the property already
subject to the Lien so extended, renewed or replaced (together with accessions
and improvements thereto and replacements thereof);

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

     (l)  rights reserved to or vested in any municipality or governmental,
statutory or public authority to control, regulate or use any property of a
Person;

     (m)  rights of a common owner of any interest in property held by a Person
and such common owner as tenants in common or through other common ownership;

     (n)  encumbrances (other than to secure the payment of Indebtedness),
easements, restrictions, servitudes, permits, conditions, covenants, exceptions
or reservations in any property or rights-of-way of a Person for the purpose of
roads, pipelines, transmission lines, transportation lines, distribution lines,
removal of gas, oil, coal, metals, steam, minerals, timber or other natural
resources, and other like purposes, or for the joint or common use of real
property, rights-of-way, facilities or equipment, or defects, irregularity and
deficiencies in title of any property or rights-of-way;

     (o)  Liens created by or resulting from zoning, planning and environmental
laws and ordinances and municipal regulations;

     (p)  Liens created by or resulting from financing statements filed by
lessors of property (but only with respect to the property so leased);

     (q)  Liens on property securing Non-recourse Debt;

     (r)  Liens on the stock or assets of SPVs; and

                                       42
<PAGE>

     (s)  Liens (not otherwise permitted by this Section 6.10) on property
securing Indebtedness (or other obligations) not exceeding $175,000,000 in the
aggregate at any time outstanding.

     Section 6.11.  Indebtedness.  The Borrower and its Subsidiaries shall not
                    ------------
incur, assume or suffer to exist any Indebtedness, except:

     (a)  existing Indebtedness outstanding on the Effective Date (such
Indebtedness, to the extent the principal amount thereof is $20,000,000 or more,
being described on Schedule 5.20 attached hereto), and any subsequent
                   -------------
extensions, renewals or refinancings thereof so long as such Indebtedness is not
increased in amount (other than amounts incurred to pay costs of such extension,
renewal or refinancing), the scheduled maturity date thereof (if prior to the
Maturity Date) is not accelerated, the interest rate per annum applicable
thereto is not increased, any scheduled amortization of principal thereunder
prior to the Maturity Date is not shortened and the payments thereunder are not
increased;

     (b)  Indebtedness under the Credit Documents;

     (c)  intercompany loans and advances to the Borrower or its Subsidiaries,
and intercompany loans and advances from any of such Subsidiaries or SPVs to the
Borrower or any other Subsidiaries of the Borrower;

     (d)  Indebtedness under any Interest Rate Protection Agreements and under
foreign exchange futures agreements, arrangements or options designed to protect
against fluctuations in currency exchange rates;

     (e)  Indebtedness of the Borrower that may be incurred, assumed or suffered
to exist without violating any section of this Agreement, including, without
limitation, Sections 6.16 and 6.17 hereof;

     (f)  Indebtedness of any Subsidiary of the Borrower (i) under unsecured
lines of credit for overdrafts or for working capital purposes in foreign
countries with financial institutions, and (ii) arising from the honoring by a
bank or other Person of a check, draft or similar instrument inadvertently
drawing against insufficient funds, all such Indebtedness not to exceed
$100,000,000 in the aggregate at any time outstanding, provided that amounts
under overdraft lines of credit or outstanding as a result of drawings against
insufficient funds shall be outstanding for one (1) Business Day before being
included in such aggregate amount;

     (g)  Indebtedness of a Person existing at the time such Person becomes a
Subsidiary of the Borrower or is merged with or into the Borrower or any
Subsidiary of the Borrower and not incurred in contemplation of such
transaction;

     (h)  Indebtedness of the Borrower or any Subsidiary of the Borrower (i)
under Performance Guaranties and Performance Letters of Credit, and (ii) with
respect to letters of credit issued in the ordinary course of business;

                                       43
<PAGE>

     (i)  Indebtedness of any Subsidiaries of the Borrower in an aggregate
principal amount for all Subsidiaries not to exceed an amount equal to ten
percent (10%) of Consolidated Net Assets (the "Subsidiary Debt Basket Amount")
in the aggregate at any time outstanding;

     (j)  other Indebtedness of any Subsidiary of the Borrower so long as such
Subsidiary has in force a Subsidiary Guaranty in substantially the form of
Exhibit 6.11, provided that such Subsidiary Guaranty shall contain a provision
------------
that such Subsidiary Guaranty and all obligations thereunder of the Guarantor
party thereto shall be terminated upon delivery to the Syndication Agent by the
Borrower of a certificate stating that (x) the aggregate principal amount of
Indebtedness of all Subsidiaries outstanding pursuant to the preceding clause
(i) and this clause (j) is equal to or less than the Subsidiary Debt Basket
Amount, and (y) no Default or Event of Default has occurred and is continuing;
and

     (k)  extensions, renewals or replacements of Indebtedness permitted by this
Section 6.11 that do not increase the amount of such Indebtedness (other than
amounts incurred to pay costs of such extension, renewal or refinancing).

     Section 6.12.  Use of Property and Facilities; Environmental Laws.  The
                    --------------------------------------------------
Borrower and its Subsidiaries shall comply in all material respects with all
Environmental Laws applicable to or affecting the properties or business
operations of the Borrower or any Subsidiary of the Borrower, where the failure
to comply could reasonably be expected to have a Material Adverse Effect.

     Section 6.13.  Transactions with Affiliates.  Except as otherwise
                    ----------------------------
specifically permitted herein, the Borrower and its Subsidiaries shall not
(except pursuant to contracts outstanding as of (i) with respect to the
Borrower, the Effective Date or (ii) with respect to any Subsidiary of the
Borrower, the Effective Date or, if later, the date such Subsidiary first became
a Subsidiary of the Borrower) enter into or engage in any material transaction
or arrangement or series of related transactions or arrangements which in the
aggregate would be material with any Controlling Affiliate, including without
limitation, the purchase from, sale to or exchange of property with, any merger
or consolidation with or into, or the rendering of any service by or for, any
Controlling Affiliate, except pursuant to the requirements of the Borrower's or
such Subsidiary's business and unless such transaction or arrangement or series
of related transactions or arrangements, taken as a whole, are no less favorable
to the Borrower or such Subsidiary (other than a wholly owned Subsidiary) than
would be obtained in an arms' length transaction with a Person not a Controlling
Affiliate.

     Section 6.14.  Sale and Leaseback Transactions.  The Borrower will not, and
                    -------------------------------
will not permit any of its Subsidiaries to, enter into, assume, or suffer to
exist any Sale-Leaseback Transaction, except any such transaction that may be
entered into, assumed or suffered to exist without violating any other provision
of this Agreement, including without limitation, Sections 6.16 and 6.17.

     Section 6.15.  Compliance with Laws.  Without limiting any of the other
                    --------------------
covenants of the Borrower in this Article 6, the Borrower and its Subsidiaries
shall conduct their business, and otherwise be, in compliance with all
applicable laws, regulations, ordinances and orders of any

                                       44
<PAGE>

governmental or judicial authorities; provided, however, that this Section 6.15
shall not require the Borrower or any Subsidiary of the Borrower to comply with
any such law, regulation, ordinance or order if (x) it shall be contesting such
law, regulation, ordinance or order in good faith by appropriate proceedings and
reserves in conformity with GAAP have been provided therefor, or (y) the failure
to comply therewith could not reasonably be expected to have a Material Adverse
Effect.

     Section 6.16.  Interest Coverage Ratio.  The Borrower will not permit the
                    -----------------------
Interest Coverage Ratio as of the end of any fiscal quarter of the Borrower to
be less than 3:00 to 1:00.

     Section 6.17.  Consolidated Indebtedness to Total Capitalization Ratio. The
                    -------------------------------------------------------
Borrower will maintain, as of the end of each fiscal quarter of the Borrower, a
ratio (expressed as a percentage) of Consolidated Indebtedness to Total
Capitalization of no greater than 40%.

ARTICLE 7.  EVENTS OF DEFAULT AND REMEDIES.

     Section 7.1.  Events of Default.  Any one or more of the following shall
                   -----------------
constitute an Event of Default:

     (a)  default by the Borrower in the payment of any principal amount of any
Loan, any interest thereon or any fees payable hereunder, within two (2)
Business Days following the date when due;

     (b)  default by the Borrower in the observance or performance of any
covenant set forth in Sections 6.9, 6.10, 6.16, or 6.17;

     (c)  default by the Borrower in the observance or performance of any
provision hereof or of any other Credit Document not mentioned in clauses (a) or
(b) above, which is not remedied within thirty (30) days after notice thereof to
the Borrower by the Syndication Agent;

     (d)  any representation or warranty made or deemed made herein or in any
other Credit Document by the Borrower or any Subsidiary proves untrue in any
material respect as of the date of the making, or deemed making, thereof;

     (e)  (x) Indedtedness in the aggregate principal amount of $50,000,000 of
the Borrower and its Subsidiaries ("Material Indebtedness") shall (i) not be
paid at maturity (beyond any applicable grace periods), or (ii) be declared to
be due and payable or required to be prepaid, redeemed or repurchased prior to
its stated maturity, or (y) any default in respect of Material Indedtedness
shall occur which permits the holders thereof, or any trustees or agents on
their behalf, to accelerate the maturity of such Indedtedness or requires such
Indedtedness to be prepaid, redeemed, or repurchased prior to its stated
maturity;

     (f)  the Borrower or any Significant Subsidiary (i) has entered
involuntarily against it an order for relief under the United States Bankruptcy
Code or a comparable action is taken under any bankruptcy or insolvency law of
another country or political subdivision of such

                                       45
<PAGE>

country, (ii) generally does not pay, or admits its inability generally to pay,
its debts as they become due, (iii) makes a general assignment for the benefit
of creditors, (iv) applies for, seeks, consents to, or acquiesces in, the
appointment of a receiver, custodian, trustee, liquidator or similar official
for it or any substantial part of its property under the Bankruptcy Code or
under the bankruptcy or insolvency laws of another country or a political
subdivision of such country, (v) institutes any proceeding seeking to have
entered against it an order for relief under the United States Bankruptcy Code
or any comparable law, to adjudicate it insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fails to file an answer or other pleading
denying the material allegations of or consents to or acquiesces in any such
proceeding filed against it, (vi) makes any board of directors resolution in
direct furtherance of any matter described in clauses (i)-(v) above, or (vii)
fails to contest in good faith any appointment or proceeding described in this
Section 7.1(f);

     (g)  a custodian, receiver, trustee, liquidator or similar official is
appointed for the Borrower or any Significant Subsidiary or any substantial part
of its property under the Bankruptcy Code or under the bankruptcy or insolvency
laws of another country or a political subdivision of such country, or a
proceeding described in Section 7.1(f)(v) is instituted against the Borrower or
any Significant Subsidiary, and such appointment continues undischarged or such
proceeding continues undismissed and unstayed for a period of sixty (60) days
(or one hundred twenty (120) days in the case of any such event occurring
outside the United States of America);

     (h)  the Borrower or any Subsidiaries of the Borrower fail within thirty
(30) days with respect to any judgments or orders that are rendered in the
United States or sixty (60) days with respect to any judgments or orders that
are rendered in foreign jurisdictions (or such earlier date as any execution on
such judgments or orders shall take place) to vacate, pay, bond or otherwise
discharge any judgments or orders for the payment of money the uninsured portion
of which is in excess of $50,000,000 in the aggregate and which are not stayed
on appeal or otherwise being appropriately contested in good faith in a manner
that stays execution;

     (i)  (x) the Borrower or any Subsidiary of the Borrower fails to pay when
due an amount that it is liable to pay to the PBGC or to a Plan under Title IV
of ERISA; or a notice of intent to terminate a Plan having Unfunded Vested
Liabilities of the Borrower or any of its Subsidiaries in excess of $30,000,000
(a "Material Plan") is filed under Title IV of ERISA; or the PBGC institutes
proceedings under Title IV of ERISA to terminate or to cause a trustee to be
appointed to administer any Material Plan or a proceeding is instituted by a
fiduciary of any Material Plan against any Borrower or any Subsidiary to collect
any liability under Section 515 or 4219(c)(5) of ERISA, and in each case such
proceeding is not dismissed within thirty (30) days thereafter; or a condition
exists by reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Material Plan must be terminated, and (y) the occurrence
of one or more of the matters in the preceding clause (x) could reasonably be
expected to have a Material Adverse Effect; or

     (j)  any Person or group of Persons acting in concert (as such terms are
used in Rule 13d-5 under the Securities Exchange Act of 1934, as amended) shall
own, directly or indirectly,

                                       46
<PAGE>

beneficially or of record, securities of the Borrower (or other securities
convertible into such securities) representing fifty percent (50%) or more of
the combined voting power of all outstanding securities of the Borrower entitled
to vote in the election of directors, other than securities having such power
only by reason of the happening of a contingency.

     Section 7.2.  Non-Bankruptcy Defaults.  When any Event of Default (other
                   -----------------------
than those described in subsections (f) or (g) of Section 7.1 with respect to
the Borrower) has occurred and is continuing, the Syndication Agent shall, by
notice to the Borrower: (a) if so directed by the Required Lenders, terminate
the remaining Commitments to the Borrower hereunder on the date stated in such
notice (which may be the date thereof); and (b) if so directed by the Required
Lenders, declare the principal of and the accrued interest on all outstanding
Loans to be forthwith due and payable and thereupon all outstanding Loans,
including both principal and interest thereon, shall be and become immediately
due and payable together with all other accrued amounts payable under the Credit
Documents without further demand, presentment, protest or notice of any kind,
including, but not limited to, notice of intent to accelerate and notice of
acceleration, each of which is expressly waived by the Borrower. The Syndication
Agent, after giving notice to the Borrower pursuant to this Section 7.2, shall
also promptly send a copy of such notice to the other Lenders, but the failure
to do so shall not impair or annul the effect of such notice.

     Section 7.3.  Bankruptcy Defaults.  When any Event of Default described in
                   -------------------
subsections (f) or (g) of Section 7.1 has occurred and is continuing with
respect to the Borrower, then all outstanding Loans shall immediately become due
and payable together with all other accrued amounts payable under the Credit
Documents without presentment, demand, protest or notice of any kind, each of
which is expressly waived by the Borrower; and all obligations of the Lenders to
extend further credit pursuant to any of the terms hereof shall immediately
terminate.

     Section 7.4.  Notice of Default.  The Syndication Agent shall give notice
                   -----------------
to the Borrower under Section 7.2 promptly upon being requested to do so by the
Required Lenders and shall thereupon notify all the Lenders thereof.

     Section 7.5.  Expenses.  The Borrower agrees to pay to the Syndication
                   --------
Agent and each Lender all reasonable out-of-pocket expenses incurred or paid by
the Syndication Agent or such Lender, including reasonable attorneys' fees and
court costs, in connection with any Default or Event of Default hereunder or in
connection with the enforcement of any of the Credit Documents.

     Section 7.6.  Distribution and Application of Proceeds.  After the
                   ----------------------------------------
occurrence of and during the continuance of an Event of Default, any payment to
the Syndication Agent or any Lender hereunder shall be paid to the Syndication
Agent to be distributed and applied as follows (unless otherwise agreed by the
Borrower, the Syndication Agent and all Lenders):

     (a)  First, to the payment of any and all reasonable out-of-pocket costs
and expenses of the Syndication Agent, including without limitation, reasonable
attorneys' fees and out-of-pocket costs and expenses, as provided by this
Agreement or by any other Credit Document, incurred in connection with the
collection of such payment or in respect of the enforcement of

                                       47
<PAGE>

any rights of the Syndication Agent or the Lenders under this Agreement or any
other Credit Document;

     (b)  Second, to the payment of any and all reasonable out-of-pocket costs
and expenses of the Lenders, including, without limitation, reasonable
attorneys' fees and out-of-pocket costs and expenses, as provided by this
Agreement or by any other Credit Document, incurred in connection with the
collection of such payment or in respect of the enforcement of any rights of the
Lenders under this Agreement or any other Credit Document, pro rata in the
proportion in which the amount of such costs and expenses unpaid to each Lender
bears to the aggregate amount of the costs and expenses unpaid to all Lenders
collectively, until all such fees, costs and expenses have been paid in full;

     (c)  Third, to the payment of any due and unpaid fees to the Syndication
Agent or any Lender as provided by this Agreement or any other Credit Document,
pro rata in the proportion in which the amount of such fees due and unpaid to
the Syndication Agent and each Lender bears to the aggregate amount of the fees
due and unpaid to the Syndication Agent and all Lenders collectively, until all
such fees have been paid in full;

     (d)  Fourth, to the payment of accrued and unpaid interest on the Loans to
the date of such application, pro rata in the proportion in which the amount of
such interest, accrued and unpaid to each Lender bears to the aggregate amount
of such interest accrued and unpaid to all Lenders collectively, until all such
accrued and unpaid interest has been paid in full;

     (e)  Fifth, to the payment of the outstanding due and payable principal
amount of each of the Loans pro rata in the proportion in which the outstanding
principal amount of such Loans owing to each Lender bears to the aggregate
amount of all outstanding Loans;

     (f)  Sixth, to the payment of any other outstanding Obligations then due
and payable, pro rata in the proportion in which the outstanding Obligations
owing to each Lender and Syndication Agent bears to the aggregate amount of all
such Obligations until all such Obligations have been paid in full; and

     (g)  Seventh, to the Borrower or as the Borrower may direct.

ARTICLE 8.  CHANGE IN CIRCUMSTANCES.

     Section 8.1.  Change of Law.
                   -------------

     (a)  Notwithstanding any other provisions of this Agreement or any Note, if
at any time any change, after the date hereof (or, if later, after the date the
Syndication Agent or any Lender becomes the Syndication Agent or a Lender), in
applicable law or regulation or in the interpretation thereof makes it unlawful
for any Lender to make or maintain Eurocurrency Loans, such Lender shall
promptly give written notice thereof and of the basis therefor in reasonable
detail to the Borrower, and such Lender's obligations to fund affected
Eurocurrency Loans or

                                       48
<PAGE>

make, continue or convert such Loans under this Agreement shall thereupon be
suspended until it is no longer unlawful for such Lender to make or maintain
such Loans.

     (b)  Upon the giving of the notice to Borrower referred to in subsection
(a) above in respect of any such Loan, (i) any outstanding such Loan of such
Lender shall be automatically converted to a Base Rate Loan in Dollars on the
last day of the Interest Period then applicable thereto or on such earlier date
as required by law, and (ii) such Lender shall make or continue its portion of
any requested Borrowing of such Loan as a Base Rate Loan in Dollars, which Base
Rate Loan shall, for all other purposes, be considered part of such Borrowing.

     (c)  Any Lender that has given any notice pursuant to Section 8.1(a) shall,
upon determining that it would no longer be unlawful for it to make such Loans,
give prompt written notice thereof to the Borrower and the Syndication Agent,
and upon giving such notice, its obligation to make, allow conversions into and
maintain such Loans shall be reinstated.

     Section 8.2.  Unavailability of Deposits or Inability to Ascertain LIBOR
                   ----------------------------------------------------------
Rate. If on or before the first day of any Interest Period for any Borrowing of
----
Eurocurrency Loans the Syndication Agent determines in good faith (after
consultation with the other Lenders) that, due to changes in circumstances since
the date hereof, adequate and fair means do not exist for determining the LIBOR
Rate or such rate will not accurately reflect the cost to the Required Lenders
of funding Eurocurrency Loans for such Interest Period, the Syndication Agent
shall give written notice (in reasonable detail) of such determination and of
the basis therefor to the Borrower and the Lenders, whereupon until the
Syndication Agent notifies the Borrower and Lenders that the circumstances
giving rise to such suspension no longer exist (which the Syndication Agent
shall do promptly after they do not exist), (i) the obligations of the Lenders
to make, continue or convert Loans as or into such Eurocurrency Loans, or to
convert Base Rate Loans into such Eurocurrency Loans, shall be suspended and
(ii) each Eurocurrency Loan will automatically on the last day of the then
existing Interest Period therefor, convert into a Base Rate Loan in Dollars.

     Section 8.3.  Increased Cost and Reduced Return.
                   ---------------------------------

     (a)  If, on or after the date hereof, the adoption of or any change in any
applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its Lending Office), with any request or directive (whether or
not having the force of law) of any such authority, central bank or comparable
agency exercising control over banks or financial institutions generally issued
after the date hereof (or, if later, after the date the Syndication Agent or
Lender becomes the Syndication Agent or Lender):

          (i)  subjects any Lender (or its Lending Office) to any tax, duty or
     other charge related to any Eurocurrency Loan or its obligation to advance
     or maintain Eurocurrency Loans or shall change the basis of taxation of
     payments to any Lender (or its Lending Office) of the principal of or
     interest on its Eurocurrency Loans or any participations in any thereof, or
     any other amounts due under this Agreement related to

                                       49
<PAGE>

     its Eurocurrency Loans or its obligation to make Eurocurrency Loans or
     acquire participations therein (except for changes with respect to taxes
     that are not Indemnified Taxes pursuant to Section 3.3); or

          (ii) imposes, modifies or deems applicable any reserve, special
     deposit or similar requirement (including, without limitation, any such
     requirement imposed by the Board of Governors of the Federal Reserve
     System, but excluding for any Eurocurrency Loan any such requirement
     included in an applicable Statutory Reserve Rate) against assets of,
     deposits with or for the account of, or credit extended by, any Lender (or
     its Lending Office) or imposes on any Lender (or its Lending Office) or on
     the interbank market any other condition affecting its Eurocurrency Loans
     or its participation in any thereof, or its obligation to advance or
     maintain Eurocurrency Loans or participate in any thereof;

and the result of any of the foregoing is to increase the cost to such Lender
(or its Lending Office) of advancing or maintaining any Eurocurrency Loan or
participating therein, or to reduce the amount of any sum received or receivable
by such Lender (or its Lending Office) in connection therewith under this
Agreement or its Note, by an amount deemed by such Lender to be material, then,
subject to Section 8.3(c), from time to time, within thirty (30) days after
receipt of a certificate from such Lender (with a copy to the Syndication Agent)
pursuant to subsection (c) below setting forth in reasonable detail such
determination and the basis thereof, the Borrower shall be obligated to pay to
such Lender such additional amount or amounts as will compensate such Lender for
such increased cost or reduction.

     (b)  If, after the date hereof, the Syndication Agent or any Lender shall
have reasonably determined that the adoption after the date hereof of any
applicable law, rule or regulation regarding capital adequacy, or any change
therein (including, without limitation, any revision in the Final Risk-Based
Capital Guidelines of the Board of Governors of the Federal Reserve System (12
CFR Part 208, Appendix A; 12 CFR Part 225, Appendix A) or of the Office of the
Comptroller of the Currency (12 CFR Part 3, Appendix A), or in any other
applicable capital adequacy rules heretofore adopted and issued by any
governmental authority), or any change after the date hereof in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by the Syndication Agent or any Lender (or its Lending
Office) with any request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on such
Lender's capital, or on the capital of any corporation controlling such Lender,
as a consequence of its obligations hereunder to a level below that which such
Lender could have achieved but for such adoption, change or compliance (taking
into consideration such Lender's or its controlling corporation's policies with
respect to capital adequacy in effect immediately before such adoption, change
or compliance) by an amount reasonably deemed by such Lender to be material,
then, subject to Section 8.3(c), from time to time, within thirty (30) days
after its receipt of a certificate from such Lender (with a copy to the
Syndication Agent) pursuant to subsection (c) below setting forth in reasonable
detail such determination and the basis thereof, the Borrower shall pay to such
Lender such additional amount or amounts as will

                                       50
<PAGE>

compensate such Lender for such reduction or the Borrower may prepay all
Eurocurrency Loans of such Lender.

     (c)  The Syndication Agent and each Lender that determines to seek
compensation or additional interest under this Section 8.3 shall give written
notice to the Borrower and, in the case of a Lender other than the Syndication
Agent, the Syndication Agent of the circumstances that entitle the Syndication
Agent or such Lender to such compensation no later than ninety (90) days after
the Syndication Agent or such Lender receives actual notice or obtains actual
knowledge of the law, rule, order or interpretation or occurrence of another
event giving rise to a claim hereunder. In any event the Borrower shall not have
any obligation to pay any amount with respect to claims accruing prior to the
ninetieth day preceding such written demand. The Syndication Agent and each
Lender shall use reasonable efforts to avoid the need for, or reduce the amount
of, such compensation, additional interest, and any payment under Section 3.3,
including, without limitation, the designation of a different Lending Office, if
such action or designation will not, in the sole judgment of the Syndication
Agent or such Lender made in good faith, be otherwise disadvantageous to it;
provided that the foregoing shall not in any way affect the rights of any Lender
or the obligations of the Borrower under this Section 8.3, and provided further
that no Lender shall be obligated to make its Eurocurrency Loans hereunder at
any office located in the United States of America. A certificate of the
Syndication Agent or any Lender, as applicable, claiming compensation or
additional interest under this Section 8.3, and setting forth the additional
amount or amounts to be paid to it hereunder and accompanied by a statement
prepared by the Syndication Agent or such Lender, as applicable, describing in
reasonable detail the calculations thereof shall be prima facie evidence of the
correctness thereof. In determining such amount, such Lender may use any
reasonable averaging and attribution methods.

     Section 8.4.  Lending Offices.  The Syndication Agent and each Lender may,
                   ---------------
at its option, elect to make or maintain its Loans hereunder at the Lending
Office for each type of Loan available hereunder or at such other of its
branches, offices or affiliates as it may from time to time elect and designate
in a written notice to the Borrower and the Syndication Agent, provided that,
except in the case of any such transfer to another of its branches, offices or
affiliates made at the request of the Borrower, the Borrower shall not be
responsible for the costs arising under Section 3.3 or 8.3 resulting from any
such transfer to the extent not otherwise applicable to such Lender prior to
such transfer.

     Section 8.5.  Discretion of Lender as to Manner of Funding.  Subject to the
                   --------------------------------------------
other provisions of this Agreement, each Lender shall be entitled to fund and
maintain its funding of all or any part of its Loans in any manner it sees fit.

     Section 8.6.  Substitution of Lender.  If (a) any Lender has demanded
                   ----------------------
compensation or additional interest or given notice of its intention to demand
compensation or additional interest under Section 8.3, (b) the Borrower is
required to pay any additional amount to any Lender under Section 2.11, (c) any
Lender is unable to submit any form or certificate required under Section 3.3(b)
or withdraws or cancels any previously submitted form with no substitution
therefor, (d) any Lender gives notice of any change in law or regulations, or in
the interpretation thereof, pursuant to Section 8.1, (e) any Lender has been
declared insolvent or a receiver or conservator has been appointed for a
material portion of its assets, business or properties or (f) any Lender

                                       51
<PAGE>

shall seek to avoid its obligation to make or maintain Loans hereunder for any
reason, including, without limitation, reliance upon 12 U.S.C. (S) 1821(e) or
(n) (1) (B), (g) any taxes referred to in Section 3.3 have been levied or
imposed (or the Borrower determines in good faith that there is a substantial
likelihood that such taxes will be levied or imposed) so as to require
withholding or deductions by the Borrower or payment by the Borrower of
additional amounts to any Lender, or other reimbursement or indemnification of
any Lender, as a result thereof, or (h) any Lender shall decline to consent to a
modification or waiver of the terms of this Agreement or any other Credit
Documents requested by the Borrower, then and in such event, upon request from
the Borrower delivered to such Lender and the Syndication Agent, such Lender
shall assign, in accordance with the provisions of Section 10.10 and an
appropriately completed Assignment Agreement, all of its rights and obligations
under the Credit Documents to another Lender or a commercial banking institution
selected by the Borrower and (in the case of a commercial banking institution)
reasonably satisfactory to the Syndication Agent, in consideration for the
payments set forth in such Assignment Agreement and payment by the Borrower to
such Lender of all other amounts which such Lender may be owed pursuant to this
Agreement, including, without limitation, Sections 2.11, 3.3, 8.3 and 10.13.

ARTICLE 9.  THE AGENTS, ARRANGERS AND BOOK RUNNERS.

     Section 9.1.  Appointment and Authorization of Syndication Agent,
                   ---------------------------------------------------
Administrative Agent, Documentation Agent, Senior Managing Agent, Joint Lead
----------------------------------------------------------------------------
Arrangers, and Joint Book Runners. Each Lender hereby appoints STB as the
---------------------------------
Syndication Agent, ABN AMRO Bank, N.V. as the Administrative Agent, Wells Fargo
Bank Texas, National Association, as the Documentation Agent, Bank of America,
N.A., as Senior Managing Agent, and Goldman Sachs Credit Partners L.P. and ABN
AMRO Bank, N.V., as the Joint Lead Arrangers and Joint Book Runners, under the
Credit Documents and hereby authorizes the Syndication Agent, the Administrative
Agent, the Documentation Agent, the Senior Managing Agent, and Joint Lead
Arrangers and Joint Book Runners to take such action as Syndication Agent,
Administrative Agent, Documentation Agent, Senior Managing Agent, and Joint Lead
Arrangers and Joint Book Runners on each of its behalf and to exercise such
powers under the Credit Documents as are delegated to the Syndication Agent, the
Administrative Agent, the Documentation Agent, the Senior Managing Agent, and
Joint Lead Arrangers and Joint Book Runners, respectively, by the terms thereof,
together with such powers as are reasonably incidental thereto.

     Section 9.2.  Rights and Powers.  The Syndication Agent, the Administrative
                   -----------------
Agent, the Documentation Agent, the Senior Managing Agent, and Joint Lead
Arrangers and Joint Book Runners shall have the same rights and powers under the
Credit Documents as any other Lender and may exercise or refrain from exercising
such rights and power as though it were not a Syndication Agent, an
Administrative Agent, a Documentation Agent, a Senior Managing Agent, or a Joint
Lead Arranger or Joint Book Runner, and the Syndication Agent, the
Administrative Agent, the Documentation Agent, the Senior Managing Agent, and
Joint Lead Arrangers and Joint Book Runners and their respective Controlling
Affiliates may accept deposits from, lend money to, and generally engage in any
kind of business with the Borrower or any of its Subsidiaries or Controlling
Affiliates as if it were not a Syndication Agent, an Administrative Agent, a
Documentation Agent, a Senior Managing Agent, or a Joint Lead Arranger or Joint

                                       52
<PAGE>

Book Runner, under the Credit Documents.  The term Lender as used in all Credit
Documents, unless the context otherwise clearly requires, includes the
Syndication Agent, the Administrative Agent, the Documentation Agent, the Senior
Managing Agent, and Joint Lead Arrangers and Joint Book Runners in their
respective individual capacities as a Lender.

     Section 9.3.  Action by Syndication Agent, Administrative Agent,
                   --------------------------------------------------
Documentation Agent, Senior Managing Agent, Joint Lead Arrangers and Joint Book
-------------------------------------------------------------------------------
Runners. The obligations of the Syndication Agent, the Administrative Agent, the
--------
Documentation Agent, the Senior Managing Agent, and Joint Lead Arrangers and
Joint Book Runners under the Credit Documents are only those expressly set forth
therein. Without limiting the generality of the foregoing, the Syndication Agent
shall not be required to take any action concerning any Default or Event of
Default, except as expressly provided in Sections 7.2. Unless and until the
Required Lenders (or, if required by Section 10.11, all of the Lenders) give
such direction the Syndication Agent may, except as otherwise expressly provided
herein or therein, take or refrain from taking such actions as it deems
appropriate and in the best interest of all the Lenders. In no event, however,
shall the Syndication Agent, the Administrative Agent, the Documentation Agent,
the Senior Managing Agent, or any Joint Lead Arranger or Joint Book Runner be
required to take any action in violation of applicable law or of any provision
of any Credit Document, and each of the Syndication Agent, the Administrative
Agent, the Documentation Agent, the Senior Managing Agent, and the Joint Lead
Arrangers and Joint Book Runners shall in all cases be fully justified in
failing or refusing to act hereunder or under any other Credit Document unless
it first receives any further assurances of its indemnification from the Lenders
that it may require, including prepayment of any related expenses and any other
protection it requires against any and all costs, expenses, and liabilities it
may incur in taking or continuing to take any such action.  The Syndication
Agent shall be entitled to assume that no Default or Event of Default, other
than non-payment of any scheduled principal or interest payment due hereunder,
exists unless notified in writing to the contrary by a Lender or the Borrower.
In all cases in which the Credit Documents do not require the Syndication Agent,
the Administrative Agent, the Documentation Agent, the Senior Managing Agent, or
any Joint Lead Arranger or Joint Book Runner to take specific action, the
Syndication Agent, each of the Administrative Agent, the Documentation Agent,
the Senior Managing Agent, and the Joint Lead Arrangers and Joint Book Runners
shall be fully justified in using its discretion in failing to take or in taking
any action thereunder.  Any instructions of the Required Lenders, or of any
other group of Lenders called for under specific provisions of the Credit
Documents, shall be binding on all the Lenders and holders of Notes.

     Section 9.4.  Consultation with Experts.  Each of the Syndication Agent,
                   -------------------------
the Administrative Agent, the Documentation Agent, the Senior Managing Agent,
and the Joint Lead Arrangers and Joint Book Runners may consult with legal
counsel, independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts.

     Section 9.5.  Indemnification Provisions; Credit Decision.  Neither the
                   -------------------------------------------
Syndication Agent, the Administrative Agent, the Documentation Agent, the Senior
Managing Agent, the Joint Lead Arrangers, the Joint Book Runners, nor any of
their directors, officers, agents, or employees shall be liable for any action
taken or not taken by them in connection with the Credit

                                       53
<PAGE>

Documents (i) with the consent or at the request of the Required Lenders (or, if
required by Section 10.11, all of the Lenders), or (ii) in the absence of their
own gross negligence or willful misconduct. Neither the Syndication Agent, the
Administrative Agent, the Documentation Agent, the Senior Managing Agent, the
Joint Lead Arrangers, the Joint Book Runners, nor any of their directors,
officers, agents or employees shall be responsible for or have any duty to
ascertain, inquire into or verify (i) any statement, warranty or representation
made in connection with this Agreement, any other Credit Document or any
Borrowing; (ii) the performance or observance of any of the covenants or
agreements of the Borrower or any Subsidiary contained herein or in any other
Credit Document; (iii) the satisfaction of any condition specified in Article 4,
except receipt of items required to be delivered to the Syndication Agent; or
(iv) the validity, effectiveness, genuineness, enforceability, value, worth or
collectability hereof or of any other Credit Document or of any other documents
or writings furnished in connection with any Credit Document; and the
Syndication Agent, the Administrative Agent, the Documentation Agent, the Senior
Managing Agent, and the Joint Lead Arrangers and Joint Book Runners make no
representation of any kind or character with respect to any such matters
mentioned in this sentence. The Syndication Agent, the Administrative Agent, the
Documentation Agent, the Senior Managing Agent, and the Joint Lead Arrangers and
Joint Book Runners may execute any of their duties under any of the Credit
Documents by or through employees, agents, and attorneys-in-fact and shall not
be answerable to the Lenders or any other Person for the default or misconduct
of any such agents or attorneys-in-fact selected with reasonable care. The
Syndication Agent, the Administrative Agent, the Documentation Agent, the Senior
Managing Agent, the Joint Lead Arrangers and the Joint Book Runners shall not
incur any liability by acting in reliance upon any notice, consent, certificate,
other document or statement (whether written or oral) believed by it to be
genuine or to be sent by the proper party or parties. In particular and without
limiting any of the foregoing, the Syndication Agent and the Documentation Agent
shall have no responsibility for confirming the accuracy of any Compliance
Certificate or other document or instrument received by any of them under the
Credit Documents. The Syndication Agent, the Administrative Agent, the
Documentation Agent, the Senior Managing Agent, the Joint Lead Arrangers and the
Joint Book Runners may treat the payee of any Note as the holder thereof until
written notice of transfer shall have been filed with such Syndication Agent
signed by such owner in form satisfactory to such Syndication Agent. Each Lender
acknowledges that it has independently, and without reliance on the Syndication
Agent, the Administrative Agent, the Documentation Agent, the Senior Managing
Agent, any Joint Lead Arranger or Joint Book Runner, or any other Lender,
obtained such information and made such investigations and inquiries regarding
the Borrower and its Subsidiaries as it deems appropriate, and based upon such
information, investigations and inquiries, made its own credit analysis and
decision to extend credit to the Borrower in the manner set forth in the Credit
Documents. It shall be the responsibility of each Lender to keep itself informed
about the creditworthiness and business, properties, assets, liabilities,
condition (financial or otherwise) and prospects of the Borrower and its
Subsidiaries, and the Syndication Agent, the Administrative Agent, the
Documentation Agent, the Senior Managing Agent, the Joint Lead Arrangers and the
Joint Book Runners shall have no liability whatsoever to any Lender for such
matters. The Syndication Agent, the Administrative Agent, the Documentation
Agent, the Senior Managing Agent, the Joint Lead Arrangers and the Joint Book
Runners shall have no duty to disclose to the Lenders information that is not
required by any Credit Document to be furnished by the Borrower or any
Subsidiaries to such Person at such time, but is

                                       54
<PAGE>

voluntarily furnished to such Person (either in their respective
capacities as Syndication Agent, the Administrative Agent, the Documentation
Agent, the Senior Managing Agent, the Joint Lead Arrangers or the Joint Book
Runners, or in their individual capacities).

     Section 9.6.  Indemnity.  The Lenders shall ratably, in accordance with
                   ---------
their Percentages, indemnify and hold the Syndication Agent, the Administrative
Agent, the Documentation Agent, the Senior Managing Agent, the Joint Lead
Arrangers and the Joint Book Runners, and their directors, officers, employees,
agents and representatives harmless from and against any liabilities, losses,
costs or expenses suffered or incurred by it under any Credit Document or in
connection with the transactions contemplated thereby, regardless of when
asserted or arising, except to the extent they are promptly reimbursed for the
same by the Borrower and except to the extent that any event giving rise to a
claim was caused by the gross negligence or willful misconduct of the party
seeking to be indemnified. The obligations of the Lenders under this Section 9.6
shall survive termination of this Agreement.

     Section 9.7.  Resignation of Agents, Arrangers, Book Runners and
                   --------------------------------------------------
Successors. The Syndication Agent, the Administrative Agent, the Documentation
----------
Agent, the Senior Managing Agent, the Joint Lead Arrangers and the Joint Book
Runners may resign at any time and shall resign upon any removal thereof as a
Lender pursuant to the terms of this Agreement upon at least thirty (30) days'
prior written notice to the Lenders and the Borrower. Any resignation of the
Syndication Agent shall not be effective until a replacement therefor is
appointed pursuant to the terms hereof. Upon any such resignation of the
Syndication Agent, the Administrative Agent, the Documentation Agent, the Senior
Managing Agent, or Joint Lead Arranger or Joint Book Runner, the Required
Lenders and, so long as no Event of Default shall then exist, with the consent
of the Borrower (which consent shall not be unreasonably withheld or delayed)
shall have the right to appoint a successor Syndication Agent, Administrative
Agent, Documentation Agent, Senior Managing Agent, or Joint Lead Arranger or
Joint Book Runner, as the case may be. If no successor Syndication Agent,
Administrative Agent, Documentation Agent, Senior Managing Agent, or Joint Lead
Arranger or Joint Book Runner, as the case may be, shall have been so appointed
by the Required Lenders and shall have accepted such appointment within thirty
(30) days after the retiring Syndication Agent's, Administrative Agent's, Senior
Managing Agent's, Documentation Agent's, or Joint Lead Arranger's or Joint Book
Runner's giving of notice of resignation, then the retiring Syndication Agent,
Administrative Agent, Documentation Agent, Senior Managing Agent, or Joint Lead
Arranger or Joint Book Runner, as the case may be, may, on behalf of the Lenders
and, so long as no Event of Default shall then exist, with the consent of the
Borrower (which consent shall not be unreasonably withheld or delayed) appoint a
successor Syndication Agent, Administrative Agent, Documentation Agent, Senior
Managing Agent, or Joint Lead Arranger or Joint Book Runner, as the case may be,
which shall be any Lender hereunder or any commercial bank organized under the
laws of the United States of America or of any State thereof and having a
combined capital and surplus of at least $1,000,000,000. Upon the acceptance of
its appointment as the Syndication Agent, the Administrative Agent, the
Documentation Agent, the Senior Managing Agent, or Joint Lead Arranger or Joint
Book Runner hereunder, such successor Syndication Agent, Administrative Agent,
Documentation Agent, Senior Managing Agent, or Joint Lead Arranger or Joint Book
Runner, as the case may be, shall thereupon succeed to and become vested with
all the rights and duties of the retiring Syndication Agent, Administrative
Agent, Documentation Agent, Senior

                                       55
<PAGE>

Managing Agent, or Joint Lead Arranger or Joint Book Runner hereunder, such
successor Syndication Agent, Administrative Agent, Documentation Agent, Senior
Managing Agent, or Joint Lead Arranger or Joint Book Runner, as the case may be,
shall thereupon succeed to and become vested with all the rights and duties of
the retiring Syndication Agent, Administrative Agent, Documentation Agent,
Senior Managing Agent, or Joint Lead Arranger or Joint Book Runner, as the case
may be, under the Credit Documents, and the retiring Syndication Agent,
Administrative Agent, Documentation Agent, the Senior Managing Agent, or Joint
Lead Arranger or Joint Book Runner shall be discharged from its duties and
obligations thereunder. After any retiring Syndication Agent's, Administrative
Agent's, Documentation Agent's, Senior Managing Agent's, or Joint Lead
Arranger's or Joint Book Runner's resignation hereunder as Syndication Agent,
Administrative Agent, Documentation Agent, Senior Managing Agent, or Joint Lead
Arranger or Joint Book Runner, as the case may be, the provisions of this
Article 9 and all protective provisions of the other Credit Documents shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Syndication Agent, Administrative Agent, Documentation Agent, Senior
Managing Agent, or Joint Lead Arranger or Joint Book Runner, as the case may be.

ARTICLE 10.    MISCELLANEOUS.

     Section 10.1. No Waiver.  No delay or failure on the part of the
                   ---------
Syndication Agent or any Lender, or on the part of the holder or holders of any
Notes, in the exercise of any power, right or remedy under any Credit Document
shall operate as a waiver thereof or as an acquiescence in any default, nor
shall any single or partial exercise thereof preclude any other or further
exercise of any other power, right or remedy. To the fullest extent permitted by
applicable law, the powers, rights and remedies under the Credit Documents of
the Syndication Agent, the Lenders, and the holder or holders of any Notes are
cumulative to, and not exclusive of, any powers, rights or remedies any of them
would otherwise have.

     Section 10.2. Non-Business Day.  Subject to Section 2.4, if any payment of
                   ----------------
principal or interest on any portion of any Loan or any other Obligation shall
fall due on a day which is not a Business Day, interest or fees (as applicable)
at the rate, if any, such portion of any Loan or other Obligation bears for the
period prior to maturity shall continue to accrue in the manner set forth herein
on such Obligation from the stated due date thereof to the next succeeding
Business Day, on which the same shall instead be payable.

     Section 10.3. Documentary Taxes. The Borrower agrees that it will pay any
                   -----------------
documentary, stamp or similar taxes payable with respect to any Credit Document,
including interest and penalties, in the event any such taxes are assessed
irrespective of when such assessment is made, other than any such taxes imposed
as a result of any transfer of an interest in a Credit Document. Each Lender
that determines to seek compensation under this Section 10.3 shall give written
notice to the Borrower and, in the case of a Lender other than the Syndication
Agent, the Syndication Agent of the circumstances that entitle such Lender to
such compensation no later than ninety (90) days after such Lender receives
actual notice or obtains actual knowledge of the law, rule, order or
interpretation or occurrence of another event giving rise to a claim hereunder.
In any event, the Borrower shall not have any obligation to pay any amount with
respect to claims accruing prior to the 90th day preceding such written demand.

     Section 10.4. Survival of Representations.  All representations and
                   ---------------------------
warranties made herein or in certificates given pursuant hereto shall survive
the execution and delivery of this Agreement and the other Credit Documents, and
shall continue in full force and effect with

                                       56
<PAGE>

respect to the date as of which they were made as long as the Borrower has any
Obligation hereunder or any Commitment hereunder is in effect.

     Section 10.5. Survival of Indemnities.  All indemnities and all provisions
                   -----------------------
relative to reimbursement to the Lenders of amounts sufficient to protect the
yield of the Lenders with respect to the Loans, including, but not limited to,
Section 2.11, Section 3.3, Section 7.5, Section 8.3, Section 10.3, and Section
10.13 hereof, shall, subject to Section 8.3(c), survive the termination of this
Agreement and the other Credit Documents and the payment of the Loans and all
other Obligations and, with respect to any Lender, any replacement by the
Borrower of such Lender pursuant to the terms hereof, in each case for a period
of one (1) year.

     Section 10.6. Setoff.  In addition to any rights now or hereafter granted
                   ------
under applicable law and not by way of limitation of any such rights, upon the
occurrence of, and throughout the continuance of, any Event of Default, each
Lender and each subsequent holder of any Note is hereby authorized by the
Borrower at any time or from time to time, without notice to the Borrower or any
other Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all deposits (general or special, including,
but not limited to, Indebtedness evidenced by certificates of deposit, whether
matured or unmatured, but not including trust accounts, and in whatever currency
denominated) and any other Indebtedness at any time owing by that Lender or that
subsequent holder to or for the credit or the account of the Borrower, whether
or not matured, against and on account of the due and unpaid obligations and
liabilities of the Borrower to that Lender or that subsequent holder under the
Credit Documents, irrespective of whether or not that Lender or that subsequent
holder shall have made any demand hereunder.  Each Lender shall promptly give
notice to the Borrower of any action taken by it under this Section 10.6,
provided that any failure of such Lender to give such notice to the Borrower
shall not affect the validity of such setoff.  Each Lender agrees with each
other Lender a party hereto that if such Lender receives and retains any
payment, whether by setoff or application of deposit balances or otherwise, in
respect of the Loans in excess of its ratable share of payments on all such
Obligations then owed to the Lenders hereunder, then such Lender shall purchase
for cash at face value, but without recourse, ratably from each of the other
Lenders such amount of the Loans and participations therein held by each such
other Lender as shall be necessary to cause such Lender to share such excess
payment ratably with all the other Lenders; provided, however, that if any such
purchase is made by any Lender, and if such excess payment or part thereof is
thereafter recovered from such purchasing Lender, the related purchases from the
other Lenders shall be rescinded ratably and the purchase price restored as to
the portion of such excess payment so recovered, but without interest.

     Section 10.7. Notices.  Except as otherwise specified herein, all notices
                   -------
under the Credit Documents shall be in writing (including cable, telecopy or
telex) and shall be given to a party hereunder at its address, telecopier number
or telex number set forth below or such other address, telecopier number or
telex number as such party may hereafter specify by notice to the Syndication
Agent and the Borrower, given by courier, by United States certified or
registered mail, by telegram or by other telecommunication device capable of
creating a written record of such notice and its receipt.  Notices under the
Credit Documents to the Lenders and the Syndication Agent shall be addressed to
their respective addresses, telecopier or telex number, or telephone numbers set
forth on the signature pages hereof, and to the Borrower to:

                                       57
<PAGE>

                    Transocean Sedco Forex Inc.
                    4 Greenway Plaza
                    Houston, Texas 77046
                    Attention:  Brian C. Voegele
                    Telephone No.:  (713) 232-7587
                    Fax No.:  (713) 232-7033

With a copy to:
                    Baker Botts LLP
                    One Shell Plaza
                    Houston, Texas  77002-4995
                    Attention:  Stephen Krebs
                    Telephone No. (713) 229-1467
                    Fax No.:  (713) 229-1522

Each such notice, request or other communication shall be effective (i) if given
by telecopier, when such telecopy is transmitted to the telecopier number
specified in this Section 10.7, on the signature pages hereof or pursuant to
Section 10.10 and a confirmation of receipt of such telecopy has been received
by the sender, (ii) if given by courier, when delivered, (iii) if given by mail,
five (5) days after such communication is deposited in the mail, certified or
registered with return receipt requested, or (iv) if given by any other means,
when delivered at the addresses specified in this Section 10.7, on the signature
pages hereof or pursuant to Section 10.10; provided that any notice given
pursuant to Article 2 shall be effective only upon receipt and, provided
further, that any notice that but for this proviso would be effective after the
close of business on a Business Day or on a day that is not a Business Day shall
be effective at the opening of business on the next Business Day.

     Section 10.8. Counterparts. This Agreement may be executed in any number of
                   ------------
counterparts, and by the different parties on different counterpart signature
pages, each of which when executed shall be deemed an original, but all such
counterparts taken together shall constitute one and the same Agreement.

     Section 10.9. Successors and Assigns.  This Agreement shall be binding upon
                   ----------------------
the Borrower, each of the Lenders, the Syndication Agent, the Administrative
Agent, the Documentation Agent, the Senior Managing Agent, the Joint Lead
Arrangers, and the Joint Book Runners, and their respective successors and
assigns, and shall inure to the benefit of the Borrower, each of the Lenders,
the Syndication Agent, the Administrative Agent, the Documentation Agent, the
Senior Managing Agent, the Joint Lead Arrangers, and the Joint Book Runners, and
their respective successors and assigns, including any subsequent holder of any
Note; provided, however, (i) the Borrower may not assign any of its rights or
obligations under this Agreement or any other Credit Document without the
written consent of all Lenders, the Syndication Agent, the Administrative Agent,
the Documentation Agent, the Senior Managing Agent, the Joint Lead Arrangers,
and the Joint Book Runners, (ii) the Syndication Agent, the Administrative
Agent, the Documentation Agent, the Senior Managing Agent, the Joint Lead

                                       58
<PAGE>

Arrangers, and the Joint Book Runners may not assign any of their respective
rights or obligations under this Agreement or any Credit Document except in
accordance with Article 9, and (iii) no Lender or may assign any of its rights
or obligations under this Agreement or any other Credit Document except in
accordance with Section 10.10.  Any Lender may at any time pledge or assign all
or any portion of its rights under this Agreement and the Notes issued to it (i)
to a Federal Reserve Bank to secure extensions of credit by such Federal Reserve
Bank to such Lender, or (ii) in the case of any Lender that is a fund comprised
in whole or in part of commercial loans, to a trustee for such fund in support
of such Lender's obligations to such trustee; provided that no such pledge or
assignment shall release a Lender from any of its obligations hereunder or
substitute any such Federal Reserve Bank or such trustee for such Lender as a
party hereto and the Borrower, the Syndication Agent and the other Lenders shall
continue to deal solely with such Lender in connection with the rights and
obligations of such Lender under this Agreement.

     Section 10.10. Sales and Transfers of Borrowing and Notes; Participations
                    ----------------------------------------------------------
in Borrowings and Notes.
-----------------------

     (a)  Any Lender may, upon written notice to the Borrower, at any time sell
to one or more commercial banking or other financial or lending institutions
("Participants") participating interests in any Commitment and Loans of such
Lender hereunder, provided that no Lender may sell any participating interests
in any such Commitment or such Loans hereunder without also selling to such
Participant the appropriate pro rata share of all such Lender's Commitment and
Loans hereunder, and provided further that no Lender shall transfer, grant or
assign any participation under which the Participant shall have rights to vote
upon or to consent to any matter to be decided by the Lenders or the Required
Lenders hereunder or under any other Credit Document or to approve any amendment
to or waiver of this Agreement or any other Credit Document except to the extent
such amendment or waiver would (i) increase the amount of such Lender's
Commitment and such increase would affect such Participant, (ii) reduce the
principal of, or interest on, any of such Lender's Borrowings, or any fees or
other amounts payable to such Lender hereunder and such reduction would affect
such Participant, (iii) postpone any date fixed for any scheduled payment of
principal of, or interest on, any of such Lender's Borrowings, or any fees or
other amounts payable to such Lender hereunder and such postponement would
affect such Participant, or (iv) release any collateral security for any
Obligation, except as otherwise specifically provided in any Credit Document. In
the event of any such sale by a Lender of participating interests to a
Participant, such Lender's obligations under this Agreement to the other parties
to this Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the holder of
any such Note for all purposes under this Agreement, the Borrower and the
Syndication Agent shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement and
such Lender shall retain the sole right to enforce the obligations of the
Borrower under any Credit Document. The Borrower agrees that if amounts
outstanding under this Agreement and the Notes shall have been declared or shall
have become due and payable in accordance with Section 7.2 or 7.3 upon the
occurrence of an Event of Default, each Participant shall be deemed to have the
right of setoff in respect of its participating interest in amounts owing under
this Agreement and any Note to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement or any Note, provided that

                                       59
<PAGE>

such right of setoff shall be subject to the obligation of such Participant to
share with the Lenders, and the Lenders agree to share with such Participant, as
provided in Section 10.6. The Borrower also agrees that each Participant shall
be entitled to the benefits of Sections 2.11, 3.3 and 8.3 with respect to its
participation in the Commitments and the Borrowings outstanding from time to
time, provided that no Participant shall be entitled to receive any greater
amount pursuant to such Sections than the transferor Lender would have been
entitled to receive in respect of the amount of the participation transferred if
no participation had been transferred and provided, further, that Sections
8.3(c) and 8.6 shall apply to the transferor Lender with respect to any claim by
any Participant pursuant to Section 2.11, 3.3 or 8.3 as fully as if such claim
was made by such Lender. Anything herein to the contrary notwithstanding, the
Borrower shall not, at any time, be obligated to pay to any Lender any sum in
excess of the sum the Borrower would have been obligated to pay to such Lender
hereunder if such Lender had not sold any participation in its rights and
obligations under this Agree ment or any other Credit Document.

     (b)  Any Lender may at any time sell to (i) any of such Lender's affiliates
or to any other Lender or any affiliate thereof that is a commercial banking or
other financial or lending institution not subject to Regulation T of the Board
of Governors of the Federal Reserve System and, (ii) upon written notice to the
Syndication Agent and the Borrower, one or more commercial banking or other
financial or lending institutions not subject to Regulation T of the Board of
Governors of the Federal Reserve System (any of (i) or (ii), a "Purchasing
Lender"), all or any part of its rights and obligations under this Agreement and
the other Credit Documents, pursuant to an Assignment Agreement in the form
attached as Exhibit 10.10, executed by such Purchasing Lender and such
            -------------
transferor Lender and delivered to the Syndication Agent; provided that each
such sale to a Purchasing Lender shall be in an amount of $1,000,000 (calculated
as hereinafter set forth) or more, or if in a lesser amount or if as a result of
such sale the sum of the unfunded Commitment of such Lender plus the aggregate
principal amount of such Lender's Loans would be less than an amount of
$1,000,000 (calculated as hereinafter set forth), such sale shall be of all of
such Lender's rights and obligations under this Agreement and all of the other
Credit Documents payable to it to one Purchasing Lender. No Lender may sell or
assign any portion of its Commitment and Loans to a Purchasing Lender without
also selling to such Purchasing Lender the appropriate pro rata share of all
such Lender's Commitment and Loans hereunder. Upon such execution and delivery,
from and after the effective date of the transfer determined pursuant to such
Assignment Agreement, (x) the Purchasing Lender thereunder shall be a party
hereto and, to the extent provided in such Assignment Agreement, have the rights
and obligations of a Lender hereunder with a Commitment as set forth herein and
(y) the transferor Lender thereunder shall, to the extent provided in such
Assignment Agreement, be released from its obligations under this Agreement
(and, in the case of an Assignment Agreement covering all or the remaining
portion of a transferor Lender's rights and obligations under this Agreement,
such transferor Lender shall cease to be a party hereto). Such Assignment
Agreement shall be deemed to amend this Agreement to the extent, and only to the
extent, necessary to reflect the addition of such Purchasing Lender and the
resulting adjustment of Commitments and Percentages arising from the purchase by
such Purchasing Lender of all or a portion of the rights and obligations of such
transferor Lender under this Agreement, the Notes and the other Credit
Documents. On or prior to the effective date of the transfer determined pursuant
to such Assignment Agreement, the Borrower, at its own expense, shall execute
and deliver to the Syndication Agent in exchange for any surrendered Note, a new
Note as appropriate to the order

                                       60
<PAGE>

of such Purchasing Lender in an amount equal to the Commitments assumed by it
pursuant to such Assignment Agreement, and, if the transferor Lender has
retained a Commitment or Borrowing hereunder, a new Note to the order of the
transferor Lender in an amount equal to the Commitments or Borrowings retained
by it hereunder. Such new Notes shall be dated the Effective Date and shall
otherwise be in the form of the Notes replaced thereby. The Notes surrendered by
the transferor Lender shall be returned by the Syndication Agent to the Borrower
marked "cancelled."

     (c)  Upon its receipt of an Assignment Agreement executed by a transferor
Lender and a Purchasing Lender, together with payment by the transferor Lender
to the Syndication Agent hereunder of a registration and processing fee of
$1,000 (unless the Borrower is replacing such Lender pursuant to the terms
hereof, in which event such fee shall be paid by the Borrower), the Syndication
Agent shall promptly on the effective date of the transfer determined pursuant
thereto give notice of recordation to the Lenders and the Borrower. The Borrower
shall not be responsible for such registration and processing fee or any costs
or expenses incurred by any Lender, any Purchasing Lender or the Syndication
Agent in connection with such assignment except as provided above.

     (d)  If, pursuant to this Section 10.10 any interest in this Agreement or
any Loan or Note is transferred to any transferee which is organized under the
laws of any jurisdiction other than the United States of America or any State
thereof, the transferor Lender shall cause such transferee, concurrently with
the effectiveness of such transfer, (i) to represent to the transferor Lender
(for the benefit of the transferor Lender, the Syndication Agent and the
Borrower) that under applicable law and treaties no taxes will be required to be
withheld by the Syndication Agent, the Borrower or the transferor Lender with
respect to any payments to be made to such transferee in respect of the Loans,
(ii) to furnish to the transferor Lender (and, in the case of any Purchasing
Lender, the Syndication Agent and the Borrower) two duly completed and signed
copies of either U.S. Internal Revenue Service Form W-8 BEN or U.S. Internal
Revenue Service Form W-8 ECI or such successor forms as shall be adopted from
time to time by the relevant United States taxing authorities (wherein such
transferee claims entitlement to complete exemption from U.S. federal
withholding tax on all interest payments hereunder), and (iii) to agree (for the
benefit of the transferor Lender, the Syndication Agent and the Borrower) to
provide the transferor Lender (and, in the case of any Purchasing Lender, the
Syndication Agent and the Borrower) new forms as contemplated by Section 3.3(b)
upon the expiration or obsolescence of any previously delivered form and
comparable statements in accordance with applicable U.S. laws and regulations
and amendments duly executed and completed by such transferee, and to comply
from time to time with all applicable U.S. laws and regulations with regard to
such withholding tax exemption.

     (e)  Notwithstanding any other provisions of this Section 10.10, no
transfer or assignment of the interests of any Lender hereunder or any grant of
participations therein shall be permitted if such transfer, assignment or grant
would require the Borrower to file a registration statement with the SEC or to
qualify the Loans, the Notes or any other Obligations under the securities laws
of any jurisdiction.

                                       61
<PAGE>

     Section 10.11. Amendments, Waivers and Consents. Any provision of the
                    --------------------------------
Credit Documents may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by (a) the Borrower, (b) the Required
Lenders, and (c) if the rights or duties of the Syndication Agent, the
Administrative Agent, the Documentation Agent, the Senior Managing Agent, the
Joint Lead Arrangers or the Joint Book Runners are affected thereby, the
Syndication Agent, the Administrative Agent, the Documentation Agent, the Senior
Managing Agent, the Joint Lead Arrangers or the Joint Book Runners, as the case
may be, provided that:

          (i)  no amendment or waiver shall (A) increase the Revolving Credit
     Commitment Amount without the consent of all Lenders or increase any
     Commitment of any Lender without the consent of such Lender, or (B)
     postpone the Maturity Date without the consent of all Lenders, or reduce
     the amount of or postpone the date for any scheduled payment of any
     principal of or interest (including, without limitation, any reduction in
     the rate of interest unless such reduction is otherwise provided herein) on
     any Loan or of any fee payable hereunder, without the consent of each
     Lender owed any such Obligation; and

          (ii) no amendment or waiver shall, unless signed by each Lender,
     change the provisions of this Section 10.11 or the definition of Required
     Lenders or the number of Lenders required to take any action under any
     other provision of the Credit Documents.

     Section 10.12. Headings. Section headings used in this Agreement are for
                    --------
reference only and shall not affect the construction of this Agreement.

     Section 10.13. Legal Fees, Other Costs and Indemnification. The Borrower,
                    -------------------------------------------
upon demand by the Syndication Agent, agrees to pay the reasonable fees and
disbursements of legal counsel to the Syndication Agent in connection with the
preparation and execution of the Credit Documents (which shall be in an amount
agreed in writing by the Borrower), and any amendment, waiver or consent related
thereto, whether or not the transactions contemplated therein are consummated.
The Borrower further agrees to indemnify each Lender, the Syndication Agent, the
Administrative Agent, the Documentation Agent, the Senior Managing Agent, the
Joint Lead Arrangers, and the Joint Book Runners, and their respective
directors, officers, employees and attorneys (collectively, the "Indemnified
Parties"), against all losses, claims, damages, penalties, judgments,
liabilities and expenses (including, without limitation, all reasonable
attorneys' fees and other reasonable expenses of litigation or preparation
therefor, whether or not such Indemnified Party is a party thereto) which any of
them may pay or incur as a result of (a) any action, suit or proceeding by any
third party or governmental authority against such Indemnified Party and
relating to any Credit Document, the Loans, or the application or proposed
application by any of the Borrower of the proceeds of any Loan, REGARDLESS OF
WHETHER SUCH CLAIMS OR ACTIONS ARE FOUNDED IN WHOLE OR IN PART UPON THE ALLEGED
SIMPLE OR CONTRIBUTORY NEGLIGENCE OF ANY OF THE INDEMNIFIED PARTIES AND/OR ANY
OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES OR ATTORNEYS, (b) any
investigation of any third party or any governmental authority involving any
Lender (as a lender hereunder), or the Syndication Agent, the Administrative
Agent, the Documentation Agent, the Senior Managing Agent, the Joint Lead
Arrangers, or the Joint Book Runners (in such capacity hereunder) and related to
any use made

                                       62
<PAGE>

or proposed to be made by the Borrower of the proceeds of any Loan or any
transaction financed or to be financed in whole or in part, directly or
indirectly with the proceeds of any Loan, and (c) any investigation of any third
party or any governmental authority, litigation or proceeding involving any
Lender (as a lender hereunder) or the Syndication Agent, the Administrative
Agent, the Documentation Agent, the Senior Managing Agent, the Joint Lead
Arrangers, or the Joint Book Runners (in such capacity hereunder) and related to
any environmental cleanup, audit, compliance or other matter relating to any
Environmental Law or the presence of any Hazardous Material (including, without
limitation, any losses, liabilities, damages, injuries, costs, expenses or
claims asserted or arising under any Environmental Law) with respect to the
Borrower, regardless of whether caused by, or within the control of, the
Borrower; provided, however, that the Borrower shall not be obligated to
indemnify any Indemnified Party for any of the foregoing arising out of such
Indemnified Party's gross negligence or willful misconduct, as determined
pursuant to a final nonappealable judgment of a court of competent jurisdiction
or as expressly agreed in writing by such Indemnified Party. The Borrower, upon
demand by the Syndication Agent, the Administrative Agent, the Documentation
Agent, the Senior Managing Agent, the Joint Lead Arrangers, or the Joint Book
Runners, or a Lender at any time, shall reimburse such Agent or such Lender for
any reasonable legal or other expenses incurred in connection with investigating
or defending against any of the foregoing, except if the same is excluded from
indemnification pursuant to the provisions of the preceding sentence. Each
Indemnified Party agrees to contest any indemnified claim if requested by the
Borrower, in a manner reasonably directed by the Borrower, with counsel selected
by the Indemnified Party and approved by the Borrower, which approval shall not
be unreasonably withheld or delayed. Any Indemnified Party that proposes to
settle or compromise any such indemnified claim shall give the Borrower written
notice of the terms of such proposed settlement or compromise reasonably in
advance of settling or compromising such claim or proceeding and shall obtain
the Borrower's prior written consent thereto, which consent shall not be
unreasonably withheld or delayed; provided that the Indemnified Party shall not
be restricted from settling or compromising any such claim if the Indemnified
Party waives its right to indemnity from the Borrower in respect of such claim.

     Section 10.14.  Governing Law; Submission to Jurisdiction; Waiver of Jury
                     ---------------------------------------------------------
Trial.
-----

     (A)  THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS, AND THE RIGHTS AND
DUTIES OF THE PARTIES THERETO, SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.

     (B)  TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HERETO
AGREE THAT ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF
THE SYNDICATION AGENT, THE DOCUMENTATION AGENT, THE SENIOR MANAGING AGENT, THE
ADMINISTRATIVE AGENT, THE JOINT LEAD ARRANGERS, THE JOINT BOOK RUNNERS, THE
LENDERS, OR THE BORROWER MAY BE BROUGHT AND MAINTAINED IN THE COURTS OF THE
STATE OF NEW

                                       63
<PAGE>

YORK SITTING IN THE BOROUGH OF MANHATTAN OR THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION
OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET
FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY
IN CONNECTION WITH SUCH LITIGATION. THE BORROWER HEREBY IRREVOCABLY DESIGNATES
CT CORPORATION SYSTEM, 111 8TH AVENUE, NEW YORK, NEW YORK 10011, AS THE
DESIGNEE, APPOINTEE AND AGENT OF THE BORROWER TO RECEIVE, FOR AND ON BEHALF OF
THE BORROWER, SERVICE OF PROCESS IN SUCH JURISDICTION IN ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT HERETO. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS, BY
REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE
STATE OF NEW YORK. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE
BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY HAVE
OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN
ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE BORROWER HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OF NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, THE BORROWER HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT AND THE OTHER CREDIT DOCUMENTS.

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

     (D) EACH PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF PROCESS
IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.7.  NOTHING IN THIS AGREEMENT
WILL AFFECT THE RIGHT OF ANY

                                       64
<PAGE>

PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
APPLICABLE LAW.

     Section 10.15. Confidentiality. Each of the Agents, the Joint Lead
                    ---------------
Arrangers, the Joint Book Runners, and Lenders agree to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (i) to their respective affiliates and to prospective
Purchasing Lenders and Participants and their respective directors, officers,
employees and agents, including accountants, legal counsel and other advisors
who have reason to use such Information in connection with the evaluation of the
transactions contemplated by this Agreement (subject to similar confidentiality
provisions as provided herein) solely for purposes of evaluating such
Information, (ii) to the extent requested by any regulatory authority, (iii) to
the extent required by applicable law or regulation or by any subpoena or
similar legal process, (iv) in connection with the exercise of any remedies
hereunder or any proceedings relating to this Agreement or the other Credit
Documents, (v) with the consent of the Borrower, or (vi) to the extent such
Information (x) becomes publicly available other than as a result of a breach of
this Section 10.15, or (y) becomes available on a non-confidential basis from a
source other than the Borrower or its affiliates or the Lenders or their
respective affiliates. For purposes hereof, "Information" means all information
received by the Lenders, the Agents, the Joint Lead Arrangers and the Joint Book
Runners from the Borrower relating to the Borrower or its business, other than
any such information that is available to such Persons on a non-confidential
basis prior to disclosure by the Borrower. The Lenders shall be considered to
have complied with their respective obligations if they have exercised the same
degree of care to maintain the confidentiality of such Information as they would
accord their own confidential information.

     Section 10.16. Effectiveness. This Agreement shall become effective on the
                    -------------
date (the "Effective Date") on which all parties to this Agreement have signed
and delivered to the Syndication Agent a counterpart signature page hereto or,
in the case of a Lender, the Syndication Agent has received a facsimile notice
that such a counterpart has been signed and mailed to the Syndication Agent.

     Section 10.17. Severability. Any provision of this Agreement that is
                    ------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

     Section 10.18. Currency Conversion.  All payments of Obligations under this
                    -------------------
Agreement, the Notes or any other Credit Document shall be made in Dollars.  If
any payment of any Obligation, whether through payment by the Borrower or the
proceeds of any collateral, shall be made in a currency other than Dollars, such
amount shall be converted into Dollars at the current market rate for the
purchase of Dollars with the currency in which such obligation was paid, as
quoted by the Lender who is the Syndication Agent in accordance with the methods
customarily used by such Lender for such purposes as of the time of such
determination.  The parties hereto hereby agree, to the fullest extent that they
may effectively do so under applicable law, that (i) if for the purposes of
obtaining any judgment or award it becomes necessary to convert from any
currency other than Dollars into Dollars any amount in connection with the
Obligations, then the

                                       65
<PAGE>

conversion shall be made as provided above on the Business Day before the day on
which the judgment or award is given, (ii) in the event that there is a change
in the rate of exchange prevailing between the Business Day before the day on
which the judgment or award is given and the date of payment, the Borrower will
pay to the Syndication Agent, for the benefit of the Lenders, such additional
amounts (if any) as may be necessary, and the Syndication Agent, on behalf of
the Lenders, will pay to the Borrower such excess amounts (if any) as result
from such change in the rate of exchange, to assure that the amount paid on such
date is the amount in such other currency, which when converted at the rate of
exchange described herein on the date of payment, is the amount then due in
Dollars, and (iii) any amount due from the Borrower under this Section 10.18
shall be due as a separate debt and shall not be affected by judgment or award
being obtained for any other sum due.

     Section 10.19. Change in Accounting Principles, Fiscal Year or Tax Laws.
                    --------------------------------------------------------
If (i) any change in accounting principles from those used in the preparation of
the financial statements of the Borrower referred to in Section 5.9 is hereafter
occasioned by the promulgation of rules, regulations, pronouncements and
opinions by or required by the Financial Accounting Standards Board or the
American Institute of Certified Public Accounts (or successors thereto or
agencies with similar functions), and such change materially affects the
calculation of any component of any financial covenant, standard or term found
in this Agreement, or (ii) there is a material change in federal or foreign tax
laws which materially affects any of the Borrower and its Subsidiaries' ability
to comply with the financial covenants, standards or terms found in this
Agreement, the Borrower and the Lenders agree to enter into negotiations in
order to amend such provisions (with the agreement of the Required Lenders or,
if required by Section 10.11, all of the Lenders) so as to equitably reflect
such changes with the desired result that the criteria for evaluating any of the
Borrower's and its Subsidiaries' financial condition shall be the same after
such changes as if such changes had not been made. Unless and until such
provisions have been so amended, the provisions of this Agreement shall govern.

     Section 10.20. Final Agreement.  The Credit Documents constitute the entire
                    ---------------
understanding among the parties to this Agreement and supersede all earlier or
contemporaneous agreements, whether written or oral, concerning the subject
matter of the Credit Documents.  THIS WRITTEN AGREEMENT TOGETHER WITH THE OTHER
CREDIT DOCUMENTS REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.

     Section 10.21. Officer's Certificates.  It is not intended that any
                    ----------------------
certificate of any officer of the Borrower delivered to the Syndication Agent or
any Lender pursuant to this Agreement shall give rise to any personal liability
on the part of such officer.

     Section 10.22. Effect of Inclusion of Exceptions. It is not intended that
                    ---------------------------------
the specification of any exception to any covenant herein shall imply that the
excepted matter would, but for such exception, be prohibited or required.

                                       66
<PAGE>

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

                              BORROWER:
                              --------

                              TRANSOCEAN SEDCO FOREX INC.,
                              a Cayman Islands company

                              By:____________________
                              Name:
                              Title:

                              Attest:________________
                              Name:
                              Title:

                                       67
<PAGE>

                              SUNTRUST BANK,
                              As Syndication Agent and a Lender

                              By:____________________
                              Name:
                              Title:

COMMITMENT AMOUNT:    $250,000,000

PERCENTAGE:            20.83333333%

Address for Notices:
-------------------

SunTrust Bank
SunTrust Plaza
303 Peachtree Street, N.E., 3rd Floor
Atlanta, GA  30308
Attn: Mr. John Fields
Telephone No.:     404/724-3667
Telecopy No.:      404/827-6270

Lending Office:
--------------

SunTrust Bank
SunTrust Plaza
303 Peachtree Street, N.E., 3rd Floor
Atlanta, GA  30308
Attn: Mr. John Fields
Telephone No.:     404/724-3667
Telecopy No.:      404/827-6270

Payment Instructions:
---------------------

Bank Name:         SunTrust Bank
ABA Number:        061 000 104
City, State:       Atlanta, Georgia
Account Number:    908 8000 112
Attention:         Pat Etheridge 404/588-8358
Reference:         Transocean Sedco Forex Inc.

                                       68
<PAGE>

                              ABN AMRO BANK, N.V.,
                              As Administrative Agent, Joint Lead
                              Arranger, Joint Book Runner, and a Lender

                              By:______________________
                              Name:
                              Title:

                              By:______________________
                              Name:
                              Title:

COMMITMENT AMOUNT:    $200,000,000

PERCENTAGE:            16.66666667%

Address for Notices:
-------------------

ABN AMRO Bank, N.V.
208 South LaSalle Street, Suite 1500
Chicago, IL  60604-1003
Attn:                    Dina Tucci-Albro
Telephone No.:           312/992-5120
Telecopy No.:            312/992-5111

with a copy to:

ABN AMRO Bank, N.V.
Three Riverway, Suite 1700
Houston, TX  77056
Attn:                    Stuart Murray
Telephone No.:           713/964-3358
Telecopy No.:            713/964-5801

                                       69
<PAGE>

                              ABN AMRO BANK, N.V.,    (continued)
                              As Administrative Agent, Joint Lead Arranger,
                              Joint Book Runner, and a Lender

Lending Office:
--------------

ABN AMRO Bank, N.V.
208 South LaSalle Street, Suite 1500
Chicago, IL  60604-1003
Attn:                     Loan Administration
Telephone No.:            312/992-5150
Telecopy No.:             312/992-5155

Payment Instructions:
--------------------

Bank Name:                ABN AMRO Bank, N.V.
ABA Number:               026009580
City, State:              New York, NY
Account Name:             F/O ABN AMRO Bank, N.V.
                          Chicago Branch CPU
Account Number:           650-001-178941
Attention:
Reference:                CPU 00193232 - Transocean Sedco

Letters of Credit:
-----------------

Bank Name:                ABN AMRO Bank, N.V.
ABA Number:               026009580
City, State:              New York, NY
Account Name:             F/O ABN AMRO Bank, N.V.
                          Chicago Trade Services CPU
Account Number:           653-001 1738 41
Attention:
Reference:                Transocean Sedco

                                       70
<PAGE>

                              GOLDMAN SACHS CREDIT PARTNERS
                              L.P., as Joint Lead Arranger, Joint Book
                              Runner, and a Lender

                              By:________________________
                              Name:
                              Title:

COMMITMENT AMOUNT:    $500,000,000

PERCENTAGE:            41.66666667%

Address for Notices:
-------------------

Goldman Sachs Credit Partners L.P.
85 Broad Street - 6/th/ Floor
New York, New York  10004
Attn: Sandra Stulberger
Telephone No.:     212/902-5977
Telecopy No.:      212/357-4597

with a copy to:

Goldman Sachs Credit Partners L.P.
c/o Goldman, Sachs & Co.
85 Broad Street - 6/th/ Floor
New York, New York  10004
Attn: Barbara Aaron/Sally Wenden
Telephone No.:     212/357-3111/9735
Telecopy No.:      212/428-1242

Lending Office:
--------------

Goldman Sachs Credit Partners L.P.
85 Broad Street - 6/th/ Floor
New York, New York  10004
Attn: Sandra Stulberger
Telephone No.:     212/902-5977
Telecopy No.:      212/357-4597

                                       71
<PAGE>

                              GOLDMAN SACHS CREDIT (continued)
                              PARTNERS L.P., as Joint Lead Arranger,
                              Joint Book Runner, and a Lender

Payment Instructions:
--------------------

Bank Name:       Citibank, N.A.
ABA Number:      021000089
City, State:     New York, New York
Account Number:  40717188
Attention:       Bank Loan Operations - Sandra Stulberger
Reference:       Transocean Sedco Forex Bridge Facility

                                       72
<PAGE>

                              BANK OF AMERICA, N.A.,
                              As Senior Managing Agent and a Lender

                              By:__________________________
                              Name:
                              Title:

COMMITMENT AMOUNT:    $125,000,000

PERCENTAGE:            10.41666667%

Address for Notices:
-------------------

Bank of America, N.A.
333 Clay Street, Suite 4550
Houston, TX  77002
Attn: Patrick Delaney, Managing Director
Telephone No.: 713/651-4929
Telecopy No.:  713/651-4808

Lending Office:
--------------

Bank of America, N.A.
901 Main Street
Dallas, TX  75202
Attn: Ramon Garcia
      Customer Service Representative
Telephone No.: 214/209-2119
Telecopy No.:  214/290-9462

with a copy to:

Bank of America, N.A.
333 Clay Street, Suite 4550
Houston, TX  77002
Attn: Thelma Johnson
Telephone No.: 713/651-4864
Telecopy No.:  713/651-4808

                                       73
<PAGE>

                              BANK OF AMERICA, N.A.,  (continued)
                              As Senior Managing Agent and a Lender

Payment Instructions:
--------------------

Bank Name:      Bank of America, N.A.
ABA Number:     #111000012
City, State:
Account Number: 1292000883
Attention:      Corporate Loan Funds
Reference:      Transocean Sedco Forex Inc.

                                       74
<PAGE>

                              WELLS FARGO BANK TEXAS,
                              NATIONAL ASSOCIATION,
                              As Documentation Agent and a Lender

                              By:________________________
                              Name:
                              Title:

COMMITMENT AMOUNT:    $125,000,000

PERCENTAGE:            10.41666667%

Address for Notices:
-------------------

Wells Fargo Bank Texas, National Association
1000 Louisiana
3rd Floor, Energy Department
Houston, TX  77002
Attn: Spencer Smith, Vice President
Telephone No.:  713/319-1362
Telecopy No.:   713/739-1087

Lending Office:
--------------

Wells Fargo Bank Texas, National Association
1740 Broadway
Denver, CO  80274
Attn: Tanya Ivie, Production Manager
Telephone No.:  303/863-6102
Telecopy No.:   303/863-2729

Payment Instructions:
--------------------

Bank Name:      Wells Fargo Bank
ABA Number:     121-000-248
City, State:    Denver, Colorado
Account Number: 2969507201
Attention:      Denver WLS
Reference:      Transocean Sedco Forex

                                       75<PAGE>
                                                                    EXHIBIT 4.35

                                NOTE AGREEMENT

                         Dated as of January 30, 2001

                                     Among

                               Delta Towing, LLC

                               as the Borrower,

                         R&B Falcon Drilling USA, Inc.

                               as RBF Noteholder

                                      and

                         Beta Marine Services, L.L.C.

                              as Beta Noteholder
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
<S>                    <C>                                                               <C>
ARTICLE I Definitions.................................................................    1
   Section 1.1.        Definitions....................................................    1

ARTICLE II Extensions of Credit and Repayments........................................   11
   Section 2.1.        The Purchase of the Notes......................................   11
   Section 2.2.        Type of Notes..................................................   12
   Section 2.3.        Interest.......................................................   12
   Section 2.4.        Payment of Principal and Interest; Maturity....................   13
   Section 2.5.        Applicable Interest Rates......................................   16
   Section 2.6.        The Notes......................................................   16

ARTICLE III Credit Documents and Collateral...........................................   17
   Section 3.1.        Credit Documents and Further Assurances........................   17
   Section 3.2.        Supplements to Fleet Mortgage..................................   17

ARTICLE IV Indemnification............................................................   17
   Section 4.1.        Legal Fees, Other Costs and Indemnification....................   17
   Section 4.2.        Intentionally Omitted..........................................   18
   Section 4.3.        Increased Cost and Reduced Return..............................   19
   Section 4.4.        Payment Office.................................................   19
   Section 4.5.        Discretion of Noteholder.......................................   19
   Section 4.6.        Withholding Taxes; Payments Free of Withholding................   20

ARTICLE V Conditions Precedent........................................................   21
   Section 5.1.        Conditions to Effectiveness and RBF Noteholder Purchase........   21
   Section 5.2.        Conditions to Beta Noteholder Purchase.........................   22

ARTICLE VI Representations and Warranties.............................................   23
   Section 6.1.        Representations and Warranties.................................   23

ARTICLE VII Covenants.................................................................   25
   Section 7.1.        Covenants of the Borrower......................................   25

ARTICLE VIII Limitation on Dividends..................................................   36
   Section 8.1.        Distributions..................................................   36

ARTICLE IX Books and Records..........................................................   36
   Section 9.1.        Books and Records; Examination.................................   36
   Section 9.2.        Financial Statements and Reports...............................   37
</TABLE>

                                       i
<PAGE>

<TABLE>
<S>                    <C>                                                               <C>
   Section 9.3.        Notice of Affiliate Transactions; Annual List..................   39

ARTICLE X Events of Default...........................................................   39
   Section 10.1.       Events of Default..............................................   39
   Section 10.2.       Non-Bankruptcy Defaults........................................   42
   Section 10.3.       Bankruptcy Defaults............................................   42
   Section 10.4.       Remedies Upon an Event of Default..............................   42
   Section 10.5.       Default Prior to 10-Year Anniversary...........................   43

ARTICLE XI Miscellaneous..............................................................   43
   Section 11.1.       Termination and Survival of Obligations........................   43
   Section 11.2.       Notices........................................................   43
   Section 11.3.       Payments and Computations......................................   44
   Section 11.4.       Setoff.........................................................   44
   Section 11.5.       Amendments, Waivers and Consents...............................   44
   Section 11.6.       Waivers........................................................   45
   Section 11.7.       Successors and Assigns.........................................   45
   Section 11.8.       Participations and Assignments.................................   45
   Section 11.9.       Governing Law; Submission to Jurisdiction; Waiver of Jury Trial   48
   Section 11.10.      Confidentiality of Agreement...................................   49
   Section 11.11.      Limitation of Liability........................................   49
   Section 11.12.      Headings; Counterparts.........................................   49
   Section 11.13.      Cumulative Rights and Severability.............................   50
   Section 11.14.      Interest Rate Limitation.......................................   50
   Section 11.15.      FINAL AGREEMENT OF THE PARTIES.................................   50
   Section 11.16.      Atlas and Goliath..............................................   51
</TABLE>

Exhibits:

   Exhibit 2.6A:    Form of Tier 1 Note
   Exhibit 2.6B:    Form of Tier 2 Note
   Exhibit 2.6C:    Form of Tier 3 Note
   Exhibit 1.01A:   Form of Parent Guarantee
   Exhibit 1.01B:   Form of Parent Pledge Agreement
   Exhibit 1.01C:   Form of Security Agreement

Schedules:

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

                                       ii
<PAGE>

                                 NOTE AGREEMENT

     Note Agreement, dated as of January 30, 2001, is among R&B Falcon Drilling
USA, Inc., a Delaware corporation (the "RBF Noteholder"), Beta Marine Services,
L.L.C., a Louisiana limited liability company (the "Beta Noteholder," and
together with the RBF Noteholder and their successors and permitted assigns, the
"Noteholders," and individually, a "Noteholder"), and Delta Towing, LLC, a
Delaware limited liability company (the "Borrower").

     The parties hereto agree as follows:

                                   ARTICLE I
                                  DEFINITIONS

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

     "Accounting Determination" is defined in Section 1.02.

     "Acquisition Expenditures" is defined in the LLC Agreement.

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

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

     "Affiliate Transaction" is defined in the LLC Agreement.

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

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

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

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

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

     "Borrower" is defined in the preamble hereof.

     "Borrower Independent Auditors" is defined in Section 9.1.

     "Borrower Optional Termination" is defined in Section 2.4(f).

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

     "Capital Expenditures" is defined in the LLC Agreement.

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

     "Casualty Event" means any of the following events: (a) an event resulting
in destruction of or damage to any Property; (b) an event that results in an
insurance settlement on the basis of an actual or a constructive loss of any
Property; (c) theft, illegal confiscation or disappearance of any Property; or
(d) condemnation or other taking of title of any Property by a Governmental
Authority or the requisition or taking of use of any Property by a Governmental
Authority.

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

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

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

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

     "Collateral" means all property and assets of the Borrower whether now
owned or hereafter acquired.

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

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

                                       2
<PAGE>

     "Condition Subsequent" means the execution and delivery of the Parent
Guarantee and the Parent Pledge Agreement by the Company.

     "Contribution Agreement" means the Contribution Agreement dated as of
January 31, 2001 between the RBF Noteholder and the Company, as amended,
restated or supplemented from time to time.

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

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

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

     "Distributions" is defined in Section 8.1.

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

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

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

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

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

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

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

all as determined on a consolidated basis in accordance with GAAP.  For purposes
of this definition, depreciation, depletion and amortization expense will
include any gains (deductions from depreciation, depletion and amortization) or
losses (additions to depreciation, depletion and amortization) on asset
retirements and excess purchase price amortization adjustments.  For the
avoidance of doubt, EBITDA shall not include any revenues or expenses
constituting Member-Indemnified Expenditures.

     "Effective Date" is defined in Section 5.1.

                                       3
<PAGE>

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

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

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

     "Event of Default" is defined in Section 10.1.

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

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

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

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

        (d) principal prepayments paid in cash on the Notes pursuant to Section
            2.4(g) between the Payment Date occurring during such Fiscal
            Quarter and the next succeeding Payment Date.

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

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

                                       4
<PAGE>

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

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

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

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

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

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

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

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

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

     "Highest Lawful Rate" means as to any Noteholder, the maximum nonusurious
rate of interest that, under applicable law, may be contracted for, taken,
reserved, charged or received by such Noteholder in respect of the Notes or
under the Credit Documents at any time or from time to time.  If the maximum
rate of interest which, under applicable law, any of the Noteholders is
permitted to charge the Borrower in respect of the Notes shall change after the
date hereof, to the

                                       5
<PAGE>

extent permitted by applicable law, the Highest Lawful Rate applicable to such
Notes shall be automatically increased or decreased, as the case may be, as of
the effective time of such change without notice to the Borrower or any other
Person.

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

     "Indemnified Parties" is defined in Section 4.1

     "Indemnified Taxes" is defined in Section 4.6.

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

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

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

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

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

                                       6
<PAGE>

     "Louisiana Collateral Documents" means the Collateral Mortgage Note dated
January 30, 2001, in the principal amount of $147,000,000.00, payable to Bearer;
the Collateral Mortgage dated January 30, 2001 made by the Borrower in favor of
the Trustee, and the Collateral Trust Agreement dated January 30, 2001 made by
the Borrower in favor of the Trustee and any other documents relating to the
Collateral in favor of the Trustee relating to the Obligations.

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

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

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

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

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

     "Membership Interest" is defined in the LLC Agreement.

     "Note" means any of the Tier 1 Notes, the Tier 2 Note and the Tier 3 Note,
as the same may be amended, renewed, extended, replaced, rearranged or otherwise
modified from time to time.

     "Noteholder" has the meaning assigned to such term in the preamble.

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

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

     "Obligors" means collectively the Borrower and the Company.

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

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

                                       7
<PAGE>

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

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

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

     "Participants" is defined in Section 11.8.

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

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

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

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

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

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

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

                                       8
<PAGE>

     "Required Noteholders" means the Noteholders constituting holders of Notes
representing more than fifty percent (50%) of the aggregate principal amount
outstanding under all the Notes.

     "Revolving Credit Facility" means the revolving line of credit contemplated
by the Master Formation Agreement or any other working capital facility obtained
by the Borrower in an amount and having terms and conditions acceptable to the
Required Noteholders, as the same may be amended, supplemented, renewed,
extended, replaced, restated, rearranged or otherwise modified from time to
time.

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

     "Security Documents" means the Fleet Mortgage, the Security Agreement, the
Parent Pledge Agreement, the Parent Guarantee, the Collateral Trust Agreement,
the Louisiana Collateral Documents and all other security agreements, mortgages
and other agreements or instruments delivered by the Borrower or any other
Person providing any credit or other support or granting a Lien on any of such
Person's property to any Noteholder or the Trustee for the benefit of the
Noteholders to secure all or any part of the Obligations, as any of the same may
be amended, renewed, restated, extended, supplemented, rearranged or otherwise
modified from time to time.

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

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

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

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

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

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

                                       9
<PAGE>

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

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

     "Tier 1 Note" is defined in Section 2.6.

     "Tier 2 Note" is defined in Section 2.6.

     "Tier 3 Note" is defined in Section 2.6.

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

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

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

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

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

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

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

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

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

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

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

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

     "Total Loss" means any actual or constructive total loss of a Vessel as
determined by the Required Noteholders.

                                       10
<PAGE>

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

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

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

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

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

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

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

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

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

     The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms.  Unless otherwise indicated, references
to a contract or other agreement shall include references to such contracts and
agreements as affected by amendments, restatements, supplements and other
modifications thereto made in accordance with the terms of the Credit Documents
and references to statutes, regulations and other laws are to statutes,
regulations and laws as amended or modified.

                                  ARTICLE II
                      EXTENSIONS OF CREDIT AND REPAYMENTS

     Section 2.1. The Purchase of the Notes. Subject to terms and conditions of
this Agreement, the Noteholders shall severally purchase Notes from the Borrower
to evidence extensions of credit to the Borrower in the aggregate principal
amount not to exceed $147,000,000. The Notes purchased by the RBF Noteholder
shall be in the aggregate principal amount of $144,000,000 and shall evidence
the Borrower's payment obligation for the purchase

                                       11
<PAGE>

price of the Marine Business in accordance with, and subject to the terms and
conditions of, the Master Formation Agreement. The Note purchased by the Beta
Noteholder shall be in the principal face amount of $3,000,000 and the proceeds
from that purchase shall be used by the Borrower for working capital purposes.

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

     (a)  Tier 1 Notes.

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

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

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

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

     Section 2.3.  Interest.

     (a)  Interest will accrue on the principal outstanding under the Notes from
          time to time at the Fixed Rate from the Closing Date to the date of
          payment thereof and shall be compounded as described in
          Section 2.3(b)-(d).

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

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

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

                                       12
<PAGE>

Section 2.4.  Payment of Principal and Interest; Maturity.

     (a)  Tier 1 Notes. Subject to the Noteholders' right to accelerate the
          Notes in accordance with Sections 10.2 and 10.3, the Borrower shall
          pay to the Tier 1 Noteholders on each Payment Date, for application
          toward payment of the principal of and accrued and unpaid interest on
          the Tier 1 Notes as hereinafter provided, an amount equal to (i) until
          the Tier 2 & 3 Termination Date, 100%, and (ii) thereafter 50%, of the
          Excess Cash Flow for the preceding Fiscal Quarter until the Tier 1
          Repayment Date, provided, however, that, in any event, the Borrower
          shall repay at least (1) 10% of the aggregate principal amount of the
          Tier 1 Notes no later than the third anniversary of the Closing Date,
          (2) 30% of the aggregate principal amount of the Tier 1 Notes no later
          than the fifth anniversary of the Closing Date and (3) 75% of the
          aggregate principal amount of the Tier 1 Notes no later than the
          seventh anniversary of the Closing Date. Each such payment shall be
          applied first to interest accrued and unpaid on the Tier 1 Notes for
          any previous Fiscal Quarters, and then to the unpaid principal of the
          Tier 1 Notes. On each Payment Date, the Borrower shall also pay to the
          Tier 1 Noteholders accrued interest on the Tier 1 Notes for the
          preceding Fiscal Quarter. Notwithstanding anything to the contrary
          contained herein or in the Credit Documents, all principal and accrued
          and unpaid interest on, the Tier 1 Notes shall be due and payable on
          the Tier 1 Maturity Date, unless earlier accelerated in accordance
          with Sections 10.2 and 10.3.

     (b)  Tier 2 Note. Subject to the Noteholders' right to accelerate the Notes
          in accordance with Sections 10.2 and 10.3, the Borrower shall pay to
          the Tier 2 Noteholders on each Payment Date on and after the Tier 1
          Repayment Date to the Tier 2 Repayment Date, for application toward
          payment of the principal of and accrued and unpaid interest on the
          Tier 2 Note as hereinafter provided, an amount equal to 75% of the
          Excess Cash Flow for the preceding Fiscal Quarter. Each such payment
          shall be applied first to the unpaid T2 Prior Interest Amount and then
          to the unpaid principal of the Tier 2 Note. On each Payment Date, the
          Borrower shall also pay to the Tier 2 Noteholder, accrued and unpaid
          interest on the principal of the Tier 2 Note for the preceding Fiscal
          Quarter.

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

                                       13
<PAGE>

     (c)  Tier 3 Note. Subject to the Noteholders' right to accelerate the Notes
          in accordance with Sections 10.2 and 10.3, the Borrower shall pay to
          the Tier 3 Noteholders on each Payment Date on and after the Tier 2
          Repayment Date until the Tier 2 & 3 Repayment Date, for application
          toward payment of the principal of and accrued and unpaid interest on
          the Tier 3 Note as hereinafter provided, an amount equal to 50% of the
          Excess Cash Flow for the preceding Fiscal Quarter. Each such payment
          shall be applied first to the unpaid T3 Prior Interest Amount and then
          to the unpaid principal of the Tier 3 Note. On each Payment Date, the
          Borrower shall also pay to the Tier 3 Noteholder, accrued and unpaid
          interest on the principal of the Tier 3 Note for the preceding Fiscal
          Quarter.

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

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

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

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

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

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

                                       14
<PAGE>

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

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

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

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

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

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

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

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

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

          The Borrower shall forthwith upon receipt turn any proceeds received
          at any time by the Borrower, over to the Noteholders for application
          as set forth above.

     (e)  Asset Sales. The cash proceeds of any Asset Sale (net of direct costs
          of such Asset Sale) shall be deposited with the Trustee within one (i)
          Business Day after receipt thereof by the Borrower or any Subsidiary
          or Affiliate of the Borrower and held by the Trustee in accordance
          with Section 4.04 of the Collateral Trust Agreement. On the 91st day
          after the receipt of such proceeds, the Trustee shall apply the same
          toward payment of the Obligations as though such proceeds were
          Casualty Proceeds being so applied to the Obligations under Section
          2.4(d), unless upon request by the Borrower the Required Noteholders
          agree in writing, in their sole discretion, to another use of those
          proceeds by the Borrower. Notwithstanding the foregoing, cash proceeds
          of any Asset Sale that are received or held by the Trustee at a time
          when an Event of Default exists shall be applied by the Trustee toward
          payment of the Obligations as aforesaid absent contrary instructions
          from the Required Noteholders.

     (f)  Borrower's Optional Termination. The Borrower may for any reason at
          any time elect to terminate the arrangements provided in this
          Agreement (a "Borrower's Optional Termination"). The Borrower shall
          give the Noteholders at least three (3) Business Days' written notice
          of the date on which it intends to effect a Borrower's Optional
          Termination. Such

                                       15
<PAGE>

          election shall be irrevocable and upon the date specified therein all
          Obligations shall be due and payable. On the date so specified, the
          Borrower shall prepay all Obligations.

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

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

     (i)  Pro Rata. All payments of principal and interest on the Notes shall be
          paid to the Noteholders that are holders of the applicable Notes, pro
          rata in accordance with the principal amount of such type of Note held
          by each such Noteholder.

     Section 2.5. Applicable Interest Rates. (a) Each Note shall bear interest
(computed on the basis of a 365- or 366-day year and actual days elapsed) on the
unpaid principal amount thereof from the date that the Note was purchased
hereunder until maturity (whether by acceleration or otherwise), at a rate per
annum equal to the Fixed Rate.

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

     (c)  Accrued interest on the Obligations shall be paid pursuant to Section
2.4.

     Section 2.6. The Notes. The Notes shall be payable to the order of the
applicable Noteholder and be in the form of Exhibits 2.6A, 2.6B and 2.6C (the
"Tier 1 Notes," the "Tier 2 Note" and the "Tier 3 Note", respectively). Each
Noteholder shall record on its books and records or on a schedule to its Notes
the initial amount of the principal owing thereunder and all payments of
principal and interest received by such Noteholder allocable to such Note. Such
records, whether shown on the books and records of the Noteholders or on a
schedule to the

                                       16
<PAGE>

Notes, shall be conclusive evidence as to all such matters absent manifest
error; provided, however, that the failure of any Noteholder to record any of
the foregoing or any error in any such record shall not limit or otherwise
affect the obligation of the Borrower to repay all principal outstanding under
the Notes, together with accrued interest thereon. The Borrower agrees to
execute and deliver to the Noteholders appropriate additional Notes as may be
necessary in connection with any assignments pursuant to Section 11.8.

                                  ARTICLE III
                        CREDIT DOCUMENTS AND COLLATERAL

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

     Section 3.2. Supplements to Fleet Mortgage. The Borrower shall, from time
to time, execute and deliver any and all supplements to the Fleet Mortgage and
other documents, to make subject to the first priority Lien of the Fleet
Mortgage and other Security Documents any Documented Vessels of Borrower within
10 days after the Borrower acquires any Documented Vessels that are not so
mortgaged.

                                  ARTICLE IV
                                INDEMNIFICATION

     Section 4.1. Legal Fees, Other Costs and Indemnification. The Borrower,
upon demand by the appropriate Person, agrees to pay the out-of-pocket costs and
expenses (a) of the Noteholders and the Trustee, including, without limitation,
the fees and disbursements of legal counsel to the Noteholders and the Trustee,
in connection with any amendment, waiver or consent related thereto, whether or
not the transactions contemplated therein are consummated, and (b) of the
Trustee and the Noteholders in connection with advising the Trustee and the
Noteholders of their rights and responsibilities under the Credit Documents
during any Default or Event of Default or in connection with the enforcement by
the Noteholders and the Trustee of any of the Credit Documents against the
Borrower. The Borrower further agrees to indemnify the Noteholders, the Trustee
and their respective directors, officers, employees and attorneys (in each case
in their capacities as such) (collectively, the "Indemnified Parties"), against
all losses, claims, damages, penalties, judgments, liabilities and expenses
(including, without limitation, all reasonable attorneys' fees and other
reasonable expenses of litigation or preparation therefor, whether or not such
Indemnified Party is a party thereto which any of them may pay or incur arising
out of or relating to (i) any action, suit or proceeding by any Governmental
Authority or any other Person against the Indemnified Party and relating to any
applicable law, (ii) any action, suit or proceeding by any Person not a party to
this Agreement (a "third party") or

                                       17
<PAGE>

Governmental Authority against such Indemnified Party and relating to the
execution, delivery or performance (or non-performance) of any Credit Document
by the Borrower, the extensions of credit evidenced by the Notes or the
application or proposed application by the Borrower of the proceeds of any Note,
REGARDLESS OF WHETHER SUCH CLAIMS OR ACTIONS ARE FOUNDED IN WHOLE OR IN PART
UPON STRICT LIABILITY OR THE ALLEGED SIMPLE OR CONTRIBUTORY NEGLIGENCE OF ANY OF
THE INDEMNIFIED PARTIES AND/OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS,
EMPLOYEES OR ATTORNEYS, (iii) any investigation of any third party or any
Governmental Authority involving the Noteholders or the Trustee (in such
capacity hereunder) and related to any use made or proposed to be made by the
Borrower of the proceeds of the credit extended hereunder, or any transaction
financed or to be financed in whole or in part, directly or indirectly with the
proceeds of any credit extended hereunder, and (iv) any investigation of any
third party or any Governmental Authority, litigation or proceeding involving
the Noteholders or the Trustee and related to any environmental cleanup, audit
or compliance with respect to the Borrower or its properties, or any other
matter relating to any Environmental Law or the presence of any Hazardous
Material (including, without limitation, any losses, liabilities, damages,
injuries, costs, expenses or claims asserted or arising under any Environmental
Law) with respect to the Borrower or its properties or operations, regardless of
whether caused by, or within the control of, the Borrower; provided, however,
that the Borrower shall not be obligated to indemnify any Indemnified Party for
any of the foregoing arising out of such Indemnified Party's gross negligence,
or willful misconduct. The Borrower, upon demand by any Noteholder or the
Trustee at any time, shall reimburse the applicable Indemnified Party for any
legal or other expenses incurred in connection with investigating or defending
against any of the foregoing. The Noteholders and the Borrower agree that any
payments by the Borrower under this Section 4.1 are not duplicative of
recoveries to be made by the Noteholders under the other Operative Documents.

     Section 4.2.  Intentionally Omitted.

     Section 4.3.  Increased Cost and Reduced Return.

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

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

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

                                       18
<PAGE>

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

     (b)  If any Noteholder seeks compensation under this Section 4.3, such
          Noteholder shall give written notice to the Borrower of the
          circumstances that entitle such Noteholder to such compensation. A
          certificate of any Noteholder claiming compensation under this Section
          4.3 and setting forth the additional amount or amounts to be paid to
          it hereunder shall be conclusive in the absence of manifest error. In
          determining such amount, such Person may use any reasonable averaging
          and attribution methods.

     Section 4.4. Payment Office. Any Noteholder may, at its option, elect to
change its Payment Office from time to time and designate another in a written
notice to the Borrower.

     Section 4.5. Discretion of Noteholder. Subject to the other provisions of
this Agreement, any Noteholder shall be entitled to purchase and maintain its
Notes in any manner it sees fit.

     Section 4.6. Withholding Taxes; Payments Free of Withholding. Except as
otherwise required by law, each payment by the Borrower to the Noteholders under
this Agreement or any other Credit Document shall be made without withholding
for or on account of any present or future taxes imposed by or within the
jurisdiction in which the Borrower is domiciled, any jurisdiction from which the
Borrower makes any payment, or (in each case) any political subdivision or
taxing authority thereof or therein, excluding taxes, assessments or other
governmental charges:

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

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

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

                                       19
<PAGE>

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

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

                                   ARTICLE V
                              CONDITIONS PRECEDENT

     Section 5.1. Conditions to Effectiveness and RBF Noteholder Purchase. This
Agreement shall become effective and RBF Noteholder shall purchase its Notes on
the first date (the "Effective Date") all conditions in this Section 5.1 are
satisfied.

     (a)  On or before such date, the Borrower shall deliver to the Noteholders
          the following documents in form and substance acceptable to the
          Noteholders:

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

                                       20
<PAGE>

               company agreement certified by the appropriate authority in its
               jurisdiction of formation, and (D) good standing certificates
               issued by the appropriate authority of each jurisdiction where
               such Obligor has material operations as and to the extent agreed
               with the Noteholders;

          (ii) The Security Documents (other than the Parent Guarantee and the
               Parent Pledge Agreement);

         (iii) All instruments and other documents required, or deemed desirable
               by the Noteholders, to perfect the Noteholders' or the Trustee's
               first priority security interest in the Collateral in all
               appropriate jurisdictions as collateral security for the
               Obligations;

          (iv) Executed copies of all (A) documents evidencing any necessary
               corporate and limited liability company action, consents and
               government authorizations taken or obtained by the Obligors or
               their members in connection with the Operative Documents and (B)
               Operative Documents;

           (v) [Intentionally Omitted]

          (vi) Such other approvals, opinions or documents as the Noteholder may
               request;

         (vii) The sale of the Marine Business to the Borrower shall have
               occurred on terms contemplated by the Operative Documents;

        (viii) The Noteholders shall have received evidence satisfactory to the
               Noteholders that the Fleet Mortgage, bills of sale and other
               documentation respecting the Documented Vessels was sent for
               filing for recordation in the Coast Guard's National Vessel
               Documentation Center in compliance with Maritime Law; and

          (ix) No default or event of default (in each case, as defined in each
               Operative Document) under any Operative Document by any Obligor
               or any other Person has occurred, the Obligors have no notice
               that (A) any Obligor or any of their Affiliates or any other
               Person has reason to, could or intends to take or has taken any
               steps to cancel or terminate any Operative Document, and (B) the
               Operative Documents are not otherwise in full force and effect;
               and the Obligors are not otherwise aware that any default or
               event of default (as defined in each Operative Document) under
               the Operative Documents has occurred and is continuing
               (regardless of the giving of any notice or the expiration of any
               applicable grace period).

                                       21
<PAGE>

     (b)  The Borrower shall have furnished to the Noteholders a certificate
          executed on behalf of the Borrower by a Senior Officer, which
          indicates that it is made in favor of and for the benefit of the
          Trustee and the Noteholders certifying, representing and warranting
          that all conditions to the Effective Date have occurred.

     (c)  No Default or Event of Default shall then exist or shall occur as a
          result of the purchase of the Notes hereunder; and

     (d)  The representations and warranties of the Borrower in Section 6.1 are
          true and correct on the Effective Date and after giving effect to the
          purchase of the Notes by the Noteholders.

     Section 5.2. Conditions to Beta Noteholder Purchase. The conditions to the
obligation of the Beta Noteholder to purchase its Tier 1 Note are:

     (a)  the occurrence of the Effective Date; and

     (b)  the purchase by the RBF Noteholder of the Notes to be held by it, and
          upon the satisfaction of such conditions, the Beta Noteholder shall
          purchase its Tier 1 Note from the Borrower.

                                  ARTICLE VI
                         REPRESENTATIONS AND WARRANTIES

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

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

     (b)  Limited Liability Company Power and Authority; Validity. The Borrower
          has the limited liability company power and authority to execute,
          deliver and carry out the terms and provisions of the Operative
          Documents to which it is a party and to consummate the transactions
          contemplated hereby and has taken all necessary limited liability
          company and member action to authorize the execution, delivery and
          performance of such Operative Documents and to consummate the
          transactions contemplated hereby. The Borrower has duly executed and
          delivered each Operative Document to which it is a party and each such
          Operative Document constitutes the legal, valid and binding obligation
          of such Person

                                       22
<PAGE>

          enforceable against it in accordance with its terms, subject as to
          enforcement only to bankruptcy, insolvency, reorganization, moratorium
          or other similar laws affecting the enforcement of creditors' rights
          generally and equitable principles.

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

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

     (e)  Use of Proceeds; Margin Regulations.

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

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

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

                                       23
<PAGE>

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

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

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

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

                                  ARTICLE VII
                                   COVENANTS

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

     (a)  Operative Documents. The Borrower acknowledges that it is fully aware
          of and will fully comply with and perform its obligations under the
          Operative Documents.

     (b)  Limited Liability Company Existence. The Borrower will preserve and
          maintain its limited liability company existence. The Borrower shall
          not make or permit to exist any Investment or enter into or permit to
          exist any

                                       24
<PAGE>

          partnerships, joint ventures or any other business combinations,
          mergers or consolidations involving itself or any subsidiary.

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

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

          The Borrower shall, at its own expense, insofar as is practicable,
          perform all ordinary maintenance on the Vessels and make all proper
          renewals and replacements necessitated by wear, tear and normal
          depreciation. Unless a Casualty Event results in a total loss, actual
          or constructive, as constructive total loss is defined in the relevant
          policy or policies of hull insurance, the Borrower shall, in a
          workmanlike manner, diligently commence and pursue the repair,
          restoration or replacement of any Property damaged as a result of a
          Casualty Event such that the damaged Property is restored to at least
          its value and operating condition immediately prior to the subject
          Casualty Event, or is replaced with comparable or better Property,
          unless the subject Property, at the time of such Casualty Event, was
          no longer used or useful to its Marine Business; provided, however,
          that in the event the Borrower does not receive the Casualty Proceeds
          in accordance with Section 4.05(c) of the Collateral Trust Agreement,
          the Borrower shall not be obligated to make such repair or
          restoration.

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

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

                                       25
<PAGE>

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

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

         (ii) Comprehensive general liability or commercial general liability
              (or equivalent coverage (including excess liability)) insurance
              including contractual liability, pollution and suitably endorsed
              to cover maritime operations with minimum limits of $5,000,000 per
              occurrence for deaths or injuries and property damage arising out
              of one accident).

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

         (iv) If any Vessel shall at any time be located in war-endangered
              waters or in other waters which may under the hull policy be

                                       26
<PAGE>

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

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

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

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

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

         (ix) All insurances and the policies evidencing the same shall by their
              terms be taken out in the joint names of the Borrower and the
              Trustee and shall by their terms be payable to the Trustee. Such

                                       27
<PAGE>

              amounts shall be applied as described in Section 2.4(d) hereof.
              The Borrower pays the amount of the deductible.

          (x) The Borrower warrants that it will maintain all such insurance
              unimpaired by any act, and that it will not be guilty of or permit
              any act of omission or commission which will in any way
              invalidate, void or suspend any insurance herein provided to be
              maintained. Each policy of insurance required to be maintained by
              the Borrower hereunder shall be endorsed with the undertaking of
              the insurance company or underwriters issuing such policy to the
              effect that such policy shall not lapse, expire, terminate or be
              canceled for any reason whatsoever, or be modified in any material
              respect, without at least thirty (30) days prior written notice to
              the Trustee and the Noteholders. The Borrower shall, within a
              reasonable period of time, pay for any loss of or damage to a
              Vessel by any cause whatsoever, and shall discharge or obtain the
              release of any third party claims whatsoever not covered by
              insurance or for which no reimbursement or incomplete
              reimbursement is secured from the insurance. Such policies shall
              not provide for or purport to provide for any recourse against the
              Trustee of the Noteholders for payment of club calls, assessments
              or advances.

     (g)  Insurance Certificate. On or before May 1 in each year, commencing May
          1, 2002, a certificate of insurance signed by an independent marine
          insurance broker retained by the Borrower and acceptable to the
          Required Noteholders (i) listing the policies of insurance outstanding
          and in force on such date in respect of the Vessels and the Borrower
          and its Subsidiaries as of such date, the names of the companies
          issuing such insurance, the amounts and expiration dates of such
          insurance and the risks covered thereby, and (ii) stating that
          attached to such certificate are true, correct and complete copies of
          all policies of insurance referred to therein or of certificates of
          the issuers of such policies or their agents evidencing the existence
          of such policies, and that such insurance complies with the
          requirements contained in Section 7.1(f) of this Agreement. If such
          certificate does not reflect coverage that is required by the Credit
          Documents, any failure by the Trustee or any Noteholder to object
          thereto shall in no event constitute a waiver of the requirements of
          this Agreement or the Credit Documents. Within three Business Days of
          the Closing Date, the Borrower shall deliver to the RBF Noteholder an
          insurance certificate on behalf of the Borrower dated no later than
          ten (10) days following the Closing Date from the Borrower describing
          in reasonable detail the insurance maintained by the Borrower as
          required by the Operative Documents.

     (h)  Other Information. Promptly, and in any event within five Business
          Days, after the Borrower obtains knowledge of any of the following,
          the

                                       28
<PAGE>

          Borrower will provide the Noteholders with written notice in
          reasonable detail of:

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

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

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

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

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

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

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

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

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

     (i)  Noteholder Inspection Rights. Upon reasonable notice from any
          Noteholder, the Borrower will permit such Noteholder (and such Persons
          as such Noteholder may reasonably designate) during normal business
          hours at such entity's sole expense unless a Default or Event of
          Default shall have occurred and be continuing, in which event at the
          Borrower's expense, to visit and inspect any of the properties of the
          Borrower, to examine all of its books and records, to make copies and
          extracts

                                       29
<PAGE>

          therefrom, verify the computation of any Excess Cash Flow, and to
          discuss its affairs, finances and accounts with its officers and
          independent public accountants (and by this provision the Borrower
          authorizes such accountants to discuss with the Noteholders (and such
          Persons as such Noteholder may reasonably designate) the affairs,
          finances and accounts of the Borrower), all as often, and to such
          extent, as may be reasonably requested.

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

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

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

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

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

                                       30
<PAGE>

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

          (i) Intentionally Omitted.

         (ii) Liens arising in the ordinary course of business of the Borrower
              and its Subsidiaries by operation of law, deposits, pledges or
              other Liens in connection with workers' compensation, unemployment
              insurance, old age benefits, social security obligations, taxes,
              assessments, public or statutory obligations or other similar
              charges, pledges or other Liens in connection with (or to obtain
              letters of credit in connection with) bids, performance, return-
              of-money or payment bonds, contracts or leases to which the
              Borrower is a party or other deposits required to be made in the
              ordinary course of business; provided, that in each case the
              obligation secured is not for Indebtedness for borrowed money and
              is not overdue or, if overdue, is being contested in good faith by
              appropriate proceedings and reserves in conformity with GAAP have
              been provided therefor;

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

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

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

                                       31
<PAGE>

              costs, fees and penalties, if any) of the Borrower secured by such
              Liens shall not exceed $100,000 at any one time outstanding;

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

        (vii) Liens created by the Operative Documents.

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

         (ix) Liens in existence on the Closing Date.

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

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

                                       32
<PAGE>

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

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

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

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

     (s)  Modifications of Organizational Documents and Operative Documents.

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

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

     (t)  Transfers of Assets. The Borrower shall not permit any transfer of an
          asset except:

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

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

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

         (iv) any Asset Sale for cash where the consideration involved is equal
              to or less than $2 million or any series of Asset Sales within a

                                       33
<PAGE>

              Fiscal Year where the aggregate consideration involved is equal to
              or less than $2 million, in either case, including contingent
              liabilities only to the extent required to be reflected on the
              balance sheet of the Company in accordance with GAAP; and

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

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

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

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

     (x)  Compliance with Laws. Without limiting any of the other covenants of
          the Borrower in this Article VII, the Borrower shall conduct its
          business, and otherwise be, in compliance with all applicable laws,
          regulations, ordinances and orders of any Governmental Authorities;
          provided, however, that this Section 7.1(x) shall not require the
          Borrower to comply with any such law, regulation, ordinance or order
          if the failure to comply therewith is not reasonably likely to have a
          Material Adverse Effect.

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

                                       34
<PAGE>

          copy of a certificate duly issued by the American Bureau of Shipping
          or other classification society, to the effect that the Classified
          Vessels have been given the highest classification and rating for
          vessels of the same age and type free of all recommendations and
          notations of such classification society affecting class.

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

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

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

                                 ARTICLE VIII
                            LIMITATION ON DIVIDENDS

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

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

                                       35
<PAGE>

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

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

                                  ARTICLE IX
                               BOOKS AND RECORDS

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

     Section 9.2.  Financial Statements and Reports.

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

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

                                       36
<PAGE>

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

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

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

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

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

                                       37
<PAGE>

          (e) Each of the statements and reports delivered pursuant to this
Section 9.2 (a) - (c) shall present in comparative form figures for the
corresponding period, if any, of the preceding Fiscal Year, all in reasonable
detail and satisfactory in form and substance to the Noteholders.  Together with
the delivery of such financial statements, the Borrower shall deliver a
certificate of the chief financial officer of the Borrower stating that the
chief financial officer has examined such statements and that such statements
fairly present (i) the financial condition, results of operations, changes in
members' capital and cash flows of the Borrower and its Subsidiaries in
accordance with GAAP and (ii) the Excess Cash Flow for the applicable Fiscal
Quarter and whether during such period a Default or Event of Default exists, and
if such exists, specifying the nature thereof and what actions the Borrower
intends to take with respect thereto; and

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

     Section 9.3. Notice of Affiliate Transactions; Annual List. (a) The
Borrower shall notify each Noteholder of any Affiliate Transaction that the
Borrower or any of its Subsidiaries is considering entering into or renewing or
extending the term thereof (whether pursuant to contractual provisions thereof
or otherwise), which notice shall be given, to the extent reasonably possible,
sufficiently in advance of the time that the Borrower intends to enter into,
renew or extend the term of such Affiliate Transaction so as to provide the
Noteholders with a reasonable opportunity to examine the documentation related
to such Affiliate Transaction.

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

                                   ARTICLE X
                               EVENTS OF DEFAULT

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

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

                                       38
<PAGE>

     (b)  Default by the Borrower in the payment when due of any interest on the
          Notes or any fee, expense or other amount payable hereunder and such
          failure continues for two (2) Business Days thereafter;

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

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

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

     (f)  The Company, the Borrower or any of their respective Subsidiaries (i)
          has entered involuntarily against it an order for relief under the
          United States Bankruptcy Code or a comparable action is taken under
          any bankruptcy or insolvency law of another country or political
          subdivision of such country, (ii) generally does not pay, or admits
          its inability generally to pay, its debts as they become due, (iii)
          makes a general assignment for the benefit of creditors, (iv) applies
          for, seeks, consents to, or acquiesces in, the appointment of a
          receiver, custodian, trustee, liquidator or similar official for it or
          any substantial part of its property under the Bankruptcy Code or
          under the bankruptcy or insolvency laws of another country or a
          political subdivision of such country, (v) institutes any proceeding
          seeking to have entered against it an order for relief under the
          United States Bankruptcy

                                       39
<PAGE>

          Code or any comparable law, to adjudicate it insolvent, or seeking
          dissolution, winding up, liquidation, reorganization, arrangement,
          adjustment or composition of it or its debts under any law relating to
          bankruptcy, insolvency or reorganization or relief of debtors or fails
          to file an answer or other pleading denying the material allegations
          of or consents to or acquiesces in any such proceeding filed against
          it, (vi) takes any corporate action in direct furtherance of any
          matter described in clauses (i)-(v) above, or (vii) fails to contest
          in good faith any appointment or proceeding described in this Section
          10.1(f);

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

     (h)  The Company, the Borrower or any of their respective Subsidiaries
          fails within thirty (30) days with respect to a judgment or an order
          (or such earlier date as any execution on such judgment or order shall
          take place) to vacate, pay, bond or otherwise discharge any judgment
          or order for the payment of money the uninsured portion of which is in
          excess of $250,000 with respect to the Company, the Borrower or such
          Subsidiary and which is not stayed on appeal or otherwise being
          appropriately contested in good faith in a manner that stays
          execution;

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

     (j)  The Company shall fail to directly own at least one hundred percent
          (100%) of the Membership Interests of the Borrower; or Gary Chouest
          fails at all times before his death to own directly or indirectly
          11.25% of the Membership Interests in the Company;

     (k)  Any default (as defined in the applicable contract) or event of
          default (as defined in the applicable contract) by Company, the
          Borrower, the Beta Noteholder under any of the Operative Documents
          shall occur and shall be continuing or any of such contracts shall be
          cancelled, terminated or

                                       40
<PAGE>

          performance of any material party suspended as a result of such
          default or event of default;

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

     (m)  Any Condition Subsequent shall not be fully satisfied on or before the
          date on which the Beta Noteholder purchases its Tier 1 Note; or

     (n)  Upon filing the Fleet Mortgage for recordation pursuant to Section
          5.1(a)(viii), the Coast Guard's National Vessel Documentation Center
          is unable to provide satisfactory evidence to the Required Noteholders
          that the Borrower owns the Vessels covered thereby free and clear of
          all recorded liens other than the Fleet Mortgage.

     Section 10.2. Non-Bankruptcy Defaults. When any Event of Default (other
than those described in Section 10.1(f) or (g) with respect to the Borrower) has
occurred and is continuing, the Required Noteholders may, without notice to the
Borrower declare the outstanding principal of and the accrued and unpaid
interest on the Notes and all other Obligations to be forthwith due and payable
and thereupon all outstanding amounts under the Notes, including both principal
of and interest thereon, shall be and become immediately due and payable
together with all other Obligations without further demand, presentment, protest
or notice of any kind, including, but not limited to, notice of intent to
accelerate and notice of acceleration, each of which is expressly waived by the
Borrower.

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

     Section 10.4. Remedies Upon an Event of Default. (a) If an Event of Default
has occurred and is continuing, the Trustee may, and, the Trustee, if directed
in writing by the Required Noteholders, shall, exercise any of the rights or
remedies granted to it under the Collateral Trust Agreement or any of the other
Operative Documents, in addition to any rights or remedies of such parties set
forth in this Agreement.

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

                                       41
<PAGE>

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

     Notwithstanding Sections 10.2 through 10.4, unless the Trustee or the
Required Noteholders shall have notified the Borrower in writing within 30 days
of the occurrence of any Tier 1 Amortization Default and thereafter commenced
the exercise of their rights and remedies in respect of such Tier 1 Amortization
Default within six months of its occurrence, and no other Default or Event of
Default shall have occurred and be continuing, then such Tier 1 Amortization
Default shall be deemed waived upon the expiration of such six month period.
Any such deemed waiver shall not affect the rights and remedies of the
Noteholders or the Trustee with respect to any other Default or Event of
Default, including any other Tier 1 Amortization Default.

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

                                  ARTICLE XI
                                 MISCELLANEOUS

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

     Section 11.2. Notices. Unless otherwise specified, all notices and other
communications hereunder shall be in writing (including by telecopier or other
facsimile communication), given

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<PAGE>

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

     Section 11.3. Payments and Computations. Notwithstanding anything herein to
the contrary, any amounts to be paid or transferred by the Borrower to, or for
the benefit of, the Noteholders or any other Person shall be paid or transferred
to the Noteholders (for the benefit of the Noteholders or any other Person). All
amounts to be paid or deposited hereunder shall be paid or transferred on the
day when due in immediately available Dollars (and, if due from the Borrower, by
11:00 a.m. (Houston time), with amounts received after such time being deemed
paid on the Business Day following such receipt). The Borrower shall, to the
extent permitted by law, pay to the Noteholders upon demand, for the account of
the applicable Person, interest on all amounts not paid or transferred by the
Borrower when due hereunder at a rate equal to the Fixed Rate plus 2% per annum,
calculated from the date any such amount became due until the date paid in full.
Any payment or other transfer of funds scheduled to be made on a day that is not
a Business Day shall be made on the next Business Day, and any interest rate
accruing on such amount to be paid or transferred shall continue to accrue to
such next Business Day.

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

     Section 11.5. Amendments, Waivers and Consents. Any provision of the Credit
Documents may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed (and/or consented to) by (a) the Borrower, and (b) the
Required Noteholders; provided that any increase or reduction in the interest
rate on the Notes and acceleration of the Tier 2 & 3 Termination Date, a
deferral of the payment dates set forth in the proviso to Section

                                       43
<PAGE>

2.4(a), or any increase or reduction in the portion of Excess Cash Flow to be
allocated to the Notes shall require the approval of all Noteholders. Any
consent to be delivered by the Noteholders under the Credit Documents shall not
be effective unless contained in a writing signed by the Required Noteholder, or
if, described in the foregoing proviso, all Noteholders.

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

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

     Section 11.8. Participations and Assignments. (a) Participations. Subject
to Section 11.8(c) and (d), the Noteholders may at any time sell to Persons
("Participants") participating interests in any Note owing to the Noteholders,
or any other interest of the Noteholders hereunder. The Borrower agrees that if
amounts outstanding under this Agreement shall have become due and payable, each
Participant shall be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as the
Noteholders under this Agreement. The Borrower also agrees that each Participant
shall be entitled to the benefits of Sections 4.1, 4.2, 4.3 and 4.6 with respect
to the principal amount of the Notes outstanding from time to time.

      (b) Assignments.  Subject to Section 11.8(c) and (d), any Noteholder may
at any time sell to any Person all or a portion of its interest in the Notes.
Upon such execution, delivery and acceptance, from and after the effective date
of the transfer, (i) such Noteholder thereunder shall be a party hereto and, to
the extent of such assignment, have the rights and obligations of the transferor
Noteholder hereunder and (ii) the transferor Noteholder thereunder shall, to the
extent provided in such assignment, be released from its obligations under this
Agreement (and, in the case of an assignment covering all or the remaining
portion of a transferor Noteholder's rights

                                       44
<PAGE>

and obligations under this Agreement, such transferor Noteholder shall cease to
be a party hereto except as to Sections 4.1, 4.2, 4.3 and 4.6 for periods prior
to the effective date of such assignment). Such assignment shall be deemed to
amend this Agreement to the extent, and only to the extent, necessary to reflect
the addition of such transferee and the resulting adjustment of percentages
arising from the purchase by such transferee of all or a portion of the rights
and obligations of such transferor Noteholder under this Agreement and the other
Credit Documents.

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

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

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

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

                                       45
<PAGE>

to the Selling Noteholder within the Election Period, to sell all (but not part)
of its interest in the Notes pursuant to the specified terms and conditions set
forth in the Offer Notice.

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

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

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

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

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

     Section 11.9. Governing Law; Submission to Jurisdiction; Waiver of Jury
Trial. (a) THIS AGREEMENT AND THE RIGHTS AND DUTIES OF THE PARTIES HERETO, SHALL
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE
OF TEXAS (WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES).

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<PAGE>

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

      (c) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO
WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR
DEFEND ANY RIGHTS UNDER THIS AGREEMENT

                                       47
<PAGE>

OR ANY OTHER CREDIT DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH OR ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT, AND AGREES THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

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

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

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

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

     Section 11.14. Interest Rate Limitation. Each provision in this Agreement
and each other Credit Document is expressly limited so that in no event
whatsoever shall the amount paid, or otherwise agreed to be paid, to any
Noteholder, or charged, contracted for, reserved, taken or received by any
Noteholder, for the use, forbearance or detention of the money to be loaned
under this Agreement or any Credit Document or otherwise (including any sums
paid as required

                                       48
<PAGE>

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

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

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

                                       49
<PAGE>

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

                                 Delta Towing, LLC, as the Borrower

Dated as of January 30, 2001     By: /s/ BERNIE W. STEWART
                                    ---------------------------------
                                    Bernie W. Stewart, President

                                    Address (after January 31, 2001):
                                    P.O. Box 309
                                    Galliano, LA 70354
                                    Facsimile: (504) 632-2282
                                    Attention: Gary Chouest, President
                                    with a copy to Dionne Chouest

                                    R&B Falcon Drilling USA, Inc., as a
                                     Noteholder

Dated as of January 30, 2001     By: /s/ BERNIE W. STEWART
                                    ---------------------------------
                                    Bernie W. Stewart, President

                                    Address (after January 31, 2001):
                                    c/o Transocean Sedco Forex Inc.
                                    4 Greenway Plaza
                                    Houston, Texas 77046
                                    Facsimile No.: (713) 232-7600
                                    Attn: General Counsel

                                       50
<PAGE>

                                       Beta Marine Services, L.L.C., as a
                                        Noteholder

Dated January 31, 2001 but         By:  /s/ GARY CHOUEST
effective as of January 30, 2001       ----------------------------------
                                       Gary Chouest, Member

                                       Address (after January 31, 2001):
                                       16210 East Main
                                       P.O. Box 309
                                       Galliano, LA 70354-0309
                                       Facsimile: (504) 632-7144
                                       Attention: Gary Chouest, President
                                       with a copy to Dionne Chouest

                                       51
<PAGE>

                                                                    EXHIBIT 2.6A
                                    FORM OF
                                PROMISSORY NOTE

                                    (TIER 1)

__________________________ $            Dated: _________ __, ____

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

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

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

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

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

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

                              By:
                                 ----------------------------------
                                 Name:
                                 Title:
<PAGE>

                                                                    EXHIBIT 2.6B
                                    FORM OF
                                PROMISSORY NOTE

                                    (TIER 2)

________________$                       Dated: __________ ___, ____

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

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

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

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

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

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

                              By:
                                  -----------------------------
                                  Name:
                                  Title:
<PAGE>

                                                                    EXHIBIT 2.6C
                                    FORM OF
                                PROMISSORY NOTE
                                    (Tier 3)

____________________$                   Dated: ___________ __, ____

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

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

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

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

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

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

                              By:
                                 ----------------------------------
                                 Name:
                                 Title:
<PAGE>

                                 SCHEDULE 1.01

                                RELATED ENTITIES

Edison Chouest Offshore, L.L.C.
Alpha Marine Services, L.L.C.
Chouest Offshore Services, L.L.C.
Holiday Offshore, L.L.C.
United Marine Holdings, L.L.C.
C-Port, L.L.C.
C-Port 2, L.L.C.
C-Logistics, L.L.C.
Offshore Support Services, L.L.C.
Martin Terminals, Inc.
North American Offshore, LLC
<PAGE>

                                SCHEDULE 6.1(C)

                                EXCEPTED MATTERS

Although Borrower believes that the transactions contemplated by the Operative
Documents comply with laws applicable to the coastwise trade business, including
the Jones Act, the Vessel Documentation Act and Section 2 of the Shipping Act,
1916, as amended, it is not making any representation or warranty regarding such
compliance.

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