Document:

CONSULTING AGREEMENT

          This  Consulting  Agreement  (this  "Agreement"),  by  and  between
Transocean  Offshore  Inc.,  a  Cayman  Islands corporation (the "Company"), and
Victor  E.  Grijalva  (the  "Consultant"),  is  dated  as  of December 13, 1999.

          WHEREAS,  pursuant  to the terms of that certain Agreement and Plan of
Merger  dated  as  of  July  12, 1999 (the "Merger Agreement"), by and among the
Company,  Sedco  Forex  Holdings  Limited,  a British Virgin Islands corporation
("Sedco  Forex"),  and  Schlumberger Limited, a Netherlands Antilles corporation
("Schlumberger"),  the  Consultant  is  to  become  the Chairman of the Board of
Directors  of  the  Company  upon  completion  of the merger provided for in the
Merger  Agreement;  and

          WHEREAS, it is a condition to the Consultant's appointment as Chairman
of  the  Board  of  Directors that he enter into a consulting agreement with the
Company;

          NOW,  THEREFORE,  in  consideration  of  the  foregoing,  and  of  the
representations,  warranties,  covenants  and agreements contained herein, it is
hereby  agreed  as  follows:

          1.  Definitions.  Capitalized  terms  used  herein  without definition
              -----------
shall  have  the  meanings  assigned  to  them  in  the  Merger  Agreement.

          2.  Post-Merger  Services.
              ---------------------

          (a)  In  connection  with  the  Merger,  the  Company  shall cause the
Consultant  to be nominated to its Board of Directors (the "Board") beginning as
of the Effective Time to serve as Chairman thereof for a term or terms extending
until  the date of his sixty-fifth (65th) birthday ("Resignation Date").  On the
Resignation Date, the Consultant shall tender to the Board his resignation, such
tender  of  resignation to be acted upon in the discretion of the Board (without
participation  by  the  Consultant  in  the  deliberation  or  vote with respect
thereto).

          (b)  From  the  Effective  Time  through the Resignation Date, or such
shorter  period  as  may be provided pursuant to Section 4(a), (b), or (c) below
(the  "Engagement  Period"),  in consideration for the compensation provided for
below,  the  Consultant shall make himself available to the Company, at mutually
convenient times and places, for such consulting services as may be requested by
the  Chief  Executive  Officer  or  the Board of the Company, in connection with
long-range  planning,  strategic  direction, integration and rationalization and
other  matters  following  the  Merger,  including work with the Chief Executive
Officer  and,  as  may be requested by the Chief Executive Officer, other senior
management  of the Company with respect to matters to be presented to the Board.

          3.  Compensation  and  Benefits.
              ---------------------------

          (a) The Company shall pay the Consultant a fee (the "Fee") of $400,000
per  annum,  payable monthly in advance in prorated one-twelfth (1/12) portions,
during  the  Engagement  Period.  In addition, during the Engagement Period, the
Consultant  shall  be  entitled

<PAGE>
to  cost reimbursement (including travel expense reimbursement) as in effect for
its non-employee members of the Board in accordance with the Company's policies.

          (b)  The  Consultant shall receive the same compensation and benefits,
other  than  cash  director  fees, as other non-employee members of the Board in
accordance  with  the  Company's  policies.

          (c)  The Consultant's status  hereunder  during  the Engagement Period
shall  be that of an independent contractor and not, for any purpose, that of an
employee  or  agent  with  authority  to  bind  the  Company in any respect. All
payments  and  other consideration made or provided to the Consultant under this
Section  3  shall  be  made  or provided without withholding or deduction of any
kind,  and  the  Consultant shall assume sole responsibility for discharging all
tax  or  other  obligations  associated therewith, unless the Consultant and the
Company  shall  otherwise  agree.

          4.  Termination.
              -----------

          (a)  If  the  Consultant  should  die  or  become Permanently Disabled
before the Resignation Date, the Engagement Period shall end on the date of such
death  or  Permanent  Disability,  and the Company shall pay to the Consultant's
estate or to the Consultant or his legal guardian, as applicable, any portion of
the  Fee  that  has accrued but remains unpaid.  For purposes of this Agreement,
"Permanently  Disabled"  or  "Permanent  Disability"  shall  mean entitlement to
benefits  under  the  long-term  disability  plan  sponsored  by  the  Company.

          (b)  The Company (by  a  vote of the Board of Directors other than the
Consultant, which vote must include the vote of at least one person serving as a
member  of the Board of Directors by designation of Schlumberger pursuant to the
Merger  Agreement) may terminate the Engagement Period for Cause, in which event
no  further  payments  of  the  Fee  (other than any portion of the Fee that has
accrued  but  remains  unpaid)  shall  be  made. For purposes of this Agreement,
"Cause"  shall  mean  (i) any material breach of Consultant's duty of loyalty to
the  Company  or  its  shareholders, (ii) acts or omissions not in good faith or
that  involve  intentional misconduct or a knowing violation of law or (iii) any
transaction  from  which  the  Consultant  derived  a material improper personal
benefit.  Any  act,  or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board or based upon the advice of counsel for the
Company shall be conclusively presumed to be done, or omitted to be done, by the
Consultant  in  good  faith  and  in  the  best interests of the Company and its
subsidiaries.

          (c)  If  the  Consultant  should  resign  or otherwise leave the Board
prior to the Resignation Date, the Engagement Period shall end as of the date of
such  resignation  or  the  date  Consultant leaves the Board, in which event no
further  payments of the Fee (other than any portion of the Fee that has accrued
but  remains  unpaid)  shall  be  made.

          (d)  This  Agreement  shall  terminate  at  the  end of the Engagement
Period.

          5.  Indemnification.  The  Company  shall indemnify the Consultant and
              ---------------
his  estate,  heirs  and  personal  representatives,  in  connection  with  the
Consultant's  services  hereunder,  as  and  to  the full extent provided in the
Company's  Articles of Association. In addition, the Consultant shall be covered
by  the  Company's  Directors  and  Officers'  liability  insurance  program.

                                        2
<PAGE>
          6.  Successors.
              ----------

          (a)  This  Agreement  is  personal  to the Consultant and shall not be
assignable  without  the  written  consent  of  the  Company.

          (b)  This  Agreement shall inure to the benefit of and be binding upon
the  Company  and  its  respective  successors  and  assigns.

          7.  Miscellaneous.
              -------------

          (a)  This  Agreement  shall be governed by and construed in accordance
with  the  laws  of  the  State  of New York, without reference to principles of
conflict  of laws. The captions of this Agreement are not part of the provisions
hereof  and  shall have no force or effect. This Agreement may not be amended or
modified otherwise than by a written agreement executed by the parties hereto or
their  respective  permitted  successors  and  assigns.

          (b)  All  notices  and  other  communications  hereunder  shall  be in
writing  and shall be given by hand delivery to the other party or by registered
or  certified  mail,  return  receipt  requested,  postage prepaid, addressed as
follows:

          If  to  the  Consultant:
          Victor  E.  Grijalva
          c/o  Schlumberger  Limited
          277  Park  Avenue
          New  York,  New  York  10172

          If  to  the  Company:
          Transocean  Sedco  Forex  Inc.
          4  Greenway  Plaza
          Houston,  Texas  77046
          Attn:  General  Counsel

or  to  such  other address as either party shall have furnished to the other in
writing  in  accordance  herewith. Notices and communications shall be effective
when  actually  received  by  the  addressee.

          (c)  The  invalidity  or unenforceability of any provision (or portion
thereof)  of  this  Agreement shall not affect the validity or enforceability of
any  other  provision  (or  portion  thereof)  of  this  Agreement.

          (d)  From and after the Effective Time, this Agreement shall supersede
any  other  agreement  between  the  parties  with respect to the subject matter
hereof.  This  Agreement  shall  be  null and void, ab initio, and of no further
effect  if  the  Merger  Agreement  is  terminated  before  the  Effective Time.

                                        3
<PAGE>
          (e)  This  Agreement  may be executed in several counterparts, each of
which  shall  be  deemed an original, and said counterparts shall constitute but
one  and  the  same  instrument.

                                        4
<PAGE>
          IN  WITNESS  WHEREOF, the Consultant has hereunto set the Consultant's
hand and, pursuant to the authorization from its Board of Directors, the Company
has  caused  this  Agreement to be executed in its name on its behalf, all as of
the  day  and  year  first  above  written.

                                        /s/ VICTOR  E.  GRIJALVA
                                        ----------------------------------------
                                        Victor  E.  Grijalva

                                        TRANSOCEAN OFFSHORE INC.

                                        By /s/ J. MICHAEL TALBERT
                                           ------------------------------------
                                           Name:
                                           Title:

                                        5
<PAGE>EXECUTION COPY

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

                             PARTICIPATION AGREEMENT

                            dated as of July 30, 1998

                                      among

                           DEEPWATER DRILLING L.L.C.,

             DEEPWATER INVESTMENT TRUST 1998-A, as Investment Trust

              WILMINGTON TRUST FSB, not in its individual capacity
       except as expressly stated herein, but solely as Investment Trustee

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

                            WILMINGTON TRUST COMPANY,
               not in its individual capacity except as expressly
                 provided herein, but solely as Charter Trustee,

                        BA LEASING & CAPITAL CORPORATION,
                             as Documentation Agent,

                            THE BANK OF NOVA SCOTIA,
                              as Syndication Agent,

                 THE OTHER FINANCIAL INSTITUTIONS LISTED ON THE
                       SIGNATURE PAGES HEREOF OR THAT MAY
                         HEREAFTER BECOME PARTY HERETO,
                           as Certificate Purchasers,

                                       and

                  solely with respect to Sections 5.2 and 6.4,
                       RBF DEEPWATER EXPLORATION INC. and
                           CONOCO DEVELOPMENT COMPANY

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

<PAGE>
                                    SECTION 1

                           DEFINITIONS; INTERPRETATION

                                    SECTION 2

                           COMMITMENTS OF THE PARTIES

<TABLE>
<CAPTION>
<S>            <C>                                                       <C>
SECTION 2.1    Certain Closing Date Events . . . . . . . . . . .  . . . .    2
SECTION 2.2    Certain Delivery Date Events . . . . . . . . . . . . . . .    3
SECTION 2.3    Advances by Certificate Purchasers . . . . . . . . . . . .    4
SECTION 2.4    Certificates and Payments  . . . . . . . . . . . . . . . .    4
SECTION 2.5    Limitations on Advances. . . . . . . . . . . . . . . . . .    5
SECTION 2.6    Fundings; Application of Proceeds. . . . . . . . . . . . .    5
SECTION 2.7    Time and Place of Advance Closings . . . . . . . . . . . .    7
SECTION 2.8    Postponement of Advance  . . . . . . . . . . . . . . . . .    7
SECTION 2.9    Records; Capitalized Certificate Return. . . . . . . . . .    8
SECTION 2.10   The Trustee's Account. . . . . . . . . . . . . . . . . . .    8
SECTION 2.11.  Timing of Fundings to Investment Trustee and
               Payments to Certificate Purchasers . . . . . . . . . . . .    9
SECTION 2.12   Computations . . . . . . . . . . . . . . . . . . . . . . .    9
SECTION 2.13   Conditions to each Advance . . . . . . . . . . . . . . . .   10
SECTION 2.14   Fees . . . . . . . . . . . . . . . . . . . . . . . . . . .   10

                                    SECTION 3

               EFFECTIVE DATE; CLOSING DATE; CONDITIONS PRECEDENT

SECTION 3.1    Effective Date; Closing Date. . . . . . . . . . . . . . .    11
SECTION 3.2    Conditions Precedent to Closing Date. . . . . . . . . . .    11

                                    SECTION 4

                       DELIVERY DATE; CONDITIONS PRECEDENT

SECTION 4.1    Conditions Precedent to Delivery Date . . . . . . . . . .    15
SECTION 4.2    Head Lease Transaction. . . . . . . . . . . . . . . . . .    17

                                    SECTION 5

                         REPRESENTATIONS AND WARRANTIES

SECTION 5.1    Representations and Warranties of Deepwater . . . . . . .    19
SECTION 5.2    Representations and Warranties of Members . . . . . . . .    23
SECTION 5.3    Representations and Warranties of the Investment

<PAGE>
                                TABLE OF CONTENTS

                                                                           Page
                                                                           ----

               Trust . . . . . . . . . . . . . . . . . . . . . . . . . .    25
SECTION 5.4    Representations and Warranties of the Certificate
               Purchasers. . . . . . . . . . . . . . . . . . . . . . . .    26
SECTION 5.5    Representations and Warranties of the Trustee . . . . . .    28

                                    SECTION 6

                        CERTAIN COVENANTS AND AGREEMENTS

SECTION 6.1    Covenants of Deepwater. . . . . . . . . . . . . . . . . .    29
SECTION 6.2    Certain Covenants of the Charter Trustee, the
               Investment Trustee and the Investment Trust . . . . . . .    34
SECTION 6.3    Covenants of the Certificate Purchasers . . . . . . . . .    36
SECTION 6.4    Covenants of the Members. . . . . . . . . . . . . . . . .    37
SECTION 6.5    Hedging Agreements. . . . . . . . . . . . . . . . . . . .    38
SECTION 6.6    Purchase Obligation . . . . . . . . . . . . . . . . . . .    38
SECTION 6.7    Charter Extension Option. . . . . . . . . . . . . . . . .    39
SECTION 6.8    Excessive Use Indemnity . . . . . . . . . . . . . . . . .    39

                                    SECTION 7

                               CERTAIN PROCEDURES

SECTION 7.1    Illegality. . . . . . . . . . . . . . . . . . . . . . . .    39
SECTION 7.2    Increased Costs and Reduction of Return . . . . . . . . .    40
SECTION 7.3    Funding Losses. . . . . . . . . . . . . . . . . . . . . .    41
SECTION 7.4    Inability to Determine Rates. . . . . . . . . . . . . . .    41
SECTION 7.5    Reserves on Base Rate Advances. . . . . . . . . . . . . .    42
SECTION 7.6    Certificates of Certificate Purchasers. . . . . . . . . .    42
SECTION 7.7    Substitution of Certificate Purchasers; Change in
               Applicable Office; Prepayments. . . . . . . . . . . . . .    42
SECTION 7.8    Legal and Tax Representation. . . . . . . . . . . . . . .    43
SECTION 7.9    Failure of a Certificate Purchaser to Fund. . . . . . . .    43

                                    SECTION 8

                           PAYMENT OF CERTAIN EXPENSES

SECTION 8.1    Transaction Expenses. . . . . . . . . . . . . . . . . . .    45
SECTION 8.2    Transaction Expenses if Closing does not Occur. . . . . .    45

                                       ii
<PAGE>
                                TABLE OF CONTENTS

                                                                           Page
                                                                           ----

SECTION 8.3    On-Going Expenses . . . . . . . . . . . . . . . . . . . .    45

                                    SECTION 9

                  RESTRICTIONS ON TRANSFERS; CHANGE OF CONTROL

SECTION 9.1    Restrictions on the Certificate Purchasers. . . . . . . .    46
SECTION 9.2    Restrictions on Trustees. . . . . . . . . . . . . . . . .    48
SECTION 9.3    Expenses. . . . . . . . . . . . . . . . . . . . . . . . .    48
SECTION 9.4    Conoco Change of Control. . . . . . . . . . . . . . . . .    48

                                   SECTION 10

                                 INDEMNIFICATION

SECTION 10.1   General Indemnity . . . . . . . . . . . . . . . . . . . .    49
SECTION 10.2   General Indemnity Exclusions. . . . . . . . . . . . . . .    50
SECTION 10.3   Proceedings in Respect of Claims. . . . . . . . . . . . .    51
SECTION 10.4   General Tax Indemnity . . . . . . . . . . . . . . . . . .    52

                                   SECTION 11

                                     AGENTS

SECTION 11.1.  Appointment of Administrative Agent,
               Documentation Agent and Syndication Agent; No
               Duties. . . . . . . . . . . . . . . . . . . . . . . . . .    62
SECTION 11.2   Delegation of Duties. . . . . . . . . . . . . . . . . . .    63
SECTION 11.3   Exculpatory Provisions. . . . . . . . . . . . . . . . . .    63
SECTION 11.4   Reliance by Agents. . . . . . . . . . . . . . . . . . . .    63
SECTION 11.5   Notice of Default . . . . . . . . . . . . . . . . . . . .    64
SECTION 11.6.  Non-Reliance on Administrative Agent and Other
               Certificate Purchasers. . . . . . . . . . . . . . . . . .    64
SECTION 11.7   Indemnification . . . . . . . . . . . . . . . . . . . . .    65
SECTION 11.8   Agents. . . . . . . . . . . . . . . . . . . . . . . . . .    66
SECTION 11.9   Successor Agent . . . . . . . . . . . . . . . . . . . . .    66

                                   SECTION 12

                                  MISCELLANEOUS

                                      iii
<PAGE>
                                TABLE OF CONTENTS

                                                                           Page
                                                                           ----

SECTION 12.1   Survival of Agreements. . . . . . . . . . . . . . . . . .    67
SECTION 12.2   No Broker; etc. . . . . . . . . . . . . . . . . . . . . .    67
SECTION 12.3   Notices . . . . . . . . . . . . . . . . . . . . . . . . .    67
SECTION 12.4   Counterparts. . . . . . . . . . . . . . . . . . . . . . .    70
SECTION 12.5   Amendments, Waivers and Consents. . . . . . . . . . . . .    70
SECTION 12.6   Confidentiality . . . . . . . . . . . . . . . . . . . . .    71
SECTION 12.7   Headings; etc . . . . . . . . . . . . . . . . . . . . . .    72
SECTION 12.8   Parties in Interest . . . . . . . . . . . . . . . . . . .    72
SECTION 12.9   Governing Law . . . . . . . . . . . . . . . . . . . . . .    72
SECTION 12.10  Severability. . . . . . . . . . . . . . . . . . . . . . .    72
SECTION 12.11  Further Assurances. . . . . . . . . . . . . . . . . . . .    72
SECTION 12.12  Waiver of Jury Trial. . . . . . . . . . . . . . . . . . .    72
SECTION 12.13  Limitations on Recourse . . . . . . . . . . . . . . . . .    72
SECTION 12.14  Applicable Laws . . . . . . . . . . . . . . . . . . . . .    73
SECTION 12.15  Right to Inspect. . . . . . . . . . . . . . . . . . . . .    74
SECTION 12.16  Accounts, Distribution of Payments and Flow of
               Funds . . . . . . . . . . . . . . . . . . . . . . . . . .    74
SECTION 12.17  Attorneys-in-Fact . . . . . . . . . . . . . . . . . . . .    74
SECTION 12.18  Successor Trustees; Jurisdiction of Trust . . . . . . . .    74
SECTION 12.19  Third-Party Beneficiary . . . . . . . . . . . . . . . . .    75
SECTION 12.20  Consent to Jurisdiction . . . . . . . . . . . . . . . . .    75
SECTION 12.21  Deepwater Acknowledgement With Respect to
               Charter Trust Agreement . . . . . . . . . . . . . . . . .    75
</TABLE>

<TABLE>
<CAPTION>
EXHIBITS
--------
<S>             <C>
EXHIBIT A    -  Form of Funding Indemnity Letter
EXHIBIT B    -  Opinion of White & Case LLP, special counsel to Deepwater
EXHIBIT C    -  Opinion of Hunton & Williams, counsel to Conoco
EXHIBIT D    -  Opinion of Wayne K. Anderson, in-house counsel to Conoco
EXHIBIT E    -  Opinion of Wayne K. Hillin, counsel to R&B
EXHIBIT F    -  Officer's and Manager's Certificate
EXHIBIT G    -  Officer's Certificate
EXHIBIT H-1  -  Amended and Restated Drilling Contract
EXHIBIT H-2  -  Amended and Restated Drilling Contract Guaranty
EXHIBIT I    -  Conoco Drilling Consent
EXHIBIT J    -  Securities Act Representation from PricewaterhouseCoopers LLP
EXHIBIT K    -  Form of Conoco Assumption Agreement and Opinion
EXHIBIT L    -  Builder's Certificate

                                       iv
<PAGE>
                                TABLE OF CONTENTS

                                                                           Page
                                                                           ----

EXHIBIT M    -  Bill of Sale
EXHIBIT N    -  Form of Advance Request
EXHIBIT O    -  Opinion of Haight, Gardner, Holland & Knight
EXHIBIT P    -  Opinion of Arias, Fabrega & Fabrega, Panamanian Counsel
EXHIBIT Q    -  Form of Notice of Certificate Return Rate
EXHIBIT R    -  Replacement Certificate Purchaser Assignment and Assumption
                Agreement
EXHIBIT S-1  -  Form of Hedging Agreements
EXHIBIT S-2  -  Form of Deepwater Hedging Agreements
EXHIBIT T    -  Form of Ship Mortgage
EXHIBIT U    -  Opinions of Cynthia L. Corliss, Vice President and Trust Counsel of
                Wilmington Trust Company and Richards, Layton, and Finger

SCHEDULES
---------

SCHEDULE 1   -  List of Transaction Documents
SCHEDULE 2   -  Facility Fee Rate
SCHEDULE 3   -  List of UCC and Other Necessary Security Filings
SCHEDULE 4   -  Information Relied Upon by Appraiser
SCHEDULE 5   -  Certificate Purchaser Notice Addresses, Payment Instructions and
                Responsible Officers
SCHEDULE 6   -  Description of OFE
SCHEDULE 7   -  Terms of Subordination for Subordinated Debt
SCHEDULE 8   -  Conditions to Effective Date
</TABLE>

                                        v
<PAGE>
                            PARTICIPATION AGREEMENT

     THIS  PARTICIPATION  AGREEMENT, dated as of July 30, 1998 (this "Agreement"
                                                                      ---------
or  "Participation  Agreement"), is entered into by and among DEEPWATER DRILLING
     ------------------------
L.L.C.,  a  Delaware  limited  liability company ("Deepwater"), WILMINGTON TRUST
                                                   ---------
FSB,  a Federal savings bank, not in its individual capacity except as expressly
provided herein, but solely as trustee under the Investment Trust Agreement (the
"Investment  Trustee"),  DEEPWATER  INVESTMENT TRUST 1998-A, a Delaware business
 -------------------
trust (the "Investment Trust"), ABN AMRO BANK N.V., as agent for the Certificate
            ----------------
Purchasers  (the  "Administrative  Agent"), WILMINGTON TRUST COMPANY, a Delaware
                   ---------------------
banking corporation, not in its individual capacity except as expressly provided
herein,  but  solely  as trustee under the Charter Trust Agreement (the "Charter
                                                                         -------
Trustee"),  BA  LEASING  &  CAPITAL  CORPORATION,  a  California corporation, as
-------
documentation  agent  (the  "Documentation  Agent"), THE BANK OF NOVA SCOTIA, as
                             --------------------
syndication  agent (the "Syndication Agent"), each of the financial institutions
                         -----------------
listed  on  the  signature  pages  hereto,  or that may hereafter become a party
hereto,  as  a  certificate  purchaser  (each,  a  "Certificate  Purchaser"  and
                                                    ----------------------
collectively,  the  "Certificate  Purchasers") (each of the foregoing parties, a
                     -----------------------
"Participant"),  and  solely with respect to Sections 5.2 and 6.4, RBF DEEPWATER
 -----------
EXPLORATION  INC.,  a  Nevada  corporation,  and  CONOCO  DEVELOPMENT COMPANY, a
Delaware  corporation  (each,  a  "Member").
                                   ------

                                   WITNESSETH
                                   ----------

     WHEREAS,  the Charter Trustee contemplates acquiring title to the Drillship
from the Builder or chartering the Drillship from the Head Lessor, and Deepwater
contemplates chartering or subchartering the Drillship from the Charter Trustee;

     WHEREAS,  pursuant  to  the Construction Supervisory Agreement, the Charter
Trustee  and  Deepwater  have  agreed  that  Deepwater  will act as Construction
Supervisor  and supervise the construction of the Vessel and the acquisition and
installation of the OFE (the Vessel and the OFE, collectively, the "Drillship");
                                                                    ---------

     WHEREAS,  Deepwater,  the  Charter Trustee and the Investment Trust wish to
arrange  financing  for  the cost of the acquisition of OFE and the construction
and  delivery  of  the  Vessel;

     WHEREAS, Deepwater and Conoco Drilling are parties to the Drilling Contract
providing  for  drilling  services  utilizing  the Drillship from Deepwater, and
payments  to  Deepwater  by  Conoco  Drilling  of the Day Rate and other amounts
referred  to  in  the  Drilling  Contract;  and

     WHEREAS,  the  Certificate  Purchasers  have agreed to make Advances to the
Charter  Trustee and the Investment Trust, as applicable, in an aggregate amount
not  to  exceed  the  Maximum  Certificate  Purchaser  Commitment  to  fund  the
construction  of  the  Vessel  pursuant  to

                                        1
<PAGE>
the  Construction  Contract, the acquisition of the OFE and certain other costs.

     NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained  herein  and  other  good  and valuable consideration, the receipt and
sufficiency  of  which  are  hereby  acknowledged,  the  parties hereto agree as
follows:

                                    SECTION 1

                          DEFINITIONS; INTERPRETATION

     Unless  the  context  otherwise  requires,  capitalized  terms used and not
otherwise  defined in this Agreement have the meanings given to them in Appendix
1  of  this  Agreement  and,  for  all  purposes of this Agreement, the rules of
interpretation  set  forth  in  such  Appendix  1  apply.

                                    SECTION 2

                           COMMITMENTS OF THE PARTIES

     Subject to the terms and conditions of this Agreement (including Sections 3
and 4) and the other Transaction Documents, each of the parties hereto agrees to
participate  in  the  transactions  contemplated by this Agreement and the other
Transaction Documents and, among other things, to take each of the actions to be
taken  by it on the Closing Date and thereafter, as more fully described in this
Section  2.

     SECTION  2.1     Certain Closing Date Events.  On the Closing Date, subject
                      ---------------------------
to  the  terms  and  conditions  of  this  Agreement  and  the other Transaction
Documents:

     (a)          the  Certificate Purchasers shall make Advances to the Charter
Trustee  pursuant  to  Section  2.3 in an aggregate amount equal to the Series A
Portion  of the Closing Date Construction Costs plus the Series A Portion of the
Transaction  Expenses  then  due  and  owing  pursuant  to  Section  8.1;

     (b)          the  Certificate  Purchasers shall purchase, and  the  Charter
Trustee  shall issue, the Series A Trust Certificates in the aggregate principal
amount  of the Series A Portion of the Maximum Certificate Purchaser Commitment;

     (c)          the  Certificate  Purchasers  shall  make  Advances  to  the
Investment  Trust  pursuant  to  Section 2.3 in an aggregate amount equal to the
Investment  Portion  of  the Closing Date Construction Costs plus the Investment
Portion  of the Transaction Expenses then due and owing pursuant to Section 8.1;

     (d)          the Certificate Purchasers shall purchase, and the Investment
Trust  shall issue, the Investment Trust Certificates in the aggregate principal
amount  of  the  Investment

                                        2
<PAGE>
Portion  of  the  Maximum  Certificate  Purchaser  Commitment;

     (e)          the  Investment  Trust  shall  make  advances  to  the Charter
Trustee  pursuant  to Section 2.3 in an aggregate amount equal to the Investment
Portion  of  the  Closing Date Construction Costs plus the Investment Portion of
the  Transaction  Expenses  then  due  and  owing  pursuant  to  Section  8.1;

     (f)          the  Investment Trust  shall purchase, and the Charter Trustee
shall  issue,  the Series B Trust Certificates in the aggregate principal amount
of  the  Investment  Portion  of  the  Maximum Certificate Purchaser Commitment;

     (g)          the  Charter  Trustee  shall  advance  to  the  Construction
Supervisor  (as  directed  by  the Construction Supervisor) the amounts received
from  the  Certificate  Purchasers  in  accordance  with  Sections  2.3 and 2.6;

     (h)          the  Transaction  Expenses and the Facility Fees shall be paid
to the Persons entitled to receive such payments on the Closing Date pursuant to
Section  8.1  by  the  Person  responsible  therefor;

     (i)          Deepwater  and  the  Charter  Trustee  shall  enter  into  the
Construction Supervisory  Agreement;

     (j)          Deepwater  and  the  Charter  Trustee  shall  enter  into  the
Charter,  pursuant  to  which  Deepwater  shall  charter  the Drillship from the
Charter  Trustee  effective  as  of  the  Delivery  Date;  and

     (k)          the  parties  shall  enter  into  the  other  Transaction
Documents indicated on Schedule 1 hereto as being entered into as of the Closing
Date.

     SECTION  2.2     Certain  Delivery  Date  Events.  On  the  Delivery  Date,
                      -------------------------------
subject  to  the  terms and conditions of this Agreement (including Section 4.1)
and  the  other  Transaction  Documents:

     (a)          Deepwater,  as  Construction  Supervisor  on  behalf  of  the
Charter  Trustee, shall take delivery of the Drillship from the Builder pursuant
to  the  Construction  Contract;

     (b)          if  the  Head Lease  Transaction  is  being  entered  into  in
accordance  with Section 4.2, Deepwater, as Construction Supervisor on behalf of
the  Charter  Trustee, shall transfer and convey, or cause to be transferred and
conveyed,  to the Head Lessor all of its right, title and interest in and to the
Drillship  and  the  Construction  Contract  (other  than  the  Warranties) and,
immediately  upon  such transfer and conveyance, the Charter Trustee shall enter
into  the  Head  Lease  with  the  Head  Lessor;

     (c)          if  the  Head  Lease  Transaction  is  not being entered into,
Deepwater, as

                                        3
<PAGE>
Construction  Supervisor on behalf of the Charter Trustee, shall transfer all of
its  right,  title  and  interest  in  and to the Drillship and the Construction
Contract  to  the  Charter  Trustee;

     (d)          Deepwater,  on  behalf  of  the  Head  Lessor  or  the Charter
Trustee,  as  applicable,  shall cause the Drillship and the Ship Mortgage to be
duly  provisionally  registered  under  the  laws  of  the  Republic  of Panama;

     (e)          the  Charter  Term  shall  commence;  and

     (f)          the  parties shall enter into the other Transaction  Documents
indicated  on  Schedule  1 hereto as being entered into as of the Delivery Date.

     SECTION  2.3     Advances  by Certificate Purchasers.  Subject to the terms
                      -----------------------------------
and  conditions  of  this  Agreement  (including  Sections  2.5,  3  and 4), the
Depository  Agreement  and  the  Trust  Agreements,  and  in  reliance  on  the
representations  and  warranties  of  the other parties contained herein or made
pursuant  hereto, upon receipt of an Advance Request, each Certificate Purchaser
shall  advance  (each an "Advance") to the Charter Trustee and to the Investment
                          -------
Trust,  as  applicable, on the Advance Date specified in such Advance Request in
immediately  available  funds  the  Series A Portion and the Investment Portion,
respectively, of its Commitment Percentage of the following amounts:  (i) on the
Closing  Date,  an amount equal to the Closing Date Construction Costs (plus any
Transaction Expenses then due and owing pursuant to Section 8.1) as set forth in
a written request from Deepwater to the Charter Trustee and the Investment Trust
delivered  at  least three Business Days prior to the Closing Date (the "Initial
                                                                         -------
Advance  Request");  (ii)  during  the  Construction  Period, the amount of each
----------------
Advance  requested  by  Deepwater  in  a  written  request from Deepwater to the
Charter  Trustee and the Investment Trust delivered at least three Business Days
prior  to  the date specified in such request for the payment of such Advance (a
"Subsequent  Advance  Request");  (iii)  on the Delivery Date, the amount of the
 ----------------------------
Advance  in  the  Subsequent  Advance  Request  delivered in connection with the
Delivery  Date; (iv) during the Interim Charter Term, the amount of each Advance
requested  by Deepwater in a Subsequent Advance Request; and (v) on the Day Rate
Commencement Date, the amount of the final Advance requested by Deepwater in the
Final  Advance  Request.

     SECTION  2.4     Certificates  and  Payments.
                      ---------------------------

     (a)          Payments  to  Certificate  Purchasers.  Each Advance  made
                  -------------------------------------
available  by a Certificate Purchaser pursuant to Section 2.3 shall be evidenced
by  the  Certificates  issued  by  the Investment Trust and the Charter Trustee,
respectively,  on  the  Closing  Date  to  such  Certificate  Purchaser.  Each
Certificate Purchaser shall be entitled to receive on the last day of any Return
Period as of which there is a Certificate Purchaser Balance greater than zero, a
return  on  its  Certificate  Purchaser  Amount  at the Certificate Return Rate;
provided  that, notwithstanding the foregoing, Certificate Return accrued on the
Certificate  Purchaser  Balance  during  the  Interim  Charter  Term  shall  be
capitalized  to  the  extent provided in Section 2.9. Any payment required to be
made  to  the  Certificate  Purchasers  by the Charter Trustee or the Investment
Trust  pursuant to any Transaction Document shall be made in accordance with the
Depository  Agreement  and

                                        4
<PAGE>
Article IV of the Investment Trust Agreement and Article IV of the Charter Trust
Agreement,  as  applicable.

     (b)          Payments  to  Investment Trust.  Each advance  made  available
                  ------------------------------
by  the Investment Trust to the Charter Trustee pursuant to Section 2.6 shall be
evidenced by the Series B Trust Certificate issued by the Charter Trustee on the
Closing  Date to the Investment Trust. The Investment Trust shall be entitled to
receive  on the last day of any Return Period as of which there is an Investment
Balance  greater  than  zero,  a  return  on  its Investment Trust Amount at the
Certificate  Return Rate; provided that, notwithstanding the foregoing, any such
return  accrued  on  the Investment Trust Amount during the Interim Charter Term
shall be capitalized to the extent provided in Section 2.9. Any payment required
to  be  made  to  the  Investment  Trust  by the Charter Trustee pursuant to any
Transaction  Document  shall be made in accordance with the Depository Agreement
and  Article  IV  of  the  Charter  Trust  Agreement.

     SECTION  2.5     Limitations  on  Advances.
                      -------------------------

     (a)          Limitation  on  Disbursements  and  Capitalizations.  The
                  ---------------------------------------------------
aggregate  amount  of  Advances  made  by  the Certificate Purchasers hereunder,
together  with the aggregate amount of all Capitalized Certificate Return, shall
not  exceed  the  Maximum  Certificate  Purchaser  Commitment, and the aggregate
amount  of  Advances  made by any Certificate Purchaser hereunder, together with
the  aggregate  amount  of  all Capitalized Certificate Return allocable to such
Certificate  Purchaser's  Certificate  Purchaser  Amount,  shall not exceed such
Certificate  Purchaser's  Commitment.

     (b)          Number  and  Dates  of  Advances.  Deepwater  may  not request
                  --------------------------------
that  Advances  be made (and the Certificate Purchasers shall not be required to
make  Advances) more than once in any calendar month other than: (i) Advances to
be  made  in  connection  with  the Delivery Date and the Date Rate Commencement
Date,  (ii)  Advances  to pay Capitalized Certificate Return and Non-Utilization
Fees  and  (iii)  Advances  made in the calendar month in which the Closing Date
occurs.  Advances  made by each Certificate Purchaser under the Investment Trust
Agreement  and  the Charter Trust Agreement pursuant to an Advance Request shall
be made on the same day and shall be considered one Advance for purposes hereof.

     (c)          Obligations  Several.  The  obligations  of  the  Certificate
                  --------------------
Purchasers, the Agents, the Depository and the Trustees under this Agreement and
the  other Transaction Documents shall be several and not joint obligations, and
no  Participant  shall  be liable or responsible for the acts or defaults of any
other  Participant  under  any  Transaction  Document.

     (d)          Termination  of Commitments.  Notwithstanding anything herein
                  ---------------------------
or  in  the  Trust Agreements to the contrary, no Certificate Purchaser shall be
obligated to make any Advances after 2:00 p.m., Eastern time, on the Outside Day
Rate  Commencement  Date.

                                        5
<PAGE>
     SECTION  2.6     Fundings;  Application  of  Proceeds.
                      ------------------------------------

     (a)          Initial  Advance.  On the  Closing  Date,  upon (i) receipt by
                  ----------------
the  Charter Trustee and the Investment Trust of the Advances by the Certificate
Purchasers  pursuant  to Section 2.3 and (ii) the satisfaction or waiver of each
of  the applicable conditions set forth in Section 3.2, (x) the Investment Trust
shall  advance  in  immediately  available  funds  to the Charter Trustee on the
Closing  Date  the  amount  of  the Advances received by it from the Certificate
Purchasers  with  respect  to the Closing Date and (y) the Charter Trustee shall
deposit  in  immediately available funds into the Trustee's Account all proceeds
from the Advances made by the Certificate Purchasers pursuant to Section 2.3 and
the  amount  advanced  by the Investment Trust pursuant to clause (x) above, the
total  amount advanced in respect of the Closing Date (whether received directly
by  the  Charter  Trustee  or  by  the  Investment  Trust).

     (b)          Subsequent  Advances.  On any  Subsequent  Advance  Date, upon
                  --------------------
(i)  receipt  by the Charter Trustee and the Investment Trust of the Advances by
the  Certificate  Purchasers  pursuant  to  Section 2.3 and (ii) satisfaction or
waiver  of  each  of  the  applicable  conditions set forth in Section 2.13, and
subject  to  Section  2.5, (x) the Investment Trust shall advance to the Charter
Trustee,  from  the  Advances  made  by  the  Certificate Purchasers pursuant to
Section  2.3,  the  amount  of  the Advances received by it from the Certificate
Purchasers  with  respect to such date and (y) the Charter Trustee shall deposit
in immediately available funds, into the Trustee's Account all proceeds from the
Advances  made  by  the  Certificate  Purchasers pursuant to Section 2.3 and the
amount  advanced by the Investment Trust pursuant to clause (x) above, the total
amount  advanced  in  respect  of  such  date  (whether received directly by the
Charter  Trustee  or  by  the  Investment  Trust).

     (c)          Final  Advance.  At least three (3) Business Days prior to the
                  --------------
Day Rate Commencement Date, to the extent that the aggregate amount of all prior
Advances  plus  all  Capitalized  Certificate  Return  is  less than the Maximum
Certificate Purchaser Commitment, and subject to Section 2.5, Deepwater may make
a  final  Advance  Request  (the "Final Advance Request") in an aggregate amount
                                  ---------------------
sufficient  to  fund (i) any remaining costs of mobilization of the Drillship to
the  Gulf  of Mexico port designated pursuant to the Drilling Contract, (ii) any
remaining  Construction  Costs  (including Certificate Return and payments under
the  Deepwater Hedging Agreements, if any, that will be accrued and unpaid as of
the  Day  Rate  Commencement  Date  and  that  will  accrue  from  the  Day Rate
Commencement  Date  through  the end of the Interim Charter Term), and (iii) the
reimbursement  of  any  Transaction Costs paid by Deepwater out of its own funds
(and  not  from  the proceeds of any Advances) (the amounts in clauses (i), (ii)
and  (iii),  "Deferred  Construction  Costs"), as set forth in the Final Advance
              -----------------------------
Request.  On  the  Day  Rate  Commencement Date, (i) upon receipt by the Charter
Trustee  and  the Investment Trust of the Advances to be made by the Certificate
Purchasers  pursuant  to Section 2.3 and (ii) the satisfaction or waiver of each
of  the  applicable  conditions set forth in Section 2.13 and subject to Section
2.5,  (x)  the  Investment  Trust shall advance to the Charter Trustee, from the
Advances  made by the Certificate Purchasers pursuant to Section 2.3, the amount
of  the  Advances received by it from the Certificate Purchasers with respect to
such  date  and  (y)  the  Charter  Trustee shall

                                        6
<PAGE>
advance  to  Deepwater  the total amount advanced in respect of such date by the
Certificate  Purchasers in immediately available funds remitted by wire transfer
to  the  Deferred  Construction  Costs  Reserve  Account.

     (d)          Application  of Proceeds.  The  proceeds  of all Advances made
                  ------------------------
by  the  Certificate Purchasers to the Investment Trust shall be advanced by the
Investment Trust to the Charter Trustee and all Advances made by the Certificate
Purchasers  or the Investment Trust to the Charter Trustee shall be deposited by
the  Charter  Trustee  (x) into the Trustee's Account in accordance with Section
2.10  or  (y)  to  the  extent  applicable, into the Deferred Construction Costs
Reserve Account pursuant to the Depository Agreement, and such proceeds shall be
used  solely  to  pay  Construction  Costs  and otherwise as provided in Section
3.1(c)  of  the  Depository  Agreement.

     SECTION  2.7     Time  and Place of Advance Closings.  The closing to occur
                      -----------------------------------
on  each  Advance Date, if any, shall occur on the Advance Date set forth in the
Advance  Request  at  a  time  and  place  reasonably  satisfactory  to  the
Administrative  Agent  and  Deepwater.

     SECTION  2.8     Postponement  of  Advance.  If  the Certificate Purchasers
                      -------------------------
have  made  Advances requested pursuant to an Advance Request and the conditions
precedent  to  such  Advance  have  not  been  satisfied  or  waived on the date
specified  in the Advance Request (each, a "Postponed Advance"), Deepwater shall
                                            -----------------
pay  to  the  Charter  Trustee and the Investment Trust, for the benefit of each
Certificate  Purchaser  which  has  made  a  Postponed  Advance,  yield  (the
"Postponement  Yield")  on the Advance funded by such Certificate Purchaser at a
 -------------------
rate equal to the Certificate Return Rate.  Neither the Investment Trust nor the
Charter  Trustee  shall  be  required  to  invest such funds in interest-bearing
accounts, but the Charter Trustee shall, upon the direction of Deepwater (or, if
an  Event  of  Default exists, the Required Certificate Purchasers), invest such
funds  in Permitted Investments to the extent it is able to do so.  Amounts held
by  the Charter Trustee and the Investment Trust may be pooled for this purpose.
The Postponement Yield shall be due and payable by Deepwater upon the occurrence
of  the postponed Advance Date and such payment shall be an additional condition
precedent  to  such  Advance  Date.  On such postponed Advance Date, the Charter
Trustee  is  hereby  directed  to  liquidate any Permitted Investments then held
pursuant to this Section 2.8, to distribute the Postponed Advances in accordance
with  Section  2.6  and to distribute any proceeds of Permitted Investments held
pursuant  to  this Section 2.8 in excess of the amount of the Postponed Advances
to  each  Certificate  Purchaser  pro  rata  (based  on  the  relation that such
                                  ---  ----
Certificate  Purchaser's  Postponed  Advance  bears to the aggregate of all such
Postponed  Advances)  for  application  to  Deepwater's  obligation  to  pay
Postponement  Yield.  Any accrued Postponement Yield thereafter remaining unpaid
shall  be deemed to be Certificate Return and shall be capitalized to the extent
permitted under Section 2.9 (and, to the extent so capitalized, shall constitute
Capitalized  Certificate  Return).  No  additional  Advance  Request  shall  be
required  if an Advance Date is postponed and thereafter timely consummated.  If
any  Advance  Date  (including the Initial Advance Date) has not occurred by the
third  Business  Day  following  the  date  specified  in the Advance Request in
respect  thereof,  then  all Postponement Yield shall be due and payable on such
third  Business

                                        7
<PAGE>
Day  (and  shall  not  be  capitalized pursuant to Section 2.9), and the Charter
Trustee  is  hereby  directed  to  liquidate any Permitted Investments then held
pursuant  to  this  Section 2.8 and to pay to each Certificate Purchaser on such
third  Business  Day  (i)  the  Postponed  Advance  funded  by  such Certificate
Purchaser  and  (ii)  the proceeds of any Permitted Investments held pursuant to
this  Section  2.8 in excess of the amount of the Postponed Advances refunded to
such  Certificate Purchaser pro rata based on the relation that such Certificate
Purchaser's  Postponed  Advance  bears  to  the  aggregate of all such Postponed
Advances  to  be  applied  to  Deepwater's obligation to pay Postponement Yield.

     SECTION  2.9     Records;  Capitalized Certificate Return.  Upon the making
                      ----------------------------------------
of each Advance, each Certificate Purchaser shall make a notation in its records
indicating  the  amount  of such Advance and the Certificate Purchaser Amount of
such  Certificate  Purchaser  as  of  such Advance Date.  In addition, except as
provided  in  Section  2.8  hereof,  on the last day of each Return Period which
occurs  after  the  Closing  Date and on or prior to the last day of the Interim
Charter Term, with respect to the Certificate Return accrued on the Certificates
during  the  Return Period ending on such date, each Certificate Purchaser shall
make  a  notation  in  its  records  that its percentage portion of such accrued
Certificate  Return  has  been  paid  and  such accrued Certificate Return shall
thereby  be  added  to  the  Certificate  Purchaser  Amount  of such Certificate
Purchaser  and  shall  thereafter  accrue  yield at the Certificate Return Rate;
provided,  however,  that  to  the  extent  that adding such accrued Certificate
--------   -------
Return  to  the  Certificate  Purchaser  Amount  would  cause  such  Certificate
Purchaser  Amount to exceed such Certificate Purchaser's Commitment, such excess
accrued  Certificate  Return  shall  not  be  added to the Certificate Purchaser
Amount  but  shall be paid by Deepwater on the last day of such Return Period to
the Charter Trustee and the Investment Trust for the benefit of such Certificate
Purchaser.  Each  Certificate  Purchaser is hereby authorized to record the date
and amount of each Advance made by such Certificate Purchaser, each continuation
thereof,  the  date  and amount of each payment or capitalization of Certificate
Return with respect thereto, the date and amount of each payment or repayment of
Certificate  Purchaser  Amount  of  such Certificate Purchaser and the length of
each  Return  Period  with  respect  thereto,  in  its  records,  and  any  such
recordation  shall  constitute  prima  facie  evidence  of  the  accuracy of the
information  so recorded.  The failure to make any recordation described in this
Section  2.9 or any error in such recordation shall not affect the obligation of
the  Charter  Trustee or the Investment Trust with respect of such Certificates,
or  the  obligation  of  Deepwater  to  pay  Charter Hire in accordance with the
Transaction  Documents.

     SECTION  2.10     The  Trustee's  Account.  The  Charter  Trustee  shall
                       -----------------------
establish  and  maintain  (or  cause  to be established and maintained) at Wells
Fargo  (the  "Bank")  a deposit account (the "Trustee's Account") in the name of
              ----                            -----------------
the  Charter  Trustee  and the Investment Trust into which the following amounts
shall  be  paid:  (x) the proceeds of Advances made by Certificate Purchasers in
accordance  with  Sections  2.6(a)  or  (b)  and  2.11 (other than Advances made
pursuant  to  the  Final  Advance  Request,  which  shall  be deposited with the
Depository  pursuant  to the Depository Agreement) and (y) any payments received
from  Deepwater  or  a  Hedging Agreement Counterparty pursuant to the Deepwater
Hedging  Agreements or the Hedging Agreements, if any, prior to the Base Charter
Term.  Deepwater hereby grants to  the

                                        8
<PAGE>
Charter  Trustee  a security interest in any rights it may have in the Trustee's
Account  and  any  proceeds therefrom. Deepwater and Construction Supervisor are
hereby  granted  a  power  of  attorney  to  make withdrawals from the Trustee's
Account  for payment of Construction Costs, so long as on any date of withdrawal
(i)  Deepwater  has not been notified in writing that a Default has occurred and
is  continuing,  (ii)  Deepwater  does not have Actual Knowledge or has not been
notified  in  writing  that a Material Default has occurred and is continuing or
(iii)  no  Event  of Default is continuing. The power of attorney granted in the
preceding  sentence  shall  be  immediately  revoked at any time when any of the
events  specified  in  clauses (i), (ii) or (iii) of the preceding sentence have
occurred  and  shall  be  immediately reinstated when any such Default, Event of
Default or Material Default has been cured or waived by the Required Certificate
Purchasers.  The  Charter Trustee agrees to give, and each Certificate Purchaser
agrees  to  take  such action as may be required to cause the Charter Trustee to
give,  written  notice  to  the  Bank of revocation and the reinstatement of the
power  of  attorney  as provided in the immediately preceding sentence. Upon the
occurrence of the Day Rate Commencement Date, Deepwater, the Charter Trustee and
the Investment Trust shall notify the Hedging Agreement Counterparties that from
and  after  the  first  day  of  the Base Charter Term, all payments made by the
Hedging Agreement Counterparties under the Hedging Agreements shall be deposited
to  the  Operating  Account.

     SECTION  2.11     Timing  of Fundings to Investment Trustee and Payments to
                       ---------------------------------------------------------
Certificate  Purchasers.  The Advance Date specified in an Advance Request shall
-----------------------
be  not  less  than  three  (3) Business Days after the date of delivery of such
Advance  Request  to  the  Charter  Trustee.  Any  Advance  Request delivered by
Deepwater to the Charter Trustee later than 2:00 p.m., New York time, on any day
shall  be  deemed  to  have been delivered on the next Business Day.  Subject to
timely  delivery of an Advance Request (together with a funding indemnity letter
from  each  of  Conoco and R&B in the form attached hereto as Exhibit A) and the
other  terms  and  conditions  of  the  Transaction  Documents, each Certificate
Purchaser  shall  make  its  Commitment  Percentage  of  the requested aggregate
Advances available to the Charter Trustee and the Investment Trust in an account
at  the  Charter  Trustee's corporate trust department designated by the Charter
Trustee  by  12:00  noon,  New York time, on the requested Advance Date, and the
Charter  Trustee  and  the  Investment  Trust  will transfer any such amounts so
received into the Trustee's Account, not later than 3:00 p.m., New York time, on
such  Advance  Date  in  accordance  with  Section  2.6.

     Charter  Hire  shall  be  paid  by or on behalf of Deepwater in immediately
available  funds  in  accordance  with the Depository Agreement and the Charter.
All  such  payments  shall  be  paid  by  the  Depository  to  the Trustees, the
Investment  Trust  or  the Certificate Purchasers, as applicable, not later than
2:00 p.m., New York time, on the date due.  Funds received after such time shall
for all purposes of the Transaction Documents be deemed to have been received on
the  next  succeeding  Business  Day.

                                        9
<PAGE>
     SECTION  2.12     Computations.
                       ------------

     (a)          Determination  of  Certificate  Return  Rate  and  Fees.  All
                  -------------------------------------------------------
computations  of  accrued amounts pursuant to the Transaction Documents shall be
made  on  the  basis  of  the  actual  number of days elapsed in a 360-day year;
provided,  that  Certificate  Return  on  any  Advance that is an Alternate Rate
Advance  and  all  Non-Utilization  Fees shall be calculated on the basis of the
actual  number of days elapsed in a 365-day or 366-day year, as applicable.  The
Charter  Trustee shall, as soon as practicable, but in no event later than 11:00
a.m.,  New York time, on the date two (2) Business Days before the effectiveness
of  each Certificate Return Rate, cause to be determined such Certificate Return
Rate  and notify each Certificate Purchaser and Deepwater thereof by delivery of
a  notice  of  Certificate  Return  Rate  in substantially the form of Exhibit Q
hereto.

     (b)          Disbursement  Information.  The  Charter Trustee shall deliver
                  -------------------------
the  Disbursement Information to Deepwater and the Depository in accordance with
Section  4.3  of  the  Depository  Agreement.

     (c)          Conclusive  Determinations.  All  information  provided by the
                  --------------------------
Charter  Trustee  pursuant  to  this  Section  2.12  for  the  purposes  of  any
Transaction Document shall be conclusive and binding on the Charter Trustee, the
Investment  Trust,  Deepwater  and  the Certificate Purchasers in the absence of
manifest  error.

     SECTION  2.13     Conditions  to  each  Advance.  The  obligation  of  each
                       -----------------------------
Certificate  Purchaser  to make an Advance in accordance with this Section 2 and
the  obligations of the Charter Trustee and the Investment Trust to disburse the
proceeds  of an Advance in connection with any Advance Request and in accordance
with  this Section 2 shall be subject to satisfaction or waiver of the following
conditions  precedent:

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

     (b)          the  representations  and warranties of Deepwater set forth in
Section  5.1  shall  be true and correct in all material respects on the date of
such  Advance  as  though made on and as of such date, except to the extent such
representations  or  warranties  relate solely to an earlier date, in which case
such  representations  and  warranties  shall  have been true and correct in all
material  respects  on  and  as  of  such  earlier  date.

     SECTION  2.14     Fees.
                       ----

     (a)          Facility  Fee.  On  the  Closing  Date, Deepwater shall pay to
                  -------------
each  Certificate  Purchaser  a  nonrefundable  upfront fee (the "Facility Fee")
                                                                  ------------
equal  to such Certificate Purchaser's Commitment multiplied by the Facility Fee
rate  applicable  to  such  Certificate  Purchaser  as  set forth in Schedule 2.

                                       10
<PAGE>
     (b)          Non-Utilization  Fee.  Commencing  on  the  Closing  Date,
                  --------------------
Deepwater  shall  pay  to  the  Charter Trustee and the Investment Trust for the
ratable  benefit  of  each  Certificate  Purchaser (measured by their respective
Commitment Percentages) a non-utilization fee (the "Non-Utilization Fee") of ten
                                                    -------------------
(10)  basis  points  per  annum  on  the  average daily unutilized amount of the
aggregate  Maximum  Certificate Purchaser Commitment during the relevant period.
The Non-Utilization Fee shall be payable by Deepwater in arrears on the last day
of each Return Period until the earlier of (i) the Outside Day Rate Commencement
Date  and  (ii)  the  Day  Rate  Commencement  Date.

                                    SECTION 3

               EFFECTIVE DATE; CLOSING DATE; CONDITIONS PRECEDENT

     SECTION  3.1     Effective  Date;  Closing  Date.
                      -------------------------------

     (a)          This  Agreement  shall  become  effective  on  the  date  (the
"Effective  Date")  on  which all of the conditions set forth on Schedule 8 have
 ---------------
been  satisfied  or  waived.

     (b)          All  documents and instruments required to be delivered on the
Closing  Date  shall  be delivered at the offices of Hunton & Williams, 200 Park
Avenue, New York, New York 10166, or at such other location as may be determined
by  the  Documentation  Agent  and  Deepwater.

     SECTION  3.2     Conditions  Precedent  to  Closing  Date.  The obligations
                      ----------------------------------------
of  the  parties  hereto  to  enter  into  the transactions contemplated by this
Agreement  and  the  other  Transaction  Documents and to take the actions to be
taken  by  each such party which are contemplated by Section 2.1 to occur on the
Closing  Date  shall be subject to satisfaction or waiver as of the Closing Date
of  the  following  conditions  precedent (provided, that the obligations of any
party shall not be subject to any conditions contained in this Section 3.2 which
are  required  to be performed or caused to be performed by such party or any of
its  respective  Affiliates):

     (a)          Each Certificate Purchaser shall have funded the Advance to be
made  by  it  on  the  Closing  Date  in  accordance  with  Section  2.3.

     (b)          Each  Certificate Purchaser shall have received its respective
Certificate  in  accordance  with  Section  2.4.

     (c)          Deepwater  shall have given the Agents not less than three (3)
Business  Days  prior  written  notice  of the Closing Date, which notice may be
included in the Initial Advance Request delivered in accordance with Section 2.3
and  each  Certificate  Purchaser shall have received a funding indemnity letter
from  R&B  and  Conoco  in  the form of Exhibit A hereto not less than three (3)
Business  Days  prior  to  the  Closing  Date.

     (d)          All  parties thereto shall have executed and delivered each of
the

                                       11
<PAGE>
Transaction  Documents  to  be entered into on the Closing Date, as indicated on
Schedule  1  hereto.

     (e)          Deepwater  shall  have  delivered to the Charter Trustee (with
copies  for  each  Certificate Purchaser) copies of the Services Agreements, the
Construction  Contract,  the  Drilling  Contract,  and  the  Drilling  Contract
Guaranty,  copies  of  all  purchase  orders and other documents relating to the
purchase  of  the  OFE,  together  with  any  amendments  thereto,  in each case
certified  by an authorized representative of Deepwater to be true, complete and
correct  copies  thereof  as  of  the  Closing  Date  and  each  of the Services
Agreements,  the  Construction  Contract, the Drilling Contract and the Drilling
Contract  Guaranty  shall be in full force and effect and no default or material
breach  shall  exist  thereunder.

     (f)          The  Agents and each Certificate Purchaser shall have received
the  Appraisal in form and substance satisfactory to the Documentation Agent and
Deepwater  shall  have  received  a  copy  thereof.

     (g)          All  Taxes,  fees and other charges due in connection with the
execution,  delivery,  performance,  recording,  filing  and registration of the
Transaction  Documents  on  the  Closing  Date  shall  have  been  paid.

     (h)          (i) White & Case LLP, special counsel to Deepwater, shall have
issued  its  opinion  to the effect and in the form set forth in Exhibit B; (ii)
Hunton  &  Williams,  counsel to Conoco, shall have delivered its opinion to the
effect and in the form set forth in Exhibit C; (iii) Wayne K. Anderson, in-house
counsel  to  Conoco,  shall  have delivered his opinion to the effect and in the
form  set  forth  in Exhibit D; (iv) Wayne K. Hillin, counsel to R&B, shall have
delivered  his opinion to the effect and in the form set forth in Exhibit E; (v)
Arias,  Fabrega  & Fabrega, Panamanian counsel, shall have delivered its opinion
to  the  effect  and  in  the  form  set forth in Exhibit P; and (vi) Cynthia L.
Corliss,  Vice  President  and  Trust  Counsel  of Wilmington Trust Company, and
Richards,  Layton & Finger, counsel to the Charter Trustee and Investment Trust,
shall  have  delivered their opinions to the effect and in the form set forth in
Exhibit  U.

     (i)          All  actions  required  to  have  been taken by any Government
Authority  on  or  prior to the Closing Date in connection with the transactions
contemplated by this Participation Agreement and the other Transaction Documents
shall  have been taken and all Government Actions required to be in effect on or
prior  to  the  Closing Date in connection with the transactions contemplated by
this Participation Agreement and the other Transaction Documents shall have been
issued  or  made,  and  all  such  Government Actions shall be in full force and
effect  on  the  Closing  Date.  All  necessary  consents,  approvals  and
authorizations  of  all  non-Government  Authorities  required  on  the  part of
Deepwater,  the  Investment Trust, the Trustees or third parties to be obtained,
given  or  made on or prior to the Closing Date in connection with the execution
and  delivery  of the Transaction Documents and transactions contemplated hereby
and  thereby  shall have been obtained, given or made and shall be in full force
and  effect.

                                       12
<PAGE>
     (j)          No  action shall have been instituted, nor shall any action or
proceeding  be threatened, before any Government Authority, nor shall any order,
judgment  or  decree have been issued or proposed to be issued by any Government
Authority  (i) to set aside, restrain, enjoin or prevent the performance of this
Participation  Agreement,  any  other  Transaction  Document  or any transaction
contemplated  hereby  or  thereby  or  (ii)  which would have a Material Adverse
Effect.

     (k)          The  transactions contemplated by the Transaction Documents do
not  and  will  not (i) violate any Applicable Law, (ii) contravene any charter,
by-laws or other organizational document of Deepwater, the Members, Conoco, R&B,
the  Investment  Trust,  the  Trustees, the Agents or any Certificate Purchaser,
(iii)  contravene  any  contract,  agreement  or  other  arrangement  to  which
Deepwater,  the  Investment  Trust,  the Trustees, the Agents or any Certificate
Purchaser  is  a  party or by which any of their respective properties or assets
are  bound,  or  (iv)  subject  Deepwater, any Member, the Investment Trust, the
Trustees,  any  Agent  or  any Certificate Purchaser to any regulations to which
such  party  had  not  been  subject  prior  to  entering  into such Transaction
Documents  and  which  would  be  materially  adverse  to  such  party.

     (l)          Deepwater,  each  Member,  Conoco  and  R&B  shall  have  each
delivered, or shall have caused to be delivered, to the Agents, and the Trustees
the  following,  in  each  case  in  form  and  substance  satisfactory  to  the
Documentation  Agent  (with  copies  for  each  Certificate  Purchaser):

          (i)     Organizational  Documents.  Copies  of  its  articles  of
                  -------------------------
     incorporation  or  other organizational documents, certified to be true and
     complete as of a recent date by the appropriate Government Authority of the
     state,  province  or  country  of  its  incorporation  or  formation.

          (ii)     Resolutions.  Copies  of  resolutions of its Members or Board
                   -----------
     of  Directors, as applicable, that, specifically or generally (as part of a
     general  enabling  resolution), approve and adopt the Transaction Documents
     and  the  transactions  contemplated  therein,  and  that,  specifically or
     generally  (as  part of a general enabling resolution), authorize execution
     and delivery thereof, certified by an appropriate officer or representative
     as  of the Closing Date to be true and correct and in full force and effect
     as  of  such  date.

          (iii)     Bylaws.  A  copy  of  its  operating  agreement  or  bylaws
                    ------
     certified  by  an  appropriate  officer or representative as of the Closing
     Date  to  be true and correct and in full force and effect as of such date.

          (iv)     Good  Standing.  Copies  of  certificates  of  good standing,
                   --------------
     existence  or  its  equivalent,  certified  as  of  a  recent  date  by the
     appropriate government authorities of the state, province or country of its
     incorporation  or  formation.

          (v)     Officer's  or Manager's Certificate.  An officer's certificate
                  -----------------------------------
     or

                                       13
<PAGE>
     manager's certificate, dated the Closing Date, substantially in the form of
     Exhibit  F.

     (m)          Each  of  the  Trustees  shall  have  delivered, or shall have
caused to be delivered, to Deepwater, the Members, the Administrative Agent, and
each  Certificate  Purchaser  the  following:

          (i)     Organizational  Documents.  Copies  of  its  articles  of
                  -------------------------
     association  or  other  organizational  documents and a copy of the Charter
     Trustee's  and Investment Trust's certificate of trust (or, if certificates
     of  trust  are  not  issued  in the Charter Trustee's or Investment Trust's
     jurisdiction  of  organization,  other  similar  organizational documents),
     together with all amendments in each case certified to be true and complete
     as  of  a  recent  date  by  the  appropriate  Government  Authority.

          (ii)     Resolutions.  Copies  of  resolutions  of  its  board  of
                   -----------
     directors,  approving  and  adopting  the  Transaction  Documents  and  the
     transactions  contemplated  therein, and authorizing execution and delivery
     thereof,  certified  by an appropriate officer as of the Closing Date to be
     true  and  correct  and  in  full  force  and  effect  as  of  such  date.

          (iii)     Good Standing.  Copies of certificates of good standing (or,
                    -------------
     if  certificates  of  good  standing  are  not  issued  in the Trustees' or
     Investment  Trust's  jurisdiction  of  organization,  some  other  similar
     certificate),  existence or its equivalent with respect to the Trustees and
     the  Investment  Trust,  in  each case certified as of a recent date by the
     appropriate  Government  Authorities.

          (iv)     Officer's  Certificate.  An  officer's certificate, dated the
                   ----------------------
     Closing  Date,  substantially  in  the  form  of  Exhibit  G.

     (n)          Closing  Date.  The  Closing  Date  shall occur on or prior to
                  -------------
August  14,  1998.

     (o)          No  Material  Adverse  Change.  As  of the Closing Date, there
                  -----------------------------
shall  not have occurred any material adverse change in the consolidated assets,
liabilities, operations, business or financial condition of:  (i) Conoco (except
as  described  in  the  letter,  dated July 24, 1998, from Robert N. Heinrich of
Conoco  to  Claire  M.  Liu  of  Bank  of  America  National  Trust  and Savings
Association  ("Bank  of  America")  and  the  copy of the press release attached
               -----------------
thereto,  copies  of  which  have  been previously delivered to each Certificate
Purchaser)  or  Deepwater  from  that  set  forth  in their respective financial
statements for the fiscal year ended December 31, 1997 or (ii) R&B from that set
forth  in  its financial statements for the fiscal quarter ended March 31, 1998.

     (p)          Transaction  Expenses.  All  Transaction Expenses then due and
                  ---------------------
owing for which Deepwater has received an invoice at least two (2) Business Days
prior  to  the  Closing Date and which will not be paid from the proceeds of the
Initial  Advance  shall  have  been  paid  by  Deepwater.

                                       14
<PAGE>
     (q)          Tax  and  Accounting.  Deepwater  shall  have  received  (x) a
                  --------------------
satisfactory  tax  opinion  of  White  &  Case LLP and (y) confirmation from its
auditors  of  the  accounting treatment for the transactions contemplated hereby
satisfactory  in  all  respects  to  Deepwater.

     (r)          Representations.  The  representations  and warranties of each
                  ---------------
party  set forth in Section 5 and in any other Transaction Document entered into
on  or  prior  to  the  Closing Date shall be true and correct as of the Closing
Date.

     (s)          Filings.  All  UCC  and  other  applicable  filings  listed on
                  -------
Schedule  3  shall  have  been  duly  made at the locations set forth beside the
filing on such schedule.  All other filings or recordings of any document in any
jurisdiction which are required to establish the perfected security interests of
the  Charter  Trustee  and  the Investment Trust in the Accounts shall have been
made.

     (t)          No  Defaults  under  Transaction  Documents.  All  Transaction
                  -------------------------------------------
Documents  required to be executed and delivered on or prior to the Closing Date
shall  be  in  full  force  and  effect  as to all of the parties thereto and no
Defaults  shall  exist  under  any  such  Transaction  Document.

     (u)          Insurance  Report.  The  Charter Trustee, the Investment Trust
                  -----------------
and  each  Certificate  Purchaser shall have received a satisfactory report from
J&H  Marsh  &  McLennan with respect to the insurance to be carried by Deepwater
pursuant  to  Article  XIV  of  the  Charter.

     (v)          Drilling  Contract.  Conoco  Drilling and Deepwater shall have
                  ------------------
entered  into  the Drilling Contract in a form substantially similar to the form
attached hereto as Exhibit H and Conoco Drilling shall have delivered the Conoco
Drilling  Consent in a form substantially similar to the form attached hereto as
Exhibit  I.

     (w)     Securities Act Representation.  PricewaterhouseCoopers LLP and Bank
             -----------------------------
of  America  shall  each  have delivered to the Charter Trustee (with copies for
each  Certificate  Purchaser), the Investment Trust and Deepwater a certificate,
in  form  substantially  similar  to  the  form  attached  hereto  as Exhibit J.

                                       15
<PAGE>
                                    SECTION 4

                      DELIVERY DATE; CONDITIONS PRECEDENT

     SECTION  4.1     Conditions Precedent to Delivery Date.  The obligations of
                      -------------------------------------
the  parties  hereto  to enter into the transactions to be entered into and take
the actions to be taken by each such party which are contemplated by Section 2.2
to occur on the Delivery Date, taking into account Section 4.2, shall be subject
to  satisfaction  or  waiver  on  the  Delivery Date of the following conditions
precedent;  provided,  that the obligations of any party shall not be subject to
any condition contained in this Section 4.1 which is required to be performed or
caused  to  be  performed  by  such  party  or any of its respective Affiliates:

     (a)          The  following  events shall have occurred with respect to the
delivery  and  documentation  of  the  Drillship:

          (i)     The Drillship (including the OFE) shall have been accepted and
     delivered,  and  a Protocol of Delivery and Acceptance substantially in the
     form  set  forth in Exhibit A to the Charter (the "Protocol of Delivery and
                                                        ------------------------
     Acceptance")  shall  have been executed by the Builder and the Construction
     ----------
     Supervisor  and delivered to the Head Lessor or the Charter Trustee, as the
     case  may  be,  pursuant  to  the  Construction  Contract.

          (ii)     Copies  of  the  Builder's  Certificate  and  Bill  of  Sale
     substantially  in  the forms set forth in Exhibits L and M, respectively, a
     copy  of  the  interim  class certificate (showing that the Drillship shall
     have  been  recommended  for classification with the Classification Society
     with  the highest classification and rating for vessels of the same age and
     type),  and  all  other documents required to be delivered by Builder under
     the  Construction Contract shall be delivered to Deepwater, as Construction
     Supervisor  (with  copies  to  the Charter Trustee (and the Head Lessor, if
     applicable)  and  the  Agents).

          (iii)     The  Drillship shall have been duly provisionally registered
     in  the name of the Head Lessor or the Charter Trustee, as the case may be,
     under  Panamanian  law  free  and  clear  of  all  Liens  of  record  and a
     provisional  patente  (the  "Provisional  Patente") shall have been issued.
                                  --------------------

          (iv)     The Ship Mortgage shall have been duly provisionally recorded
     under  Panamanian  Law.

          (v)     The  Charter  Trustee  and  Deepwater  shall  have  received a
     Certificate  of  Ownership  and  Encumbrance  from the Panamanian registry,
     showing  the  Head Lessor or the Charter Trustee, as the case may be, to be
     the  owner  of  the  Drillship, free and clear of all recorded Liens, other
     than  the  Ship  Mortgage.

          (vi)     The Charter Trustee, the Investment Trust, the Administrative
     Agent  and  the  Certificate  Purchasers  shall have received an opinion of
     Panamanian  counsel  in

                                       16
<PAGE>
     substantially the form of Exhibit P.

     (b)          If requested pursuant to Section 2.3, and subject to the terms
and  conditions  of  this  Agreement  and  the other Transaction Documents, each
Certificate Purchaser shall have funded the Advance, if any, to be made by it on
the  Delivery  Date  in  accordance  with  Section  2.3.

     (c)          The  parties  shall  have  received  opinions  of counsel with
respect to the transactions to be consummated on the Delivery Date substantially
in  the  forms  as  set  forth  in  Exhibits  B,  C,  D,  E,  O,  P  and  U.

     (d)          All  Transaction  Documents to be entered into on the Delivery
Date,  as indicated on Schedule 1 hereto, shall have been executed and delivered
by  each  of  the  parties  thereto.

     (e)          All  Transaction  Expenses  (including  registration  and
recordation  fees  under Panamanian Law) then due and owing shall have been paid
on  or  prior  to  the  Delivery  Date.

     (f)          The  Charter  Trustee,  the  Documentation  Agent  and  the
Administrative  Agent shall have received (i) an updated report from J&H Marsh &
McLennan  confirming  that  the insurance then in effect satisfies the insurance
requirements  set  forth  in  Article  XIV  of  the  Charter,  such report being
satisfactory  in  form  and  substance  to  the  Documentation  Agent  and  (ii)
certificates  of  insurance from Deepwater's insurance broker(s) evidencing that
all  insurance  required  under Article XIV of the Charter is in effect and that
all  premiums  have  been  paid.

     (g)          Each  of  the  Charter  Trustee,  the Investment Trust and the
Certificate Purchasers shall have received an Officer's Certificate of Deepwater
stating  that  the representations and warranties of Deepwater listed in Section
5.1 or in any other Transaction Document are true and correct as of the Delivery
Date  (except  to  the  extent  that  such representations and warranties relate
solely to an earlier or to a later date, in which event such representations and
warranties  shall  be  true  on  and  as  of  such  earlier  or  later  date).

     (h)          No  Material  Default,  Event  of  Default,  Event  of Loss or
Construction  Period Event of Loss shall have occurred and be continuing on such
date.

     (i)          All  necessary approvals, orders, permits, authorizations, and
consents  which  are  required as of the Delivery Date on the part of Deepwater,
the  Certificate  Purchasers,  the Agents, the Investment Trust, the Trustees or
other  third parties (except to the extent that such approvals, orders, permits,
authorizations  and consents are required as a result of such Person's status as
a  trust company or a regulated depository or banking institution) in connection
with  any  of  the  transactions contemplated by this Agreement or in connection
with  the  ownership,  use or operation of the Drillship as of the Delivery Date
shall  have  been  duly  obtained,  and  Deepwater  shall have provided evidence
thereof  reasonably  satisfactory to  the

                                       17
<PAGE>
Documentation  Agent.

     (j)          All  actions,  if  any,  required  to  have  been taken by any
Government Authority as of the Delivery Date in connection with the transactions
contemplated  by this Agreement shall have been taken and all Government Actions
required  to  be  in  effect  as  of  the  Delivery  Date in connection with the
transactions  contemplated by this Agreement shall have been issued and all such
Government  Actions  shall  be  in  full  force  and  effect.

     (k)          The  Outside  Day  Rate  Commencement  Date shall not yet have
occurred.

     (l)          The  Charter Trustee and the Certificate Purchasers shall have
received  a  report  from  the  Independent  Marine  Surveyor  stating  that the
Drillship  meets  the  Minimum  Specifications.

     SECTION  4.2     Head  Lease  Transaction.  (a)  Deepwater  shall, with the
                      ------------------------
consent  of  the  Certificate  Purchasers,  be  permitted  to enter into, and to
require  the  Charter  Trustee  to  enter  into,  the  following  transactions
(collectively, the "Head Lease Transaction") on or after the Delivery Date:  (i)
                    ----------------------
title  to  the  Drillship shall be transferred to the Head Lessor; (ii) the Head
Lessor  shall  charter  (directly or through a sub-charter) the Drillship to the
Charter Trustee; (iii) the Head Lessor shall finance its acquisition of title to
the  Drillship,  in  part, through a loan (the "Head Lease Loan"); (iv) the Head
                                                ---------------
Lessor and the Charter Trustee shall enter into arrangements whereby the Charter
Trustee's payment obligations under the Head Lease are defeased (the "Head Lease
                                                                      ----------
Defeasance  Arrangements");  (v)  the  Head  Lessor  shall  enter  into the Ship
------------------------
Mortgage;  and  (vi)  the  economic  benefit  of  entering  into  the Head Lease
Transaction  shall  be  paid  over  to,  or  otherwise accrue to the benefit of,
Deepwater.  If  Deepwater  shall  have  requested  the Certificate Purchasers to
consent  to  the  Head  Lease  Transaction  not  less  than 30 days prior to the
proposed  closing  date  of  the  Head Lease Transaction (which request shall be
accompanied  by  drafts  of  the  documents  relating  thereto), the Certificate
Purchasers  agree to consider such request in good faith.  Thereafter, Deepwater
shall  promptly  provide  the Certificate Purchasers with the drafts of the Head
Lease  Documents  to the extent such drafts are distributed to the other parties
to  the  Head  Lease  Transaction.  If  each  Certificate  Purchaser in its sole
discretion  approves the Head Lease Transaction, the Charter Trustee shall enter
into  the  Head  Lease  Transaction  on  the  date  proposed  by  Deepwater.
Notwithstanding  the  provisions of this Section 4, neither the consummation nor
the  failure  to consummate the Head Lease Transaction on or before the Delivery
Date  shall  be  a condition to the obligation of any party hereto to enter into
the  other  transactions contemplated by this Agreement to occur on the Delivery
Date  or  to  execute  and  deliver the Transaction Documents to be executed and
delivered  on  the  Delivery  Date  (other  than those transactions or documents
reflecting  only  the  Head  Lease  Transaction).

     (b)          If  Deepwater  shall have requested the Certificate Purchasers
to  consent  to  the Head Lease Transaction in accordance with this Section 4.2,
Deepwater  may,  in  its  sole  discretion,  elect  to  replace  any Certificate
Purchaser  that does not consent to the Head Lease Transaction by having another
financial institution that meets the conditions set forth in this

                                       18
<PAGE>
Section  4.2(b)  (a  "Replacement  Certificate  Purchaser")  purchase  such
                      -----------------------------------
non-consenting  Certificate Purchaser's interest in accordance with this Section
4.2.  Replacement  of  a  Certificate  Purchaser  by  a  Replacement Certificate
Purchaser  shall be subject to the following conditions precedent (collectively,
the  "Certificate  Purchaser  Replacement  Conditions"):
      -----------------------------------------------

          (i)     such  replacement  does  not conflict with any Applicable Law;

          (ii)     the  Replacement  Certificate  Purchaser  shall  pay  to  the
     Certificate  Purchaser  being  replaced  the  amount  of  its  outstanding
     Certificate Purchaser Amount and accrued and unpaid Certificate Return with
     respect thereto plus any other accrued and unpaid amounts owed by Deepwater
     to  such  Certificate  Purchaser under the Transaction Documents, including
     any  reasonable  expenses  relating  to its replacement; if the Replacement
     Certificate  Purchaser  does  not  provide  sufficient  funds  to allow the
     Certificate  Purchaser being replaced to receive such amount, Deepwater may
     provide  funds  sufficient  to  cover  the  shortfall;

          (iii)     the  Replacement  Certificate Purchaser shall have agreed to
     execute  the  Assignment and Assumption Agreement in substantially the form
     of  Exhibit  R  hereto;  and

          (iv)     the  requirements  set  forth  in Section 9.1 shall have been
     satisfied.

                                    SECTION 5

                         REPRESENTATIONS AND WARRANTIES

     SECTION  5.1     Representations  and  Warranties of Deepwater.  Deepwater,
                      ---------------------------------------------
in  its  individual  capacity  and  as  Construction  Supervisor, represents and
warrants  to  each of the other parties hereto as of the date hereof as follows:

     (a)          Due  Organization,  etc.  Deepwater  is  a  limited  liability
                  -----------------------
company  duly organized, validly existing and in good standing under the laws of
Delaware  and  has  the  power  and  authority  and has all requisite government
licenses, permits and other approvals that are required as of the date hereof to
enter  into and perform its obligations under the Transaction Documents to which
it is or will be a party and each other agreement, instrument and document to be
executed  and  delivered  by  it in connection with, or as contemplated by, each
such  Transaction Document to which it is or will be a party.  Deepwater is duly
qualified  to  transact  business  and  is in good standing as a foreign limited
liability  company  in  every  jurisdiction  where  the  nature  of its business
requires  such  qualification.

     (b)          Authorization;  No  Conflict.  The  execution,  delivery  and
                  ----------------------------
performance  by Deepwater of each Transaction Document to which it is or will be
a  party (i) is within its company powers under Delaware law and its Certificate
of  Formation  and LLC Agreement

                                       19
<PAGE>
(collectively, the "Organizational Documents"); (ii) has been duly authorized by
                    ------------------------
all  necessary  company  action  on the part of Deepwater and its Members; (iii)
requires no Government Action by, or filing with, any Government Authority which
is  required to be obtained, given or made by Deepwater or its Members as of the
date  hereof (other than such Government Action as has been duly obtained, given
or  made); (iv) does not and will not contravene, or constitute a default under,
any  Applicable  Law  or  its  Organizational  Documents,  or  of  any  material
agreement,  judgment, injunction, order, decree or other instrument binding upon
or affecting Deepwater or the Drillship; and (v) does not and will not result in
the  creation,  imposition  or  violation  of any Lien on any asset of Deepwater
other  than  as  contemplated  or  permitted by the terms hereof or of the other
Transaction  Documents.  Deepwater has obtained all Government Actions necessary
to  carry  on its business as now conducted, except for those Government Actions
that  are  normally obtained at a later time and with respect to which Deepwater
does  not  anticipate  any  problems  in  obtaining.

     (c)          Enforceability,  etc.  Each  of  the  Services Agreements, the
                  --------------------
Drilling  Contract  and the Transaction Documents, to which Deepwater is or will
be  a  party  has been, or on or before the date on which such document is to be
signed  will be, duly executed and delivered by Deepwater and each such document
to  which  Deepwater is a party constitutes, or upon execution and delivery will
constitute,  assuming  the  due authorization, execution and delivery thereof by
the  other  parties  thereto,  a legal, valid and binding obligation enforceable
against  Deepwater  in  accordance  with  the  terms  thereof,  except  as  such
enforceability  may  be  limited  or  denied  by  (i)  applicable  bankruptcy,
insolvency,  reorganization,  moratorium  or  similar  laws affecting creditors'
rights  and  the enforcement of debtors' obligations generally, and (ii) general
principles  of  equity,  regardless  of  whether  enforcement  is  pursuant to a
proceeding  in  equity  or  at  law.

     (d)          Financial Information.  The balance sheet of Deepwater for the
                  ---------------------
fiscal  year  ended  December  31, 1997 fairly presents, in conformity with GAAP
consistently  applied,  the  financial  position  of  Deepwater as of such date.
Since  December  31,  1997,  no  event  has occurred with respect to the assets,
liabilities,  operations,  business  or  financial  condition of Deepwater which
would  have  a  Material  Adverse  Effect.

     (e)          Litigation.  There  is  no  litigation, action, proceeding, or
                  ----------
labor  controversy to which Deepwater is a party which, if adversely determined,
would  adversely  affect  the financial condition, operations, assets, business,
properties  or  prospects of Deepwater or which purports to affect the legality,
validity  or  enforceability  of  any of the Transaction Documents, the Services
Agreements  or  the  Drilling  Contract.

     (f)          Ownership  of  Properties.  Deepwater has good title to all of
                  -------------------------
its  properties  and  assets, real and personal, tangible and intangible, of any
nature  whatsoever (including patents, trademarks, tradenames, service marks and
copyrights)  which  it  purports  to own, free and clear of all Liens (including
infringement  claims  with  respect  to  patents, trademarks, copyrights and the
like),  except  for  Permitted  Liens.

                                       20
<PAGE>
     (g)          Taxes.  Deepwater  has  filed  all  tax  returns  and  reports
                  -----
required by law to have been filed by it and has paid all Taxes thereby shown to
be  owing,  except  for  any  Taxes which are not yet due or are being contested
pursuant  to  a  Permitted  Contest.

     (h)          Pension  and  Welfare Plans.  As of the date hereof, Deepwater
                  ---------------------------
does not maintain any Plan for the benefit of its employees.  Except as provided
in  Section  6.1(o) hereof, Deepwater will not maintain any Plan for the benefit
of  its  employees.

     (i)          Investment Company Act and Public Utility Holding Company Act.
                  -------------------------------------------------------------
Deepwater  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,  or  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 Act of
1935,  as  amended.

     (j)          Securities  Act.  Neither  Deepwater nor any Person authorized
                  ---------------
by  Deepwater  to  act  on  its  behalf  has offered or sold any interest in the
Certificates,  or  in  any  similar  security  relating  to  the  transactions
contemplated  by  the  Transaction Documents, or in any security the offering of
which  for  the purposes of the Securities Act would be deemed to be part of the
same  offering as the offering thereof, or solicited any offer to acquire any of
the  same  from,  any  Person other than the parties hereto and not more than 18
other  institutional  investors, and neither Deepwater nor any Person authorized
by  Deepwater  to act on its behalf will take any action which would subject the
issuance  or  sale  of  any interest in the Trust Estate, the Charter Trust, the
Investment  Trust or the Certificates or in any similar security relating to the
Drillship  to  the  provisions of Section 5 of the Securities Act or require the
qualification of any Transaction Document under the Trust Indenture Act of 1939,
as  amended.  The  only  Persons  which have been authorized to act on behalf of
Deepwater  for  this purpose are PricewaterhouseCoopers LLP, Bank of America and
the  Syndication  Agent.

     (k)          Chief Place of Business.  Deepwater's chief place of business,
                  -----------------------
chief  executive  office  and  office  where the documents, accounts and records
relating  to  the  transactions  contemplated  by  this Agreement and each other
Transaction  Document  is  kept  and  is located at 901 Threadneedle, Suite 200,
Houston,  Texas  77079.

     (l)          Business  of  Deepwater.  (i)  Deepwater  has  engaged  in  no
                  -----------------------
business  activity  other  than  as  contemplated by, or in connection with, the
Construction  Contract,  the  Drilling  Contract,  the  Services Agreements, the
Drilling  Contract Guaranty and the Transaction Documents; (ii) Deepwater has no
subsidiaries;  (iii)  as of the Closing Date, all of the membership interests in
Deepwater  are  owned  by the Members; and (iv) from and after the Closing Date,
Deepwater  will  have  no  Indebtedness  except  for  Permitted  Indebtedness.

     (m)          Bankruptcy.  Deepwater  has  not filed a voluntary petition in
                  ----------
bankruptcy  or  been adjudicated as bankrupt or insolvent, or filed any petition
or answer seeking any reorganization, liquidation, dissolution or similar relief
under  any  federal  or  state  bankruptcy,

                                       21
<PAGE>
insolvency  or  other law relating to relief for debtors, or sought or consented
to  or  acquiesced  in  the appointment of any trustee, receiver, conservator or
liquidator  of  all  or  any  part  of  its  properties  or  its interest in the
Drillship.  No court of competent jurisdiction has entered an order, judgment or
decree  approving a petition filed against Deepwater seeking any reorganization,
arrangement,  composition,  readjustment,  liquidation,  dissolution  or similar
relief  under  federal  bankruptcy  or  insolvency  act or other law relating to
relief  for debtors, and no other liquidator has been appointed for Deepwater or
of  all  or  any  part of its properties or its interest in the Drillship and no
such  action  is  pending.  Deepwater  has  not  given  notice to any Government
Authority  of  insolvency  or  pending  insolvency,  or  suspension  or  pending
suspension  of  operations.

     (n)          Certain  Contracts.  From  and  after  the  Closing  Date, the
                  ------------------
Construction  Contract,  the  Services Agreements, the Drilling Contract and the
Drilling  Contract  Guaranty  are  in  full  force  and effect and have not been
amended  except  as  permitted  or  contemplated  by  the Transaction Documents.
Deepwater  is not in default under, and, to the knowledge of Deepwater, no other
Person  is  in  default  under,  any  of the Construction Contract, the Services
Agreements,  the  Drilling  Contract  or  the  Drilling  Contract Guaranty.  The
execution,  delivery  and  performance by Deepwater of its obligations under the
Construction  Contract,  the  Services  Agreements,  the Drilling Contract, this
Agreement  and  the other Transaction Documents to which it is a party, will not
violate  in  any  material  respect  any  provisions  of  any  Applicable  Law.

     (o)          Federal Reserve Regulations.  Deepwater is not engaged in, and
                  ---------------------------
does not have as one of its activities, the business of extending credit for the
purpose  of  purchasing  or  carrying  any  margin stock, and no proceeds of any
Advances  will  be  used  for a purpose which violates, or would be inconsistent
with,  the  rules and regulations of the Federal Reserve Board.  Terms for which
meanings  are  provided  in  Federal  Reserve  Board  Regulations  U or X or any
regulations  substituted  therefor,  as from time to time in effect, are used in
this  clause  (o)  with  such  meanings.

     (p)          Absence  of  Events.  No  Default  or  Event  of  Default  has
                  -------------------
occurred  and  is  continuing,  and  no  Construction  Period  Event of Loss has
occurred  that has not been remedied before the date hereof and Deepwater is not
in  default  in, nor has any non-permanent waiver been granted to Deepwater with
respect  to,  the  performance,  observance  or  fulfillment  of  any  of  the
obligations, conditions or covenants contained in the Construction Contract, the
Drilling  Contract  or  the  Services  Agreements.

     (q)          Subject  to  Government  Regulation.  None  of  the Investment
                  -----------------------------------
Trust,  the  Trustees, the Agents or any Certificate Purchaser, solely by reason
of  entering  into  the  Transaction  Documents  or  the  consummation  of  the
transactions  contemplated thereby, will become subject to ongoing regulation of
its  operations  by  any  Government  Authority  having  jurisdiction  over  the
ownership  or operations of the Drillship solely by reason of any of Deepwater's
business  activities  or  the  nature  of  the  Drillship.

     (r)         Solvency. Deepwater does not have capital unreasonably small in
                 --------

                                       22
<PAGE>
relation  to  its  business,  will  not  be rendered insolvent by the execution,
delivery and performance of its obligations under the Transaction Documents, and
does  not  intend  to  hinder,  delay or defraud its creditors by or through the
execution,  delivery and performance of the Transaction Documents to which it is
a  party,  including  the  Charter.  As of the date hereof and as of the Closing
Date,  there  are  no  outstanding  unsatisfied  judgments,  liens  for Taxes or
bankruptcy  proceedings  against  Deepwater.

     (s)          Appraisal  Disclosure.  As of the date hereof, the information
                  ---------------------
listed  on  Schedule  4  and  provided by Deepwater or any Affiliates thereof in
writing  to  the  Appraiser  in  connection  with the Appraisal, when taken as a
whole, does not contain any untrue statement of a material fact or omit to state
a  material fact necessary in order to make the statements contained therein not
materially  misleading  under  the  circumstances  in which such statements were
made.

     (t)          Accuracy  of Information.  The cash flow projections contained
                  ------------------------
in Section 7E of the Private Placement Memorandum, dated as of October 27, 1997,
were  prepared  by  Deepwater  in  good  faith  on  the  basis  of  reasonable
investigation,  information, assumptions and procedures which Deepwater believed
were  reasonable  under the facts and circumstances then existing, and since the
date  of  such projections there has been no change in any of the facts on which
such  projections  were  based that would result in a material adverse change in
such  projections.

     (u)          Title  to  the  Drillship;  Documentation;  Condition.  On the
                  -----------------------------------------------------
Delivery  Date,  after  giving  effect to the transactions to be effected on the
Delivery Date, the Charter Trustee (or the Head Lessor) will have valid title to
the  Drillship  (including all OFE) and the Drillship will be duly provisionally
documented  in  the  name  of the Charter Trustee (or the Head Lessor) under the
laws  of  the  Republic  of  Panama  free  and  clear  of  all  liens,  charges,
encumbrances  and  security  interests  other  than  Permitted  Liens.

     (v)          Recording  of  Ship  Mortgage.  On  the  Delivery  Date, after
                  -----------------------------
giving  effect  to the transactions to be effected on the Delivery Date, (i) the
Ship  Mortgage  shall have been duly provisionally recorded with the appropriate
Panamanian  authorities  in Panama City, Republic of Panama (which office is the
only  place  in which such recording is necessary), (ii) the Ship Mortgage shall
constitute  a  first  naval mortgage on the Drillship in favor of the Investment
Trust,  the  Hedging  Agreement  Counterparties  and,  if the Head Lessor is the
mortgagor  under  the  Ship  Mortgage,  the  Charter Trustee, and (iii) no other
recordings  or  periodic  rerecording  or  filing or periodic filing of the Ship
Mortgage  is  necessary  under  existing  law to constitute the lien of the Ship
Mortgage  on  the Drillship (including all OFE), except final recordation of the
Ship  Mortgage following the granting of the Permanent Patente by the Panamanian
authorities  within  six  (6)  months  of  the provisional recording of the Ship
Mortgage.

     (w)          Other  Recordings  and  Filings.  On  the  Delivery  Date, all
                  -------------------------------
filings  and recordings (including all filings of financing statements under the
Uniform  Commercial Code) will have been duly made in each jurisdiction in which
such  filings and recordings are required or reasonably requested by the Charter
Trustee  or  the  Investment  Trust  in  order  to  perfect  the

                                       23
<PAGE>
security  interests  granted  by the Deepwater Assignment, the Ship Mortgage and
the  other  Security  Documents  and  to  make such security interests valid and
enforceable;  provided,  that Deepwater makes no representation or warranty with
              --------
respect  to  any  security  interest  in  the  Construction  Contract  or  any
Construction  Document.

     SECTION  5.2     Representations  and  Warranties of Members.  Each Member,
                      -------------------------------------------
severally  and not jointly, represents and warrants to each of the other parties
hereto  as  of  the  date  hereof  as  follows:

     (a)          Due  Organization,  etc.  Such  Member  is  a corporation duly
                  -----------------------
organized,  validly  existing  and  in  good  standing  under  the  laws  of the
respective  jurisdiction of its organization and has the power and authority and
has  all  requisite  government  licenses, permits and other approvals currently
necessary  to  enter  into  and  perform  its  obligations under the Transaction
Documents to which it is or will be a party and each other agreement, instrument
and  document  to  be  executed  and  delivered  by it in connection with, or as
contemplated  by,  each  such  Transaction  Document to which it is or will be a
party.  Such Member is duly qualified to transact business in every jurisdiction
where  the  nature  of  its  business  requires  such  qualification.

     (b)          Authorization;  No  Conflict.  The  execution,  delivery  and
                  ----------------------------
performance  by  such Member of each Transaction Document to which it is or will
be  a party (i) is within its corporate powers; (ii) has been duly authorized by
all  necessary  corporate  action;  (iii)  requires  no Government Action by, or
filing with, any Government Authority; (iv) does not contravene, or constitute a
default  under,  any  Applicable  Law or its organizational documents, or of any
material  agreement,  judgment,  injunction,  order,  decree or other instrument
binding  upon  or  affecting  it;  and  (v)  does  not  result  in the creation,
imposition or violation of any Lien on any of its assets.  Such Member possesses
all  government  licenses,  authorizations,  consents  and approvals required to
carry  on  its  business  as  now  conducted.

     (c)          Enforceability,  etc.  Each  Transaction Document to which the
                  --------------------
Member  is  or will be a party has been, or on or before the Closing Date or the
Delivery  Date  on which such Transaction Document is to be signed will be, duly
executed  and  delivered  by  such  Member and each such Transaction Document to
which  such  Member  is a party constitutes, or upon execution and delivery will
constitute,  assuming  the  due authorization, execution and delivery thereof by
the  other parties thereto, a legal, valid and binding obligation of such Member
enforceable  against such Member in accordance with the terms thereof, except as
such  enforceability  may  be  limited  or  denied by (i) applicable bankruptcy,
insolvency,  reorganization,  moratorium  or  similar  laws effecting creditors'
rights  and  the enforcement of debtors' obligations generally, and (ii) general
principles  of  equity,  regardless  of  whether  enforcement  is  pursuant to a
proceeding  in  equity  or  at  law.

     (d)          Securities Act.  Neither such Member nor any Person authorized
                  --------------
by  such  Member  to  act  on  its  behalf  has  offered or sold any interest in
Deepwater,  or in any security relating to the Drillship, or in any security the
offering  of  which for the purposes of the Securities Act would be deemed to be
part  of  the  same  offering  as  the  offering  thereof,  or  solicited  any

                                       24
<PAGE>
offer  to acquire any of the same from, any Person other than the parties hereto
and  not more than 10 other institutional investors, and neither such Member nor
any  Person  authorized by such Member to act on its behalf will take any action
which  would  subject  the  issuance or sale of any interest in Deepwater to the
provisions  of  Section  5 of the Securities Act or require the qualification of
any  Transaction  Document  under  the  Trust Indenture Act of 1939, as amended.

     (e)          Litigation.  To  such  Member's  Actual Knowledge, there is no
                  ----------
action  or  proceeding pending or threatened to which the Charter Trustee or the
Investment  Trust  is  or  will  be  a  party  before any court or arbitrator or
Government Authority that, if adversely determined, would reasonably be expected
to  have  a  material  adverse  effect  on the property, operations or financial
condition  of  Deepwater.

     (f)          Assignment.  From and after the Closing Date, such Member will
                  ----------
not  assign  or  transfer  to  any Person that is not a party hereto, any of its
right,  title  or  interest  in  or under Deepwater, the Charter, the Completion
Guaranty,  the  Construction  Supervisory  Agreement,  the  Drillship,  or  the
Collateral  or  any  other  Transaction  Document, except as contemplated by the
Transaction  Documents.

     (g)          Absence  of  Events.  To  such  Member's  Actual Knowledge, no
                  -------------------
Default  or Event of Default has occurred and is continuing, and no Construction
Period  Event  of  Loss  has occurred that has not been remedied before the date
hereof and Deepwater is not in default in, nor has any non-permanent waiver been
granted to Deepwater with respect to, the performance, observance or fulfillment
of any of the obligations, conditions or covenants contained in the Construction
Contract,  Drilling  Contract  or  the  Services  Agreements.

     (h)          Compliance  With  Laws.  To  such  Member's  Actual Knowledge,
                  ----------------------
Deepwater  is  currently  in  compliance,  in  all  material  respects, with all
Applicable Laws with respect to the conduct of its business and the ownership of
its  properties.

     SECTION 5.3  Representations  and  Warranties  of the Investment Trust.
                  ---------------------------------------------------------
The Investment Trust represents and warrants to each of the other parties hereto
as  of  the  date  hereof  as  follows:

     (a)          Due Organization, etc.  It is a business trust duly formed and
                  ---------------------
validly  existing and in good standing under the laws of the jurisdiction of its
organization  and  has  the  power  and  authority to enter into and perform its
obligations  under  the  Transaction Documents to which it is or will be a party
and  each  other agreement, instrument and document to be executed and delivered
by  it in connection with, or as contemplated by, each such Transaction Document
to  which  it  is  or  will  be  a  party.

     (b)          Authorization;  No  Conflict.  The  execution,  delivery  and
                  ----------------------------
performance by it of each Transaction Document to which it is or will be a party
(i) is within its powers; (ii) has been duly authorized by all necessary action;
(iii)  requires  no  Government  Action  by,  or  filing  with,  any  Government
Authority;  (iv)  does  not  contravene,  or  constitute  a  default  under,

                                       25
<PAGE>
any  Applicable  Law  or  its  organizational  documents,  or  of  any  material
agreement,  judgment, injunction, order, decree or other instrument binding upon
it; and (v) does not result in the creation, imposition or violation of any Lien
on  any  of  its  assets.  It possesses all government licenses, authorizations,
consents  and  approvals  required  to  carry  on its business as now conducted.

     (c)          Enforceability, etc.  Each Transaction Document to which it is
                  -------------------
or  will be a party has been, or on or before the date on which such Transaction
Document  is  to  be  signed will be, duly executed and delivered by it and each
such  Transaction Document to which it is a party constitutes, or upon execution
and  delivery  will  constitute,  assuming  the due authorization, execution and
delivery  hereof  and  thereof by the other parties hereto and thereto, a legal,
valid and binding obligation enforceable against it in accordance with the terms
thereof,  except  as  such  enforceability  may  be  limited  or  denied  by (i)
applicable  bankruptcy,  insolvency,  reorganization, moratorium or similar laws
affecting  creditors'  rights  and  the  enforcement  of  debtors'  obligations
generally,  and  (ii)  general  principles  of  equity,  regardless  of  whether
enforcement  is  pursuant  to  a  proceeding  in  equity  or  at  law.

     (d)          Assignment.  It  has  not  assigned  or transferred any of its
                  ----------
right,  title  or interest in or under the Charter, the Completion Guaranty, the
Construction  Supervisory  Agreement,  the  Drillship,  or the Collateral or any
other  Transaction Document, except as expressly contemplated by the Transaction
Documents.

     (e)          Securities Act.  Neither it nor any Person authorized by it to
                  --------------
act  on  its  behalf  has  offered or sold any interest in the Trust Estate, the
Charter  Trust,  the  Investment  Trust  or  the Certificates, or in any similar
security relating to the Drillship, or in any security the offering of which for
the  purposes  of  the  Securities  Act  would  be deemed to be part of the same
offering  as  the offering thereof, or solicited any offer to acquire any of the
same  from,  any  Person  other  than the parties hereto, and neither it nor any
Person  authorized  by  it to act on its behalf will take any action which would
subject  the  issuance  or sale of any interest in the Trust Estate, the Charter
Trust,  the  Investment  Trust  or  the  Certificates or in any similar security
related to the Drillship to the provisions of Section 5 of the Securities Act or
require  the qualification of any Transaction Document under the Trust Indenture
Act  of  1939,  as  amended.

     (f)          Chief  Place  of Business.  The Investment Trust's chief place
                  -------------------------
of business, chief executive office and office where the documents, accounts and
records  relating  to  the  transactions contemplated by this Agreement and each
other  Transaction  Document  are  and  will be kept is located at Rodney Square
North,  1100  North  Market  Street,  Wilmington,  Delaware  19890-0001.

     (g)          No Other Activities.  It does not hold any assets, conduct any
                  -------------------
business nor is it party to any document, agreement or instrument other than the
Transaction  Documents  to  which  it  is,  or  will  be,  a  party.

     SECTION  5.4     Representations  and  Warranties  of  the  Certificate
                      ------------------------------------------------------
Purchasers.  Each
----------

                                       26
<PAGE>
Certificate  Purchaser, individually and not jointly, represents and warrants to
each  of  the  other  parties  hereto  as  of  the  date  hereof  as  follows:

     (a)          Due  Organization,  etc.  Such  Certificate  Purchaser is duly
                  -----------------------
organized,  validly  existing and in good standing (to the extent relevant under
Applicable  Law)  in  the jurisdiction of its organization and has the power and
authority  to  enter  into  and  perform  its  obligations under the Transaction
Documents to which it is or will be a party and each other agreement, instrument
and  document  to  be  executed  and  delivered  by it in connection with, or as
contemplated  by,  each  such  Transaction  Document to which it is or will be a
party.

     (b)          Authorization;  No  Conflict.  The  execution,  delivery  and
                  ----------------------------
performance  by such Certificate Purchaser of each Transaction Document to which
it is or will be a party (i) is within its powers; (ii) has been duly authorized
by all necessary action; (iii) requires no Government Action by, or filing with,
any  Government  Authority  (it being understood that such Certificate Purchaser
makes  no representation or warranty relating to the Drillship or the Applicable
Laws  pertaining  thereto);  (iv)  does  not contravene, or constitute a default
under,  any  Applicable  Law or its organizational documents, or of any material
agreement,  judgment, injunction, order, decree or other instrument binding upon
such  Certificate Purchaser; and (v) does not result in the creation, imposition
or  violation  of  any  Lien  on  any  asset  of  such  Certificate  Purchaser.

     (c)          Enforceability,  etc.  Each Transaction Document to which such
                  --------------------
Certificate  Purchaser  is  or  will  be  a  party has been, or on or before the
Closing  Date will be, duly executed and delivered by such Certificate Purchaser
and  each  such  Transaction  Document  to which such Certificate Purchaser is a
party  constitutes, or upon execution and delivery will constitute, assuming the
due  authorization,  execution  and  delivery  hereof  and  thereof by the other
parties  hereto  and  thereto, a legal, valid and binding obligation enforceable
against  such Certificate Purchaser in accordance with the terms thereof, except
as  such  enforceability  may be limited or denied by (i) applicable bankruptcy,
insolvency,  reorganization,  moratorium  or  similar  laws effecting creditors'
rights  and  the enforcement of debtors' obligations generally, and (ii) general
principles  of  equity,  regardless  of  whether  enforcement  is  pursuant to a
proceeding  in  equity  or  at  law.

     (d)          ERISA.  Either  (x) such Certificate Purchaser is not and will
                  -----
not  be  making  any  Advance  with the assets of an "employee benefit plan" (as
defined  in  Section  3(3)  of  ERISA) which is subject to Title I of ERISA or a
"plan" (as defined in Section 4975(e)(1) of the Code) or (y) the source of funds
for  any  Advance  made  by  such  Certificate Purchaser is an insurance company
general  account (as such term is defined in PTE 95-60 (issued July 12, 1995) in
respect  of  which  the  reserves  and  liabilities  (as  defined  by the annual
statement  for  life insurance companies approved by the National Association of
Insurance  Commissioners) (the "NAIC Annual Statement")) for the general account
                                ---------------------
contract(s) held by or on behalf of any employee benefit plan, together with the
amount  of the reserves and liabilities for the general account contract(s) held
by  or  on  behalf  of  any  other employee benefit plans maintained by the same
employer  (or affiliate thereof as defined in PTE 95-60) or by the same employee

                                       27
<PAGE>
organization in the general account, do not exceed 10% of the total reserves and
liabilities  of  the general account (exclusive of separate account liabilities)
plus  surplus  as  set  forth  in  the  NAIC  Annual  Statement  filed with such
Certificate  Purchaser's  state  of  domicile.

     (e)          Securities  Act.  Neither  such  Certificate Purchaser nor any
                  ---------------
Person authorized by such Certificate Purchaser to act on its behalf has offered
or  sold  any  interest  in  the Trust Estate, the Charter Trust, the Investment
Trust or the Certificates, or in any similar security relating to the Drillship,
or  in any security the offering of which for the purposes of the Securities Act
would  be  deemed  to  be  part of the same offering as the offering thereof, or
solicited  any  offer to acquire any of the same from, any Person other than the
parties hereto, and neither such Certificate Purchaser nor any Person authorized
by  such  Certificate  Purchaser to act on its behalf will take any action which
would  subject  the  issuance  or  sale of any interest in the Trust Estate, the
Charter  Trust,  Investment Trust or the Certificates or in any similar security
relating  to  the Drillship to the provisions of Section 5 of the Securities Act
or  require  the  qualification  of  any  Transaction  Document  under the Trust
Indenture  Act  of  1939,  as  amended.

     (f)          Litigation.  To such Certificate Purchaser's Actual Knowledge,
                  ----------
there  is  no  action  or  proceeding pending or threatened to which the Charter
Trustee,  the  Trust Estate or the Investment Trust is or will be a party before
any  court  or arbitrator or Government Authority that, if adversely determined,
would  reasonably be expected to have a material adverse effect on the property,
operations  or  financial  condition  of  the  Charter Trustee or the Investment
Trust.

     (g)          No  Other  Documents.  Such  Certificate  Purchaser  has  not
                  --------------------
authorized,  or  voted to authorize, the Charter Trustee or the Investment Trust
to  execute  any  document,  agreement  or instrument other than the Transaction
Documents to which either the Charter Trustee or the Investment Trust is or will
be  a  party.

     SECTION  5.5     Representations  and  Warranties of the Trustees.  Each of
                      ------------------------------------------------
the  Trustees in their respective individual capacities (and where indicated, as
trustee)  represents  and  warrants,  severally  and not jointly, to each of the
other  Participants  as  of  the  date  hereof  as  follows:

     (a)          Due  Organization,  etc.  It  is  a  banking  corporation or a
                  -----------------------
Federal  savings  bank  (as applicable), duly organized, validly existing and in
good  standing  under  the  laws of the state of its incorporation or the United
States (as applicable), has full corporate power and authority to enter into and
perform  its  obligations  under  the  Transaction  Documents  to  which  it
(individually  or as trustee, as the case may be) is or will be a party and each
other  agreement,  instrument  and  document  to be executed and delivered by it
(individually  or  as  trustee,  as  the  case may be) in connection with, or as
contemplated  by,  each  such  Transaction  Document to which it is or will be a
party.

     (b)          Authorization;  No  Conflict.  The  execution,  delivery  and
                  ----------------------------
performance  by  it of each Transaction Document to which it (individually or as
trustee,  as  the  case  may be) is or will be a party (i) is within its powers;
(ii)  has  been  duly  authorized  by  all  necessary  action; (iii) requires no
Government  Action  by,  or filing with, any Government Authority; (iv) does not

                                       28
<PAGE>
contravene,  or  constitute  a  default  under,  any  Applicable  Law  or  its
organizational  documents,  or  of any material agreement, judgment, injunction,
order,  decree or other instrument binding upon it (individually or as trustee);
and  (v) does not result in the creation, imposition or violation of any Lien on
any  of  its  assets  (individually  or  as  trustee).

     (c)          Enforceability, etc.  Each Transaction Document to which it is
                  -------------------
or will be a party (individually or as trustee, as the case may be) has been, or
on  or  before  the  Closing Date or the Delivery Date on which such Transaction
Document  is  to  be  signed will be, duly executed and delivered by it and each
such  Transaction Document to which it is a party constitutes, or upon execution
and  delivery  will  constitute,  assuming  the due authorization, execution and
delivery  hereof  and  thereof by the other parties hereto and thereto, a legal,
valid and binding obligation enforceable against it in accordance with the terms
thereof,  except  as  such  enforceability  may  be  limited  or  denied  by (i)
applicable  bankruptcy,  insolvency,  reorganization, moratorium or similar laws
affecting  creditors'  rights  and  the  enforcement  of  debtors'  obligations
generally,  and  (ii)  general  principles  of  equity,  regardless  of  whether
enforcement  is  pursuant  to  a  proceeding  in  equity  or  at  law.

     (d)          Litigation.  There  is  no  action, suit or proceeding pending
                  ----------
or, to its knowledge (individually or as trustee, as the case may be) threatened
to  which  it  (individually  or  as trustee), or, in the case of the Investment
Trustee,  the  Investment  Trust  is  or  will  be  a party, before any court or
arbitrator  or  any  Government  Authority  that, if adversely determined, would
reasonably  be  expected  to  materially  and adversely affect the ability of it
(individually  or  as  trustee,  as  the  case  may  be), or, in the case of the
Investment Trustee, the Investment Trust to perform their respective obligations
under each of the Transaction Documents to which it (individually or as trustee,
as  the  case may be), or, in the case of the Investment Trustee, the Investment
Trust  is  or  is  to  be  a  party.

     (e)          Assignment.  It  has  not  assigned  or transferred any of its
                  ----------
right,  title  or interest in or under the Charter, the Completion Guaranty, the
Construction  Supervisory  Agreement, the Drillship or the Collateral, except as
expressly  contemplated  by  the  Transaction  Documents.

     (f)          Securities  Act.  Neither  it (individually or as trustee) nor
                  ---------------
any  Person  authorized  by it (individually or as trustee) to act on its behalf
has  offered  or  sold any interest in the Trust Estate, the Investment Trust or
the  Certificates,  or  in any similar security relating to the Drillship, or in
any  security the offering of which for the purposes of the Securities Act would
be  deemed to be part of the same offering as the offering thereof, or solicited
any  offer  to  acquire  any of the same from, any Person other than the parties
hereto, and neither it (individually or as trustee) nor any Person authorized by
it  (individually or as trustee) to act on its behalf will take any action which
would  subject  the  issuance  or  sale of any interest in the Trust Estate, the
Investment  Trust  or  the  Certificates  to  the provisions of Section 5 of the
Securities  Act  or  require the qualification of any Transaction Document under
the  Trust  Indenture  Act  of  1939,  as  amended.

                                       29
<PAGE>
     (g)          Chief Place of Business.  The Charter Trustee's chief place of
                  -----------------------
business  and  the  office where the documents, accounts and records relating to
the  Drillship and the transactions contemplated by this Agreement and the other
Transaction  Documents  are  and will be kept is located at Rodney Square North,
1100  North  Market  Street,  Wilmington,  Delaware  19890-0001.  The Investment
Trustee's  chief  place of business, chief executive office and the office where
the  documents,  accounts  and  records  relating  to  the  Drillship  and  the
transactions  contemplated by this Agreement and the other Transaction Documents
are  and will be kept is located at 3773 Howard Hughes Parkway, Suite 300 North,
Las  Vegas,  Nevada  89109.

     (h)          No Other Documents.  The Charter Trustee has not executed, and
                  ------------------
the Investment Trustee has not authorized, or voted to authorize, the Investment
Trust  to  execute,  any  document,  agreement  or  instrument  other  than  the
Transaction  Documents  to  which  either  the Charter Trustee or the Investment
Trust  is  or  will  be  a  party.

                                    SECTION 6

                        CERTAIN COVENANTS AND AGREEMENTS

     SECTION 6.1  Covenants  of  Deepwater.
                  ------------------------

     (a)          No  Other Business.  From the date hereof to the expiration or
                  ------------------
termination  of the Charter Term, Deepwater shall not (i) engage in any business
other  than  as  expressly  contemplated  by the Transaction Documents, the Head
Lease Documents (if any), the Drilling Contract or the Services Agreements; (ii)
become a party to any agreement other than this Agreement, the other Transaction
Documents,  the  Drilling Contract, the Drilling Contract Guaranty, the Services
Agreements,  the  Construction  Contract,  the  Construction Documents, the Head
Lease Documents (if any), and any other agreements incidental to the performance
of  its  obligations  hereunder or thereunder; (iii) amend, modify or supplement
the  Drilling  Contract,  the  Drilling  Contract  Guaranty,  or  the  Services
Agreements  in  any  manner  that  would have an adverse effect on the rights or
interests  of  the  Charter  Trustee,  the  Investment  Trust or the Certificate
Purchasers  without  the  prior  written  consent  of  the  Majority Certificate
Purchasers;  (iv)  make  any distributions to its Members so long as an Event of
Loss  has occurred or a Material Default or Event of Default has occurred and is
continuing;  or  (v)  incur  any Indebtedness other than Permitted Indebtedness.
Deepwater  shall  provide the Charter Trustee with substantially final drafts of
any  amendments,  modifications  or  supplements  to  the Drilling Contract, the
Drilling Contract Guaranty or the Services Agreements at least ten (10) Business
Days  prior  to  the  effectiveness  of  such  amendments,  modifications  or
supplements.

     (b)          No  Profit-Sharing.  From the date hereof to the expiration or
                  ------------------
termination of the Charter Term, Deepwater shall not enter into any partnership,
profit-sharing  or  royalty  arrangement  or  other  similar arrangement whereby
Deepwater's income or profits are, or might be, shared with any other Person, or
enter  into  any management contract or similar arrangement whereby its business
or  operations  are  managed  by  any  other  Person, in each case

                                       30
<PAGE>
other  than  as provided in the Transaction Documents, the Head Lease Documents,
the  LLC  Agreement, the Drilling Contract, the Services Agreements or any other
agreement incidental to the performance of its obligations under the Transaction
Documents;  provided  that,  notwithstanding  the foregoing, this Section 6.1(b)
shall  not  prohibit  profit-sharing  arrangements  made  pursuant  to  a  Plan
maintained  by  Deepwater  in  accordance  with  Section  6.1(o).

     (c)          No  Merger.  Deepwater  shall not, from the date hereof to the
                  ----------
expiration  or  termination  of the Charter Term, merge with any other entity or
sell  all  or  substantially  all  of  its  assets.

     (d)          No Subsidiaries.  Deepwater shall not, from the date hereof to
                  ---------------
the  expiration or termination of the Charter Term, form, or cause to be formed,
or  own  any  interest  in,  any  Subsidiaries.

     (e)          No  Abandonment.  Deepwater shall not, from the date hereof to
                  ---------------
the  expiration  or termination of the Charter Term, abandon or agree to abandon
the  Drillship other than a tender of an abandonment to an insurer in connection
with  obtaining  payment  from  such  insurer  for  an  Event  of  Loss.

     (f)          Corporate  Existence,  Etc.  Deepwater  shall,  from  the date
                  ---------------------------
hereof  to  the expiration or termination of the Charter Term, do or cause to be
done,  in  all  material  respects, all things necessary to preserve and keep in
full  force  and  effect  its  rights  and  powers  and  franchises as a limited
liability  company  and its power and authority to perform its obligations under
the Transaction Documents, including any necessary qualification or licensing in
any  foreign  jurisdiction.

     (g)          Compliance  With  Laws.  Deepwater shall, from the date hereof
                  ----------------------
to  the  expiration  or  termination of the Charter Term, comply in all material
respects  with  all  Applicable Laws with respect to the conduct of its business
and  the  ownership  of  its  properties  except  in connection with a Permitted
Contest.

     (h)          Change  of  Name  or Location.  Deepwater shall, from the date
                  -----------------------------
hereof  to  the  expiration  or  termination of the Charter Term, furnish to the
Administrative Agent and each Certificate Purchaser notice before any relocation
of  its chief executive officer, principal place of business or the office where
it  keeps its records concerning its accounts or change of its name, identity or
limited  liability  structure.

     (i)          No  Disposition  of  the Drillship.  Deepwater shall, from the
                  ----------------------------------
date  hereof  to  the  expiration  or termination of the Charter Term, not sell,
contract  to sell, assign, transfer, convey or otherwise dispose of or permit to
be  sold,  assigned,  leased, transferred, conveyed or otherwise disposed of the
Drillship  or  any  part  thereof  except  as  otherwise  contemplated  by  the
Transaction  Documents.

     (j)          Brokers  Fees.  Deepwater  shall hold the Charter Trustee, the
                  -------------

                                       31
<PAGE>
Investment  Trust,  the  Administrative  Agent,  and  each Certificate Purchaser
harmless  from  and  against  any  claim,  demand  or liability for any brokers,
finders,  or placement fees or commissions incurred as a result of any action by
Deepwater  in  connection  with the transactions contemplated by the Transaction
Documents, except for any such fee or commission included in Construction Costs;
provided,  that the covenant contained in this Section 6.1(j) shall not apply to
any  claim,  demand  or  liability for any brokers, finders or placement fees or
commissions: (i) due and payable to Bank of America; (ii) due and payable to any
broker  engaged  by  the  Trustees,  Investment  Trust,  Certificate Purchasers,
Administrative  Agent  or  Affiliate  thereof;  or  (iii) due and payable to any
broker  retained  after  Deepwater's  election  of the Return Option pursuant to
Section  20.3  of  the  Charter.

     (k)          Notice  of Material Default, Event of Default or Environmental
                  --------------------------------------------------------------
Claim;  Other  Certificates.  If  a  Responsible Officer of Deepwater has Actual
---------------------------
Knowledge  of a Material Default, Event of Default, Construction Period Event of
Loss  or  Environmental  Claim with respect to the Drillship (to the extent that
Deepwater  reasonably  expects the cost to remediate or liability to be incurred
with  respect  to  all  such  Environmental  Claims  then  outstanding to exceed
$2,000,000  individually  or  in  the  aggregate), Deepwater shall promptly give
notice  thereof  to  each  other  party  to  this  Agreement.

     Deepwater  shall,  upon the request of the Administrative Agent, (i) advise
the Charter Trustee and the Administrative Agent in writing in reasonable detail
of  its  response  to  any Environmental Claim with respect to the Drillship and
(ii)  provide to the Administrative Agent prompt notice of the date and location
of  the next scheduled dry-docking, if any, of the Drillship prior to such date.

     If  a  default  occurs  and  is  continuing  with  respect  to  Deepwater's
obligations  under  any  Permitted  Indebtedness of the type specified in clause
(iii)  of  the  definition of Permitted Indebtedness, Deepwater shall notify the
Trustees  of  such  default promptly after Deepwater obtains Actual Knowledge of
such  default  and,  upon receiving such notice, either of the Trustees may cure
such  default  at  Deepwater's  expense.

     Deepwater  shall  furnish  to the Charter Trustee, the Investment Trust and
the  Administrative  Agent  (with  copies for the Certificate Purchasers) within
ninety  (90)  days  after  each  anniversary  of  the  Delivery Date, the annual
confirmation  of  classification  of  the Drillship issued by the Classification
Society,  and  at any other time upon the request of the Charter Trustee, copies
of all certificates issued by the U.S. Coast Guard or the Classification Society
with  respect  to  the  Drillship.

     (l)          Documentation of Drillship and Ship Mortgage.  Deepwater shall
                  --------------------------------------------
obtain  a  Permanent Patente from the Panamanian authorities and shall cause the
Drillship  to  be  duly  permanently documented and the Ship Mortgage to be duly
permanently  recorded  under  the laws of Panama at least ten (10) Business Days
before  the  end  of  six  (6)  months following the issuance of the Provisional
Patente. In the event that a successor trustee to the Charter Trustee shall have
been  appointed  pursuant  to  Section  5.10  of the Charter Trust Agreement and
Section

                                       32
<PAGE>
12.18,  or  the  Charter  Trustee  shall merge or consolidate with any Person in
accordance  with  Section 5.12 of the Charter Trust Agreement and Section 12.18,
Deepwater,  at  its  sole expense, shall cause the Drillship to be provisionally
documented  (if  the  Head  Lease Transaction has not been entered into) and the
Ship  Mortgage to be provisionally recorded under the laws of Panama in the name
of  any  successor  trustee  within fifteen (15) Business Days of the receipt of
written  notice  of any such appointment, merger or consolidation; provided that
Deepwater  shall  not  be deemed to be in violation of the covenant contained in
this  sentence  to  the  extent  that  any  delay  in procuring such provisional
documentation or recordation results from the failure of any of the Participants
to  execute  any  necessary  documents or instruments promptly upon receipt from
Deepwater or to take any other action necessary to effectuate such documentation
or recording promptly upon request by Deepwater. Deepwater, at its sole expense,
shall  thereafter  cause the Drillship to be duly permanently documented (if the
Head  Lease  Transaction  has not been entered into) and the Ship Mortgage to be
duly  permanently recorded at least 10 Business Days prior to the end of the six
(6)  months  following  the  issuance  of  the  provisional  documentation.

     (m)          Financial  Statements.  Deepwater  shall, from the date hereof
                  ---------------------
to  the  expiration  or  termination of the Charter Term, provide to the Charter
Trustee  and  each  Certificate  Purchaser  financial  statements  as  follows:

          (i)     for  each fiscal year ended after December 31, 1997, within 90
     days  after  the  end  of  such  fiscal  year,  annual financial statements
     including  a statement of earnings, a statement of cash flows and a balance
     sheet  of  Deepwater  for the fiscal year then ended prepared in conformity
     with  GAAP,  consistently  applied,  and audited by its independent outside
     auditors;

          (ii)     for  each  fiscal  quarter of Deepwater, within 45 days after
     the end of such fiscal quarter, unaudited financial statements, including a
     statement  of  earnings,  a  statement of cash flows and a balance sheet of
     Deepwater  for  the  fiscal  quarter then ended prepared in conformity with
     GAAP,  consistently  applied;  and

          (iii)     together  with  the  financial  statements  required  to  be
     delivered  under  clauses (i) and (ii) above, a certificate from a member's
     representative of Deepwater certifying that no Material Default or Event of
     Default  has  occurred  and  is  then  continuing.

     (n)          Subordinated  Operating  Expenses.  Deepwater  shall, from the
                  ---------------------------------
date  hereof  to the expiration or termination of the Charter Term, maintain the
Services Agreements in effect and shall ensure that to the extent that Operation
and  Maintenance  Expenses incurred during each month of the Charter Term exceed
the  Unsubordinated  Operating Expense Amount, such expenses shall be payable by
Deepwater  under  the Services Agreements as Subordinated Operating Expenses. In
the  event that on any Charter Hire Payment Date there are insufficient funds in
the  Operating  Account  to pay all Subordinated Operating Expenses then due and
payable in accordance with Section 3.4(b) of the Depository Agreement, Deepwater
shall  be  entitled  to  issue  Subordinated  Debt  to  the  Person to whom such
Subordinated  Operating

                                       33
<PAGE>
Expenses are due in the amount of such shortfall.

     (o)          Plans.  Deepwater  shall  not,  from  the  date  hereof to the
                  -----
expiration or termination of the Charter Term, maintain any Plan for the benefit
of  its  employees;  provided,  however,  that,  notwithstanding  the foregoing,
                     --------   -------
Deepwater  may  adopt  one  or more Plans for the benefit of its employees which
are,  in  the  aggregate,  comparable to the Plans maintained by other employers
engaged  in the same or similar industry.  With respect to any such Plan adopted
by  Deepwater:

          (i)     such  Plan  shall be operated and administered by Deepwater in
     compliance  with  its  terms  and  with  the  requirements  of  any and all
     Applicable  Laws,  in  all  material  respects;

          (ii)     no  material liability pursuant to Titles I or IV of ERISA or
     the  penalty  or  excise  tax provisions of the Code shall be incurred; and

          (iii)     no  lien  pursuant to Titles I or IV of ERISA or Section 412
     of  the Code shall be imposed on any of the rights, properties or assets of
     Deepwater.

     (p)          Y2K Compliance.  Deepwater shall use its best efforts to cause
                  --------------
the  computer programs used as part of the OFE, when used in accordance with the
pertinent  user  documentation  and  when  the  input  to  them  is formatted in
accordance  with  such  documentation,  to  comply with the following:  (i) such
programs  shall  accurately and completely process (including but not limited to
calculation,  comparison  and  sequencing, and including without limitation leap
year  calculations)  date-related  data  for  dates  prior  to  the  year  2000,
date-related data for dates after the year 1999, and date-related data for dates
both  before the year 2000 and after the year 1999; and (ii) such programs shall
not, as a consequence of the change of centuries or the fact that data from more
than one century is being processed, cause an abnormal termination of execution,
an  endless  loop,  incorrect  values  or  invalid results, or otherwise fail to
perform  accurately  and  completely  those  functions  set  forth  in such user
documentation.  All  date-related data generated by or embodied in such programs
shall  include  an  indication  of  century.

     SECTION  6.2     Certain  Covenants  of the Charter Trustee, the Investment
                      ----------------------------------------------------------
Trustee  and  the Investment Trust.  Each of the Charter Trustee, the Investment
----------------------------------
Trustee  and  the  Investment  Trust,  severally  and  not jointly, covenants as
follows:

     (a)          Maintenance of Existence.  The Investment Trust shall maintain
                  ------------------------
its  existence as a Delaware business trust and its qualification to do business
in  each jurisdiction in which the failure to have such a qualification may have
a  material  adverse  effect  on  the  performance  of its obligations under the
Transaction Documents.  The Charter Trustee shall maintain its existence and its
qualification  to  do business in each jurisdiction in which the failure to have
such  qualification may have a material adverse effect on the performance of its
obligations  under  the  Transaction  Documents.

                                       34
<PAGE>
     (b)          Indebtedness;  Other  Business.  Neither  the Investment Trust
                  ------------------------------
nor  the  Trustees shall contract for, create, incur or assume any Indebtedness,
or  enter  into  any  business  or other activity, other than pursuant to, or as
contemplated  by,  the  Transaction  Documents  and  the  Head  Lease Documents.

     (c)          Change  of  Chief  Place of Business.  Each of the Trustees in
                  ------------------------------------
their  respective individual capacities shall give prompt notice to Deepwater if
any  of  the  Investment  Trust's  or Trustees' chief place of business or chief
executive  office  or  the  office  where the records concerning the accounts or
contract rights relating to the Drillship are kept, shall cease to be located at
the  address  set  forth  in  Section  12.3.

     (d)          No  Voluntary  Bankruptcy by Investment Trust.  The Investment
                  ---------------------------------------------
Trust  shall  not  (i)  commence  any case, proceeding or other action under any
existing  or  future  law,  relating  to bankruptcy, insolvency, reorganization,
arrangement,  winding-up,  liquidation, dissolution, composition or other relief
with  respect  to it or its debts, (ii) seek appointment of a receiver, trustee,
custodian  or other similar official for them or for all or any substantial part
of  its  assets  or  property  or  (iii)  take  any action in furtherance of, or
indicating  its consent to, approval of, or acquiescence in, any of the acts set
forth  in  this  Section  6.2.

     (e)          No  Voluntary  Bankruptcy  by  Charter  Trustee.  The  Charter
                  -----------------------------------------------
Trustee,  in  its  individual capacity or as trustee, shall not (i) commence any
case,  proceeding  or other action under any existing or future law, relating to
bankruptcy,  insolvency,  reorganization,  arrangement, winding-up, liquidation,
dissolution,  composition  or  other  relief with respect to it, its debts, (ii)
seek appointment of a receiver, trustee, custodian or other similar official for
it  or  for  all or any substantial part of its assets or property or (iii) take
any  action  in  furtherance  of,  or indicating its consent to, approval of, or
acquiescence  in,  any  of  the  acts  set  forth  in  this  Section  6.2.

     (f)          No Voluntary Bankruptcy by Investment Trustee.  The Investment
                  ---------------------------------------------
Trustee,  in  its  individual capacity or as trustee, shall not (i) commence any
case,  proceeding  or other action under any existing or future law, relating to
bankruptcy,  insolvency,  reorganization,  arrangement, winding-up, liquidation,
dissolution,  composition  or  other  relief  with respect to it, its debts, the
Investment  Trust  or  the  Investment Trust's debts, (ii) seek appointment of a
receiver,  trustee,  custodian  or  other  similar  official  for  all  or  any
substantial  part  of  its or the Investment Trust's assets or property or (iii)
take any action in furtherance of, or indicating its consent to, approval of, or
acquiescence  in,  any  of  the  acts  set  forth  in  this  Section  6.2.

     (g)          No Sale of Drillship.  Neither the Trustees nor the Investment
                  --------------------
Trust  shall  transfer  all  or  any  of  its  interest  in the Drillship or the
Transaction  Documents  except  as  expressly  permitted  in  the  Transaction
Documents.

     (h)          Trust Agreements.  Without prejudice to any right of either of
                  ----------------
the  Trustees  under  the Trust Agreements to resign as trustee, or the right of
the  Certificate  Purchasers  under the Trust Agreements to remove either of the
Trustees  as  trustee,  and in each case subject to the terms of the Transaction
Documents,  neither the Trustees nor the Investment

                                       35
<PAGE>
Trust  shall  (i) terminate or revoke the trusts created by the Trust Agreements
before  the later of the expiration or termination of the Charter or the payment
in  full  of  the  obligations  under  the  Certificates,  (ii)  amend,  modify,
supplement,  terminate  or  revoke  or  otherwise  modify  any  provision of any
Transaction  Document  (other than the Ship Mortgage) or any Head Lease Document
in  any  manner  that would have an adverse effect on the rights or interests of
Deepwater without the prior written consent of Deepwater, or (iii) amend, modify
or  supplement  the  Ship  Mortgage  without  Deepwater's prior written consent.

     (i)          Liens.  Neither  Trustee  (in  its  individual  capacity or as
                  -----
trustee)  shall  create  or  suffer  to exist (and shall discharge promptly) any
Trust Lien; provided, however, that such Trustee shall not be required to remove
            --------  -------
a  Trust  Lien  if  it is being contested pursuant to a Permitted Contest and is
bonded  to  the  satisfaction  of  Deepwater.

     (j)          Change  of  Jurisdiction of the Trustees.  Neither Trustee (in
                  ----------------------------------------
its individual capacity) shall (i) without sixty (60) days' prior written notice
to  Deepwater  and the Participants, change its jurisdiction of incorporation or
organization (individually or as trustee) or (ii) change the jurisdiction of the
Investment  Trust  or  the  trust created by the Charter Trust Agreement, in any
case,  without  the  consent  of  Deepwater  and  the  Administrative  Agent.

     (k)          Quiet Enjoyment.  So long as no Charter Event of Default shall
                  ---------------
have  occurred  and  be  continuing  and Deepwater shall have received no notice
thereof,  neither  the  Investment  Trustee  (in  its  individual  and  trustee
capacities)  nor the Investment Trust shall take any action to interfere with or
otherwise  disturb Deepwater's, its agents' or its permitted subcharterers' full
use  and  possession  of  the  Drillship or do or cause to be done any act which
would  deprive Deepwater, its agents, or its permitted subcharterers of the full
use and possession of the Drillship on the terms provided for in the Transaction
Documents.

     SECTION 6.3  Covenants  of  the  Certificate  Purchasers.
                  -------------------------------------------

     Each  Certificate  Purchaser,  individually  and  not jointly, covenants as
follows:

     (a)          Trust  Agreements.  Without  prejudice  to  any  right  of the
                  -----------------
Trustees  under  the Trust Agreements to resign as Trustees, or the right of the
Certificate Purchasers under the Trust Agreements to remove the Trustees, and in
each  case  subject  to the terms of the Transaction Documents, such Certificate
Purchaser hereby agrees with Deepwater (i) not to terminate or revoke the trusts
created  by  the  Trust  Agreements  before  the  later  of  the  expiration  or
termination  of the Charter Term or the payment in full of the obligations under
the Certificates, and (ii) not to amend, modify, supplement, terminate or revoke
or  otherwise modify any provision of any Transaction Document or any Head Lease
Document  in  any  manner  that  would  have  an adverse effect on the rights or
interests of Deepwater without the prior written consent of Deepwater; provided,
however,  that  the consent requirement contained in clause (ii) of this Section
6.3(a)  shall  only  apply  to  amendments,  supplements  revocations  or  other
modifications which can be made legally effective without Deepwater's execution.

                                       36
<PAGE>
     (b)          Compliance  by  Charter Trustee and Investment Trust.  Subject
                  ----------------------------------------------------
to the terms of Section 12.13, each of the Certificate Purchasers agrees that it
shall  not  instruct, or vote to instruct, the Charter Trustee or the Investment
Trust  to  take any action inconsistent with, contrary to or in violation of the
Transaction  Documents  or  the  Charter  Trustee's  or  the  Investment Trust's
obligations  thereunder,  and  each of the Certificate Purchasers agrees that it
shall  instruct,  or  vote  to  instruct,  the  Investment Trust and the Charter
Trustee  to  take  any  affirmative  action  necessary to satisfy the Investment
Trust's  and the Charter Trustee's obligations under the Conoco Drilling Consent
(including  any  obligation  to  enter into an assumption agreement, replacement
drilling  contract  or  similar  arrangement in accordance with the terms of the
Conoco  Drilling  Consent).

     (c)          Each  of  the  Certificate Purchasers agrees that it shall not
create  or  suffer  to  exist  (and  shall  discharge  promptly) any Certificate
Purchaser  Lien  attributable  to  it;  provided,  however,  that no Certificate
                                        --------   -------
Purchaser  shall be required to remove a Certificate Purchaser Lien attributable
to  it if it is being contested pursuant to a Permitted Contest and is bonded to
the  satisfaction  of  Deepwater.

     (d)          No  Voluntary  Bankruptcy.  Each of the Certificate Purchasers
                  -------------------------
agrees that it shall not (i) commence any case, proceeding or other action under
any  existing or future law, relating to bankruptcy, insolvency, reorganization,
arrangement,  winding-up,  liquidation, dissolution, composition or other relief
with  respect to the Charter Trustee's or Investment Trust's debts, or (ii) seek
appointment  of a receiver, trustee, custodian or other similar official for the
Charter  Trustee  or  the Investment Trust or for all or any substantial part of
either  or  both  of  their  assets  or  property  and  each  of the Certificate
Purchasers  shall  not  take  any  action  in  furtherance of, or indicating its
consent  to,  approval  of,  any  of the acts set forth in this Section 6.3 (d).

     (e)          Quiet  Enjoyment.  Each  of  the Certificate Purchasers agrees
                  ----------------
that  so  long  as  no  Charter  Event  of  Default  shall  have occurred and be
continuing and Deepwater shall have received no notice thereof, such Certificate
Purchaser  shall  not  take  any  action  to interfere with or otherwise disturb
Deepwater's, its agents' or its permitted subcharterers' full use and possession
of  the  Drillship  or  do  or  cause  to  be  done  any act which would deprive
Deepwater,  its  agents,  or  its  permitted  subcharterers  of the full use and
possession  of  the  Drillship  on  the  terms  provided  for in the Transaction
Documents.

     SECTION  6.4     Covenants  of  the Members.  As the sole obligation of the
                      --------------------------
Members  under  this  Agreement, each of the Members, severally and not jointly,
covenants  as  follows:

     (a)          Bankruptcy.  Such Member agrees that it shall not (i) commence
                  ----------
any  case,  proceeding  or  other action under any existing or future law of any
jurisdiction,  domestic  or  foreign,  relating  to  bankruptcy,  insolvency,
reorganization,  arrangement,  winding-up, liquidation, dissolution, composition
or other relief with respect to Deepwater or its debts; (ii) seek appointment of
a  receiver,  trustee,  custodian or other similar official for Deepwater or for
all  or  any  substantial  part of its property; or (iii) vote its interest as a
member  of  Deepwater  to,  or

                                       37
<PAGE>
to  otherwise,  cause Deepwater to file a voluntary petition in bankruptcy or an
answer  seeking  reorganization in a proceeding under any bankruptcy, insolvency
or  similar  laws  or an answer admitting the material obligations of a petition
filed  against  Deepwater  in  any  such  proceeding.

     (b)          No  Amendment to LLC Agreement.  Other than in connection with
                  ------------------------------
a transfer of an ownership interest permitted by Section 6.4(c) or a transaction
permitted  by  Section 6.1(c), such Member agrees that it will not amend the LLC
Agreement  as  in  effect  on  the Closing Date, in a manner that has an adverse
effect  on  the  rights  or interests of the Trustees, the Investment Trust, the
Certificate  Purchasers,  or  their  respective  rights  under  the  Transaction
Documents  or the obligations of Deepwater thereunder, in each case, without the
prior  written  consent  of  the  Administrative  Agent,  such consent not to be
unreasonably  withheld.

     (c)          Maintenance  of Membership Interests.  Such Member agrees that
                  ------------------------------------
it  shall  not  sell, assign or transfer any of its interest in Deepwater if the
result of such sale, assignment or transfer is to cause the aggregate membership
interests  in Deepwater of such Member and its Affiliates to be less than 40% of
all  of  the  Membership  interests  in  Deepwater.

     (d)          Compliance  by  Deepwater.  Subject  to  the  terms of Section
                  -------------------------
12.13,  such  Member  agrees  that  it  shall not instruct Deepwater to take any
action  inconsistent  with,  contrary  to  or  in  violation  of the Transaction
Documents  or  Deepwater's  obligations  thereunder.

     SECTION 6.5  Hedging  Agreements.  On or prior to the Delivery Date, if
                  -------------------
Deepwater  has  arranged  for  one  or  more interest rate swaps in an aggregate
notional  principal  amount  of  up to $185,000,000 in substantially the form of
Exhibit  S-1 hereto (the "Hedging Agreements") to be entered into by one or more
                          ------------------
Hedging  Agreement  Counterparties, then upon the written request from Deepwater
the  Charter  Trustee shall enter into such Hedging Agreements and, concurrently
therewith,  Deepwater  and  the  Charter  Trustee  shall  enter into one or more
matching  interest  rate  swaps  in substantially the form of Exhibit S-2 hereto
(the  "Deepwater  Hedging  Agreements");  provided that, at the time the Hedging
       ------------------------------
Agreements  are entered into, each of the Hedging Agreement Counterparties shall
be  a  Certificate  Purchaser  or  an  Affiliate thereof and each of the Hedging
Agreement  Counterparties shall have executed acknowledgements to the Depository
Agreement,  the Charter Trustee Assignment and any other appropriate Transaction
Document.  The  Charter  Trustee  is hereby instructed and agrees to deposit all
amounts owed to Deepwater under the Deepwater Hedging Agreements (the "Deepwater
                                                                       ---------
Hedge  Payments")  and all amounts paid to the Charter Trustee under the Hedging
---------------
Agreements  (x)  into the Trustee's Account pursuant to Section 2.10 or (y) with
the  Depository  to  be  applied  pursuant  to  the  Depository  Agreement,  as
applicable.  All  Deepwater  Hedge  Payments deposited pursuant to the preceding
sentence  shall  satisfy,  to  the  extent  so deposited, the obligations of the
Charter  Trustee  under  the Deepwater Hedging Agreements.  All payments made to
the  Hedging  Agreement  Counterparties of amounts owed to the Hedging Agreement
Counterparties under the Hedging Agreements pursuant to the Depository Agreement
shall  satisfy  the  corresponding  obligations of Deepwater under the Deepwater
Hedging  Agreements.  If a Responsible Officer of Deepwater has Actual Knowledge
of  an  Event  of  Default,  Construction Period Event of Loss or Event of Loss,
Deepwater  shall  promptly  give notice thereof to each of the Hedging Agreement
Counterparties.

                                       38
<PAGE>
In  addition,  Deepwater  shall  provide  to  each  of  the  Hedging  Agreement
Counterparties a copy of any notice of its election to exercise its Construction
Period  Purchase  Right  under  Section  6.3  of  the  Construction  Supervisory
Agreement  or  its  election of its Special Purchase Right under Section 16.4 of
the  Charter. The Charter Trustee shall provide to each of the Hedging Agreement
Counterparties  a copy of any notice given to Deepwater under Article XVI of the
Charter.

     SECTION  6.6     Purchase  Obligation.  Notwithstanding any other provision
                      --------------------
of  this  Agreement or any other Transaction Document, in the event that the Day
Rate  Commencement  Date  has  not  occurred  on  or before the Outside Day Rate
Commencement  Date,  Deepwater  shall  be  obligated  to  purchase  the  Charter
Trustee's  and  Investment  Trust's  rights in and to the Drillship on the first
Business Day after the Outside Day Rate Commencement Date for an amount equal to
the Certificate Purchaser Balance plus all accrued and unpaid Certificate Return
as  of  the  date  of  payment, plus all amounts then due and owing by Deepwater
under  the  Transaction  Documents.  Deepwater  shall  pay  all  such amounts in
immediately available funds on the first Business Day after the Outside Day Rate
Commencement  Date.  Nothing  contained  in  this Section 6.6 shall be deemed to
extend  the  Outside  Day  Rate  Commencement  Date.   Upon  payment of all such
amounts,  the Charter and the Construction Supervisory Agreement shall terminate
and  the  Trustees,  the  Investment  Trust and the Certificate Purchasers shall
convey all of their right, title and interest in and to the Drillship (including
their  rights  under  the  Construction Contract or the Head Lease Documents, if
any),  free  and  clear  of  the  Ship Mortgage, all Trust Liens and Certificate
Purchaser  Liens and otherwise "as is," "where is", without recourse or warranty
(except  as  to  the absence of Trust Liens and Certificate Purchaser Liens), to
Deepwater,  and  Deepwater shall have no further obligation under the Charter or
the  Construction  Supervisory  Agreement  immediately  upon  such  payment.

     SECTION  6.7     Charter  Extension  Option.  In  the  event that Deepwater
                      --------------------------
elects  the  Charter  Extension  Option  in accordance with Section  20.2 of the
Charter, Deepwater may, in its sole discretion, elect to replace any Certificate
Purchaser  that  does  not submit an offer to extend or whose offer to extend is
rejected  by  Deepwater  by  having a Replacement Certificate Purchaser purchase
such  non-consenting  Certificate  Purchaser's  interest in accordance with this
Agreement.  Replacement  of a Certificate Purchaser by a Replacement Certificate
Purchaser  shall be subject to the Certificate Purchaser Replacement Conditions.

     SECTION  6.8     Excessive  Use Indemnity.  In the event that (a) Deepwater
                      ------------------------
elects the Return Option and (b) after paying to the Charter Trustee all amounts
due  under  Section  20.3  of  the Charter, including Net Sales Proceeds and the
Residual Guarantee Amount, the Charter Trustee has not received sufficient funds
to  reduce  the  Certificate  Purchaser  Balance  to  zero, then Deepwater shall
deliver  a  report  from  an  independent  appraiser  acceptable to the Required
Certificate  Purchasers  establishing  whether  or  not  the decline in the fair
market  value  of  the  Drillship  from the anticipated fair market value of the
Drillship  as of the Scheduled Charter Expiration Date in the Appraiser's report
delivered  pursuant  to Section 3.2(f) was due to wear and tear on the Drillship
in excess of ordinary wear and tear.  Deepwater shall pay to the Charter

                                       39
<PAGE>
Trustee  promptly after receipt of such report an amount equal to the amount, if
any, of the decline in the fair market value of the Drillship that the appraiser
has  attributed to such excess wear and tear; provided, however, that the amount
owed  by  Deepwater  pursuant  to  this Section 6.8 shall in no event exceed the
amount  of  funds  necessary to reduce the Certificate Purchaser Balance to zero
and  to  pay all accrued and unpaid Certificate Return after Deepwater's payment
of  all  amounts  due  under  Section  20.3  of  the  Charter.  The  appraiser's
determination  shall  be  absolute  and  final  and  not contested by any of the
parties  hereto,  absent  manifest  error.

                                    SECTION 7

                               CERTAIN PROCEDURES

     SECTION  7.1     Illegality.  If  after  the  date  of  this  Agreement the
                      ----------
adoption  of  any Applicable Law, or any change in any Applicable Law, or in the
interpretation  or  administration  by  any  central  bank  or  other Government
Authority  of any Applicable Law, has made it unlawful, or it is asserted by any
central  bank  or  other  Government  Authority  that  it  is  unlawful, for any
Certificate  Purchaser  or  its Applicable Office to make Base Rate Advances (an
"Illegality  Event")  then,  on  written  notice  thereof  by  such  Certificate
 -----------------
Purchaser  to  Deepwater  and  the  Charter  Trustee,  any  obligation  of  such
Certificate  Purchaser  to  make  Base  Rate  Advances shall be suspended to the
extent  necessary  to comply with any such Applicable Law until such Certificate
Purchaser  notifies the Charter Trustee and Deepwater that such Illegality Event
no  longer  exists.

     If an Illegality Event occurs, upon written notice of such Illegality Event
from the affected Certificate Purchaser to Deepwater (with a copy to the Charter
Trustee),  all Base Rate Advances of that Certificate Purchaser then outstanding
shall  automatically  be  converted  to an Alternate Rate Advance, either on the
last day of the Return Period thereof, if the Certificate Purchaser may lawfully
continue to maintain such Base Rate Advances to such day, or immediately, if the
Certificate  Purchaser  may  not  lawfully  continue  to maintain such Base Rate
Advance.

     If  the  obligation  of  any Certificate Purchaser to make or maintain Base
Rate  Advances  has been terminated or suspended in accordance with this Section
7.1, Deepwater may elect, by giving notice to such Certificate Purchaser through
the  Charter  Trustee  or  the  Investment  Trust  that all Advances which would
otherwise  be  made by such Certificate Purchaser as Base Rate Advances shall be
made  instead  as  Alternate  Rate  Advances.

     Before  giving  any  notice  to  Deepwater,  the  Charter  Trustee  or  the
Investment  Trust  under  this  Section  7.1, the affected Certificate Purchaser
shall  designate  a  different  Applicable  Office with respect to its Base Rate
Advances  if  such  designation will avoid or cure the Illegality Event and will
not,  in  the  judgment  of  the  Certificate Purchaser, be illegal or otherwise
disadvantageous  to  the  Certificate  Purchaser.

                                       40
<PAGE>
     SECTION  7.2     Increased  Costs  and Reduction of Return.  (a)  If due to
                      -----------------------------------------
either  (i)  the  adoption  of  or any change in or in the interpretation by any
Government  Authority  of  any  law  or regulation or (ii) the compliance by any
Certificate  Purchaser  with  any  guideline or request from any central bank or
other  Government  Authority  (whether  or  not  having  the  force of law), any
Certificate  Purchaser  becomes  subject to any Tax, duty or other charge (other
than  Taxes  for which indemnification is provided under Section 10.4) such that
there shall be any increase in the cost to any Certificate Purchaser of agreeing
to  make or making, funding or maintaining any Base Rate Advances, then, subject
to Section 7.6, Deepwater shall be liable for, and shall from time to time, upon
written demand from such Certificate Purchaser (with a copy of such demand to be
sent to the Charter Trustee), pay to the Charter Trustee for the account of such
Certificate  Purchaser, additional amounts equal to the amount of such increased
costs.

     (b)          If  (i)  the  adoption  of  any Applicable Law relating to the
adequacy  of  the  Certificate  Purchaser's capital, (ii) any change in any such
Applicable  Law, (iii) any change in the interpretation or administration of any
such  Applicable  Law  by any central bank or other Government Authority charged
with  the  interpretation  or  administration thereof, or (iv) compliance by the
Certificate  Purchaser (or its Applicable Office) or any corporation controlling
the  Certificate Purchaser with any such Applicable Law, affects or would affect
the  amount  of capital required or expected to be maintained by the Certificate
Purchaser or any corporation controlling the Certificate Purchaser such that the
return  on  capital of such Certificate Purchaser is reduced as a consequence of
such Certificate Purchaser's Commitment or obligations under this Agreement to a
level  below  that  which such Certificate Purchaser could have achieved but for
such  adoption or change (taking into consideration such Certificate Purchaser's
or  such  corporation's  policies  with  respect  to  capital  adequacy and such
Certificate  Purchaser's  reasonably  expected  return  on  capital),  then upon
written  notice from such Certificate Purchaser to Deepwater (with a copy to the
Charter Trustee) Deepwater shall, subject to Section 7.6, pay to the Certificate
Purchaser  additional amounts sufficient to compensate the Certificate Purchaser
for  such  reduction  in  return.

     (c)          A  Certificate  Purchaser affected by a change as described in
subparagraphs  (a)  or  (b) shall, pursuant to Section 7.6, deliver to Deepwater
and  the  Charter Trustee as promptly as practicable a certificate setting forth
in  reasonable  detail  the amount actually imposed or assessed on payments made
under  the  Certificates  in the case of the occurrence of an event described in
Section 7.2(a) or (b), setting forth in reasonable detail such increased amounts
or the amount required to compensate such Certificate Purchaser for such reduced
return  and  the  basis  for  the  determination  of  such  amounts.

     SECTION 7.3  Funding  Losses.  Deepwater  shall  reimburse  each
                  ---------------
Certificate  Purchaser  and  hold  each  Certificate Purchaser harmless from any
direct  loss  or expense (as opposed to consequential loss or expense) which the
Certificate  Purchaser may sustain or incur as a consequence of: (a) the failure
of  Deepwater to make on a timely basis any payment which it is required to make
under  the  Transaction  Documents  which  is  to  be  applied to the payment of
principal  of  any Base Rate Advance; (b) the failure of Deepwater to accept the
proceeds  of  any

                                       41
<PAGE>
Advance;  (c)  the  failure  of  Deepwater  to  accept,  continue or convert the
proceeds  of  an  Advance paid to the Charter Trustee by a Certificate Purchaser
after  Deepwater  has given (or is deemed to have given) an Advance Request; (d)
the  failure of Deepwater to make any payment which it is required to make under
the Transaction Documents which is to be applied to the prepayment of an Advance
in  accordance  with  any  notice  delivered  pursuant  to this Agreement or any
Transaction  Document;  (e)  the  prepayment  or  other payment (including after
acceleration  thereof)  of a Base Rate Advance on a day that is not the last day
of  the relevant Return Period, or (f) the automatic conversion of any Base Rate
Advance  to  an  Alternate Rate Advance on a day that is not the last day of the
relevant  Return  Period,  including  any  such loss or expense arising from the
liquidation  or  reemployment  of funds obtained by it to maintain its Base Rate
Advances  or  from  fees payable to terminate the deposits from which such funds
were  obtained.  For purposes of calculating amounts payable by Deepwater to the
Certificate  Purchasers  under  this Section 7.3 and under Sections 2.4 and 2.8,
each  Base  Rate  Advance  made  by  the Certificate Purchaser (and each related
reserve,  special  deposit or similar requirements) shall be conclusively deemed
to have been funded at the LIBOR used in determining the Certificate Return Rate
for  such  Base  Rate  Advance  by  a matching deposit or other borrowing in the
interbank Eurodollar market for a comparable amount and for a comparable period,
whether  or  not  such  Base  Rate  Advance  is  in  fact  so  funded.

     SECTION  7.4     Inability  to  Determine Rates.  If the Charter Trustee or
                      ------------------------------
the  Required  Certificate Purchasers determine that for any reason adequate and
reasonable  means  do  not exist for determining the Base Rate for any requested
Return  Period  with  respect  to  a proposed Base Rate Advance by reason of any
changes  arising  after  the  date  of  this  Agreement  affecting the interbank
Eurodollar  market,  the  Charter  Trustee will promptly so notify Deepwater and
each  Certificate  Purchaser.  Thereafter,  the  obligation  of  the Certificate
Purchasers  to  make or maintain Base Rate Advances hereunder shall be suspended
until  the  Charter  Trustee,  upon  the instruction of the Required Certificate
Purchasers,  revokes  such  notice  in  writing.  Upon  receipt  of such notice,
Deepwater  may  revoke  any Advance Requests then submitted by it.  If Deepwater
does not revoke any such Advance Request, the Certificate Purchasers shall make,
convert  or  continue  the  Advances,  as  proposed  by Deepwater, in the amount
specified  in  the  applicable  notice submitted by Deepwater, but such Advances
shall be made, converted or continued as Alternate Rate Advances instead of Base
Rate  Advances.

     SECTION  7.5     Reserves  on Base Rate Advances.  If after the date hereof
                      -------------------------------
any  Certificate  Purchaser  shall  be required under regulations of the Federal
Reserve  Board or any other applicable Government Authority to maintain reserves
with  respect  to  liabilities or assets consisting of or including Eurocurrency
funds  or  deposits  (currently  known as "Eurocurrency liabilities"), Deepwater
                                           ------------------------
shall pay to such Certificate Purchaser additional costs on the unpaid principal
amount  of  each  Base  Rate  Advance equal to the actual costs of such reserves
maintained  and  allocated to such Advance by the Certificate Purchaser, payable
on  each  date  on which interest is payable on such Advance, provided Deepwater
shall  have  received at least 15 days' prior written notice (with a copy to the
Charter  Trustee)  of  such  additional  Certificate Return from the Certificate
Purchaser.  If a Certificate Purchaser fails to give notice 15 days

                                       42
<PAGE>
prior  to the relevant Payment Date, such additional Certificate Return shall be
payable  15  days  from  receipt  of  such  notice.

     SECTION  7.6     Certificates  of  Certificate Purchasers.  Any Certificate
                      ----------------------------------------
Purchaser  claiming  reimbursement  or  compensation  under this Section 7 shall
deliver  to Deepwater (with a copy to the Charter Trustee) a certificate setting
forth  in  reasonable  detail  the  amount  payable to the Certificate Purchaser
hereunder  and  the  basis  for  the  determination  of  such  amount  and  such
certificate  shall  be  conclusive  and  binding  on Deepwater in the absence of
manifest  error.  Deepwater shall not be obligated to compensate any Certificate
Purchaser  for  any  costs  incurred more than 120 days before the date on which
such Certificate Purchaser first notifies Deepwater of its intent to make such a
claim  or  it  notifies  Deepwater of an event that entitles it to compensation.

     SECTION  7.7     Substitution  of  Certificate  Purchasers;  Change  in
                      ------------------------------------------------------
Applicable  Office;  Prepayments.  Upon  the  receipt  by  Deepwater  from  any
--------------------------------
Certificate  Purchaser  (an  "Affected  Certificate  Purchaser")  of a claim for
                              --------------------------------
compensation  under  Section  7.2,  Deepwater  may:  (i)  request  the  Affected
Certificate  Purchaser  to  use  its commercially reasonable efforts to obtain a
replacement  bank  or  financial  institution  satisfactory  to  Deepwater  (a
"Substitute  Certificate Purchaser") to acquire and assume all or a ratable part
 ---------------------------------
of  all of such Affected Certificate Purchaser's Advances and Commitment so long
as  the Affected Certificate Purchaser is paid its Certificate Purchaser Amount,
accrued  and  unpaid  Certificate Return and any other accrued and unpaid amount
owed  to  it by Deepwater under the Transaction Documents; (ii) request one more
of  the  other  Certificate Purchasers to acquire and assume all or part of such
Affected  Certificate  Purchaser's  Advances  and  Commitment; (iii) designate a
Substitute  Certificate Purchaser and require the Affected Certificate Purchaser
to  transfer  all of its Advances and Commitments to such Substitute Certificate
Purchaser;  (iv)  request  the  Affected  Certificate  Purchaser  to designate a
different  Applicable  Office  if  such  designation will avoid the need for, or
reduce  the  amount  of,  such compensation and will not be illegal or otherwise
disadvantageous  to  the Affected Certificate Purchaser; or (v) make payments to
the  Charter  Trustee  which  are equal to the amounts necessary for the Charter
Trustee  to  prepay  all or a portion of the Certificate Purchaser Amount of the
Affected  Certificate  Purchaser,  together  with accrued and unpaid Certificate
Return  attributable  to  the  amount  being  prepaid.  The Affected Certificate
Purchaser  shall take any commercially reasonable actions necessary to carry out
a  request  or election made by Deepwater in accordance with this Section 7.7 at
Deepwater's  sole cost and expense.  Any designation of a Substitute Certificate
Purchaser  under  this Section 7.7 shall be subject to the prior written consent
of  the  Administrative  Agent which consent shall not be unreasonably withheld,
delayed  or  conditioned.

     SECTION  7.8     Legal  and Tax Representation.  Deepwater acknowledges and
                      -----------------------------
agrees  that  none  of  the  Trustees,  the  Investment Trust, the Agents or any
Certificate  Purchaser  has  made  any representation or warranty concerning the
tax,  accounting  or  legal  characteristics  of the Charter or any of the other
Transaction

                                       43
<PAGE>
Documents,  and  that  Deepwater has obtained and relied on such tax, accounting
and  legal  advice  regarding the Charter and the other Transaction Documents as
its  deems  appropriate.  Each of the Charter Trustee, Investment Trust and each
Certificate Purchaser acknowledges and agrees that it has obtained and relied on
the  Transaction  Documents  and  the  various  items  delivered  in  connection
therewith,  and  on  such tax, accounting and legal advice regarding the Charter
and  the  other  Transaction  Documents  as  it  deems  appropriate.

     SECTION  7.9     Failure of a Certificate Purchaser to Fund.  If an Advance
                      ------------------------------------------
is  to  be  made  in  accordance with the terms and conditions hereof and if the
Charter Trustee determines that any Certificate Purchaser (each such Certificate
Purchaser a "Defaulting Certificate Purchaser") will not make available all or a
             --------------------------------
portion  of  its Commitment Percentage of such Advance (the "Defaulted Amount"),
                                                             ----------------
the  Charter  Trustee  shall  promptly  so  notify  Deepwater  and  each  other
Certificate Purchaser (each, a "Non-Defaulting Certificate Purchaser") and shall
                                ------------------------------------
specify the additional amounts required to be funded by each such Non-Defaulting
Certificate  Purchaser  pursuant  to this Section 7.9.  Each such Non-Defaulting
Certificate  Purchaser  as  soon  as  practical  after receipt of notice but not
before  the  Advance  Date,  shall  transfer  to  the  Charter  Trustee  and the
Investment  Trust,  as  applicable, in immediately available funds, its pro rata
share  of  the  Defaulted  Amount,  determined  in the same proportion that such
Non-Defaulting  Certificate  Purchaser's  Commitment  bears  to  the  aggregate
Commitments  of  all  such Non-Defaulting Certificate Purchasers; provided, that
such  amount,  together  with  all  amounts  previously  funded  by  each  such
Non-Defaulting  Certificate  Purchaser,  shall  not  exceed  such Non-Defaulting
Certificate  Purchaser's  Commitment; provided, further, that any funds advanced
                                      --------  -------
to  the  Investment  Trust by any Certificate Purchaser pursuant to this Section
7.9 shall be advanced to the Charter Trustee.  If the Defaulted Amount cannot be
fully  funded  by the Non-Defaulting Certificate Purchasers, the Charter Trustee
shall so notify Deepwater and the Non-Defaulting Certificate Purchasers and give
to  all  such  Non-Defaulting Certificate Purchasers the opportunity to increase
their  respective  Commitments  by  notice  in  writing  to the Charter Trustee;
provided,  that  should  the  aggregate proposed increased Commitments by one or
more  Non-Defaulting  Certificate  Purchasers  exceed  the Defaulted Amount, the
Charter  Trustee  shall  increase  the  Commitments  of  the  participating
Non-Defaulting Certificate Purchasers on a pro-rata basis in accordance with the
respective  amounts  by  which  such  Non-Defaulting Certificate Purchasers have
offered to participate, it being understood that in no event shall the aggregate
amount funded by any Certificate Purchaser exceed the amount of such Certificate
Purchaser's  Commitment  after  giving effect to any increase in such Commitment
pursuant  to this sentence.  If the Non-Defaulting Certificate Purchasers do not
increase  their commitments by an amount sufficient to fund the entire Defaulted
Amount,  then Deepwater shall have the right to elect to fund any such shortfall
and shall thereafter be deemed to be a Certificate Purchaser for all purposes of
the  Transaction  Documents and shall be entitled to receive yield on the amount
so  funded  in  an  amount equal to the applicable Certificate Return; provided,
                                                                       --------
however,  that  Deepwater  shall not be deemed to be a Certificate Purchaser for
-------
purposes  of  the  definitions of "Required Certificate Purchasers" or "Majority
                                   -------------------------------      --------
Certificate Purchasers".  Notwithstanding anything contained in this Section 7.9
----------------------
to the contrary, if Deepwater elects to fund a shortfall in accordance with this
Section  7.9,  Deepwater  shall not be obligated to make any subsequent Advances
(including  any  subsequent  Advances with respect to any Defaulting Certificate

                                       44
<PAGE>
Purchaser).

     In  the event of any funding of all or a portion of the Defaulted Amount by
the  Non-Defaulting  Certificate  Purchasers,  the  following  rules shall apply
notwithstanding  any  other  provision  in  any  Transaction  Document:

          (i)  The  Commitment  of the Defaulting Certificate Purchaser shall be
     decreased  in  an  amount equal to the total aggregate increase, if any, in
     the  Commitments  of  the Non-Defaulting Certificate Purchasers pursuant to
     this  Section  7.9  and  the  Commitment  Percentages  of  the  Certificate
     Purchasers  shall  be  revised  accordingly;  provided,  that nothing shall
     preclude any party from pursuing any rights or remedies it may have against
     the Defaulting Certificate Purchaser in connection with its failure to make
     an  Advance;

          (ii)  The  Defaulting Certificate Purchaser shall be obligated to fund
     any  Advances occurring after its default based upon its revised Commitment
     Percentage,  if  the  Commitment Percentages are revised in accordance with
     the immediately preceding clause (i); and to the extent that the Commitment
     Percentage of any Defaulting Certificate Purchaser shall not be so revised,
     the  Charter  Trustee  may thereafter call upon such Defaulting Certificate
     Purchaser  to  fund  a  share  of  one or more future Advances in an amount
     greater  than such Defaulting Certificate Purchaser's Commitment Percentage
     so  that  the  aggregate  amount  disbursed  by such Defaulting Certificate
     Purchaser shall equal (after giving effect to such Advance or Advances) its
     original Commitment Percentage of the aggregate amount of all Advances then
     made  by  all  Certificate  Purchasers;

          (iii)  A  Defaulting Certificate Purchaser shall not have the right to
     fund its Defaulted Amount without the written consent of Deepwater and then
     only  to  the  extent  such  Defaulted  Amount  has  not been funded by the
     Non-Defaulting  Certificate  Purchasers  in  a  manner  that  resulted in a
     decrease  in such Defaulting Certificate Purchaser's Commitment Percentage;

          (iv)  If  and to the extent that the Defaulted Amount is not funded in
     full  by  the  Non-Defaulting  Certificate Purchasers, the Charter Trustee,
     after  providing written notice thereof to Deepwater, may delete funds from
     the  Advance  Request  so  that  the total Advance specified in the Advance
     Request  equals  the  aggregate  revised  fundings for the Advance Date and
     shall  so  notify  all  Certificate  Purchasers  thereof;  and

          (v) The Non-Defaulting Certificate Purchasers shall not be responsible
     for any damages suffered by Deepwater or any of Deepwater's Affiliates as a
     result  of  the  Defaulting Certificate Purchaser's failure to so fund. The
     Defaulting  Certificate  Purchasers  shall  not  be  responsible  for  any
     consequential  or  special  damages  suffered  by  Deepwater  or  any  of
     Deepwater's  Affiliates  as  a  result  of  its  failure  to  fund.

                                       45
<PAGE>
                                    SECTION 8

                          PAYMENT OF CERTAIN EXPENSES

     SECTION  8.1     Transaction Expenses.  If the transactions contemplated by
                      --------------------
this Agreement to occur on the Closing Date are consummated, Deepwater shall pay
promptly  all  Transaction Expenses incurred in connection with the negotiation,
execution  and delivery of this Agreement and the other Transaction Documents on
the  Closing  Date  and  the consummation of the other transactions contemplated
hereby  and  thereby to occur on (or in connection with) the Closing Date and on
(or  in  connection  with)  the  Delivery  Date  as  and  when  they become due.
Deepwater  may pay any such Transaction Expenses out of the proceeds of Advances
made  available  to  Deepwater  in  accordance  with  Section  2; provided, that
                                                                  --------
Deepwater  may  not pay Transaction Expenses in connection with the Closing Date
in  excess  of  $2,800,000  out  of  proceeds  of  Advances other than the final
Advance.

     SECTION  8.2     Transaction  Expenses  if  Closing does not Occur.  If the
                      -------------------------------------------------
transactions contemplated by this Agreement to occur on the Closing Date are not
consummated  for  any reason Deepwater shall promptly pay all of the Transaction
Expenses  submitted  to  Deepwater  as  they  become  due.

     SECTION  8.3     On-Going Expenses.  Deepwater shall, promptly upon demand,
                      -----------------
pay  or  reimburse  the  Charter  Trustee, the Investment Trust, the Certificate
Purchasers,  the  Agents  or  the  other  Persons entitled thereto for all other
out-of-pocket  expenses  (including  counsel  fees)  reasonably  incurred  in
connection  with: (a) entering into, or the giving or withholding of, any future
amendments,  supplements,  waivers  or  consents with respect to the Transaction
Documents, to the extent required by the terms of the Transaction Documents, the
Head  Lease  Documents,  the  Services  Agreements, the Drilling Contract or the
Drilling  Contract  Guaranty, or requested or consented to by Deepwater (whether
or  not consummated); (b) the negotiation and documentation of any restructuring
or  "workout"  whether  or  not  consummated, of any Transaction Document to the
extent  requested  or  consented to by Deepwater; (c) the enforcement, attempted
enforcement  or  preservation  of  the  rights or remedies under the Transaction
Documents,  the  Services  Agreements,  the  Drilling  Contract  or the Drilling
Contract  Guaranty;  (d)  further  assurances requested by Deepwater pursuant to
Section  12.11; (e) any transfer by the Charter Trustee, the Investment Trust or
any  Certificate  Purchaser  of any interest in the Transaction Documents during
the  continuance  of  an  Event  of  Default;  (f) the ongoing fees (if any) and
expenses  of  the  Agents,  the Trustees and the Depository pursuant to separate
agreements  entered  into  by Deepwater with such Persons; and (g) the costs and
expenses  associated  with the Delivery Date or any Advance Date, including fees
and  expenses of U.S. and Panamanian counsel, recordation and recording fees and
all  other  out-of-pocket  expenses of the parties hereto in connection with the
Delivery Date and the transactions contemplated herein (provided, that Deepwater
                                                        --------
shall  only  be  responsible  for  fees and expenses of one U.S. counsel and one
Panamanian  counsel  for  all  of  the  Certificate  Purchasers, the Agents, the
Trustees  and  the  Investment  Trust).

                                       46
<PAGE>
                                    SECTION 9

                  RESTRICTIONS ON TRANSFERS; CHANGE OF CONTROL

     SECTION  9.1     Restrictions on the Certificate Purchasers.  A Certificate
                      ------------------------------------------
Purchaser  may  transfer  all or a portion of its interest in its Series A Trust
Certificate  and its Investment Trust Certificate with the prior written consent
of  Deepwater,  to  a  transferee that has executed an Assignment and Assumption
Agreement  in  substantially  the  form  of  Exhibit  R  hereto,  by  which such
transferee  assumes  the  duties and obligations of the transferring Certificate
Purchaser under the Transaction Documents; provided, however, that no consent of
Deepwater  will  be  required  to  transfer  all  or  a portion of a Certificate
Purchaser's  interest in its Series A Trust Certificate and its Investment Trust
Certificate  if  the  following  conditions  shall  be  satisfied:

     (a)          such  transfer  shall  be  in  respect  of  an  aggregate
outstanding  Certificate  Purchaser  Amount  at  least  equal  to  the lesser of
$5,000,000  and  such  Certificate  Purchaser's  then  outstanding  Certificate
Purchaser  Amount;

     (b)          if the  transferee  is an Affiliate of a Certificate Purchaser
and  does  not  otherwise  qualify  under  clause  (c)  below,  such Certificate
Purchaser  shall have unconditionally and irrevocably guaranteed the payment and
performance  obligations  of  the  transferee;

     (c)          if  the  transferee  is  an  Affiliate  of  a  Certificate
Purchaser,  such  transferee  shall  have a capital and surplus of at least $250
million  or  a  tangible  net  worth  at  least  equal  to  $100  million;  or

     (d)          if  the  transferee  is  not  an  Affiliate  of  a Certificate
Purchaser,  the  transferee,  or  a  party  unconditionally  and  irrevocably
guaranteeing  the payment and performance obligations of the transferee pursuant
to  a  guaranty  in form and substance satisfactory to Deepwater, shall meet the
following  criteria:

          (i) the transferee or guarantor shall have a capital and surplus of at
     least  $400  million  or  a  net  worth  of  at  least  $150  million;

          (ii)  each  of  the  transferee  and  the guarantor of the payment and
     performance  obligations  of  the  transferee,  if any, is an institutional
     investor;

          (iii)  Deepwater,  Conoco and R&B have not previously been involved in
     material  litigation with the proposed transferee or guarantor, if any, and
     are  not  currently  involved  in  material litigation proceedings with the
     proposed  transferee  or  guarantor,  if  any;

          (iv)  on  the  date  of  such  transfer  the  transferee shall provide
     evidence  satisfactory  to Deepwater that it is not subject to or is exempt
     from  United  States  withholding  taxes;

                                       47
<PAGE>
          (v) neither such transferee nor any of its Affiliates is a Competitor;
     and

          (vi)  on  the  date of such transfer, the transferee shall certify, in
     writing,  that  no  facts exist that would permit such transferee to make a
     claim  against  Deepwater  for  increased  costs,  indemnities  or  other
     additional  amounts  under  Section  7.

     Any  transfer  of  an  interest  in  a  Series  A  Trust  Certificate or an
Investment  Trust  Certificate  by  a  Certificate Purchaser in violation of the
foregoing  restrictions  shall  be  null  and  void,  and the transferor and any
guarantor  thereof  shall  remain  liable  under  the  Transaction Documents.  A
Certificate Purchaser that intends to transfer an interest in its Series A Trust
Certificate or Investment Trust Certificate (including a sale of a participation
in  any  such  Certificate  pursuant to Section 3.8(h) of the Trust Agreement or
Section  3.8(h)  of  the  Investment  Trust Agreement, respectively, or a pledge
thereof)  must  transfer the same percentage interest in both its Series A Trust
Certificate  and  Investment Trust Certificate together to the same purchaser or
transferee  in  a  single  transaction.

     Notwithstanding  any  other  provision in this Section 9.1, any Certificate
Purchaser  may  at any time create a security interest in, or pledge, all or any
portion  of  its  rights under its Investment Trust Certificate and its Series A
Trust  Certificate,  together with the rights evidenced by such certificates, in
favor  of any Federal Reserve Bank in accordance with Regulation A of the FRB or
U.S. Treasury Regulation 31 C.F.R. Section 203.14, and such Federal Reserve Bank
may  enforce  such  pledge  or  security  interest in any manner permitted under
Applicable  Law.

     SECTION  9.2     Restrictions  on  Trustees.  The Charter Trustee shall not
                      --------------------------
resign  as  Charter  Trustee  and  the  Investment  Trustee  shall not resign as
Investment  Trustee,  unless and until a successor has been appointed which is a
Person  who  has  agreed  to  act  as  Charter Trustee or Investment Trustee, as
applicable,  and  is  reasonably  acceptable  to  Deepwater.

     SECTION  9.3     Expenses.  All  reasonable  and  documented  costs  and
                      --------
expenses  (including  counsel  fees and disbursements) of the parties thereto in
connection  with  any  transfer  permitted  by  Sections 9.1 or 9.2 shall be the
responsibility  of  the  transferor.

     SECTION  9.4     Conoco  Change  of  Control.
                      ---------------------------

     (a)          If a Prepayment Change of Control  Trigger  Event occurs, each
Certificate  Purchaser  shall  have  the  right,  by written notice delivered to
Deepwater,  the  Charter Trustee and the Investment Trust within 10 days of such
event,  to  require  Deepwater  to  make payments to the Charter Trustee and the
Investment  Trust  in  an aggregate amount equal to such Certificate Purchaser's
Certificate  Purchaser  Amount, together with its accrued and unpaid Certificate
Return  (the  "Change of Control Prepayment Amount").  Deepwater shall make such
               -----------------------------------
payment,  in  immediately available funds, no later than seven (7) Business Days
after  receipt of such notice.  Upon receipt of such payment from Deepwater, the
Charter  Trustee  shall  pay  the  Series  A  Portion  of  the Change of Control
Prepayment  Amount to the Certificate Purchaser requiring prepayment pursuant to
this  Section  9.4 and shall pay the Investment Portion of the Change of Control
Prepayment  Amount  to  the  Investment  Trust,  which,  in  turn, shall pay the
Investment  Portion  of  the

                                       48
<PAGE>
Change of Control Prepayment Amount to such Certificate Purchaser.

     (b)          If a Pricing Change  of  Control  Trigger  Event  occurs,  the
Certificate  Return Rate shall increase effective as of the date of such Pricing
Change of Control Trigger Event (with such increase to be based on the rating of
Conoco  or  the  Acquiror  of  Conoco,  and  in the case of ratings that are not
equivalent,  the  lower  of  the  two  ratings) in accordance with the following
schedule:

     Credit Rating of Conoco
      or Acquiror of Conoco                 Increase of Certificate Return Rate
======================================     =====================================
Greater than or equal to Baa1/BBB+                 12.5 basis points
  Less than or equal to Baa2/BBB             additional 12.5 basis points

     (c)          If a Pricing Change of Control  Trigger  Event  occurs and the
Certificate  Return  Rate  has been increased as set forth in Section 9.4(b), in
the event that Conoco or the Acquiror of Conoco at any time thereafter obtains a
rating of at least A2 from Moody's and at least A from S&P, then the Certificate
Return  Rate shall be adjusted downward to the Certificate Return Rate in effect
as of the Closing Date.  Such decrease shall be effective as of the first day of
the  Return  Period  which  next  succeeds  the  date  of  such  adjustment.

                                   SECTION 10

                                INDEMNIFICATION

     SECTION  10.1     General Indemnity.  Deepwater hereby agrees to indemnify,
                       -----------------
on  an  After-Tax  Basis,  each  of  the Trustees (in their trust and individual
capacities, respectively), the Investment Trust, the Certificate Purchasers, the
Depository,  the  Agents (in their agent and individual capacities), the Hedging
Agreement  Counterparties  (if  any)  and  their respective officers, directors,
employees, agents and Affiliates (each an "Indemnified Party" and, collectively,
                                           -----------------
the "Indemnified Parties") from and against any and all claims, damages, losses,
     -------------------
liabilities,  demands,  suits,  judgments,  causes of action, legal proceedings,
whether  civil  or  criminal,  penalties,  fines  and  other  sanctions, and any
reasonable  and  documented  costs  and  expenses  in connection with any of the
foregoing  ("Claims"),  which  may  be  asserted  against such Indemnified Party
             ------
arising  out  of:

     (a)          the condition, ownership,  construction,  purchase,  delivery,
nondelivery,  subcharter,  charter,  acceptance,  rejection, possession, return,
abandonment,  disposition,  use  or  operation  of  the  Drillship;

     (b)          any defect in the Drillship arising  from  the material or any
articles  used  therein  or from the design, testing, or use thereof or from any
maintenance,  service,  repair,

                                       49
<PAGE>
overhaul  or  testing  of  the  Drillship;

     (c)          any  failure  by  Deepwater  or  either  Member  to perform or
observe any covenant, condition or agreement contained in any of the Transaction
Documents,  or  the  falsity  of  any  of  Deepwater's  or  either  Member's
representations  and  warranties;

     (d)          the transactions contemplated by the Transaction Documents;

     (e)          any Environmental Claims  arising  from  or  relating  to  the
construction,  use,  operation,  ownership, maintenance, chartering or return of
the  Drillship;

     (f)          the  exercise by such Indemnified Party of remedies in the
event  of  a  default under the Transaction Documents and the enforcement of any
security  or  other  rights  with  respect  thereto;

     (g)           any violation of Applicable Law by Deepwater or a Member with
respect  to  the  transactions  contemplated  by  the  Transaction  Documents;

     (h)          any Liens which Deepwater or any Member is required to remove;
or

     (i)          any  obligation  asserted  to be owed by the Indemnified Party
under  any  Assigned  Contract  as  a  result of the assignment of such Assigned
Contract  pursuant  to  the  Deepwater  Assignment.

     SECTION  10.2     General  Indemnity  Exclusions.  Notwithstanding  the
                       ------------------------------
provisions  of  Section  10.1,  Deepwater shall not be obligated to indemnify an
Indemnified  Party  under Section 10.1 for any Claim that is attributable to any
of  the  following:

     (a)          acts,  events  or circumstances occurring after the expiration
or  earlier  termination  of  the  Charter and the return of the Drillship, when
required  in  accordance  with  the  Charter;

     (b)          Taxes,  loss  of  tax benefits and the cost and expense of tax
controversies  (whether  or  not indemnified by Deepwater under Section 10.4 and
other  provisions  of  the  Transaction Documents) (except (A) Taxes, penalties,
interest or charges of any nature whatsoever to the extent necessary to make any
required  payment on an After Tax Basis, (B) Taxes that are governmental charges
incidental to any Government Action or proceeding that is in the nature of court
costs,  filing  fees,  recording fees, postage, stamps, duties, license fees and
other  similar  charges);

     (c)          increased costs,  losses or expenses for which compensation is
provided  under Sections 2.8, 2.14, 6.8, 7.1, 7.2, 7.3, 7.4, 7.5, 8.1, 8.2, 8.3,
9.3  and  9.4;

     (d)          the  gross  negligence,  willful  misconduct  or breach of any
covenant,  representation  or  warranty  under  any Transaction Document by such
Indemnified Party to the

                                       50
<PAGE>
extent  that such Claim arises out of or is caused by an act, misrepresentation,
breach  or omission of such Indemnified Party where such act, misrepresentation,
breach  or  omission  (x)  is  in  breach or violation of the express covenants,
representations  or  warranties  of such Indemnified Party under the Transaction
Documents,  (y)  constitutes  gross  negligence  or  willful  misconduct of such
Indemnified  Party (other than gross negligence or willful misconduct imputed as
a  matter of law to such Indemnified Party solely by reason of entering into the
Transaction  Documents or consummation of the transactions contemplated thereby)
or  (z)  is  in  violation  of any Applicable Law and such violation causes such
Claim;

     (e)          transfers  (direct or indirect) by: (i) the Charter Trustee or
the  Investment  Trust  of  either  of  their  interests in the Drillship or any
portion  thereof  (other  than any such transfer pursuant to Sections 5.2, 16.2,
16.4, 20.1 or 20.3 of the Charter, Section 6.6 of the Participation Agreement or
Section  6.3  of  the  Construction Supervisory Agreement) or (ii) a Certificate
Purchaser  of  all  or  any  portion  of  its  interest in the Trust Estate, the
Investment  Trust  or  the  Transaction Documents, other than a transfer upon an
exercise  of  remedies  after  a  Charter  Event  of Default has occurred and is
continuing  and  the  Charter  has  been  declared  in  default;

     (f)          any amount for which such Indemnified Party has agreed to make
payment  without  a  right  of  reimbursement  from  Deepwater;

     (g)          any Claim resulting from the imposition of any Lien which such
Indemnified  Party  is  responsible  for  or  is required to lift and discharge;

     (h)          any  Claim  arising  out of or related to an inspection of the
Drillship  by  or  on behalf of an Indemnified Party, unless at the time of such
inspection  a  Charter Event of Default has occurred and is continuing or unless
and  to  the  extent  such  Claim  arises  from  the gross negligence or willful
misconduct  of  Deepwater  or  its  agents;  and

     (i)          any  Claim  for  an  amount  of Basic Hire, Termination Value,
Construction  Period  Termination  Amount,  Certificate  Return,  Certificate
Purchaser  Balance,  Residual  Guarantee  Amount,  or  Postponement Yield, or an
amount  due  under  the  Deepwater Hedging Agreements or the Hedging Agreements.

     SECTION  10.3     Proceedings  in  Respect  of Claims.  With respect to any
                       -----------------------------------
amount  that  Deepwater is requested by an Indemnified Party to pay by reason of
Section  10.1,  such  Indemnified  Party shall, if so requested by Deepwater and
prior  to  any  payment,  submit  such  additional  information  to Deepwater as
Deepwater  may  reasonably  request  and  which  is  in  the  possession of such
Indemnified  Party  to substantiate properly the requested payment.  In case any
action,  suit  or  proceeding  shall be brought against any Indemnified Party in
respect  of  any  Claim,  such  Indemnified  Party shall notify Deepwater of the
commencement  thereof,  and  Deepwater  shall  be  entitled,  at its expense, to
participate in, and, to the extent that Deepwater desires to, assume and control
the  defense  thereof; provided, however, that Deepwater shall have acknowledged
                       --------  -------
in writing its obligation to indemnify such Indemnified Party in respect of such
action,  suit  or  proceeding  under  Section  10.1,  such  acknowledgment to be
conditioned  on  the

                                       51
<PAGE>
accuracy  and  completeness  of  the  information  provided to Deepwater by such
Indemnified  Party  with  respect  to  the  Claim;  and,  provided further, that
                                                          -------- -------
Deepwater  shall  not  be entitled to assume and control the defense of any such
action,  suit  or  proceeding  if  and to the extent that, (A) in the reasonable
opinion  of  such Indemnified Party (x) such action, suit or proceeding involves
any  possibility  of  imposition  of  criminal liability or any material risk of
material  civil  liability  on such Indemnified Party or (y) the control of such
action,  suit  or proceeding would involve a conflict of interest (in which case
each Indemnified Party may retain separate counsel at the expense of Deepwater),
(B) such proceeding involves Claims not indemnified by Deepwater which Deepwater
and  the  Indemnified  Party  have  been  unable  to  sever from the indemnified
claim(s),  or  (C) an Event of Default has occurred and is continuing. Deepwater
shall  keep  such Indemnified Party fully apprised of the status of such action,
suit or proceeding and shall provide such Indemnified Party with all information
with  respect  to such action suit or proceeding as such Indemnified Party shall
reasonably request. The Indemnified Party may participate in a reasonable manner
at  its  own  expense  and  with  its own counsel in any proceeding conducted by
Deepwater  in  accordance  with  the  foregoing.

     No  Indemnified  Party  shall enter into any settlement or other compromise
with respect to any Claim which is entitled to be indemnified under Section 10.1
without  the  prior  written  consent  of  Deepwater, which consent shall not be
unreasonably  withheld,  unless  such  Indemnified  Party waives its right to be
indemnified  under  Section  10.1  with  respect  to  such  Claim.

     Upon  payment in full of any Claim by Deepwater pursuant to Section 10.1 to
or  on  behalf  of  an Indemnified Party, Deepwater, without any further action,
shall  be  subrogated to any and all claims that such Indemnified Party may have
relating thereto to the extent of such payment, and such Indemnified Party shall
execute  such  instruments  of assignment and conveyance, evidence of claims and
payment  and  such  other  documents,  instruments  and  agreements  as  may  be
reasonably  necessary  to  preserve any such claims and otherwise cooperate with
Deepwater  and  give  such  further  assurances  as  are reasonably necessary or
advisable  to  enable  Deepwater  vigorously  to  pursue  such  claims.

     Any  amount  payable to an Indemnified Party pursuant to Section 10.1 shall
be  paid  to  such  Indemnified  Party promptly upon receipt of a written demand
therefor  from  such  Indemnified  Party  accompanied  by  a  written  statement
describing in reasonable detail the basis for such indemnity and the computation
of  the  amount  so  payable.

     SECTION  10.4     General  Tax Indemnity.  (a) Without regard to any of the
                       ----------------------
exclusions  set  forth in Section 10.4(b), if any amount payable by Deepwater as
Charter  Hire  (or  by  the  Charter  Trustee  to  the  Investment  Trust or any
Certificate  Purchaser)  under the Transaction Documents or otherwise payable by
Deepwater  under  the Head Lease Documents becomes subject to any Tax imposed by
way  of withholding at the source, Deepwater shall hold harmless the Indemnified
Party against such Tax, and, if such withholding is required, shall, at the same
time  that any such payment is due and payable, either (i) pay such Tax directly
to the appropriate taxing authority, (ii) indemnify such Person for such Tax, or
(iii)  pay  an  additional amount, such

                                       52
<PAGE>
that  the  net  amount  actually  received  by  each  Indemnified Party entitled
thereto, free and clear of, and without deduction for, any and all Taxes imposed
by  withholding will equal the amount then due absent such withholding and shall
pay  any  additional  Taxes  payable  in  respect  of such payment, indemnity or
additional  amount,  as the case may be, by each Indemnified Party. In the event
Deepwater  is  required  to  make  any  payment  or  indemnity  pursuant to this
paragraph in respect of withholding Taxes on any payment made to any Indemnified
Party,  Deepwater shall not be treated as responsible for such withholding Taxes
(1)  if  such  withholding  Taxes  would  not  have been imposed but for (x) the
failure  of  the  Indemnified  Party  or  a  Related  Indemnified  Party  to  be
incorporated  in  the  United States or any state in the United States (it being
understood  that,  for  this  purpose, the Charter Trust shall not be treated as
failing  to  be  incorporated  in  the  United States or any state in the United
States  merely  as  a  result of the organization of the Charter Trust under the
laws  of  Panama)  or  (y)  the  amount  payable to such Indemnified Party being
attributable  to a permanent establishment of the Indemnified Party or a Related
Indemnified  Party in any jurisdiction other than the United States (unless such
permanent  establishment  results solely from the location of all or any part of
the  Drillship  in,  such  jurisdiction)  (it  being  understood  that, for this
purpose,  amounts  payable  to  the  Charter  Trustee  shall  not  be treated as
attributable  to a permanent establishment of the Charter Trust in Panama merely
as  a  result  of the organization of the Charter Trust under the laws of Panama
and/or  the  making  of  payments  and the performance of its obligations by the
Charter  Trustee  in  accordance  with,  and as contemplated by, the Transaction
Documents  ("Permitted  Charter  Trustee  Acts")),  (2)  if such withholding Tax
             ---------------------------------
results  from a breach of any covenant or undertaking in Section 10.4(i) of such
Indemnified Party or any of its Related Indemnified Parties, (3) with respect to
any  such  Tax imposed in respect of any transferee of such Indemnified Party to
the  extent of the excess of such Taxes over the amount of such Taxes that would
have  been imposed and indemnified hereunder had such original Indemnified Party
from  which  such  Indemnified  Party  derives  its interest not sold, assigned,
transferred  or  otherwise  disposed  of all or a portion of its interest in the
Drillship or Transaction Documents (unless such transferee acquired its interest
pursuant  to the transferor's exercise of remedies), (4) if such withholding Tax
results  from  (x)  the  gross  negligence,  willful misconduct or fraud of such
Indemnified  Party  or  any  of  its  Related  Indemnified  Parties  or  (y) the
inaccuracy  or breach of a representation, warranty, covenant or any undertaking
of such Indemnified Party or any of its Related Indemnified Parties, (5) if such
withholding  Taxes  are  imposed  by a taxing authority of or in a country other
than  the  United  States  or  Panama  and  would  not have been imposed but for
activities,  property  or  operations  of  the  Indemnified  Party or any of its
Related  Indemnified Parties that are unrelated to the transactions contemplated
by  the Transaction Documents, or (6) if such withholding Taxes are imposed by a
taxing  authority in Panama as a result of the Indemnified Party's (or a Related
Indemnified  Party's)  direction  that  Deepwater  make  payments  to an account
located  in  Panama  (except if such direction is made while an Event of Default
exists).  If,  for  any  reason, Deepwater is required to make any payment to an
Indemnified  Party  or  to a taxing authority on behalf of any Indemnified Party
pursuant  to  this  Section  10.4(a)  with  respect  to,  or as a result of, any
withholding Tax imposed with respect to any payment of Charter Hire by Deepwater
(or by the Charter Trustee to the Investment Trust or any Certificate Purchaser)
pursuant  to  the  Transaction Documents or other payment by Deepwater under the
Head  Lease  Documents,  which

                                       53
<PAGE>
withholding  Tax  is  not  the  responsibility  of  Deepwater under this Section
10.4(a), then such Indemnified Party shall pay to Deepwater on written demand an
amount  which  equals  on  an  After-Tax  Basis  such  additional amount paid by
Deepwater with respect to, or as a result of, such withholding Tax plus interest
at  (i)  the  Certificate  Return  Rate during the period commencing on the date
Deepwater  shall  have  paid  an  amount  pursuant to the first sentence of this
paragraph  and  ending  on the date Deepwater demands in writing payment of such
amount  pursuant  to  this  sentence  and  (ii) the Overdue Rate from the period
commencing  five  Business Days following the date Deepwater shall have demanded
in  writing  such  payment to the date Deepwater actually receives such payment.

     (b)          Except  as  provided  in  Section  10.4(a) and 10.4(c) hereof,
Deepwater  agrees  to  indemnify, defend and hold harmless on an After-Tax Basis
each Indemnified Party against any and all Taxes, imposed against or payable by,
or  imposed  on  payments  to  or  from,  Deepwater or any Indemnified Party, or
imposed  against  all  or  any  part  of,  or  interest in, the Drillship by any
federal,  state  or local taxing authority of or within the United States and by
any  jurisdiction  outside of the United States if the Drillship or Deepwater is
located  in  such  jurisdiction,  upon or with respect to or in connection with,
based  upon  or  measured  by,  in  whole  or  in  part:

          (i)  the  Drillship  or  any  part  thereof  or  interest  therein;

          (ii)  the  manufacture,  purchase,  financing, refinancing, ownership,
     delivery, redelivery, transport, location, leasing, subleasing, possession,
     registration,  use,  operation,  condition,  maintenance,  repair,  return,
     abandonment,  preparation,  storage,  transfer  of title, sale, acceptance,
     importation,  exportation,  rejection  or other disposition of or action or
     event  with  respect  to  the  Drillship  or  any  part thereof or interest
     therein;

          (iii)  the  hire,  receipts,  income  or  earnings  arising  from  the
     purchase,  financing, ownership, delivery, redelivery, leasing, subleasing,
     possession,  use,  operation,  return,  storage, transfer of title, sale or
     other disposition of the Drillship or any part thereof or interest therein;

          (iv)  the  Advances,  Certificates,  their  issuance,  modification,
     refinancing  or acquisition, or the payments of any amounts thereon or with
     respect  thereto;

          (v)  the  Transaction  Documents  or  the  Head  Lease  Documents  or
     amendments  or  supplements  thereto,  their  execution or the transactions
     contemplated  thereby  or  any  proceeds  or payments under any thereof; or

          (vi)  otherwise with respect to or in connection with the transactions
     contemplated  or effected by or resulting from the Transaction Documents or
     the  Head Lease Documents or the exercise of rights and remedies thereunder
     or  the  enforcement  thereof.

                                       54
<PAGE>
     (c)           Exclusions.  Except  as  provided  in  Section  10.4(a),  the
                   ----------
indemnity  provided  for  in Section 10.4(b) above shall not apply to any of the
following:

          (i)  Taxes  (other  than  Taxes  that  are sales, use or rental Taxes)
     imposed  by  the United States federal government on, based on, or measured
     by  or with respect to the gross or net income, or gross or net receipts or
     that  are  in  the  nature of, or are imposed with respect to, capital, net
     worth,  excess  profits,  accumulated earnings, capital gains, franchise or
     conduct  of business of such Indemnified Party; provided, that this Section
                                                     --------
     10.4(c)(i)  shall  not  be  interpreted to exclude any amounts necessary to
     make  any  payment  on  an  After-Tax  Basis;

          (ii)  Taxes  imposed by (x) any state or local taxing authority in the
     United  States  (other  than  Taxes  that  are  sales,  use, rental, stamp,
     property (tangible or intangible) or similar Taxes imposed as a result of a
     Deepwater  Person's  activities  in  (including  being  incorporated in, or
     making  payments  from),  or  the  location of the Drillship or any portion
     thereof  in,  such  state  or  local  jurisdiction) or (y) any jurisdiction
     outside  of the United States other than any Taxes imposed as a result of a
     Deepwater Person's activities in (including being incorporated in, having a
     permanent establishment or other residence in, or making payments from), or
     the  location of the Drillship or any portion thereof in, such jurisdiction
     outside  of the United States or Taxes imposed by Panama merely as a result
     of  the  organization  of the Charter Trust under the laws of Panama and/or
     the  performance  by the Charter Trustee of Permitted Charter Trustee Acts;
     provided, that this Section 10.4(c)(ii) shall not be interpreted to exclude
     --------
     any  amounts  necessary  to  make  any  payment  on  an  After-Tax  Basis;

          (iii) Taxes imposed on or against or payable by such Indemnified Party
     to  the  extent  of  the excess of such Taxes over the amount of such Taxes
     that would have been imposed and indemnified hereunder had there not been a
     transfer  by  the  original  Indemnified Party (from which such Indemnified
     Party  derives  its  interest)  of  any  interest  in  the  Drillship,  the
     Certificates, the Trust Estate, the Investment Trust, any Indemnified Party
     or  the  Transaction  Documents  or the Head Lease Documents; except (x) if
     such  transferee  acquired  its interest in connection with the exercise of
     remedies  with  respect  to a Charter Event of Default or (y) to the extent
     necessary  to  make  indemnity  payments  to the transferee on an After-Tax
     Basis;

          (iv)  Taxes  imposed  with  respect  to  any period (except during the
     exercise  of  remedies  pursuant  to  the  Charter  in  connection with the
     occurrence  and  continuance  of  a Charter Event of Default) more than one
     year  after the expiration or earlier termination of the Charter and, where
     required,  the  return  of  the  Drillship  pursuant to Section 20.3 of the
     Charter (but not to the extent attributable to events occurring on or prior
     to  such  date);

          (v)  Taxes resulting from (x) the gross negligence, willful misconduct
     or fraud of the Indemnified Party or any of its Related Indemnified Parties
     (except as solely attributed to such Party by virtue of its having executed
     the  Transaction  Documents),

                                       55
<PAGE>
     (y)  the  inaccuracy  or  breach  of a representation, warranty or covenant
     under  the  Transaction  Documents  or  the  Head  Lease  Documents  or any
     undertaking  required  by  the  Transaction  Documents  or  the  Head Lease
     Documents  of  such  Indemnified  Party  or  any of its Related Indemnified
     Parties  (unless  such inaccuracy or breach is caused by Deepwater's breach
     of any representation, warranty or covenant under the Transaction Documents
     or  a breach by Deepwater or an Affiliate of Deepwater under the Head Lease
     Documents),  or  (z)  in  the  case  of  any  Indemnified  Party, any Liens
     attributable  to  such  Indemnified  Party  or a Related Indemnified Party;

          (vi)  Taxes  that  result  from  (x)  a  voluntary  transfer  or other
     voluntary  disposition  by  the  Indemnified Party or a Related Indemnified
     Party  of  all  or  any portion of its interest in the Drillship, the Trust
     Estate,  the Investment Trust, any Indemnified Party, the Certificates, the
     Transaction Documents or the Head Lease Documents (other than a transfer or
     disposition  resulting  from  (A) any Charter, substitution, or maintenance
     of,  or  any  modification  to  the  Drillship  or any portion thereof, (B)
     Deepwater's exercise of any purchase or termination option, (C) an Event of
     Loss  or (D) the exercise of remedies under the Charter following a Charter
     Event  of  Default)  or  (y)  an  involuntary transfer or other involuntary
     disposition  by the Indemnified Party or a Related Indemnified Party of all
     or  any  part  of  an  interest  in  the  Drillship,  the Trust Estate, the
     Investment  Trust, any Indemnified Party, the Certificates, the Transaction
     Documents  or  the  Head  Lease  Documents (other than any such transfer or
     disposition  that  occurs  while  an  Event  of Default has occurred and is
     continuing)  in  connection with any bankruptcy or other proceeding for the
     relief  of  debtors  in  which  an  Indemnified  Party is the debtor or any
     foreclosure  by  a  creditor  of  an Indemnified Party that is in each case
     unrelated  to the transactions contemplated by the Transaction Documents or
     the  Head  Lease  Documents;

          (vii)  Taxes  imposed  on  the  Administrative Agent in its individual
     capacity  with  respect  to  any  fees  received  by  or  payable  to  the
     Administrative  Agent  for  services  rendered;

          (viii)  Taxes that would not have been imposed but for an amendment to
     any  Transaction Document or Head Lease Document not requested or consented
     to  or  acquiesced in by Deepwater in writing, other than any amendment (A)
     that  may  be  necessary  or appropriate to, and is in conformity with, any
     amendment  to  any Transaction Document or Head Lease Document initiated or
     requested by or consented to by any Deepwater Person in writing, (B) to any
     Transaction  Document  or Head Lease Document due to, or in connection with
     there  having  occurred,  an  Event  of  Default or (C) that is required by
     Applicable  Law or the terms of the Transaction Documents or the Head Lease
     Documents  or  is  executed  in  connection with any other amendment to the
     Transaction  Documents  or  the  Head  Lease  Documents that is required by
     Applicable  Law;

          (ix)  Taxes  to  the extent actually utilized on a current basis by an
     Indemnified  Party  or  an  Affiliate of such Indemnified Party as a credit
     against  Taxes  not

                                       56
<PAGE>
     indemnifiable  by  Deepwater  hereunder;

          (x)  Taxes to the extent resulting from or measured by income, assets,
     activities,  or  other matters of or relating to the Indemnified Party or a
     Related  Indemnified  Party  that  are  unrelated  to  the  transactions
     contemplated  by  the Transaction Documents (except to the extent necessary
     to make a payment on an After-Tax Basis (which shall be calculated assuming
     the  Indemnified  Party  is  taxable  at  the  highest marginal rate in the
     applicable  jurisdiction));

          (xi)  any  Taxes,  while  such Taxes are being contested in accordance
     with  the  contest  provisions  of  Section  10.4(f);

          (xii) any interest, penalties or additions to Tax that result from the
     failure  of  an  Indemnified  Party to file any return properly and timely,
     unless  such  failure  is caused by the failure of Deepwater to fulfill its
     obligations,  if  any,  under  this  Agreement  with respect to such return
     (including  the  provision  of  information  sufficient  to  enable  such
     Indemnified  Party  to  file  such  return);

          (xiii)  Taxes that would not have been imposed but for the Indemnified
     Party  or  a  Related  Indemnified Party having its tax residence, place of
     business, situs of organization, place of management or controls, permanent
     establishment or other presence in the taxing jurisdiction (unless such tax
     residence, place of business, situs of organization, place of management or
     control,  permanent  establishment  or  other  presence  results  from  the
     presence  or activities of Deepwater or any Deepwater Person (including the
     making  of  payments  unless  directed  by  the  Charter  Trustee  or  any
     Certificate  Holder to make payment to an account located in Panama (except
     if  such  direction  is  made  while  an  Event of Default exists)) in such
     jurisdiction  it  being  understood  that,  for  this  purpose, the Charter
     Trustee  shall  not be treated as having any such presence in Panama merely
     as  a  result  of  the  trust  being  formed  pursuant to the Charter Trust
     Agreement  under  the  laws of Panama and/or the performance by the Charter
     Trustee  of  Permitted  Charter  Trustee  Acts).

     (d)          Calculation  of Payments.  Any payment that Deepwater shall be
                  ------------------------
required  to make to or for the account of any Indemnified Party with respect to
any Tax that is subject to indemnification under this Section 10.4 shall be paid
on  an  After-Tax  Basis.  If  an  Indemnified  Party  or  any Affiliate of such
Indemnified  Party who files any tax return on a combined, consolidated, unitary
or  similar  basis with such Indemnified Party shall actually realize any saving
of  any  Tax  not indemnified by Deepwater pursuant to the Transaction Documents
(by  way of credit (including any foreign tax credit), deduction, exclusion from
income or otherwise) by reason of any amount with respect to which Deepwater has
indemnified  such  Indemnified Party pursuant to this Section 10.4, and such tax
saving was not taken into account in determining the amount payable by Deepwater
on  account  of  such  indemnification,  such  Indemnified  Party  shall  pay to
Deepwater,  so long as no Event of Default shall have occurred and be continuing
(but shall be required to make such payment at such time as the

                                       57
<PAGE>
Event  of  Default  shall  have  been  cured or at the time Deepwater shall have
fulfilled  all of its obligations arising upon such Event of Default), within 30
days  after such Indemnified Party shall have actually realized such tax saving,
the  amount of such saving, together with the amount of any tax saving resulting
from  any  payment pursuant to this sentence; provided, that Deepwater shall not
                                              --------
be  entitled  to  receive  an amount in excess of all amounts previously paid by
Deepwater  pursuant  to  this  Section 10.4, to such Indemnified Party or to the
relevant  taxing  authority  on  behalf  of  such  Indemnified  Party  (less the
aggregate  amount  of  all prior payments by such Indemnified Party to Deepwater
under  this  Section  10.4(d))  (but any excess amount described in this proviso
shall  reduce  pro  tanto any amount that Deepwater is subsequently obligated to
               ---  -----
pay  to  such  Indemnified  Party  pursuant  to  Section  10.4).

     (e)          Payment.  Deepwater shall pay any Tax for  which  it is liable
                  -------
pursuant  to  this  Section 10.4 directly to the appropriate taxing authority or
upon  demand  of  an  Indemnified Party to such Indemnified Party in immediately
available  funds  within  30 days of a written demand, but in no event more than
two  Business Days prior to the date such Tax is due (including all extensions),
or,  in the case of Taxes which are being contested, more than two Business Days
prior  to  the  time  such  contest  is finally resolved.  Any such demand shall
specify  in  reasonable detail the calculation of the payment and the facts upon
which  the  right  to  payment  is based.  Each Indemnified Party shall promptly
forward to Deepwater any notice, bill or advice received by it from the relevant
taxing  authority  concerning any Tax against which Deepwater may be required to
indemnify  hereunder.  Deepwater  upon  the  reasonable  written  request  of an
Indemnified  Party  shall  furnish such Indemnified Party with the original or a
certified  copy  of  a receipt (if any is reasonably available to Deepwater) for
Deepwater's  payment  of  any Tax that is subject to indemnification pursuant to
this  Section 10, or such other evidence of payment of such Tax as is reasonably
acceptable  to  such  Indemnified Party (and reasonably available to Deepwater).

     (f)          Contest.  If  a  written claim is made against an  Indemnified
                  -------
Party  or  if  any  proceeding  shall be commenced against any Indemnified Party
(including  a  written notice of such proceeding), for any Taxes with respect to
which  Deepwater  may  be  liable  for  payment or indemnity hereunder or if any
Indemnified Party shall determine that any Tax as to which Deepwater may have an
indemnity  obligation  hereunder  shall be payable, such Indemnified Party shall
promptly  notify Deepwater in writing and shall not take any action with respect
to  such  claim,  proceeding or Tax without the consent of Deepwater for 30 days
after  the  receipt of such notice by Deepwater; provided, however, that, in the
                                                 --------  -------
case  of  any  such  claim  or proceeding, if action shall be required by law or
regulation  to be taken prior to the end of such 30-day period, such Indemnified
Party  shall,  in  such  notice to Deepwater, so inform Deepwater, and no action
shall  be  taken  with  respect  to  such  claim  or  Tax without the consent of
Deepwater  before  the end of such shorter period. If, within 30 days of receipt
of  such  notice  from  the  Indemnified  Party  (or  such shorter period as the
Indemnified  Party  has  notified Deepwater is required by law or regulation for
the  Indemnified  Party  to  commence  such contest), Deepwater shall request in
writing  that  such  Indemnified  Party  contest the imposition of such Tax, the
Indemnified  Party  shall,  at  the  expense of Deepwater, in good faith contest
(including,  without  limitation,  by  pursuit

                                       58
<PAGE>
of appeals), and shall not settle without Deepwater's good faith consent (or (i)
if  such  contest can be pursued in the name of Deepwater and independently from
any  other  proceeding  involving  a  tax  liability, other than a net income or
withholding  Tax,  of  such  Indemnified  Party, the Indemnified Party shall, at
Deepwater's  sole  discretion,  allow Deepwater to contest, (ii) if such contest
involves  a  Tax,  other  than  a  net  income or withholding Tax, which must be
pursued  in  the name of the Indemnified Party, but can be pursued independently
from  any  other proceeding involving a tax liability of such Indemnified Party,
the  Indemnified  Party  shall  allow  Deepwater  to  contest in the name of the
Indemnified  Party  unless, in the good faith judgment of the Indemnified Party,
such  contest  by Deepwater could have a material adverse impact on the business
or  operations of the Indemnified Party, in which case the Indemnified Party may
control  such contest or (iii) in the case of any contest, the Indemnified Party
may  request Deepwater to contest) the validity, applicability or amount of such
Taxes  by,  in  the  sole  discretion of the Person conducting such contest, (i)
resisting  payment  thereof,  (ii)  not paying the same except under protest, if
protest  is necessary and proper, (iii) if the payment be made, using reasonable
efforts  to  obtain  a refund thereof in appropriate administrative and judicial
proceedings;  or  (iv)  taking  such  other action as is reasonably requested by
Deepwater  from  time  to  time.

     Notwithstanding  the  foregoing  provisions  of  this Section 10.4(f), such
Indemnified  Party  shall not be required to take any administrative or judicial
or other action and Deepwater shall not be able to contest such claim in its own
name  or that of the Indemnified Party unless (A) Deepwater shall have agreed to
pay,  and  shall  pay,  to  such  Indemnified  Party  on  demand  all reasonable
out-of-pocket  costs,  losses and expenses that such Indemnified Party may incur
in  connection  with  contesting  such  Taxes,  including  all reasonable legal,
accounting  and  investigatory  fees  and  disbursements  (including  reasonable
allocated  time  charges of internal counsel of such Indemnified Party), (B) the
action  to  be  taken  will  not result in any material imminent danger of sale,
forfeiture  or  loss of the Drillship or any part thereof or interest therein or
risk of criminal liability, (C) if such contest shall involve the payment of the
Tax  prior  to  the  contest,  Deepwater shall, at its option, either (x) pay or
reimburse the Indemnified Party for such Taxes or (y) provide to the Indemnified
Party  an  interest-free  advance  in  an  amount  equal  to  the  Tax which the
Indemnified  Party  is required to pay (with no additional net after-tax cost to
such  Indemnified  Party), (D) Deepwater shall have provided to such Indemnified
Party  an  opinion  of  independent  tax  counsel  selected  by  Deepwater,  and
reasonably  satisfactory to the Indemnified Party that a Reasonable Basis exists
to  contest  such  claim,  and  (E)  if such contest is controlled by Deepwater,
Deepwater  shall have acknowledged, in writing, its liability for such indemnity
in  the  event  such  contest is unsuccessful.  In no event shall an Indemnified
Party  be  required  to  appeal  an adverse judicial determination to the United
States  Supreme  Court.  The  Indemnified Party shall consult in good faith with
Deepwater  regarding  the  conduct of any contest controlled by such Indemnified
Party  and  shall  allow  Deepwater  to  participate  in the conduct of any such
contest unless the Indemnified Party shall in good faith determine that allowing
Deepwater  to  participate  in the conduct of such contest could have a material
adverse  impact  on  the  business  or operations of the Indemnified Party.  The
parties  agree that an Indemnified Party may at any time decline to take further
action  with  respect  to the contest of any claim for a Tax and may settle such
claim,  if  such  Indemnified Party shall waive its rights to any indemnity from
Deepwater

                                       59
<PAGE>
that  otherwise  would  be  payable  in  respect of such claim (or any logically
related claim) and shall pay to Deepwater any amount previously paid or advanced
by  Deepwater  pursuant  to  this  Section 10.4(f) other than clause (A) of this
paragraph  (by  way of indemnification or advance for the payment of a Tax) with
respect  to  such  Taxes.

     If  an  Indemnified  Party shall fail to perform its obligations under this
Section 10.4(f), such failure shall not discharge, diminish or relieve Deepwater
of  any liability for indemnification that it may have to such Indemnified Party
hereunder,  unless  the  contest  of  a  claim  is precluded as a result of such
failure;  provided,  that  any  payment  by  Deepwater to such Indemnified Party
          --------
pursuant  hereto  shall  not  be deemed to constitute a waiver or release of any
right  or  remedy  (including  any  remedy  of  damages) that Deepwater may have
against  such  Indemnified  Party.

     (g)          Refund.  If an Indemnified Party shall receive a refund of (or
                  ------
receive  a  credit  against,  or  any  other  current  reduction in, any Tax not
indemnified  by Deepwater under this Section 10.4, in respect of) all or part of
any Taxes which Deepwater shall have paid on behalf of such Indemnified Party or
for which Deepwater shall have reimbursed, advanced funds to or indemnified such
Indemnified Party (or would have received such a refund, credit or reduction but
for  a  counterclaim  or  other  claim not indemnified by Deepwater hereunder (a
"deemed  refund")),  within 30 days of such receipt (or, in the case of a deemed
refund,  within  30 days of the final determination of such deemed refund), such
Indemnified  Party shall pay or repay to Deepwater an amount equal to the amount
of  such  refund or deemed refund, plus any net tax benefit (taking into account
any  Taxes  incurred  by such Indemnified Party by reason of the receipt of such
refund, credit or reduction or deemed refund) realized by such Indemnified Party
as  a  result  of  any  payment  by such Indemnified Party made pursuant to this
sentence;  provided, however, that such Indemnified Party shall not be obligated
           --------  -------
to  make  any payment pursuant to this sentence to the extent that the amount of
such payment would exceed (x) the amount of all prior payments made by Deepwater
to  such  Indemnified Party pursuant to this Section 10.4 less (y) the amount of
all  prior  payments  by  such  Indemnified  Party to Deepwater pursuant to this
Section  10.4(g);  provided, further, however, that such Indemnified Party shall
                   --------  -------  -------
not  be  obligated  to  make  any payment to Deepwater pursuant to this sentence
while  an  Event  of  Default  is continuing, but shall be required to make such
payment  at  such time as the Event of Default is cured or at the time Deepwater
shall  have  fulfilled  all  its obligations arising upon such Event of Default.
If,  in  addition  to  such refund, credit or reduction or deemed refund, as the
case  may  be,  such Indemnified Party shall receive (or would have received but
for  a  counterclaim  or  other claim not indemnified by Deepwater hereunder) an
amount  representing interest on the amount of such refund, credit or reduction,
or  deemed  refund,  as  the  case  may  be, such Indemnified Party shall pay to
Deepwater  within  30  days  of such receipt or, in the case of a deemed refund,
within 30 days of the final determination of such deemed refund, that proportion
of  such interest that shall be fairly attributable to Taxes paid, reimbursed or
advanced  by  Deepwater  prior  to  the receipt of such refund or deemed refund.

     (h)          Reports.  Deepwater will provide such information  as  may  be
                  -------
available

                                       60
<PAGE>
to  it  and  reasonably  requested  in  writing  by an Indemnified Party that is
required  to  enable an Indemnified Party to fulfill its tax filing requirements
with  respect  to the transactions contemplated by the Transaction Documents. If
any  return, statement or report is required to be made or filed with respect to
any  Tax imposed on or indemnified against by Deepwater under this Section 10.4,
Deepwater  shall  promptly  notify  the  appropriate  Indemnified  Party of such
requirement  and  (i) to the extent permitted by law (unless otherwise requested
by the Indemnified Party) or required by law, make and file in its own name such
return,  statement  or  report and furnish the relevant Indemnified Party with a
copy  of  such return, statement or report, (ii) where such return, statement or
report  is  required  to be in the name of or filed by such Indemnified Party or
the  Indemnified  Party otherwise requests that such return, statement or report
be  filed  in its name, prepare and furnish such return, statement or report for
filing by such Indemnified Party in such manner as shall be satisfactory to such
Indemnified Party and send the same to the Indemnified Party for filing no later
than  15  days  prior  to  the due date or (iii) where such return, statement or
report  is  required  to  reflect  items  in  addition  to  Taxes  imposed on or
indemnified  against  under  this Section 10.4 as determined by such Indemnified
Party, provide such Indemnified Party with information within a reasonable time,
sufficient  to  permit  such return, statement or report to be properly made and
timely  filed  with  respect  thereto.  If  an Indemnified Party fails to file a
return  after it has been properly prepared by Deepwater in accordance with this
Section  10.4(h)  and furnished to such Indemnified Party at least 15 days prior
to  the due date of such return, Deepwater shall not be liable for Taxes imposed
as  a  result  of  the  failure  to  file.  Each Indemnified Party shall furnish
Deepwater,  at  the request and expense of Deepwater, with such information, not
within  the  control of Deepwater, as is in such Indemnified Party's control and
is reasonably available to such Indemnified Party and necessary for Deepwater to
comply  with  its  obligations  under  this  Section  10.4(h).

     (i)          Forms,  etc.  Each  Indemnified  Party  agrees  to  furnish to
                  ------------
Deepwater  from  time  to  time,  at Deepwater's timely made written request and
expense,  such duly executed and properly completed forms as may be necessary or
appropriate in order to claim any reduction of or exemption from any withholding
or  other  Tax  imposed  by  any  taxing  authority  in  respect of any payments
otherwise  required  to  be  made  by  Deepwater  pursuant  to  the  Transaction
Documents,  which  reduction  or  exemption may be available to such Indemnified
Party.  Each  Indemnified  Party  agrees  that  it  will use its reasonable best
efforts  to  the  extent  permitted  by  Applicable  Law (and to the extent such
Indemnified Party is entitled to do so) to file returns or tax declarations that
would  minimize  any  indemnity  payable  by Deepwater; provided, that Deepwater
                                                        --------
shall  indemnify  the  Indemnified  Party  for  any  cost  resulting  from  such
Indemnified  Party's  filing  of such return or declaration. Notwithstanding the
foregoing,  no  Indemnified  Party shall be required to furnish any form or file
any  return or tax declaration if it has determined in its reasonable good faith
judgment  that furnishing the form or filing the return or tax declaration could
have a material adverse impact on the business or operations of such Indemnified
Party  or  any  Related  Indemnified  Party,  unless  the  Indemnified  Party is
indemnified  in  a  manner  reasonably satisfactory to such Indemnified Party by
Deepwater  for  such  material  adverse  impact.

                                       61
<PAGE>
     (j)          Records.  In  addition  to  its  obligations  under  the first
                  -------
sentence  of  Section 10.4(h), Deepwater shall make available for inspection and
copying  by  an  Indemnified Party such records that are regularly maintained by
Deepwater  in the ordinary course of its business as may be reasonably necessary
to  enable  such Indemnified Party to fulfill its tax return filing obligations,
subject  to  reasonable  confidentiality  requirements  of  Deepwater.

     (k)          Non-Parties.  If  an  Indemnified Party is not a party to this
                  -----------
Agreement, Deepwater may require the Indemnified Party to agree in writing, in a
form reasonably acceptable to Deepwater, to the terms of this Section 10.4 prior
to  making  any  payment  to  such  Indemnified  Party  under this Section 10.4.

     (l)          Verification.  The  results of all computations required under
                  ------------
this Section 10.4, together with a statement describing in reasonable detail the
manner  in which such computations were made, shall be delivered to Deepwater in
writing.  If  Deepwater  so  requests  within  30  days  after  receipt  of such
computations,  any  determination  shall  be reviewed by a nationally recognized
independent  public  accounting  firm  mutually  acceptable  to  the  relevant
Indemnified  Party  and Deepwater who shall be asked to verify, after consulting
with  Deepwater  and  the  relevant  Indemnified  Party  whether  the  relevant
Indemnified  Party's  computations are correct, and to report its conclusions to
both  Deepwater  and  the  relevant  Indemnified  Party. Subject to satisfactory
confidentiality  agreements, the relevant Indemnified Party and Deepwater hereby
agree to provide such accountants with all information and materials as shall be
reasonably  necessary  or  desirable  in  connection  herewith.  The fees of the
accountants  in  verifying  an adjustment pursuant to this Section 10.4 shall be
paid  by  Deepwater,  unless  such  verification  discloses  an error adverse to
Deepwater  in an amount greater than 4.0% of the amount of the indemnity payment
as  determined  by the accounting firm, in which case such fees shall be paid by
the  relevant Indemnified Party. Any information provided to such accountants by
any  Person  shall be and remain the exclusive property of such Person and shall
be deemed by the parties to be (and the accountants will confirm in writing that
they  will  treat such information as) the private, proprietary and confidential
property  of  such  Person,  and  no  Person  other  than  such  Person  and the
accountants  shall be entitled thereto, and all such materials shall be returned
to  such  Person.  Such  accounting  firm  shall  be  requested  to  make  its
determination  within 30 days of Deepwater's request to such accounting firm for
review.  In  the  event  such independent public accounting firm shall determine
that  such  computations  are  incorrect, then such firm shall determine what it
believes  to  be  the correct computations.  The computations of the independent
public  accounting  firm  shall be final, binding and conclusive upon, Deepwater
and  the  relevant  Indemnified  Party and Deepwater shall not have any right to
inspect the books, records, tax returns or other documents of or relating to the
relevant Indemnified Party to verify such computations or for any other purpose.
The  parties  hereby  agree  that  the independent public accounting firm's sole
responsibility  shall  be to verify the computation of any amounts payable under
this  Section  10.4 and that matters of interpretation of this Agreement and the
other  Transaction Documents are not within the scope of such independent public
accounting  firm's  responsibilities.

                                       62
<PAGE>
     (m)          Restructuring  For  Withholding  Taxes.  Each party covered by
                  --------------------------------------
this  Section  10.4 agrees to use reasonable efforts to investigate alternatives
for  reducing  any  withholding  Taxes that are indemnified against hereunder or
imposed  on  Charter  Hire (or payments by the Charter Trustee to the Investment
Trust or any Certificate Purchaser) (whether or not indemnifiable hereunder) and
to  use  reasonable efforts to reduce any withholding Taxes that are indemnified
against  hereunder,  including, without limitation, negotiating in good faith to
relocate  or restructure the Advance (which relocation or restructuring shall be
at  Deepwater's  expense) or the domicile of the Investment Trust or the Charter
Trustee,  but  no Party shall be obligated to take any such action as such Party
determines  will be adverse to its business or financial or commercial interest.

                                   SECTION 11

                                     AGENTS

     SECTION  11.1     Appointment  of Administrative Agent, Documentation Agent
                       ---------------------------------------------------------
and Syndication Agent; No Duties.  Each Certificate Purchaser hereby irrevocably
--------------------------------
(subject  to  Section  11.9)  designates,  authorizes and appoints ABN AMRO Bank
N.V.,  as  Administrative  Agent  of  such  Certificate  Purchaser  under  the
Transaction  Documents, BA Leasing & Capital Corporation, as Documentation Agent
of  such  Certificate Purchaser under the Transaction Documents, and The Bank of
Nova  Scotia,  as  Syndication  Agent  of  such  Certificate Purchaser under the
Transaction  Documents,  and  each  such  Certificate  Purchaser  irrevocably
authorizes  each of ABN AMRO Bank N.V., BA Leasing & Capital Corporation and The
Bank  of Nova Scotia to act as the Administrative Agent, Documentation Agent and
Syndication  Agent,  respectively,  for such Certificate Purchaser, to take such
action  on  its  behalf under the provisions of the Transaction Documents and to
exercise  such powers and perform such duties as are expressly delegated to such
Agent  by  the  terms  of  this  Agreement  and the other Transaction Documents,
together  with  such  other  powers  as  are  reasonably  incidental  thereto.
Notwithstanding  any  provision  to  the  contrary  herein  or  elsewhere in the
Transaction  Documents, the Agents shall not have any duties or responsibilities
except  those  expressly  set  forth  herein  or  therein,  or  any  fiduciary
relationship  with  any  Certificate  Purchaser,  and  no  implied  covenants,
functions,  responsibilities,  duties,  obligations or liabilities shall be read
into  the  Transaction  Documents  or  otherwise  exist  against  the  Agents.

     SECTION 11.2     Delegation of Duties.  The Agents may execute any of their
                      --------------------
duties  under  this  Agreement and the other Transaction Documents by or through
agents  or  attorneys-in-fact,  and  shall  be  entitled  to  advice  of counsel
concerning  all  matters  pertaining  to  such  duties.  The Agents shall not be
responsible  for the negligence or misconduct of any agents or attorneys-in-fact
selected  by  them  with  reasonable  care.

     SECTION 11.3     Exculpatory Provisions.  No Agent nor any of its officers,
                      ----------------------
directors,  employees,  agents,  attorneys-in-fact  or  Affiliates  shall be (i)
liable for any action taken or omitted to be taken by it or such Person under or
in  connection  with  the Transaction Documents

                                       63
<PAGE>
(except for its or such Person's own gross negligence or willful misconduct), or
(ii)  except as expressly set forth in the Transaction Documents, responsible in
any  manner  to  any of the Certificate Purchasers for any recitals, statements,
representations or warranties made by Deepwater or any officer thereof contained
in  the  Transaction Documents or in any certificate, report, statement or other
document  referred  to  or  provided  for in, or received by such Administrative
Agent  under  or  in  connection  with,  the  Transaction  Documents, or for the
validity,  effectiveness,  genuineness,  enforceability  or  sufficiency  of the
Transaction  Documents,  including  the  Certificates,  or  for  any  failure of
Deepwater  to  perform its obligations hereunder or thereunder. The Agents shall
be  under  no obligation to any Certificate Purchaser to ascertain or to inquire
as  to  the  observance or performance of any of the agreements contained in, or
conditions of, the Transaction Documents, or to inspect the properties, books or
records  of  Deepwater.

     SECTION 11.4     Reliance by Agents.  The Agents shall be entitled to rely,
                      ------------------
and  shall  be  fully  protected in relying, upon any note, writing, resolution,
notice,  consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex,  facsimile  or  teletype  message,  statement, order or other document or
conversation  reasonably  believed  by  it to be genuine and correct and to have
been  signed,  sent  or made by the proper Person or Persons and upon advice and
statements  of  legal  counsel  (including,  without  limitation,  counsel  to
Deepwater),  independent  accountants  and other experts selected by such Agent.
The  Agents  may  deem  and treat the registered owner of any Certificate as the
owner  thereof  for  all  purposes  unless  a  written  notice  of  assignment,
negotiation  or  transfer thereof shall have been filed with such Agent.  Agents
shall  be  fully  justified  in failing or refusing to take any action under the
Transaction Documents unless they shall first receive such advice or concurrence
of  the  Majority  Certificate  Purchasers  (or, where expressly required by any
provision  of the Transaction Documents, the Required Certificate Purchasers) as
they  deem  appropriate and, if they so request, they shall first be indemnified
to  their  satisfaction  against  any and all liability and expense which may be
incurred by them by reason of taking or continuing to take any such action.  The
Agents  shall  in  all cases be fully protected in acting, or in refraining from
acting,  under the Transaction Documents and the Certificates in accordance with
a  request  of the Majority Certificate Purchasers (or, where expressly required
by  any  provision  of  the  Transaction  Documents,  the  Required  Certificate
Purchasers),  and  such  request and any action taken or failure to act pursuant
thereto  shall  be  binding  upon  all the Certificate Purchasers and all future
holders  of  the  Certificates.

     SECTION  11.5     Notice of Default.  The Administrative Agent shall not be
                       -----------------
deemed  to  have  knowledge or notice of the occurrence of any Default, Material
Default  or  Event  of  Default  hereunder  unless such Administrative Agent has
received  notice  from  a  Certificate  Purchaser,  either  Trustee or Deepwater
referring  to this Agreement, describing such Default, Material Default or Event
of  Default and stating that such notice is a "notice of default".  In the event
that the Administrative Agent receives such a notice, Administrative Agent shall
give  notice  thereof  to the Documentation Agent, the Syndication Agent and the
Certificate  Purchasers.  The  Administrative  Agent shall take such action with
respect  to  such  Default,  Material  Default  or  Event of Default as shall be
reasonably  directed by the Majority Certificate Purchasers (or,

                                       64
<PAGE>
where  expressly  required  by  any  provision of the Transaction Documents, the
Required  Certificate  Purchasers);  provided,  that  unless  and  until  the
                                     --------
Administrative  Agent  shall  have  received such directions, the Administrative
Agent  may  (but  shall  not  be obligated to) take such action, or refrain from
taking  such  action, with respect to such Default, Material Default or Event of
Default,  as  it  shall  deem advisable in the best interests of the Certificate
Purchasers.

     SECTION 11.6     Non-Reliance on Administrative Agent and Other Certificate
                      ----------------------------------------------------------
Purchasers.  Each  Certificate Purchaser expressly acknowledges that neither the
----------
Administrative  Agent,  Documentation  Agent, Syndication Agent nor any of their
officers,  directors,  employees,  agents,  attorneys-in-fact or Affiliates have
made any representation or warranty to it, and that no act by the Administrative
Agent,  the  Documentation  Agent  or  the  Syndication Agent hereinafter taken,
including  any  review  of the affairs of Deepwater and its Affiliates, shall be
deemed to constitute any representation or warranty by the Administrative Agent,
the  Documentation  Agent or the Syndication Agent to any Certificate Purchaser.
Each  Certificate  Purchaser  represents  to  the  Administrative  Agent,  the
Documentation  Agent  and  the  Syndication Agent that it has, independently and
without  reliance upon the Administrative Agent, the Documentation Agent and the
Syndication  Agent,  or  any  other  Certificate  Purchaser,  and  based on such
documents  and  information as it has deemed appropriate, made its own appraisal
of  and  investigation  into  the  business, operations, property, financial and
other  condition and creditworthiness of Deepwater and its Affiliates, the value
of and title to any collateral, and all applicable bank regulatory laws relating
to  the  transactions contemplated hereby and by the other Transaction Documents
and has made its own decision to make its Certificate Purchaser Amount available
hereunder  and  enter into this Agreement and the other Transaction Documents to
which it is a party as a Certificate Purchaser.  Each Certificate Purchaser also
represents  that  it  will,  independently  and  without  reliance  upon  the
Administrative  Agent,  the Documentation Agent or the Syndication Agent, or any
other  Certificate  Purchaser, and based on such documents and information as it
shall  deem  appropriate  at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the  other  Transaction  Documents  to  which  it  is  a  party as a Certificate
Purchaser, and to make such investigation as it deems necessary to inform itself
as  to  the  business,  operations,  property, financial and other condition and
creditworthiness  of  Deepwater and its Affiliates.  Except for notices, reports
and  other  documents  expressly  required  to  be  furnished to the Certificate
Purchasers  by  the  Agents  hereunder,  the  Agents  shall  have  no  duty  or
responsibility  to  provide  any  Certificate Purchaser with any credit or other
information  concerning  the business, operations, property, financial and other
condition or creditworthiness of Deepwater or its Affiliates, the Administrative
Agent,  the  Documentation  Agent,  the  Syndication  Agent and their respective
Affiliates  which  may come into the possession of the Administrative Agent, the
Documentation  Agent  or  the  Syndication  Agent,  or  any  of  their officers,
directors,  employees,  agents,  attorneys-in-fact  or  Affiliates.

     SECTION  11.7     Indemnification.  The  Certificate  Purchasers  severally
                       ---------------
agree to indemnify each of the Administrative Agent, the Documentation Agent and
the Syndication Agent in their capacity as such (to the extent not reimbursed by
Deepwater within a reasonable period after demand has been made to Deepwater for
those  amounts  owing  by  Deepwater,  and

                                       65
<PAGE>
without  limiting  the  obligation  of Deepwater to do so), ratably according to
their  respective  Certificate  Purchaser  Amounts, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs,  expenses  or  disbursements of any kind whatsoever which may at any time
(including,  without  limitation,  at  any  time  following  the  payment of the
Certificates)  be imposed on, incurred by or asserted against the Administrative
Agent,  the  Documentation Agent or the Syndication Agent in any way relating to
or arising out of the Transaction Documents, or any documents contemplated by or
referred  to  herein  or  therein  or  any  action  taken  or  omitted  by  the
Administrative  Agent, the Documentation Agent or the Syndication Agent under or
in  connection with any of the foregoing; provided that no Certificate Purchaser
                                          --------
shall be liable for the payment of any portion of such liabilities, obligations,
losses,  damages,  penalties,  actions,  judgments,  suits,  costs,  expenses or
disbursements  resulting  from  the  Administrative  Agent's,  the Documentation
Agent's  or  the Syndication Agent's gross negligence or willful misconduct; and
provided,  further,  that  the Administrative Agent, the Documentation Agent and
--------   -------
the  Syndication  Agent shall not make any claim under this Section 11.7 for any
claim  or  expense  indemnified  against  by Deepwater or its Affiliates without
first  making demand on such Person for payment of such claim or expense (unless
such  demand  shall then be prohibited by Applicable Law). Whenever, at any time
after the Administrative Agent, the Documentation Agent or the Syndication Agent
has received from any Certificate Purchaser such Certificate Purchaser's ratable
share  of  amounts owing to the Administrative Agent, the Documentation Agent or
the  Syndication  Agent pursuant to this Section 11.7, the Administrative Agent,
the Documentation Agent or the Syndication Agent shall receive any reimbursement
from  Deepwater  on  account  of  such  amounts,  the  Administrative Agent, the
Documentation  Agent  or  the  Syndication  Agent  shall  distribute  to  such
Certificate  Purchaser  its  ratable  share  thereof  in like funds as received;
provided,  however,  that  in  the  event that the receipt by the Administrative
--------   -------
Agent, the Documentation Agent or the Syndication Agent of such reimbursement is
required  by  law  or  court  or  administrative  order  to  be  returned,  such
Certificate  Purchaser  shall  return  to  the  Administrative  Agent,  the
Documentation  Agent  or  the  Syndication  Agent any portion thereof previously
distributed  by  the  Administrative  Agent,  the  Documentation  Agent  or  the
Syndication  Agent  to  it in like funds as such reimbursement is required to be
returned by the Administrative Agent, the Documentation Agent or the Syndication
Agent.

     SECTION 11.8     Agents.  The Administrative Agent, the Documentation Agent
                      ------
and  the  Syndication  Agent  and their respective Affiliates may make loans to,
issue letters of credit for the account of, accept deposits from, acquire equity
interests  in  and  generally  engage  in  any  kind of business with Deepwater,
Conoco,  R&B  and  their  Affiliates  as  though  the  Administrative Agent, the
Documentation Agent and the Syndication Agent were not the Administrative Agent,
the  Documentation  Agent and the Syndication Agent hereunder and without notice
to  or  the  consent  of  the  Certificate  Purchasers.  It  is  understood  and
acknowledged  by  each  Certificate  Purchaser  that  an  Affiliate  of  the
Administrative Agent, the Documentation Agent and the Syndication Agent may also
separately  be  a  Certificate  Purchaser.  It  is  further  understood  and
acknowledged  by  each  Certificate  Purchaser  that, pursuant to the activities
referenced  in  this  Section  11.8, the Administrative Agent, the Documentation
Agent  and  the  Syndication  Agent and their Affiliates may receive information
regarding  Deepwater,  Conoco,  R&B  and their

                                       66
<PAGE>
Affiliates  (including  information  that  may  be  subject  to  confidentiality
obligations  in  favor  of  Deepwater,  Conoco,  R&B  and  their Affiliates) and
acknowledge  that  the  Administrative  Agent,  the  Documentation Agent and the
Syndication  Agent  shall  be under no obligation to provide such information to
them.  With  respect  to  its  Certificate Purchaser Amount, if any, each of the
Agents  shall  have the same rights and powers under this Agreement as any other
Certificate  Purchaser and may exercise the same as though it were not an Agent.

     SECTION  11.9     Successor  Agent.  At  any  time  during the term of this
                       ----------------
Agreement, the Administrative Agent, the Documentation Agent and the Syndication
Agent may resign upon thirty (30) days' notice to the Certificate Purchasers and
Deepwater.  If  any  of the Administrative Agent, the Documentation Agent or the
Syndication  Agent  resigns  herewith, the Required Certificate Purchasers shall
appoint  from among the Certificate Purchasers a successor Agent which successor
Agent  shall  be approved by Deepwater (which approval shall not be unreasonably
withheld or delayed).  If no successor Agent is appointed prior to the effective
date  of  the  resignation  of  the corresponding Agent, such Agent may appoint,
after  consulting  with  the  Certificate  Purchasers and Deepwater, a successor
Agent  from  among  the  Certificate  Purchasers.  Upon  the  successor  Agent's
acceptance of its appointment as successor Agent hereunder, such successor Agent
shall succeed to all the rights, powers and duties of the retiring Agent and (i)
the  term  "Administrative Agent" shall mean such successor administrative agent
            --------------------
and  such  retiring  Administrative Agent's appointment, powers and duties as an
Administrative  Agent  shall  be  terminated,  (ii)  the  term  "Documentation
                                                                 -------------
Agent" shall  mean  such  successor  documentation  agent  and  such  retiring
-----
Documentation  Agent's  appointment,  powers and duties as a Documentation Agent
shall  be  terminated,  and  (iii)  the term "Syndication Agent" shall mean such
                                              -----------------
successor  syndication  agent and such retiring Syndication Agent's appointment,
powers  and  duties  as  a  Syndication  Agent  shall  be terminated.  After the
retiring  Agent's  resignation herewith, the provisions of this Section 11 shall
inure  to its benefit as to any actions taken or omitted to be taken by it while
it  was  an  Agent  hereunder  and under the other Transaction Documents.  If no
successor  agent  has  accepted appointment by the date which is forty-five (45)
days following the notice of resignation, the resignation shall thereupon become
effective and the Certificate Purchasers shall perform all of the duties of such
Agent  hereunder  and  under the other Transaction Documents until such time, if
any,  as  the  Required  Certificate  Purchasers  appoint  a  successor Agent as
provided  for  above.

                                       67
<PAGE>
                                   SECTION 12

                                  MISCELLANEOUS

     SECTION  12.1     Survival of Agreements.  The representations, warranties,
                       ----------------------
covenants,  indemnities  and  agreements  of  the  parties  provided  for in the
Transaction  Documents,  and the parties' obligations under any and all thereof,
shall  survive the execution and delivery of this Agreement, the transfer of the
Drillship  to the Head Lessor (if applicable), the lease of the Drillship by the
Head  Lessor  (if  any) to the Charter Trustee and the subsequent charter of the
Drillship  by  the  Charter  Trustee  to  Deepwater,  the  construction  of  the
Drillship,  any  disposition  of  any  interest  of  the  Charter Trustee or the
Investment  Trust in the Drillship, the payment of the Advances and shall be and
continue  in  effect notwithstanding any investigation made by any party and the
fact that any party may waive compliance with any of the other terms, provisions
or conditions of any of the Transaction Documents.  Except as expressly provided
herein,  it  is  expressly  understood  and  agreed  that  the  indemnification
obligations  of  Deepwater  under  Section  10  shall  survive the expiration or
termination  of  the Charter and the other Transaction Documents and the payment
by  Deepwater and Conoco of all amounts due thereunder for a period of three (3)
years  (but  shall  continue  in  full force and effect following such date with
respect  to  any  Claim  asserted  prior to such date) and shall be separate and
independent from any remedy under the Charter or any other Transaction Document.

     SECTION  12.2     No Broker; etc.  Each of the parties hereto represents to
                       --------------
the  others that it has not retained or employed any broker, finder or financial
advisor,  other  than  PricewaterhouseCoopers LLP and Bank of America, to act on
its  behalf  in  connection with this Agreement or the transactions contemplated
herein,  nor  has it authorized any broker, finder or financial adviser retained
or  employed  by any other Person so to act.  Any party who is in breach of this
representation  shall  indemnify  and  hold  the other parties harmless from and
against any cost or liability arising out of such breach of this representation.

     SECTION  12.3     Notices.  Unless  otherwise specifically provided herein,
                       -------
all  notices,  consents, directions, approvals, instructions, requests and other
communications  required  or  permitted  by  the terms hereof to be given to any
Person shall be given in writing by United States mail, by nationally recognized
courier service, by hand or by facsimile communication and any such notice shall
become  effective one (1) Business Day after delivery to a nationally recognized
courier  service  specifying  overnight  delivery or, if delivered by hand, when
received,  or,  if sent by facsimile communication, when confirmed by electronic
or  other  means during business hours on a Business Day (or, if confirmed after
business  hours or on a non-Business Day, on the next Business Day) and shall be
directed  to  the  address  of  such  Person  as  indicated:

                                       68
<PAGE>
     If to Deepwater, to it at:

          Attn: Manager
          Deepwater Drilling L.L.C.
          901 Threadneedle, Suite 200
          Houston, Texas 77079
          Telephone:  (281) 496-5000
          Telecopier:  (281) 496-0285

     with copies to:

          Attn: Wayne K. Anderson, Esq.
          Corporate Counsel
          Conoco Inc. (formerly Continental Oil Company)
          Charter Number 523126
          600 North Dairy Ashford
          Houston, Texas 77079
          Telephone:    (281)293-3890
          Telecopier:  (281)293-3700

          Attn: Wayne K. Hillin, Esq.
          Counsel
          R & B Falcon Corporation
          901 Threadneedle, Suite 200
          Houston, Texas 77079
          Telephone:    (281) 496-5000
          Telecopier:   (281) 496-0285

     If to the Investment Trust, to it at:

          Attn: Corporate Trust Administration
          Wilmington Trust FSB
          3773 Howard Hughes Parkway, Suite 300 North
          Las Vegas, Nevada 89109
          Telephone:   (702) 866-2200
          Telecopier:  (702) 866-2244

                                       69
<PAGE>
     If to the Charter Trustee, to it at:

          Attn:    Corporate Trust Administration
          Wilmington Trust Company
          1100 North Market Street
          Wilmington, DE, 19890
          Telephone:    (302) 651-1000
          Telecopier:   (302) 651-8882

     If to Administrative Agent, to it at

          Attn: Linda Boardman
          ABN AMRO Bank N.V.
          1325 Avenue of the Americas, 9th Floor
          New York, NY 10019
          Telephone:   (212) 314-1724
          Telecopier:  (212) 314-1712

     If to the Investment Trustee, to it at:

          Attn: Corporate Trust Administration
          Wilmington Trust FSB
          3773 Howard Hughes Parkway, Suite 300 North
          Las Vegas, Nevada 89109
          Telephone:   (702) 866-2200
          Telecopier:  (702) 866-2244

     If to any Member, to it at:

          Conoco Development Company
          600 North Dairy Ashford
          Houston, Texas 77079
          Telephone:   (281) 293-3890
          Telecopier:  (281) 293-3700
          Attn: Assistant Secretary

     or

          RBF Deepwater Exploration Inc.
          901 Threadneedle, Suite 200
          Houston, Texas 77079
          Telephone:   (281) 496-5000
          Telecopier:  (281) 496-0285
          Attn: President

                                       70
<PAGE>
     If  to  a Certificate Purchaser, to it at the address set forth in Schedule
5.

     SECTION  12.4     Counterparts.  This  Agreement  may  be  executed  by the
                       ------------
parties  hereto  in  separate  counterparts,  each of which when so executed and
delivered  shall  be  an  original,  but  all  such  counterparts shall together
constitute  but  one  and  the  same  agreement.

     SECTION  12.5     Amendments,  Waivers  and  Consents.  Except as otherwise
                       -----------------------------------
expressly  provided  herein  or in any other Transaction Document, no amendment,
waiver  or  termination  of  any  provision  of  this  Agreement  or  any  other
Transaction Document, and no consent with respect to any departure by any Person
therefrom,  shall be effective unless the same shall be in writing and signed by
the  Majority  Certificate Purchasers and the applicable Person and acknowledged
by  the Trustees, and then any such waiver or consent shall be effective only in
the  specific  instance  and for the specific purpose for which given; provided,
                                                                       --------
however,  that no such waiver, amendment or consent shall, unless in writing and
-------
signed by all Certificate Purchasers and acknowledged by the Trustees, do any of
the  following:

          (a)  change  the  Commitment of any Certificate Purchaser (except with
the written consent of such Certificate Purchaser) except as provided in Section
7.9;

          (b)  postpone  or delay any date fixed by any Transaction Document for
any  payment  of  Certificate  Return  on the Certificates, or any fees or other
amounts due to the Certificate Purchasers (or any of them) under any Transaction
Document  (except, with respect to amounts owed only to a particular Certificate
Purchaser,  with  the  written  consent  of  such  Certificate  Purchaser);

          (c)  reduce  (i) the amount of any outstanding Advances or the rate of
the  Certificate  Return  on the Certificates, or (ii) any fees or other amounts
payable  to  Certificate  Purchasers  (or  any  of  them)  under any Transaction
Document  (except, with respect to amounts owed only to a particular Certificate
Purchaser,  with  the  written  consent  of  such  Certificate  Purchaser);

          (d)  postpone  or reduce the payment obligations of Deepwater pursuant
to  any  Transaction  Document  (except,  with respect to amounts owed only to a
particular  Certificate  Purchaser, with the written consent of such Certificate
Purchaser);

          (e)  change  the  aggregate  percentage  of  the Certificate Purchaser
Balance  or  the  Commitment  Percentage  which  is  required  for  Certificate
Purchasers  (or  any  of  them)  to  take  any  action  hereunder;

          (f)  amend  this  Section  or  any  provision  herein  or in any other
Transaction  Document  providing  for consent or other action by all Certificate
Purchasers;

          (g)  discharge  the Completion Guarantor, the Conoco Guaranty, the R&B
Guaranty  or  the  Drilling  Contract Guarantee, or release the Lien of the Ship
Mortgage  or any

                                       71
<PAGE>
material  portion  of  any  other  Collateral or subordinate or take any action,
including  the issuance of additional instruments or documents, which results in
the  subordination  of  the  interest  of  any  Certificate  Purchaser  in  any
Collateral;

          (h)  amend  the  definition of "Certificate Return Rate," "Certificate
                                          -----------------------    -----------
Margin",  "Base Rate", "Alternate Rate", "Federal Funds Rate", "Charter Residual
------     ---------    --------------    ------------------    ----------------
Risk  Amount",  "Coverage  Ratio",  "Residual  Guarantee  Amount",  "Required
------------     ---------------    ----------------------------     --------
Certificate  Purchaser",  "Certificate  Return"  or  "Return  Period";  or
----------------------     -------------------        --------------

          (i)  amend  Section 14.1 of the Charter or Article 3 of the Depository
Agreement;

and  provided,  further,  that  no amendment, waiver or consent shall, unless in
     --------   -------
writing  and  signed  by  the  Trustees in addition to the appropriate number of
Certificate  Purchasers  or the Hedging Agreement Counterparties, as applicable,
affect  the  rights  or duties of the Trustees under this Agreement or any other
Transaction  Document  or  the  Hedging  Agreement Counterparties, respectively.

     SECTION  12.6     Confidentiality.  Each  party  hereto  agrees to exercise
                       ---------------
commercially  reasonable efforts to keep any non-public information delivered or
made  available by Deepwater to it which is indicated or stated in writing to be
confidential  information,  confidential from anyone other than persons employed
or  retained  by  such  Participant who are or are expected to become engaged in
evaluating,  approving,  structuring  or  administering  any  of the Transaction
Documents  (such  Persons  to  likewise  be  under  similar  obligations  of
confidentiality  with  respect  to  such  information);  provided, however, that
                                                         --------  -------
nothing  herein  shall prevent any party from disclosing such information (i) to
any  other  party,  (ii)  upon  the order of any court or administrative agency,
(iii)  upon  the  request or demand of any regulatory agency or authority having
jurisdiction  over such Participant, (iv) which has been publicly disclosed, (v)
to the extent reasonably required in connection with any litigation to which any
party  or  its Affiliates may be a party, (vi) to the extent reasonably required
in  connection  with  the  exercise  of  any remedy hereunder or under any other
Transaction  Document, (vii) to such party's legal counsel, independent auditors
and  to  such  party's  Affiliates, (viii) to any actual or proposed assignee or
other  transferee  of  all  or  part of its rights hereunder which has agreed in
writing  to  be  bound by the provisions of this Section 12.6 and (ix) except as
otherwise required by Applicable Law; provided, however, that, should disclosure
                                      --------  -------
of any such confidential information be required by virtue of clause (ii) or (v)
of  the immediately preceding provisos, such party shall notify Deepwater of the
same  so  as  to allow Deepwater to seek a protective order or to take any other
appropriate  action;  provided, further, that no such party shall be required to
                      --------  -------
delay  compliance with any directive to disclose beyond the last date such delay
is  legally  permissible any such information so as to allow Deepwater to effect
any  such  action  and provided, further, that if Deepwater exercises the Return
                       --------  -------
Option,  no  Participant  thereafter shall be bound by the terms of this Section
12.6  with  respect  to  any  information  regarding  the  Drillship (excluding,
however,  any  information  regarding  the  Drilling  Contract).

                                       72
<PAGE>
     SECTION  12.7     Headings; etc.  The Table of Contents and headings of the
                       -------------
various  Sections  of  this  Agreement are for convenience of reference only and
shall not modify, define, expand or limit any of the terms or provisions hereof.

     SECTION  12.8     Parties  in  Interest.  Except  as  expressly  provided
                       ---------------------
herein, none of the provisions of this Agreement are intended for the benefit of
any  Person  except  the  parties  hereto.

     SECTION  12.9     Governing  Law.  THIS  AGREEMENT SHALL BE GOVERNED BY THE
                       --------------
LAWS  OF  THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY
AND  PERFORMANCE  (INCLUDING  SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW BUT EXCLUDING, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ALL OTHER
CHOICE OF LAW AND CONFLICTS OF LAW RULES).  THIS AGREEMENT HAS BEEN DELIVERED IN
THE  STATE  OF  NEW  YORK.

     SECTION  12.10     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  12.11     Further  Assurances.  The  parties hereto shall promptly
                        -------------------
cause  to  be  taken,  executed,  acknowledged  or  delivered, at the expense of
Deepwater,  all  such further acts, conveyances, documents and assurances as any
of  the  parties  may from time to time reasonably request in order to carry out
and  effectuate the intent and purposes of this Agreement, the other Transaction
Documents  and  the transactions contemplated hereby and thereby (including, the
preparation,  execution  and  filing  of  any  and  all  Uniform Commercial Code
financing statements and other filings or registrations which the parties hereto
may  from time to time request to be filed or effected).  Deepwater will, at its
own  expense and without need of any prior request from any other party, to take
such action as may be necessary (including any action specified in the preceding
sentence),  or  (if the Investment Trust or the Trustees shall so request) as so
requested,  in order to maintain and protect all security interests provided for
hereunder  or  under  any  other  Transaction  Document.

     SECTION  12.12     Waiver  of  Jury  Trial.  TO  THE  EXTENT  PERMITTED  BY
                        -----------------------
APPLICABLE  LAW, EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT
TO  TRIAL  BY  JURY  IN  ANY  LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THE
TRANSACTION  DOCUMENTS  OR  THE  TRANSACTIONS  CONTEMPLATED  HEREBY.

     SECTION  12.13     Limitations  on  Recourse.  (a)  The  Certificate
                        -------------------------
Purchasers,  the  Trustees  and  the Investment Trust agree that their rights in
respect  of  the  obligations of Deepwater to pay Charter Hire, and any claim or
liability  under  this  Agreement  or  any  other  Transaction Document shall be
limited  to  satisfaction  out of, and enforcement against, the Collateral.  The
Certificate

                                       73
<PAGE>
Purchasers,  the  Trustees and the Investment Trust hereby acknowledge and agree
that  none of the Non-Recourse Parties shall have any liability to all or any of
the Certificate Purchasers, the Trustees or the Investment Trust for the payment
of  any  sums  now  or  hereafter owing by Deepwater under this Agreement or any
other  Transaction  Document or for the performance of any of the obligations of
Deepwater  contained  herein  or  therein  or  shall  otherwise  be  liable  or
responsible with respect thereto (such liability, including such as may arise by
operation  of  law,  being  hereby expressly waived), except as provided in this
Section  12.13.  If any Event of Default shall occur and be continuing or if any
claim  of  any  Certificate  Purchasers,  the  Investment Trust and the Trustees
against  or alleged liability to the Certificate Purchasers, the Trustees or the
Investment  Trust  of,  Deepwater  shall be asserted under this Agreement or any
other  Transaction  Document,  the  Certificate Purchasers, the Trustees and the
Investment Trust agree that they shall not have the right to proceed directly or
indirectly  against  the  Non-Recourse  Parties  or  against  their  respective
properties and assets (other than the Collateral) for the satisfaction of any of
the  obligations  of  Deepwater  to  pay  Charter  Hire  or of any such claim or
liability  or  for any deficiency judgment (except to the extent enforceable out
of  the  Collateral)  in  respect  of  such  obligations  or  any  such claim or
liability.  The foregoing notwithstanding, it is expressly understood and agreed
that  nothing contained in this Section 12.13 shall be deemed to (a) release any
Non-Recourse  Party  from  liability  for  its  fraudulent  actions  or  willful
misconduct  or  (b) limit or affect the obligations of any Non-Recourse Party in
accordance  with  the  terms of this Agreement or any other Transaction Document
creating such obligation to which such Non-Recourse Party is a party, including,
without limitation, the obligations of Conoco under the Completion Guaranty, the
obligations  of  Conoco  Drilling  under  the Drilling Contract Guaranty and the
obligations of Conoco and R&B with respect to the Residual Guarantee Amount. The
foregoing  acknowledgements,  agreements and waivers shall be enforceable by any
Non-Recourse  Party.

     (b)     Deepwater, Conoco and R&B hereby acknowledge and agree that none of
the  Administrative  Agent,  the Syndication Agent, the Documentation Agent, the
Trustees  and  the  Certificate  Purchasers  shall  have  any personal liability
whatsoever  to  Deepwater,  Conoco  or  R&B  or  their respective successors and
assigns  for  any claim based on or in respect of this Agreement or arising from
the  transactions  contemplated  hereby.  Subject to Section 6.1 of the Charter,
the  sole  recourse  of  Deepwater,  Conoco  and R&B for any such claims arising
hereunder  will  be  to  the  Trust  Estate.  Deepwater,  Conoco and R&B further
acknowledge  that each has no rights (as third-party beneficiaries or otherwise)
or  standing  under  any  agreement  between  the Trustees and any or all of the
Investment Trust, Administrative Agent, the Syndication Agent, the Documentation
Agent,  or  the  Certificate  Purchasers which agreements are not by their terms
intended  for  the benefit of other parties other than Sections 5.2,5.3, 5.4 and
5.5  of  the  Charter  Trust Agreement and Sections 5.2, 5.3, 5.4 and 5.5 of the
Investment  Trust  Agreement.

     SECTION  12.14     Applicable Laws.  Nothing in this Agreement or any other
                        ---------------
Transaction  Document  shall be construed to constitute or to require either the
Trustees,  Investment  Trust or Deepwater to take or omit any action which would
constitute  a  violation  of,  or  subject  the  Trustees,  Investment  Trust or
Deepwater  to  a  penalty  under,  the  laws  of  the  United States of

                                       74
<PAGE>
America.

     SECTION  12.15     Right  to  Inspect.  Upon  reasonable notice and at such
                        ------------------
times  and  places as shall not unduly interfere with the commercial utilization
or operation of the Drillship (it being understood that Deepwater shall be under
no  obligation  to  interrupt  or  delay  any  operation  of the Drillship or to
otherwise  incur  any out-of-pocket expense or loss of revenue), but in no event
more  than  once  in  any  twelve-month  period,  Deepwater  shall  afford
representatives  of  the  Administrative Agent (together with representatives of
the  Certificate  Purchasers  and  the  Trustees)  reasonable  access  to  the
Drillship, its logs and papers for the purpose of inspecting the same.  Any such
inspection shall be subject to any required Government Approvals and shall be at
the  sole  risk  and  expense  of  the  Administrative  Agent,  the  Certificate
Purchasers  and  the  Trustees, as applicable, unless a Charter Event of Default
has  occurred  and  is continuing, in which case any such inspection shall be at
the  expense  of Deepwater and may occur more than once per year upon reasonable
notice  after  such  Charter  Event  of  Default.  Upon  written  request by the
Administrative  Agent  and the Trustees, Deepwater shall give the Administrative
Agent  and  the  Trustees  prior  written notice of the time and location of the
Drillship's  next  scheduled  dry-docking.

     SECTION  12.16     Accounts,  Distribution  of  Payments and Flow of Funds.
                        -------------------------------------------------------
Pursuant  to  the  Deepwater  Assignment,  Deepwater  has  assigned its right to
receive  payment  of  all  Deposited  Amounts  to  the  Charter  Trustee and the
Investment  Trust.  Each  of  the  Trustees,  the Investment Trust and Deepwater
hereby  agrees  (severally  and  not  jointly)  to  deposit,  or  to cause to be
deposited,  all  Account Collateral of any kind received by it promptly (but not
later  than  the  six  (6)  Business  Days  after  receipt)  into  the  Accounts
established  pursuant  to the Depository Agreement to be applied as set forth in
the  Depository  Agreement.

     SECTION  12.17     Attorneys-in-Fact.  Subject  to  the  terms  of  the
                        -----------------
Transaction  Documents, without in any way limiting the obligations of Deepwater
hereunder,  Deepwater  hereby  appoints  each  of  the  Charter  Trustee and the
Investment  Trust  as  its  agent  and  attorney-in-fact,  with  full  power and
authority  at any time during which Deepwater is obligated to deliver possession
of  the  Drillship  to  the  Charter  Trustee in connection with the exercise of
remedies  after  the  occurrence  of  an  Event  of  Default, to demand and take
possession  of  the  Drillship  in  the  name  and  on  behalf of Deepwater from
whomsoever  shall  be  at  the time in possession thereof in accordance with the
Transaction  Documents.

     SECTION  12.18     Successor  Trustees;  Jurisdiction  of  Trust.
                        ---------------------------------------------
Notwithstanding  the  provisions  of the Trust Agreement, so long as no Event of
Default  shall  have occurred and be continuing, (i) no successor or replacement
Charter  Trustee  or  Investment  Trustee  shall  be appointed without the prior
written  consent  of Deepwater (which consent shall not be unreasonably withheld
or  delayed)  and  (ii)  the  jurisdiction  in  which the trusts under the Trust
Agreements are created shall not be changed without the prior written consent of
Deepwater.

     SECTION  12.19     Third-Party  Beneficiary.  Each  of  the  Certificate
                        ------------------------
Purchasers agrees that Conoco Drilling shall be a third-party beneficiary of the
covenant  contained  in  Section  6.3(b)

                                       75
<PAGE>
and  shall  be entitled to rely on and enforce such covenant as though it were a
party  to  this  Agreement.  Each  of the parties hereto agrees that the Hedging
Agreement  Counterparties  shall  be  third-party  beneficiaries of the covenant
contained  in  Sections 10 and 12.5 and shall be entitled to rely on and enforce
such  covenants  as  though the Hedging Agreement Counterparties were parties to
this  Agreement.

     SECTION  12.20     Consent to Jurisdiction.  Each of the parties hereto (i)
                        -----------------------
hereby irrevocably submits to the nonexclusive jurisdiction of the Supreme Court
of the State of New York, New York County (without prejudice to the right of any
party to remove to the United States District Court for the Southern District of
New  York)  and  to the jurisdiction of the United States District Court for the
Southern  District  of  New  York, for the purposes of any suit, action or other
proceeding  arising  out  of this Agreement, the other Transaction Documents, or
the  subject  matter  hereof  or thereof or any of the transactions contemplated
hereby  or  thereby  brought by any of the parties hereto or their successors or
assigns, (ii) hereby irrevocably agrees that all claims in respect of such suit,
action  or  proceeding  may be heard and determined in such New York State court
or, to the fullest extent permitted by Applicable Law, in such Federal court and
(iii)  to the extent permitted by Applicable Law, hereby irrevocably waives, and
agrees  not to assert, by way of motion, as a defense, or otherwise, in any such
suit,  action  or  proceeding any claim that it is not personally subject to the
jurisdiction  of  the above-named courts, that the suit, action or proceeding is
brought  in  an  inconvenient  forum,  that  the  venue  of  the suit, action or
proceeding  is improper or that this Agreement, the other Transaction Documents,
or the subject matter hereof or thereof may not be enforced in or by such court.
A  final judgment obtained in respect of any action, suit or proceeding referred
to  in  this  Section  12.20  shall  be  conclusive and may be enforced in other
jurisdictions  by  suit  on  the  judgment  or  in any manner as provided by and
subject  to  Applicable  Law.  Each  of  the  parties  hereto hereby consents to
service  of process in connection with the subject matter specified in the first
sentence  of this Section 12.20 in connection with the above mentioned courts in
New  York  by  registered  mail,  Federal Express, DHL or similar courier at the
address  to which notices to it are to be given, it being agreed that service in
such  manner  shall  constitute  valid service upon such party or its respective
successors  or  assigns  in  connection with any such suit, action or proceeding
only;  provided, however, that nothing in this Section 12.20(i) shall affect the
       --------  -------
right  of  any  of  such  party or its respective successors or assigns to serve
legal process in any other manner permitted by law or affect the right of any of
such  parties  or its respective successors or assigns to bring any suit, action
or  proceeding  against any other one of such parties or its respective property
in  the  courts  of  other  jurisdictions.

     SECTION  12.21     Deepwater  Acknowledgement With Respect to Charter Trust
                        --------------------------------------------------------
Agreement.  Deepwater  hereby  agrees  and consents to the provisions of Section
---------
8.1(a)  of  the Charter Trust Agreement in respect of Deepwater's obligations to
reimburse  the  Charter  Trustee's  reasonable  fees  and  expenses.

                  [Remainder of Page Intentionally Left Blank]

                                       76
<PAGE>
     IN  WITNESS  WHEREOF,  the  parties  hereto  have caused this PARTICIPATION
AGREEMENT  to  be  duly executed by their respective officers and thereunto duly
authorized  as  of  the  day  and  year  first  above  written.

                              DEEPWATER DRILLING L.L.C.

                              By:   /s/ TIM  W.  NAGLE
                                    --------------------------------------------
                                    Name:    Tim  W.  Nagle
                                    Title:   Member  Representative

                              DEEPWATER INVESTMENT TRUST 1998-A

                              By:   WILMINGTON TRUST FSB, not in its
                                      individual  capacity,  but  solely  as
                                      Investment  Trustee

                              By:   /s/ JAMES  P.  LAWLER
                                    --------------------------------------------
                                    Name:    James  P.  Lawler
                                    Title:   Vice  President

                              WILMINGTON  TRUST  FSB,  not  in  its
                                individual capacity, except as specified herein,
                                but solely as Investment Trustee

                              By:   /s/ JAMES  P.  LAWLER
                                    --------------------------------------------
                                    Name:    James  P.  Lawler
                                    Title:   Vice  President

                            [Participation Agreement]

<PAGE>
                              WILMINGTON  TRUST  COMPANY,  not  in  its
                                individual capacity, except as specified herein,
                                but  solely  as  Charter  Trustee

                              By:   /s/ JAMES  P.  LAWLER
                                    --------------------------------------------
                                    Name:    James  P.  Lawler
                                    Title:   Vice  President

                              RBF  DEEPWATER  EXPLORATION INC.,
                                with respect to Sections 5.2 and 6.4 only

                              By:   /s/ TIM  W.  NAGLE
                                    --------------------------------------------
                                    Name:    Tim  W.  Nagle
                                    Title:   Vice  President  and  Treasurer

                              CONOCO  DEVELOPMENT  COMPANY,  with
                                respect to Sections 5.2 and 6.4 only

                              By:   /s/ R.  N.  HEINRICH
                                    --------------------------------------------
                                    Name:    R.  N.  Heinrich
                                    Title:   Attorney-in-Fact

                            [Participation Agreement]

<PAGE>
                              BA  LEASING  &  CAPITAL  CORPORATION,
                              as  Documentation  Agent

                              By:   /s/ MARK  A.  ERICKSON
                                    --------------------------------------------
                                    Name:    Mark  A.  Erickson
                                    Title:   Vice  President

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

                            [Participation Agreement]

<PAGE>
                              ABN  AMRO  BANK  N.V.,
                              as  Administrative  Agent

                              By:   /s/ STUART  MURRAY
                                    --------------------------------------------
                                    Name:    Stuart  Murray
                                    Title:   Vice  President

                               By:   /s/ STEPHANIE  BALETTE
                                    --------------------------------------------
                                    Name:    Stephanie  Balette
                                    Title:   Assistant  Vice  President

                            [Participation Agreement]

<PAGE>
                              THE  BANK  OF  NOVA  SCOTIA,
                              as  Syndication  Agent

                              By:   /s/ F. C. H. ASHBY
                                    --------------------------------------------
                                    Name:    F. C. H. Ashby
                                    Title:   Senior  Manager  Loan  Operations

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

                            [Participation Agreement]

<PAGE>
Certificate  Purchasers:

                              BA  LEASING  &  CAPITAL  CORPORATION

                              By:   /s/ MARK  A.  ERICKSON
                                    --------------------------------------------
                                    Name:    Mark  A.  Erickson
                                    Title:   Vice  President

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

                              ABN  AMRO  BANK  N.V.

                              By:   /s/ STUART  MURRAY
                                    --------------------------------------------
                                    Name:    Stuart  Murray
                                    Title:   Vice  President

                              By:   /s/ STEPHANIE  BALETTE
                                    --------------------------------------------
                                    Name:    Stephanie  Balette
                                    Title:   Assistant  Vice  President

                              BANK  AUSTRIA  AKTIENGESELLSCHAFT
                              NEW  YORK  BRANCH

                              By:   /s/ R.  TENHAVE
                                    --------------------------------------------
                                    Name:    R.  Tenhave
                                    Title:   SVP

                              By:   /s/ KAREN  L.  JILL
                                    --------------------------------------------
                                    Name:    Karen  L.  Jill
                                    Title:   Assistant  Vice  President
                                             Bank  Austria

                            [Participation Agreement]

<PAGE>
                              THE  BANK  OF  NOVA  SCOTIA

                              By:   /s/ F. C. H. ASHBY
                                    --------------------------------------------
                                    Name:    F.  C.  H.  Ashby
                                    Title:   Senior  Manager  Loan  Operations

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

                              BAYERISCHE  VEREINSBANK  AG
                              NEW  YORK  BRANCH

                              By:   /s/ RALF  ENKE
                                    --------------------------------------------
                                    Name:    Ralf  Enke
                                    Title:   Assistant  Treasurer

                              By:   /s/ ALAN  BABCOCK
                                    --------------------------------------------
                                   Name:    Alan  Babcock
                                   Title:   Executive  Vice  President

                              COMMERZBANK  AKTIENGESELLSCHAFT,
                              ATLANTA  AGENCY

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

                              By:   /s/ W.  DAVID  SUTTLES
                                    --------------------------------------------
                                    Name:     W.  David  Suttles
                                    Title:     Vice  President

                            [Participation Agreement]

<PAGE>
                              CREDIT  LYONNAIS  NEW  YORK  BRANCH

                              By:   /s/ CONRAD  MEYER
                                    --------------------------------------------
                                    Name:    Conrad  Meyer
                                    Title:   Vice  President

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

                              GREAT-WEST  LIFE  AND  ANNUITY
                              INSURANCE  COMPANY

                              By:   /s/ JAMES  G.  LOWERY
                                    --------------------------------------------
                                    Name:   James  G.  Lowery
                                    Title:  Assistant Vice President Investments

                              By:   /s/ WAYNE  T.  HOFFMANN
                                    --------------------------------------------
                                    Name:    Wayne  T.  Hoffmann
                                    Title:   Vice  President  Investments

                              MEES  PIERSON  CAPITAL  CORPORATION

                              By:   /s/ D.  THOMAS  ABBOTT
                                    --------------------------------------------
                                    Name:    D.  Thomas  Abbott
                                    Title:   Chairman

                              By:   /s/ SVEIN  ENGH
                                    --------------------------------------------
                                    Name:    Svein  Engh
                                    Title:   Vice  President

                            [Participation Agreement]

<PAGE>
                              WESTDEUTSCHE  LANDESBANK
                              GIROZENTRALE,  NEW  YORK  BRANCH

                              By:   /s/ FELICIA  LA  FORGIA
                                    --------------------------------------------
                                    Name:    Felicia  La  Forgia
                                    Title:   Vice  President

                              By:   /s/ KENNETH  R.  CREPSO
                                    --------------------------------------------
                                    Name:    Kenneth  R.  Crespo
                                    Title:   Vice  President

                            [Participation Agreement]

<PAGE>
                                    EXHIBIT A

                        Form of Funding Indemnity Letter

                            [Participation Agreement]

<PAGE>
                                    EXHIBIT B

            Opinion of White & Case LLP, special counsel to Deepwater
                                    Exhibit C

                Opinion of Hunton & Williams, counsel to Conoco
                                    Exhibit D

            Opinion of Wayne K. Anderson, in-house counsel to Conoco
                                    Exhibit E

                   Opinion of Wayne K. Hillin, counsel to R&B
                                    Exhibit F

                      Officer's and Manager's Certificate
                                    Exhibit G

                             Officer's Certificate
                                  Exhibit H-1

                     Amended and Restated Drilling Contract
                                  Exhibit H-2

                Amended and Restated Drilling Contract Guaranty
                                    Exhibit I

                            Conoco Drilling Consent
                                    Exhibit J

          Securities Act Representation from PricewaterhouseCoopers LLP
                                    Exhibit K

                Form of Conoco Assumption Agreement and Opinion
                                    Exhibit L

                              Builder's Certificate
                                    Exhibit M

                                  Bill of Sale
                                    Exhibit N

                            Form of Advance Request
                                    Exhibit O

                  Opinion of Haight, Gardner, Holland & Knight

                            [Participation Agreement]

<PAGE>
                                    Exhibit P

            Opinion of Arias, Fabrega & Fabrega, Panamanian Counsel
                                    Exhibit Q

                    Form of Notice of Certificate Return Rate
                                    Exhibit R

      Replacement Certificate Purchaser Assignment and Assumption Agreement
                                  Exhibit S-1

                           Form of Hedging Agreements
                                  Exhibit S-2

                      Form of Deepwater Hedging Agreements
                                    Exhibit T

                              Form of Ship Mortgage
                                    Exhibit U

      Opinions of Cynthia L. Corliss, Vice President and Trust Counsel of
             Wilmington Trust Company and Richards, Layton & Finger
                                   Schedule 1

                          List of Transaction Documents
                                   Schedule 2

                                Facility Fee Rate
                                   Schedule 3

                List of UCC and Other Necessary Security Filings
                                   Schedule 4

                      Information Relied Upon by Appraiser

1.     Description  &  General  Design  Specifications  for  the  Drillship

2.     Construction  Cost  Data

3.     Participation  Agreement

                                   Schedule 5

                    Certificate Purchaser Notice Addresses,
                  Payment Instructions and Responsible Officers

                            [Participation Agreement]

<PAGE>
                                   Schedule 6

                               Description of OFE
                                   Schedule 7

                  Terms of Subordination for Subordinated Debt

                            [Participation Agreement]

<PAGE>
                                   Schedule 8

                          Conditions to Effective Date

     1.     Each  Certificate  Purchaser  shall  have  received  its  respective
Certificate  in  accordance  with  Section  2.4.

     2.     All  parties  thereto  shall  have  executed  and  delivered  this
Agreement,  the  Trust  Agreements, the Completion Guaranty, the Conoco Guaranty
and  the  R&B  Guaranty.

     3.     The  Agents  and  each Certificate Purchaser shall have received the
Appraisal  in  form  and  substance  satisfactory to the Documentation Agent and
Deepwater  shall  have  received  a  copy  thereof.

     4.     No  action  shall  have  been  instituted,  nor  shall any action or
proceeding  be threatened, before any Government Authority, nor shall any order,
judgment  or  decree have been issued or proposed to be issued by any Government
Authority  (i) to set aside, restrain, enjoin or prevent the performance of this
Participation  Agreement,  any  other  Transaction  Document  or any transaction
contemplated  hereby  or  thereby  or  (ii)  which would have a Material Adverse
Effect.

     5.     The  transactions  contemplated  by the Transaction Documents do not
and  will  not  (i)  violate  any  Applicable  Law, (ii) contravene any charter,
by-laws or other organizational document of Deepwater, the Members, Conoco, R&B,
the  Investment  Trust,  the  Trustees, the Agents or any Certificate Purchaser,
(iii)  contravene  any  contract,  agreement  or  other  arrangement  to  which
Deepwater,  the  Investment  Trust,  the Trustees, the Agents or any Certificate
Purchaser  is  a  party or by which any of their respective properties or assets
are  bound,  or  (iv)  subject  Deepwater, any Member, the Investment Trust, the
Trustees,  any  Agent  or  any Certificate Purchaser to any regulations to which
such  party  had  not  been  subject  prior  to  entering  into such Transaction
Documents  and  which  would  be  materially  adverse  to  such  party.

<PAGE>

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