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Exhibit 10.59    
    

Dated
8 April 2003 

BLUEWATER HOLDING B.V.

as Standby Lessor  

 —and—  

 PIERCE PRODUCTION COMPANY LIMITED

as Sub-Lessee  

 STANDBY SUB-LEASE AGREEMENT FOR TOPSIDES FACILITIES  

relating to the topsides processing plant for the

Floating Production, Storage and

Off-Loading Facility "Haewene Brim" 

 
 

WATSON, FARLEY & WILLIAMS
  London    
    

 
 

INDEX    
    

	 
	 	 
	 	Page

	1	 	DEFINITIONS	 	2
	2	 	LEASE	 	7
	3	 	DELIVERY	 	7
	4	 	HIRE	 	8
	5	 	PAYMENTS	 	9
	6	 	EXTENT OF STANDBY LESSOR'S OBLIGATIONS AND LIABILITY	 	10
	7	 	COST AND INDEMNITY	 	12
	8	 	TAXES	 	14
	9	 	USE AND EMPLOYMENT	 	15
	10	 	MAINTENANCE AND OPERATION	 	15
	11	 	PARTS	 	16
	12	 	TITLE	 	16
	13	 	INSURANCES	 	16
	14	 	LOSS, DAMAGE AND REQUISITION	 	19
	15	 	REDELIVERY	 	20
	16	 	TERMINATION	 	21
	17	 	FORCE MAJEURE	 	21
	18	 	NOTICES	 	22
	19	 	ASSIGNMENTS	 	22
	20	 	MISCELLANEOUS	 	22
	21	 	APPLICABLE LAW	 	23
	APPENDIX 1 DESCRIPTION OF EQUIPMENT	 	25
	APPENDIX 2 CERTIFICATE OF DELIVERY AND ACCEPTANCE	 	27

   THIS AGREEMENT is made on 8 April 2003 

BETWEEN:  

	(1)
	BLUEWATER HOLDING B.V., a company incorporated in The Netherlands with company number 349 2253 with its registered office at Marsstraat
33, 2132 HR Hoofddorp, The Netherlands (the "Standby Lessor") and

	(2)
	PIERCE PRODUCTION COMPANY LIMITED, a company incorporated in England with its registered office at c/o Watson, Farley &
Williams, 15 Appold Street, London EC2A 2HB, England (the "Sub-Lessee") 

WHEREAS:  

	(A)
	By
a standby put option deed entered into or, as the context may require, to be entered into on or about the date of this Agreement between Ola Dunk II Foundation (the
"Standby Purchaser") and Hill Samuel Leasing No.4 Limited (the "Lessor") (the
"Standby Put Option Deed"), the Standby Purchaser granted or, as the context may require, will grant the Lessor an option to dispose of the Lessor's
rights in the topsides processing plant for the floating production storage and offloading facility "Haewene Brim" (as more particularly therein defined, the
"Equipment") to the Standby Purchaser in accordance with the terms of the Standby Put Option Deed.

	(B)
	By
a lease agreement entered into or, as the context may require, to be entered into on or about the date of this Agreement between the Standby Purchaser and the Standby Lessor (the
"Standby Lease Agreement") the Standby Purchaser agreed or, as the context may require, will agree that upon the completion of the purchase of the
Equipment by the Lessor in accordance with the terms of the Standby Put Option Deed, the Standby Purchaser shall lease the Equipment to the Standby Lessor and the Standby Lessor shall take the
Equipment on lease in accordance with the terms of the Standby Lease Agreement for the purpose of, inter alia, on-leasing the Equipment by the Standby Lessor to the Sub-Lessee
to enable the Sub-Lessee to perform its obligations to Enterprise Oil plc (in its capacity as Pierce Operator) ("Enterprise") under the
Enterprise Contract.

	(C)
	This
Agreement sets out the terms and conditions on which, from the date of delivery to and acceptance by the Standby Lessor of the Equipment in accordance with the terms of
clause 4.2 of the Standby Lease Agreement (the "Delivery Date") the Standby Lessor will let and the Sub-Lessee will hire the
Equipment. 

NOW IT IS HEREBY AGREED  

1      DEFINITIONS  

	1.1
	Credit Agreement definitions. The words and expressions used in the Credit Agreement (as defined in Clause 1.2) shall, unless
the context otherwise requires, bear the same meaning attributed to them in this Agreement.

	1.2
	In this Agreement the following expressions shall have the following meanings unless the context otherwise requires: 

"Approved Profit" means, during the Security Period, that part of gross income comprising Earnings which the Sub-Lessee is entitled to
retain (and actually receives) for or on account of profit derived from the Enterprise Contract and is not otherwise included in the received Operating Expenses, in an amount approved by the Facility
Agent if and to the extent such approval is required under or pursuant to the Credit and Security Documents; 

"Banks" has the meaning given to such term in the Credit Agreement; 

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"Banking Day" has, during the Security Period, the meaning given to it in the Credit Agreement and otherwise means any day (other than Saturday or
Sunday or other holiday established by law) on which the banks are open for business in London and Amsterdam; 

"Beneficiaries" has the meaning given to it in the Credit Agreement; 

"Business Day" means a day (other than a Saturday or a Sunday) on which banks are open for business in London, Curaçao and Amsterdam; 

"Certificate of Delivery and Acceptance" means a certificate in substantially the form set out in Appendix 2 to be signed on Delivery as required
under Clause 3.2; 

"Charter" means the bareboat charter of the Vessel dated 9 November 2001 and made between the Vessel Owners as owners and the Charterer; 

"Charterer" means the Sub-Lessee, in its capacity as charterer of the Vessel under the Charter; 

"Commencement of Commercial Production" (or "CCP"), "Completion
Certificate", "Development Contract", "DOR",
"Extraordinary Expenditure" "FPSO", "FPSO Mooring
System", "FPSO Vessel", "Functional Specification",
"Pierce Operator", "Rectification Event", "Scope of
Works", "TDCCP" and "Works", have the meanings given in the Enterprise
Contracts; 

"Compulsory Acquisition" means, in relation to the Equipment, requisition of title or other compulsory acquisition requisition, appropriation,
expropriation, deprivation, forfeiture or confiscation for any reason of the Equipment by any Government Entity or other competent authority, whether de jure or de facto, but excluding requisition for
use or hire not involving requisition of title; 

"Credit Agreement" means the credit agreement dated 15 January 2002 entered into between (1) Bluewater Holding B.V., Bluewater (Munin)
N.V., Bluewater (Haewene Brim) N.V., Bluewater Energy Services B.V., Bluewater Offshore Production Systems Limited, Ranberger Holding N.V., Luludia Asset Finance B.V. and Refugio B.V., as borrowers,
(2) the Banks and Financial Institutions listed in Schedule 1 thereto, and their assignees and transferees, as lenders, (3) Barclays Bank PLC, acting through its investment
banking division, Barclays Capital, Fortis Bank (Nederland) N.V., and ING Bank N.V., as arrangers, (4) ING Bank N.V., acting as facility agent, (5) Barclays Bank PLC acting as facility
security trustee, (6) Barclays Bank PLC acting through its investment banking division, Barclays Capital, as technical bank, and (7) Bluewater Energy Services B.V., as Aurelia agent; 

"Credit and Security Documents" means the Credit Agreement and the other Facility Documents executed or to be executed under or pursuant to, or as a
condition precedent or subsequent to any obligation of any person in, the Credit Agreement; 

"Delivery Date" means the date as defined in Recital A; 

"Delivery" means the date on and time at which the Equipment is delivered to and accepted by the Sub-Lessee subject to the terms of the
Credit and Security Documents; 

"Development Contract" means contract no 97.22.01 dated 9 September 1997 and made between Enterprise Oil plc (in its capacity as
Pierce Operator) and Statoil, as novated by Statoil to the Lessee and as supplemented and amended from time to time; 

"Dollars" and "$" mean lawful currency of the United States of America; 

3

 

"Earnings" means, in relation to the Equipment, all monies whatsoever from time to time due or payable to any person arising out of or otherwise in
connection with the use or operation of that Equipment or any part thereof including (without limitation) all freight, hire and passage monies, monies arising under any contract or other agreement or
arrangement with any operator (including, without limitation, the Enterprise Contract in relation to that Equipment), income arising under any pooling arrangements, compensation payable as a result
of, or otherwise in connection with, the requisition of the Equipment for hire, remuneration for salvage and towage services, demurrage and detention monies, and all damages for breach, and all
payments for, or otherwise in connection with, any variation or termination of any charterparty, contract or other agreement or arrangement in respect of, or otherwise in connection with, the
employment of the Equipment (including, without limitation, the Enterprise Contract); 

"Encumbrance" means, during the Non-Security Period, any mortgage, charge (whether fixed or floating), pledge, lien, right of set off,
hypothecation, assignment, security interest, title retention or other encumbrance securing any obligation of any person, and during the Security Period has the meaning given to it in the Credit
Agreement; 

"Enterprise Contract" means contract no. 97.22.02 dated 9 September 1997 and made between the Field Contractor and Statoil, as novated by
Statoil to the Sub-Lessee and as supplemented and amended from time to time; 

"Equipment" means the topsides processing plant attached to the Hull and forming part of the Haewene Brim, as more particularly described in the
Topsides Facilities Description contained in Appendix A, and currently made available to PPC for service under the Enterprise Contract pursuant to the lease agreement dated 9
November 2001 and entered into in relation to the Equipment between (1) Ranberger and (2) PPC, as amended by the deed of amendment dated 28 January 2002, the ownership
interest of the Lessor in which is, upon delivery to the Lessor, to be registered as a "deviating condition" pursuant to article 1 of book 8 of the Netherlands Antilles Civil Code of 1
January 2001; 

"Equipment Rights" means all rights and claims, including without prejudice to the generality of the foregoing, the benefit of all guarantees,
warranties and indemnities which may from time to time exist against any manufacturer or repairer or supplier in respect of the title, condition, design or construction of any part of the Equipment
other than, for the avoidance of doubt, the right to take possession of and title to the Equipment; 

"Facility Agent" has the meaning given to it in the Credit Agreement; 

"Facility Documents" has the meaning given to it in the Credit Agreement; 

"Field Contract" means the Enterprise Contract and upon expiry or early termination of the Enterprise Contract any production or service contract under
which the Equipment is employed from time to time; 

"Field Contractor" means: 

	(a)
	during
the term of the Enterprise Contract, Enterprise;

	(b)
	thereafter,
the relevant counterparty to the Field Contract; 

"General Assignment" has the meaning given to it in the Credit Agreement; 

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"Hire Payment" means: 

	(c)
	an
amount equal to the amount of Earnings which are identified in the Notice of Assignment which is from time to time served on the Field Contractor pursuant to the General Assignment
(but excluding, for the avoidance of doubt, any Operating Expenses and Approved Profit) and which:

	(i)
	are
required by the Banks to be received and applied by the Standby Lessor in repayment or payment of the Indebtedness incurred under the Credit Agreement;

	(ii)
	are
actually received from Enterprise or any other Field Contractor under the Enterprise Contract or any other Field Contract; and

	(iii)
	which
the Standby Lessor agrees in writing on or before the date of this Agreement with the Facility Agent are attributable to the Equipment rather than the Vessel (payment for
which is made under the Charter); 

"Hire Payment Date" means in respect of any Hire Payment, each Banking Day on which the Sub-Lessee receives a payment of Earnings under the
Enterprise Contract; 

"Insurance Plan" means the insurance plan as from time to time arranged and agreed between the Standby Lessor, the Sub-Lessee and other
interested parties in relation to the FPSO (including the Equipment) its mobilization and operation under and in connection with the Enterprise Contract or any other Field Contract, and related
matters; 

"Losses" means, during the Non-Security Period, any and all losses, costs. charges, expenses, fees, payments, liabilities, penalties, fines,
damages or other sanctions of a monetary nature other than Taxes; and during the Security Period has the meaning given in Clause 7.1; 

"Management Agreement" means the agreement of even date with this Agreement made between the Sub-Lessee and APS UK Limited in respect of the
operation and maintenance of the Equipment during the Standby Sub-Lease Period; 

"Non-Security Period" means that part of the Standby Sub-Lease Period (if any) which continues after the end of the Security
Period; 

"Operating Expense" means the proper and reasonable costs required for the proper, safe and orderly operation of the Vessel and the Equipment in
accordance with good industry practice and any contract under which the Vessel and the Equipment are operated or chartered but excluding any VAT chargeable on those costs other than irrecoverable VAT; 

"Operating Phase" means the period commencing on the Delivery and ending on the date of termination or expiry of the Enterprise Contract; 

"Payment Date" means, during the Non-Security Period, the 10th day of each calendar month and the last day of the Non-Security
Period, provided that if any Payment Date would, but for this proviso, fall on a day which is not a Business Day it shall fall on the next following Business Day; 

"Rate of Interest" means an annual rate of interest determined, from time to time, in accordance with Clause 5.3; 

"Recognition of Rights Agreement" has the meaning given to it in the Credit Agreement; 

"Security Period" has the meaning given to it in the Credit Agreement; 

"Standby Sub-Lease Period" means the period determined in accordance with Clause 2.1; 

"Statoil" means Den norske stats oljeselskap a.s.; 

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"Taxes" includes all present and future taxes, levies, imposts, duties, or charges of a similar nature, including, but not limited to, income tax,
corporation tax, Value Added Tax, customs and other import or export duty or excise duty, imposed by any national or local taxing or fiscal authority or agency together with interest thereon and
penalties in respect thereof and "Taxation" shall be construed accordingly; 

"Total Loss" means, during the Non-Security Period, in relation to the Equipment. the occurrence of any of the events described in the
definition of "Total Loss" in the Field Contract; and during the Security Period it has the meaning given to it in the Credit Agreement; 

"UKCS" means the United Kingdom Continental Shelf; 

"Vessel" means the Haewene Brim registered in the Netherlands Antilles and owned by the Vessel Owner, which, for the avoidance of doubt, excludes the
Equipment belonging to the Standby Purchaser; 

"Vessel Owners" means Bluewater (Haewene Brim) N.V; and 

"Value Added Tax" means (i) value added tax of the United Kingdom as provided for in the Value Added Tax Act 1994, including legislation
(delegated of otherwise) supplementary thereto, and any similar or substitute tax and (ii) any tax similar thereto imposed, levied or assessed in any jurisdiction outside the United Kingdom. 

	1.3
	In this Agreement, unless the context otherwise requires:

 
	(a)
	 references to "Clauses" and "Appendices" shall mean the clauses of and appendices to this Agreement;

	(b)
	references
to this Agreement include the Appendices;

	(c)
	any
word denoting the singular shall include the plural and vice versa;

	(d)
	any
word denoting a person only shall also denote a corporation, company, association or partnership;

	(e)
	clause
headings are inserted for convenience of reference only and shall be ignored in construing this Agreement;

	(f)
	references
to any agreement, instrument or document shall include such agreement, instrument or document as it may from time to time be amended, supplemented or substituted; and

	(g)
	references
to any person shall include its successors, permitted assignees and permitted transferees, in accordance with the terms of the relevant document or documents. 

1.4    

	(a)
	Notwithstanding
any other provision of this Agreement, during the Security Period:

	(i)
	in
the event of any conflict between the provisions of this Agreement on the one hand and the Credit and Security Documents on the other hand, the latter shall prevail; and, without
limiting the generality of the foregoing, the Standby Lessor and the Sub-Lessee agree to comply with all the provisions of the Credit and Security Documents and they shall not act or fail
to act in a manner which would, in relation to the leasing of the Equipment under this Agreement, cause either party to breach the terms of the Credit and Security Documents; 

6

 

	(ii)
	if
the Standby Lessor and the Sub-Lessee are complying with the Credit and Security Documents in the performance of any term of the Credit and Security Documents relating
to the Equipment, this Agreement or both, such compliance shall be deemed to be compliance with the terms of this Agreement;

	(iii)
	where
any provision of this Agreement requires the Sub-Lessee to indemnify the Standby Lessor in respect of any loss, damage. liability, cost or expense referred to in
the relevant provision, references therein to the Standby Lessor shall be deemed to include (additionally) a reference to each Beneficiary and such indemnity shall include, without double-counting,
any amount which the Standby Lessor is required to pay to the Beneficiaries under the Credit and Security Documents as a direct or indirect consequence of the Sub-Lessees breach of such
provision.

	(b)
	The
Standby Lessor and the Sub-Lessee confirm to each other that they are each fully familiar with the terms of the Credit and Security Documents and will comply with
those to which they are a party, and ensure that they do not act or fail to act under this Agreement in a manner which would put any other party to those documents in breach of them. 

2      LEASE  

2.1   

	(a)
	During
the Security Period the Sub-Lessee and the Standby Lessor shall only be entitled to terminate or cancel this Agreement and re-deliver the Equipment in
the manner and on the terms prescribed by the Credit and Security Documents (including, without limitation, where the Sub-Lessee has not made a Hire Payment (or part of a Hire Payment) on
its due date for whatever reason).

	(b)
	During
the Non-Security Period either party will be entitled to terminate this Agreement and re-deliver the Equipment to the Standby Lessor on the date of
expiry or early termination of the Enterprise Contract or any other Field Contract.

	(c)
	Unless
agreed otherwise by the Beneficiaries this Agreement shall terminate:

	(i)
	on
any sale of the Equipment required by or under or pursuant to the Credit and Security Documents whether on their enforcement or otherwise; or

	(ii)
	upon
the receipt by the Sub-Lessee of written notice from the Facility Agent requiring such termination following any exercise by the Beneficiaries of their respective
rights under (and subject to the terms of) the Credit and Security Documents. 

3      DELIVERY  

	3.1
	Delivery shall be on the Delivery Date and at a location on or nearby the Pierce Field (in the UKCS of North Sea) to be mutually
agreed; Delivery of the Equipment shall be contemporaneous with its delivery under the Standby Lease.

	3.2
	On Delivery the Sub-Lessee and the Standby Lessor shall each sign the Certificate of Delivery and Acceptance in a form
attached hereto as Appendix 2. (Without prejudice to the obligations of the Standby Lessor under this Agreement, delivery of the Certificate of Delivery and Acceptance shall be conclusive proof
of acceptance of the Equipment by the Sub-Lessee).

	3.3
	The Equipment shall be delivered "as is, where is, and with all faults" and otherwise subject to the terms of the following provisions
of this Clause 3. 

7

 
	3.4
	The Sub-Lessee acknowledges and agrees that:

	(a)
	each
part of the Equipment has been designed, manufactured, assembled, constructed and converted at the instigation and under the supervision or with the approval of the
Sub-Lessee and that the Sub-Lessee alone has selected the equipment for leasing by the Standby Lessor to the Sub-Lessee under this Agreement;

	(b)
	the
Standby Lessor has not made or given or shall be deemed to have made or given any term, condition, representation, warranty or covenant, express or implied (whether statutory or
otherwise), as to the suitability, capacity, age, state, value, quality, durability, condition, appearance, safety, design, construction, operation, performance, description, satisfactory quality,
fitness for use or purpose or suitability of the Equipment or any part thereof as to the absence of latent or other defects, whether or not discoverable, as to the absence of any infringement of any
patent, trademark or copyright, or as to title to the Equipment or any part thereof (except as stated in Clause 12) or any other representation or warranty whatsoever, express or implied, with
respect to the Equipment or any part thereof (except representations and warranties expressly and specifically stated in this Agreement), all of which are hereby excluded;

	(c)
	the
Sub-Lessee's acceptance of Delivery from the Standby Lessor in accordance with this Agreement shall be conclusive evidence as between the Standby Lessor and the
Sub-Lessee that the Equipment is complete, in good order and condition, of satisfactory quality, fit for any purpose for which it may be intended or required, suitable in all respects and
in every way satisfactory;

	(d)
	save
as otherwise expressly and specifically provided by this Agreement, the Sub-Lessee hereby waives as between itself and the Standby Lessor all its rights, express or
implied (whether statutory or otherwise), whether against the Standby Lessor in respect of the Equipment (or any part thereof) or against the Equipment or any part thereof (except rights arising out
of any act or omission of the Standby Lessor which is a breach by the Standby Lessor of its express and specific obligations to the Sub-Lessee under this Agreement). 

4      HIRE  

	4.1
	During the Security Period the Sub-Lessee shall pay to the Standby Lessor for the hire of the Equipment the Hire Payment
(without deduction or set-off otherwise than may be permitted under the Credit and Security Documents) on each of the Hire Payment Dates.

	4.2
	Without limiting Clause 4.1, during the Security Period all Hire Payments shall be paid and secured in the manner required by
the Credit and Security Documents.

	4.3
	In the event that the Standby Lessor, or the Beneficiaries as direct or indirect assignees of the Standby Lessor, receives any payment
under the Enterprise Contract or other Field Contract which, but for the exercise of any rights or powers of the Beneficiaries, would have been paid to and retained by the Sub-Lessee free
of any Encumbrances created by or pursuant to the Credit and Security Documents (the "Direct Payment"), the Sub-Lessee shall be deemed to
have paid to the Standby Lessor an amount of Hire Payment under this Agreement equivalent to the Direct Payment. 

Hire
is payable to such account as the Facility Agent (during the Security Period) or the Standby Lessor (during the Non-Security Period) shall advise. 

8

 
	4.4
	In respect of the Operating Phase occurring during the Non-Security Period hire shall be based on daily rates determined by
the Standby Lessor and notified to the Sub-Lessee applying principles established on a reasonable basis by the Standby Lessor reflecting arm's length terms taking proper account of the
proceeds receivable from the relevant Field Contract.

	4.5
	Hire is payable in all circumstances, unless and until the letting and hiring of the Equipment under this Agreement is terminated,
except in respect of any day (or part thereof) when the FPSO is off-hire under the Enterprise Contract due to a Rectification Event (as defined in the Enterprise Contract) or hire rate
payment are otherwise not payable under the Enterprise Contract.

	4.6
	The daily rates of hire applicable during that part of the Operating Phase occurring during the Non-Security Period shall
be adjusted on an appropriate basis, as agreed by the parties, to reflect any revision or adjustment of the Daily Rates under the Enterprise Contract, including (without limitation) as follows:

	(a)
	to
reflect any revision to account for exchange rate movement relating to the cost of the Equipment, as provided for in Note I to Exhibit H (Daily Rates) to the
Enterprise Contract;

	(b)
	to
reflect any agreed adjustment to the Hire Rate under Clause 12.10 of the Enterprise Contract;

	(c)
	to
reflect the reduced Force Majeure Rate under Clause 12.5(b) of the Enterprise Contract;

	(d)
	to
reflect variations to the FPSO Hire Rate under Item 7.3 (Variations to FPSO Topsides Conversion Costs) of Exhibit D (Remuneration Schedule) to the Development Contract. 

5      PAYMENTS  

	5.1
	All payments and other amounts payable by the Sub-Lessee under this Agreement shall be made, without prior demand, on their
scheduled due dates (unless expressly stated to be payable on demand) and in full without any right of set-off or counterclaim and free and clear of all deductions or withholdings
whatsoever, unless any deductions or withholdings are required by law in which event Clause 8.2 to 8.5 shall apply, in Dollars (or, in the case of payments in respect of Losses, in the currency
in which the relevant Losses are incurred) in cleared funds to such account as the Standby Lessor may from time to time notify to the Sub-Lessee in writing, with the consent of the Banks.
Time of payment of hire and other amounts payable by the Sub-Lessee under this Agreement shall be of the essence of this Agreement.

	5.2
	The Sub-Lessee shall pay to the Standby Lessor any Value Added Tax levied on any payments of hire of other amounts payable
by the Sub-Lessee under this Agreement at the rate applicable for the time being (by addition to, and at the time of payment of, the said hire of other amounts).

	5.3
	In the event of failure by the Sub-Lessee to pay on the due date for payment thereof or, in the case of a sum payable on
demand, the date of demand therefor, any hire or other amount payable by it under this Agreement (including any failure to pay on demand any amount due under this Clause 5.3) the
Sub-Lessee will pay to the Standby Lessor on demand interest on such hire or other amount from the date of such failure to the date of actual payment (both before and after any relevant
judgement or winding up of the Sub-Lessee):

	(a)
	during
the Security Period, at the Default Rate; and

	(b)
	during
the Non-Security Period, 

9

 

at
the rate determined by the Standby Lessor and certified by it to the Sub-Lessee (such certification to be conclusive in the absence of manifest error) to be the aggregate of
(a) four per cent and (b) the rate per annum (as notified by the Bank to the Standby Lessor) at which three month deposits in Dollars are offered to the Bank in the London Interbank
Market at or about 11:00 a.m. (London time) on the relevant date. Such rate to be recalculated on the same basis at the end of each 3 month period until such hire or other amount is
received by the Standby Lessor. 

	5.4
	Interest payable under this Agreement during the Non-Security Period shall accrue from day to day and shall be recalculated
on the basis of the actual number of days elapsed and a 360 day year, and during the Security Period shall accrue and be recalculated in the manner (if different) set out in the Credit and
Security Documents.

	5.5
	The Sub-Lessee shall obtain or procure that there are obtained all certificates, licences, permits and other authorisations
which are from time to time required for all payments of hire or other amounts by the Sub-Lessee under this Agreement on the dates and in the amounts and currency which are stipulated
herein, and shall maintain the same or procure that the same are maintained in full force and effect for so long as the same shall be required. 

6      EXTENT OF STANDBY LESSOR'S OBLIGATIONS AND LIABILITY  

	6.1
	The Standby Lessor shall be under no obligation to provide to the Sub-Lessee or any other person any replacement for the
Equipment (or any part thereof) during any period when the Equipment (or any part thereof) is unavailable for use for any reason whatever nor, except where the unavailability for use arises solely as
a result of the breach by the Standby Lessor of its express and specific obligations to the Sub-Lessee under this Agreement, otherwise to compensate the Sub-Lessee in respect
of such unavailability for use.

	6.2
	Save as expressly provided in this Agreement, the Standby Lessor shall be under no liability to the Sub-Lessee whatsoever
and howsoever arising, and from whatever cause, and whether in contract, tort or otherwise, in respect of any loss (consequential or otherwise), liability or damage of, or to, or in connection with,
the Equipment or any part thereof (including delay in delivery of the Equipment under this Agreement) or any person or property whatsoever irrespective of whether such loss, liability or damage shall
arise from the Standby Lessor's act or omission, unless such action or omission was a breach of the Standby Lessor's express and specific obligations under this Agreement or from its gross negligence
or wilful misconduct.

	6.3
	The Standby Lessor warrants that during the Standby Sub-Lease Period the Standby Lessor shall not, otherwise than pursuant
to its obligations under the Credit and Security Documents (and then subject to any restriction on the exercise of those rights under the Credit and Security Documents) and except as may be required
by law, through its own acts, interfere with the Sub-Lessee's quiet use, operation, possession and enjoyment of the Equipment on and subject to the terms and conditions contained in this
Agreement.

	6.4
	Nothing in this Agreement shall afford to the Standby Lessor any wider exclusion of any liability of the Standby Lessor to any person
for death or personal injury than the Standby Lessor may effectively exclude having regard to the provisions of the Unfair Contract Terms Act 1977.

	6.5
	Upon the expiry or termination of the Standby Sub-Lease Period the Sub-Lessee shall cease to be entitled to any
rights under Clauses 6.1 to 6.3. 

10

  

	6.6
	The Standby Lessor covenants with the Sub-Lessee that unless and until the leasing of the Equipment terminates under this
Agreement the Standby Lessor shall not create or permit to arise or suffer to exist any Encumbrance on the Equipment or this Agreement which arises solely from, or solely as a result of:

	(a)
	any
claim against the Standby Lessor that is not related to, or does not arise directly or indirectly as a result of, the transactions contemplated by this Agreement, the Credit and
Security Documents; or

	(b)
	any
act or omission of the Standby Lessor which constitutes its gross negligence or wilful misconduct.

 

	6.7
	If the Standby Lessor creates or permits to arise or suffers to exist any Encumbrance on the Equipment which arises as a result of the
circumstances or events set out in Clause 6.6, the Standby Lessor hereby authorises the Sub-Lessee, as agent of the Standby Lessor, to discharge such Encumbrances.

	6.8
	The Standby Lessor and the Sub-Lessee agree that:

	(a)
	the
Standby Lessor hereby assigns and agrees to assign to the Sub-Lessee, at the cost and expense of the Sub-Lessee, any Equipment Rights which are (at the
date of this Agreement) vested in the Standby Lessor, or which become vested in the Standby Lessor at any time after the date of this Agreement and prior to the end of the Standby
Sub-Lease Period, to the extent they are assignable in any case;

	(b)
	the
Sub-Lessee shall be entitled, at its cost and expense, to take such action as assignee of the Standby Lessor (and in the name of the Standby Lessor, if the
Sub-Lessee desires) to enforce against any person such Equipment Rights as may from time to time be vested in the Standby Lessor;

	(c)
	if
the Sub-Lessee is not entitled for any reason in its own name to enforce, take any action in relation to, or otherwise deal with any Equipment Rights which the Standby
Lessor has assigned or agreed to assign to the Standby Lessor under this Agreement, the Standby Lessor shall, at the Sub-Lessee's cost and expense and subject to the Standby Lessor being
indemnified against any resulting liability, from time to time do and perform such further acts and execute and deliver such other instruments as may be required by law or reasonably requested by the
Sub-Lessee to establish, maintain, protect and enforce the Sub-Lessee's title, interest and other rights to or in relation to the Equipment Rights against any other person, or
otherwise to enable the Sub-Lessee to deal with such Equipment Rights, and shall, without prejudice to the generality of the foregoing. commence and conduct, or defend, in each case on the
instructions and at the direction of the Sub-Lessee, any action or proceedings in relation to such Equipment Rights which the Sub-Lessee considers appropriate for such purpose,
or, alternatively, shall permit the Sub-Lessee to take such action in the Standby Lessor's name, subject to the Standby Lessor first being indemnified and secured to its satisfaction,
acting reasonably, by or on behalf of the Sub-Lessee against all potential, losses costs, damages or expenses; and

	(d)
	if,
prior to or during the Standby Sub-Lease Period, any Equipment Right becomes vested in the Standby Lessor but is not assignable, the Standby Lessor shall at the cost
and expense of the Sub-Lessee, use all reasonable endeavours to enforce such rights and procure the remedy of any defect to which such rights relate, and pay to the Sub-Lessee
any sum received in respect of the exercise of the relevant Equipment Rights. 

11

 

	6.9
	Notwithstanding any other provision of this Agreement (including, but not limited to, Clause 7.2) the Standby Lessor shall not
be responsible for any act or failure to act of the Sub-Lessee or any other party to the Credit and Security Documents (except itself) and, accordingly, no inaction by the Standby Lessor
with respect to any such act or failure to act shall constitute gross negligence or wilful misconduct of the Standby Lessor for the purposes of this Agreement.

	6.10
	During the Security Period the assignment and agreements to assign and the other actions referred to in paragraphs (a) to
(d) of Clause 6.8 shall be subject to the terms of the Credit and Security Documents. 

7      COST AND INDEMNITY  

	7.1
	The Sub-Lessee hereby agrees at all times to pay promptly or, as the case may be, indemnify and hold the Standby Lessor and
its officers, directors, secondees, agents and employees (together, the "Indemnified Persons") harmless on a full indemnity basis from and against each
and every liability, loss, charge, claim, demand, action, proceeding, damage, judgment, order or other sanction, enforcement, penalty, fine, fee, commission, interest, Encumbrances, salvage, general
average cost and expense of whatever nature suffered or incurred by or imposed on any Indemnified Person (together, "Losses"):

	(a)
	arising
out of or in connection with the purchase, manufacture, construction, ownership, possession, transportation, performance, management, sale, import to or export from any
jurisdiction, control, use or operation, registration, navigation, certification, classification, management, manning, provisioning, the provision of bunkers and lubricating oils, testing, design,
condition, delivery to or by the Standby Lessor, acceptance, leasing, sub-leasing, insurance, maintenance, repair, service, modification, refurbishment, drydocking, survey, conversion,
overhaul, replacement, removal, repossession, return, redelivery, sale or disposal by the Sub-Lessee or any other person of the Equipment (or any part thereof), whether or not such
liability may be attributable to any defect in the Equipment (or any part thereof) or to the design, construction or use thereof or from any maintenance, service, repair, overhaul, inspection or to
any other reason whatsoever (whether similar to the foregoing or not), and regardless of when the same shall arise (whether prior to, during or after termination of the Standby Sub-Lease
Period), and whether or not the Equipment (or any part thereof) is in the possession or control of the Sub-Lessee or any other person and whether the same is in the waters of the United
Kingdom or abroad;

	(b)
	as
a consequence of any claim that any design, article or material in the Equipment (or any part thereof) or relating thereto or the operation or use thereof constitutes an
infringement of patent, copyright, design or other proprietary right;

	(c)
	in
preventing or attempting to prevent the arrest, confiscation, seizure. taking in execution, requisition, impounding, forfeiture or detention of the Equipment (or any part thereof),
or in securing or attempting to secure the release of the Equipment (or any part thereof);

	(d)
	which
are costs and expenses incurred by the Standby Lessor in connection with the sale of the Equipment (or any part thereof) (including, without limitation, brokers' commissions,
redelivery costs, marketing expenses, legal costs, storage, insurance, registration fees and any other expenses of the Standby Lessor incurred pending the sale or disposal of the equipment (or any
part thereof) or otherwise in connection with the sale or disposal of the Equipment (or any part thereof); and 

12

 

	(e)
	if
the Equipment or the FPSO as a whole becomes a wreck or obstruction to navigation, against all losses, costs, damages and expenses which such Indemnified Person may in consequence
thereof incur, including in respect of the removal or destruction of the wreck or obstruction under statutory or other powers.

 

	7.2
	The indemnities contained in Clause 7.1 shall extend to:

	(a)
	cost
or expense incurred in taking preventative measures to avoid or mitigate loss or damage; and

	(b)
	all
costs of interest, fees and other amounts whatsoever suffered or incurred by any Indemnified Person in order to fund the satisfaction or discharge of any Loss.

 

	7.3
	The indemnities contained in Clauses 7.1 and 7.2 shall not extend to any Loss:

	(a)
	to
the extent that such Loss is caused by any act of an Indemnified Person which constitutes the gross negligence or wilful misconduct of such Indemnified Person;

	(b)
	to
the extent that such Loss is caused by any failure on the part of the Standby Lessor to comply with any of its express and specific obligations under this Agreement, or the Credit
and Security Documents; and

	(c)
	in
respect of which the Standby Lessor is expressly and specifically indemnified under any provision of this Agreement.

 

	7.4
	The Standby Lessor shall:

	(a)
	notify
the Sub-Lessee in writing as soon as reasonably practicable after receipt by the Standby Lessor of notice of a Loss, and such notice to the Sub-Lessee
from the Standby Lessor shall give such details as the Standby Lessor then has and which are in all the circumstances reasonable having regard to the contents of the notice of Loss received by the
Standby Lessor; and

	(b)
	notify
the Sub-Lessee of the Standby Lessor's intention to pay or procure the payment of any moneys in respect of any such Loss before any payment is made.

 

	7.5
	The Sub-Lessee shall be entitled to take (at its own cost) such actions as it reasonably deems fit to defend or avoid any
liability arising in respect of a Loss or to take action against any third a party in respect of a Loss and shall be entitled to take action in the name of the Standby Lessor, subject always to the
Standby Lessor first being indemnified and secured to its satisfaction, acting reasonably, by the Sub-Lessee against all potential, losses, costs damages and expenses.

	7.6
	If any Indemnified Person shall recover from or be paid by any person other than the Sub-Lessee any amount in respect of
payments paid or discharged by the Sub-Lessee in accordance with this Clause 7, then provided that the Standby Lessor has received payment of such amount and is satisfied, acting
reasonably, that such amount is unconditionally available for retention by the relevant Indemnified Person, the Standby Lessor shall pay to the Sub-Lessee a sum equal to the value of such
recovered or paid amount together with any interest actually earned on such recovered or paid amount.

	7.7
	Where in this Clause 7 an indemnity is expressed to be for the benefit of any person who is not a party to this Agreement the
Standby Lessor shall be entitled to indemnify such person on the same terms as the indemnities expressed to be for the benefit of such person in this Clause 7, and the Sub-Lessee
shall, without double-counting, indemnify the Standby Lessor and hold the Standby Lessor harmless on a full indemnity basis from and against each amount paid or payable by the Standby Lessor to such
person tinder any such indemnity. 

13

 
	7.8
	The Sub-Lessee agrees, without prejudice to the express provisions of this Agreement, to waive any rights as against the
Standby Lessor that the Sub-Lessee may have under the 1976 Convention on the Limitation of Liability for Maritime Claims (as most recently enacted in the United Kingdom under the Merchant
Shipping Act 1995) to limit or reduce any amount that the Sub-Lessee is or may be obliged to pay to the Standby Lessor.

	7.9
	If circumstances arise in respect of the Standby Lessor which could reasonably be expected, or would upon the giving of notice, result
in the Sub-Lessee being obliged to pay the Standby Lessor or any other Indemnified Person any amount under this Clause 7, the Standby Lessor shall at the cost of the
Sub-Lessee take all reasonable steps, and procure that any other Indemnified Person takes all reasonable steps, to mitigate any actual or potential Loss which are requested in writing by
the Sub-Lessee.

	7.10
	The indemnities given by the Sub-Lessee under this Clause 7 shall continue in full force and effect notwithstanding
any sale, transfer or other disposition of the Equipment, a Total Loss having occurred, the repudiation by the Sub-Lessee of this Agreement, the expiration of the Standby
Sub-Lease Period i-n or any other circumstance whatsoever. 

8      TAXES  

	8.1
	

	(a)
	The
Sub-Lessee shall pay promptly all Taxes which are levied or assessed on, or in respect of, the Equipment, which are incidental to the use and operation of the
Equipment or which are otherwise levied or assessed on, or in respect of, the chartering of the Equipment pursuant to this Agreement and the making of any payments pursuant to this Agreement
("Equipment Taxes").

	(b)
	If
any Equipment Taxes are imposed on the Standby Lessor, the Standby Lessor will, promptly following receipt by it of any demand for such Equipment Taxes, notify the
Sub-Lessee in writing of the amount of such Equipment Taxes and provide the Sub-Lessee with a copy of any such demand. The Sub-Lessee will, promptly thereafter,
fund the Standby Lessor with money which are sufficient to enable the Standby Lessor to pay such Equipment Taxes on their due date of payment.

	(c)
	Equipment
Taxes shall not include any Taxes on the Standby Lessor's management fee in the agreed amount, nor any other payment or income of the Standby Lessor not connected with this
Agreement or the transaction of which this Agreement forms part.

 

	8.2
	If the Sub-Lessee is required by law to make a tax deduction from any payment to the Standby Lessor:

	(a)
	the
Sub-Lessee shall notify the Standby Lessor as soon as it becomes aware of the requirement;

	(b)
	the
Sub-Lessee shall pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises;

	(c)
	the
amount due in respect of the payment shall be increased by the amount necessary to ensure that the Standby Lessor receives and retains (free from any liability relating to the tax
deduction) a net amount which, after tax deduction, is equal to the full amount which it would otherwise have received.

 

	8.3
	Within 1 month after making any tax deduction. the Sub-Lessee shall deliver to the Standby Lessor documentary
evidence satisfactory to the Standby Lessor that the tax had been paid to the appropriate taxation authority. 

14

 
	8.4
	If the Standby Lessor receives for its own account a repayment or credit in respect of tax on account of which the
Sub-Lessee has made an increased payment under Clause 8.2 it shall pay to the Sub-Lessee a sum equal to the proportion of the repayment or credit which the Standby
Lessor allocates to the amount due from the Sub-Lessee in respect of which the Sub-Lessee made the increased payment, provided always that:

	(a)
	nothing
in this Clause 8.4 shall oblige the Standby Lessor to arrange its tax affairs in any particular manner, to claim any type of relief, credit, allowance or deduction
instead of, or in priority to, another or to make any such claim within any particular time; and

	(b)
	nothing
in this Clause 8.4 shall oblige the Standby Lessor to make a payment which would leave it in a worse position than it would have been in if the Sub-Lessee
had not been required to make a tax deduction from a payment. 

9      USE AND EMPLOYMENT  

	9.1
	During the Standby Sub-Lease Period the Sub-Lessee shall have the full possession and use of the Equipment,
which is or shall be installed on the Vessel for use in the course of the FPSO's employment (including, without limitation, under the Enterprise Contract).

	9.2
	The Sub-Lessee, if and when requested so to do by the Standby Lessor in writing, shall promptly furnish to the Standby
Lessor all such information as the Standby Lessor may from time to time reasonably require regarding the Equipment and the use or employment of the Equipment.

	9.3
	The Sub-Lessee shall not without the previous consent of the Standby Lessor in writing sub-lease the Equipment.

	9.4
	The Standby Lessor and the Sub-Lessee shall ensure that throughout the Security Period the Equipment shall be attached to
the Vessel, or removed, as required by the Credit and Security Documents.

	9.5
	Notwithstanding the provisions of Clauses 9.1 to 9.4, during the Security Period the Sub-Lessee shall comply with covenants
contained in clause 10 of the General Assignment concerning the subject-matter of this Clause 9. 

10    MAINTENANCE AND OPERATION  

	10.1
	During the Standby Sub-Lease Period the Sub-Lessee shall at its own expense maintain the Equipment and every
part of the Equipment in a good state of repair, in efficient operating condition and in accordance with good commercial maintenance practice (fair wear and tear expected) and so as to comply with the
provisions of all regulations and requirements (statutory or otherwise) from time to time applicable to the Equipment, wherever the Equipment may be located.

	10.2
	The Sub-Lessee shall be permitted at its own risk to make such substitutions of or modifications to all or any part of the
Equipment (including the fitting of additional equipment) as are required to ensure the Equipment's compliance with the DOR and the Functional Specification and its mobilisation and operation under
the Enterprise Contracts.

	10.3
	The Sub-Lessee shall not do anything which, nor omit to do anything the omission of which, prejudices any right which the
Standby Lessor may have against a manufacturer or supplier of any part of the Equipment in respect of the Equipment of any part thereof. 

15

 
	10.4
	The Standby Lessor shall have the right at all reasonable times and intervals to inspect or survey the Equipment to ascertain the
condition of the Equipment and satisfy itself that the Equipment is being properly repaired and maintained in accordance with the provisions of this Agreement. The Sub-Lessee shall afford
all proper and reasonable facilities for inspection. Each party shall bear its own costs in relation to surveys.

	10.5
	The Sub-Lessee shall have the use of all such books, manuals, handbooks, data, drawings and such other documentation
(including updating documentation to include modifications) in regard to the Equipment, and the same or their substantial equivalent shall be returned to the Standby Lessor on redelivery in good order
and condition fair wear and tear alone expected.

	10.6
	Notwithstanding the provisions of Clauses 10.1 to 10.5, during the Security Period the Sub-Lessee shall comply with
covenants contained in clause 10 of the General Assignment. 

11    PARTS  

	11.1
	During the Standby Sub-Lease Period the Sub-Lessee shall, from time to time during the Standby
Sub-Lease Period replace, renew or obtain substitutions for such parts of the Equipment as shall be so damaged or worn as to be unfit for use provided always that in any such case title to
any part replaced, renewed or substitute shall remain with the Standby Purchaser until the part which replaced it of the new or substitute part becomes the property of the Standby Purchaser or is
replaced, renewed or substituted by a part which thereupon becomes the property of the Standby Purchaser and the Sub-Lessee shall, if any replacement or renewed or substituted part is not
the property of the Standby Purchaser, as soon as practicable replace the same with a part which thereupon becomes the property of the Standby Purchaser; and the Sub-Lessee shall at its
expense, execute and do any and all such further documents and acts as may be required by the Standby Purchaser to vest, or evidencing the vesting of, property in the replacement or renewed or
substituted part in the Standby Purchaser.

	11.2
	Notwithstanding the provisions of Clause 11.1, during the Security Period the Sub-Lessee shall comply with
covenants contained in clause 10 of the General Assignment concerning the subject-matter of this Clause 11. 

12    TITLE  

	12.1
	During the Standby Sub-Lease Period title to and ownership of the Equipment shall remain vested in the Standby Purchaser.
The Sub-Lessee shall have no right, title of interest in or to any part of the Equipment except the rights expressly set out in this Agreement. The Sub-Lessee shall do all acts
and things, which the Standby Purchaser or the Standby Lessor may reasonably require to be done to evidence the interest of the Standby Purchaser and the Standby Lessor in the Equipment or to protect
such interest against the claims of any other person.

	12.2
	Without prejudice to the generality of Clause 12.1 the Sub-Lessee will not create, suffer, nor permit to exist or
be continued, any Encumbrance over the title and interest of the Standby Lessor in the Equipment or the rights of the Sub-Lessee hereunder, and shall pay and discharge (or provide bail in
respect of) all debts, damages and liabilities whatsoever which may have given or may give rise to such Encumbrance or any claim enforceable against the Equipment (other than those for which the
Standby Lessor is expressly and specifically liable under this Agreement). 

13    INSURANCES  

	13.1
	During the Security Period the Equipment shall be insured in accordance with the provisions of the Insurance Plan, but subject always
to the General Assignment and, as between the Standby Lessor and the Sub-Lessee, at the expense of the Sub-Lessee. 

16

 
	13.2
	Subject as hereinafter provided, during the Non-Security Period:

	(a)
	the
Equipment shall throughout the Standby Sub-Lease Period be in every respect at the risk of the Sub-Lessee, who shall bear all risks howsoever arising of,
operation and maintenance of the Equipment or otherwise; and

	(b)
	the
Sub-Lessee shall throughout the Standby Sub-Lease Period at its expense and in accordance with the Insurance Plan (and otherwise as the Standby Lessor and
Sub-Lessee may agree) insure the Equipment and keep the Equipment insured in accordance with Insurance Plan.

	(c)
	all
such insurances as aforesaid shall be effected and maintained by the Sub-Lessee in the joint names of the Standby Purchaser, the Standby Lessor and the
Sub-Lessee according to their respective interests (but without, as between the Standby Lessor and the Sub-Lessee, liability on the part of the Standby Lessor for premiums or
calls and with all deductibles to be assumed by, for the account of and at the sole risk of the Sub-Lessee);

	(d)
	the
Sub-Lessee shall pay punctually all premiums, calls, contributions or other sums payable in respect of all such insurances and produce all relevant receipts when so
required by the Standby Lessor;

	(e)
	the
Sub-Lessee shall arrange for the execution of such guarantees as may from time to time be required by any protection and indemnity or war risks association;

	(f)
	the
Sub-Lessee shall be entitled to procure that the policies in respect of the insurances against fire and usual marine risks and the policies or entries in respect of
the insurances against war risks shall, in each case, be endorsed to the effect that payment of any claim (including for a Total Loss) will be made to the Sub-Lessee (for application in
accordance with Clause 13.10).

	(g)
	the
Sub-Lessee shall procure that the policies or entries in respect of protection and indemnity risks shall provide for moneys payable thereunder to be paid to the person
to whom was incurred the liability in respect of which the relevant money was paid;

	(h)
	the
Sub-Lessee shall (if the Standby Lessor so requests) procure that duplicates of all cover notes, policies and certificates of entry shall be furnished to the Standby
Lessor of its approval and custody;

	(i)
	the
Sub-Lessee shall (if the Standby Lessor so requests) procure that the brokers and the war risk and protection and indemnity associations with which the Equipment is
entered shall supply to the Standby Lessor such information in relation to the insurances effected. or to be effected, with them as the Standby Lessor may from time to time require;

	(j)
	the
Sub-Lessee shall not do any act or permit of suffer any act to be done whereby any insurance required as aforesaid shall or may be suspended, impaired or become
defective and (without prejudice to the generality of the foregoing) shall not use the Equipment or allow the Equipment to be used otherwise than in conformity with the terms of the insurances
effected pursuant to this Clause 13 (including any warranties expressed or implied therein) without first obtaining the consent to such employment of the insurers and complying with such
requirements as to extra premium or otherwise as the insurers may prescribe.

 

	13.3
	Unless otherwise agreed between the Standby Lessor and the Sub-Lessee, during the Non-Security Period the
Equipment shall be kept insured in respect of fire and usual marine risks for not less than its market value. 

17

 
	13.4
	Nothing in this Clause 13 shall prohibit either party from placing additional insurance on the Equipment at its own expense and
for its sole benefit provided however that:

	(a)
	such
insurance shall not exceed the amount permitted by warranties or other conditions contained in the insurance required by the preceding provisions of this Clause 13 without
the consent of the insurers of such required insurance; and

	(b)
	the
placing party shall upon request immediately furnish the other party with particulars of any additional insurance effected including copies of any cover notes or policies and of
the written consent of the insurers of the required insurance in any case where such consent is necessary.

 

	13.5
	In the event of the FPSO or the Equipment becoming a wreck or obstruction to navigation the Sub-Lessee shall indemnify the
Standby Lessor against any sums which the Standby Lessor shall become liable to pay, and shall pay, in respect of the removal or destruction of the wreck or obstruction under statutory powers.

	13.6
	In the event that at any time the Standby Lessor is not satisfied that the Equipment is being insured and kept insured by the
Sub-Lessee in accordance with the requirements of this Clause 13 the Standby Lessor shall notify the Sub-Lessee whereupon the Sub-Lessee shall rectify the
position within seven running days, failing which the Standby Lessor shall be at liberty to effect and thereafter to maintain such insurances on the Equipment of the Sub-Lessee's account.

	13.7
	If the Standby Lessor assigns its rights or any thereof as permitted by this Agreement, the Sub-Lessee will, upon request
and subject to the agreement of the insurers, procure that the assignee shall be added as additional assured in any policy effected under this Clause 13, so as to enjoy the same rights and
insurances enjoyed by the Standby Lessor under the insurance policy or policies and any amendments thereof.

	13.8
	The Sub-Lessee shall with due regard to the interest of the Standby Lessor in the Equipment be entitled to settle,
compromise or (with the consent of the Standby Lessor in respect of any claim for Total Loss) abandon any claim under the insurances (save any placed by the Standby Lessor in accordance with
Clause 13.4); and the Standby Lessor shall upon the request of the Sub-Lessee promptly execute such documents as may be required to enable the Sub-Lessee to abandon the
Equipment to insurers and claim a constructive total loss.

	13.9
	Without prejudice to the generality of its obligations under Clauses 10.1 and 11, the Sub-Lessee shall throughout the
Standby Sub-Lease Period be responsible for effecting all insured repairs and for settling all costs in connection with such repairs (including all insured charges, expenses and
liabilities), reimbursement to be secured by the Sub-Lessee from the insurers or underwriters to the extent of coverage under the insurances provided for under this Clause 13.

	13.10
	All moneys payable by the insurers in respect of any Total Loss of or any damage to the Equipment shall (save for amounts payable
under any additional insurances placed in accordance with Clause 13.4 which shall be paid to the placing party and retained for its sole benefit) be paid to the Sub-Lessee for
application as follows:

	(a)
	if
the Equipment becomes a Total Loss, the Sub-Lessee shall distribute insurance proceeds of such Total Loss between the Standby Lessor and the Sub-Lessee
according to their respective interest.

	(b)
	the
Sub-Lessee shall apply the proceeds of any claim for repairable damage to the Equipment in or towards settlement or reimbursement of the cost of effecting repair of
the Equipment in accordance with the Sub-Lessee's repair and maintenance obligations under this Agreement. 

18

 

	13.11
	Notwithstanding the provisions of Clauses 13.1 to 13.10, during the Security Period the Sub-Lessee shall comply with
insurance covenants (including, but not limited to, the payment, receipt and application of insurance proceeds) contained in clause 10 of the General Assignment. 

14    LOSS, DAMAGE AND REQUISITION  

	14.1
	Throughout the Standby Sub-Lease Period the Sub-Lessee shall bear the full risk of any Total Loss of or any
damage (fair wear and tear excepted) to the Equipment howsoever arising and of any other occurrence of whatever kind which may or shall deprive the Sub-Lessee of the use, possession or
enjoyment of the Equipment and no such event shall affect any obligation of the Sub-Lessee under this Agreement.

	14.2
	The Sub-Lessee shall notify the Standby Lessor forthwith by telex (thereafter confirmed by letter) of any occurrence in
consequence whereof the Equipment has become or is, by the passing of time or otherwise, likely to become a Total Loss.

	14.3
	If there is a Total Loss or Compulsory Acquisition of the Equipment, the Sub-Lessee shall promptly pay to the Standby
Lessor all hire, and any other amounts, due and payable under this Agreement as at the date on which the Total Loss or Compulsory Acquisition occurred (the "Date of
Loss") and shall cease to be under any liability to pay any hire, but not any other amounts, thereafter becoming due and payable under this Agreement.

	14.4
	For the purpose of ascertaining the Date of Loss:

	(a)
	an
actual Total Loss of the Equipment shall be deemed to have occurred at noon London time on the actual date the Equipment was lost but in the event of the date of the loss being
unknown the actual total loss shall be deemed to have occurred at noon London time on the date on which it is acknowledged by the insurers to have occurred;

	(b)
	a
constructive, comprised, agreed, or arranged total loss of the Equipment shall be deemed to have occurred at noon London Time on the date that notice claiming such a total loss of
the Equipment is given to the insurers, or, if the insurers do not admit such a claim, at the date and time at which a total loss is subsequently admitted by the insurers or adjudged by a competent
court of law or arbitration tribunal to have occurred. Either the Standby Lessor or, with the prior written consent of the Standby Lessor (such consent not to be unreasonably withheld), the
Sub-Lessee shall be entitled to give notice claiming a constructive total loss but prior to the giving of such notice there shall be consultation between the Sub-Lessee and the
Standby Lessor and the party proposing to give such notice shall be supplied with all such information as such party may request; and

	(c)
	a
Compulsory Acquisition shall be deemed to have occurred at noon London time on the first day following the end of the one month period specified in the definition of Compulsory
Acquisition.

 

	14.5
	With effect from the Date of Loss the letting and hiring of the Equipment under this Agreement shall terminate. All compensation
payable in respect of a Compulsory Acquisition shall be paid over to the Sub-Lessee for application between the Standby Lessor and the Sub-Lessee according to their respective
interests. 

19

 
	14.6
	If the Equipment is requisitioned for hire by any governmental or other competent authority during the Standby Sub-Lease
Period then:

	(a)
	the
letting and hiring of the Equipment under this Agreement shall continue in full force and effect for the remainder of the Standby Sub-Lease Period and the
Sub-Lessee shall continue to pay the stipulated hire in the manner provided by this Agreement. The Sub-Lessee shall also remain fully responsible for the due compliance with
all its other obligations under this Agreement other than such obligations which the Sub-Lessee is unable to comply with solely by virtue of such requisition; and

	(b)
	if
the Sub-Lessee shall duly comply with all its obligations under this Agreement, the Sub-Lessee shall during the Standby Sub-Lease Period be
entitled as between the Standby Lessor and the Sub-Lessee to all requisition hire paid to the Standby Lessor or to the Sub-Lessee by such governmental or other competent
authority or by any person acting by the authority of the same on account of such requisition; and

	(c)
	the
Sub-Lessee shall as soon as practicable after the end of any requisition for hire, and whether that requisition shall end during or after the expiry or termination of
the Standby Sub-Lease Period, cause the Equipment to be put into the condition required by this Agreement; and

	(d)
	the
Standby Lessor shall be entitled to all compensation payable by the relevant governmental or other competent authority, or by any person acting by the authority of the same, in
respect of any change in the structure, state or condition of the Equipment arising during the period of requisition for hire (and such compensation shall be paid to the Sub-Lessee to the
extent required to compensate it for the cost of complying with Clause 14.6(c)).

 

	14.7
	Notwithstanding the provisions of Clauses 14.1 to 14.6, during the Security Period the Sub-Lessee shall comply with
covenants contained in clause 10 of the General Assignment in relation to the subject-matter of this Clause 14. 

15    REDELIVERY  

	15.1
	On termination of the letting and hiring of the Equipment under this Agreement (other than pursuant to Clause 14.4), or upon
the ending of the Standby Sub-Lease Period by effluxion of time, the Sub-Lessee at its own expense shall (unless otherwise directed by the Standby Lessor, or, during the
Security Period, the Banks) remove the Equipment from the FPSO Vessel and redeliver the Equipment to the Standby Lessor at a place to be agreed between the parties and subject to the provisions of
Clauses 15.2 through 15.4, unless the same are disapplied by Clause 15.5.

	15.2
	The Sub-Lessee shall ensure that on redelivery the Equipment shall be in the same (or as good) structure, state and
condition (fair wear and tear alone excepted) as at Delivery or, if redelivery takes place after CCP, as at CCP.

	15.3
	At or about the time of redelivery a survey shall, if the Standby Lessor so requires, be made to determine the state and condition of
the Equipment. The Sub-Lessee and the Standby Lessor shall each appoint surveyors to be present at such survey and the surveyors present shall determine the state and condition of the
Equipment and shall identify the repairs or work necessary to place the Equipment at the date of redelivery in the class and the structure, state and condition referred to in Clause 15.2. If
the said surveyors disagree they shall refer the matter to a surveyor appointed on the application of either of them by the Director General of the Institute of Petroleum in London. Such surveyor
shall act as expert and not as arbitrator and his decision shall be final and binding on the parties hereto. All reasonable costs accessioned by any such survey including the costs of the said
surveyors shall be payable by the Sub-Lessee. 

20

 
	15.4
	If on redelivery the requirements of Clause 15.2 shall not have been satisfied the Standby Lessor shall be entitled to request
the Sub-Lessee to make good such and carry out such work on or repairs to the Equipment without delay or, if the Sub-Lessee fails to so take such actions, to carry out such
work on or repairs to the Equipment, and otherwise take such actions, as shall be necessary to cause such requirements to be satisfied and shall be entitled to recover from the Sub-Lessee
on demand the costs so incurred together with interest at the Default Rate from the date of expenditure by the Standby Lessor of the relevant cost until the date of recovery thereof from the
Sub-Lessee (both before and after any relevant judgement).

	15.5
	If the Sub-Lessee has performed or procured the performance of its obligations in respect of the maintenance and repair of
the Equipment through the Management Agreement, the foregoing provisions of Clauses 15.2, 15.3 and 15.4 shall not apply and the Standby Lessor shall be deemed to have accepted the Equipment to be in
satisfactory condition at the time of its redelivery under Clause 15.1.

	15.6
	Notwithstanding the provisions of Clause 15.1 to 15.5, during the Security Period the Sub-Lessee and the Standby
Lessor shall comply with the terms of the Credit and Security Documents applying to the subject matter of those Clauses. 

16    TERMINATION  

	16.1
	Subject to any restrictions on termination contained in the Credit and Security Documents the Sub-Lessee will be entitled
to cancel this Agreement and re-deliver the Equipment to the Standby Lessor if the Enterprise Contract or any other Field Contract is terminated.

	16.2
	During the Non-Security Period in the event of a failure by the Sub-Lessee to pay hire (or any other amount
due to the Standby Lessor under this Agreement) continuing beyond a period of 30 running days, the Standby Lessor shall have the right at its option (and without prejudice to any of its other rights
under this Agreement or under applicable law) to accept such repudiation and by 10 days written notice to the Sub-Lessee (copied to its Board of Directors) to terminate the letting
and hiring of the Equipment by the Sub-Lessee, without noting any protest and without interference by any court or any other formality whatsoever; and shall, without prejudice to any other
claim the Standby Lessor may otherwise have against the Sub-Lessee under this Agreement, be entitled to damages in respect of all costs and losses incurred as a result of the
Sub-Lessee's default and the ensuing termination of this Agreement and of the Standby Lessor's consent to the possession of the Equipment by the Sub-Lessee of the Development
Contract. 

17    FORCE MAJEURE  

	

	Intentionally
deleted. 

21

  

18    NOTICES  

	18.1
	Any notice, certificate, demand or other communication to be served, given made or sent under or in relation to this Agreement shall
be in writing and (without prejudice to any other valid method or giving making or sending the same) shall be deemed sufficiently given or made or sent if despatched if sent by registered post or by
telex to the following respective addresses:

	(a)
	to
the Standby Lessor to:

Marsstraat 33,

2132 HR Hoofddorp,

The Netherlands

	(b)
	to
the Sub-Lessee to:

Pierce Production Company Limited

St Magnus House

Guild Street

Aberdeen

AB11 6NJ, Scotland

For the attention of the Project Manager 

Or,
if a party hereto changes its address or telex number, to such other address or telex number as that party may notify to the other party hereto. 

19    ASSIGNMENTS  

	19.1
	Except as required by or permitted under or pursuant to the Credit and Security Documents, neither the Standby Lessor nor the
Sub-Lessee may:

	(a)
	sell,
assign or otherwise transfer or dispose of its rights, title, interests or obligations in or under this Agreement or the Equipment (including, but not limited to, the Standby
Lessor's rights to receive hire or any other payment) to any person; nor

	(b)
	create
or allow to subsist any Encumbrance over or in its rights, title, interests or obligations in this Agreement or the Equipment (including, but not limited to, the Standby
Lessor's right to receive hire or any other payment) to any person; nor

	(c)
	(without
limiting the generality of Clauses 19.1(a) or any other clause of this Agreement), sub-demise, charter, lease or otherwise use or employ the Equipment under this
Agreement. 

20    MISCELLANEOUS  

	20.1
	The terms and conditions of this Agreement and the rights of the parties shall not be waived or varied otherwise than by an instrument
in writing of the same date as or subsequent to this Agreement executed by both parties or by their duly authorised representatives.

	20.2
	No failure or delay on the part of either party in exercising any power, right or remedy hereunder or in relation to the Equipment
shall operate as a waiver thereof nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise of any such right or owner or the exercise of any
other right, power or remedy.

	20.3
	If any term or condition of this Agreement shall to any extent be illegal invalid or unenforceable the remainder of this Agreement
shall not be affected thereby and each other term and condition shall be legal valid and enforceable to the fullest extent permitted by law. 

22

 

21    APPLICABLE LAW  

	21.1
	This Agreement shall be governed by and construed in accordance with English law, and the Standby Lessor and the
Sub-Lessee hereby submit to the exclusive jurisdiction of the English courts.

	21.2
	No term of this Agreement is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this
Agreement.

	21.3
	The Standby Lessor agrees to appoint an agent for service of process in England and to maintain that or a similar appointment
throughout the Standby Sub-Lease Period on terms similar to those applying to the same subject under the General Assignment. 

IN WITNESS whereof the parties hereto have entered into this Agreement the day and year first above written. 

23

 

	THE STANDBY LESSOR	 	 
	SIGNED by	 	)
	Cornelis Voormolen	 	)
	For and on behalf of	 	)
	BLUEWATER HOLDING B.V.	 	)
	in the presence of: Karita Shah	 	 
	 	 	 
	THE SUB-LESSEE	 	 
	SIGNED by Cornelis Voormolen	 	)
	 	 	)
	For and on behalf of	 	)
	PIERCE PRODUCTION	 	)
	COMPANY LIMITED	 	)
	in the presence of: Karita Shah	 	)

24

 
 
 

APPENDIX 1
  DESCRIPTION OF EQUIPMENT    
    

DESCRIPTION OF EQUIPMENT & SCOPE OF SUPPLY  

1 GENERALLY  

The
Sub-Lessee shall lease from the Standby Lessor on the terms contained herein this Agreement the Equipment, all as further described hereunder by way of information only, to meet the
requirements of the DOR, CCP and Functional Specification prescribed by the Enterprise Contracts. 

2 DESCRIPTION OF THE TOPSIDE FACILITIES  

The
Equipment comprises of the following main elements, all being installed above the tank deck of the Vessel. Support stools for modules and skids are included. 

	(a)
	Manifold

	(b)
	Topside
Piperack Sections (8)

	(c)
	Flare
Stack

	(d)
	Workshop
Module

	(e)
	Gas
treatment Module

	(f)
	Separation
Module

	(g)
	Produced
Water Skid

	(h)
	Flair
Skid

	(i)
	Gas
Reinjection Module

	(j)
	Gas
recompression Module

	(k)
	Utility
Module

	(l)
	Infill
Skid

	(m)
	Chemical
Injection Module

	(n)
	Pedestal
Crane Aft (pedestal included) 

In
addition. the Equipment includes: 

	(a)
	Access
Corridor (from aft end of topside Pierack to Temporary Refuge Area Aft)

	(b)
	Boom
Rest for Pedestal Crane Aft

	(c)
	Closed
Drain System above tank deck

	(d)
	Open
Drain System above tank deck

	(e)
	Combined
Open Drain and Slop Treatment Package

	(f)
	El.
Driven Fire Water Pumps (2)

	(g)
	Sea
water Lift Pumps (2)

	(h)
	Sea
water Intake Hose 

25

 

	(i)
	Air
Compressor and Dryer (those installed in addition to the units being part of the Vessel)

	(j)
	Transport
Equipment as forklift, trolleys and multi-roller for use within the Topside Facility

	(k)
	HVAC
equipment for Access Corridor and Rooms in the aftship prepared for distribution of electric power to the Topside Facility

	(l)
	Electric
Distribution Equipment for the Topside Facility, either located within the Vessel forward and aft, or within the Topside Facility area

	(m)
	Oil
Metering Package

	(n)
	Safety
and Automation System (SAS) for the Topside Facility including furniture in CCR.

	(o)
	Deluge
Skids including Strainers, Deluge Nozzles and Hydrants for the Topside facility

	(p)
	Misc.
Safety Equipment for the Topside Facility. 

3      INSTALLATION TOOLS AND OPERATIONAL SPARES  

Special
tools and consumables / spares for installation. commissioning and start-up are included in the Equipment delivery at levels and numbers to be agreed with PPC. 

4      INSTALLATION, HOOK-UP AND COMMISSIONING  

Pipes,
cables, instruments, etc. required for hook-up of all these items, form part of the Equipment. In case the hook-ups have interfaces to the PPC or PPC partners
deliveries, the interfaces are specified in SIR. 

5      CERTIFICATION & DOCUMENTATION  

The
Standby Lessor shall if requested in writing by, and at the cost of, the Sub-Lessee: 

	(a)
	obtain
and maintain such regularity approvals as are required by the Sub-Lessee in connection with the Equipment;

	(b)
	provide
such documentation, manuals. and data as is necessary for the operation, maintenance and repair of the Equipment; and

	(c)
	assist
the Sub-Lessee with preparation of documentation for the Equipment as required for the design and operation Safety case and other documents required by the
Statutory Authorities. 

26

 

 
 

APPENDIX 2
  CERTIFICATE OF DELIVERY AND ACCEPTANCE    
    

27

 
 
 

Protocol of Delivery and Acceptance    
    

	Agreement: Lease Agreement No. [•]	 	Dated: [•]
	

Standby Lessor: [•]	
 	

 

Sub-Lessee:
Pierce Production Company Limited, c/o Watson, Farley & Williams, 15 Appold Street, London EC2A 2HB. 

It
is hereby certified through this certificate that the Standby Lessor has delivered to the Sub-Lessee and the Sub-Lessee has accepted delivery of the Equipment (as defined in
the Agreement) in accordance with the Agreement at such place and date as hereinafter indicated. 

Place
and Date of Delivery: [    •    ] 

	Item No.	 	Description	 	Qty	 	Comments
	

	

	

	

	

	

Signed
and executed in [    •    ] on this [    •    ] day of
[    •    ] 

	For the Standby Lessor	 	For the Sub-Lessee
	

Signed:	
 	

	
 	

Signed:	
 	

	

Name:	
 	

	
 	

Name:	
 	

28

QuickLinks

Exhibit 10.59

WATSON, FARLEY & WILLIAMS London

INDEX

APPENDIX 1 DESCRIPTION OF EQUIPMENT

APPENDIX 2 CERTIFICATE OF DELIVERY AND ACCEPTANCE

Protocol of Delivery and AcceptanceQuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.60    
    

Dated 8 April 2003

OLA DUNK II FOUNDATION

as standby purchaser

and

BLUEWATER HOLDING B.V.

as lessee

and

PIERCE PRODUCTION COMPANY LIMITED

as sub-lessee

 STANDBY LEASE AGREEMENT

relating to the topsides processing plant

for

the Floating Production,

Storage and Off-Loading Facility

"Haewene Brim"  

  

  
 

    Contents    
    

	Clause
	 	Page

	1	 	Definitions and interpretation	 	1
	2	 	Representations and warranties	 	2
	3	 	Conditions precedent	 	3
	4	 	Leasing and delivery and acceptance of the Equipment	 	3
	5	 	Disclaimers and exclusions, Standby Purchaser's covenants	 	3
	6	 	Lease Period	 	5
	7	 	Rent	 	5
	8	 	Payments	 	6
	9	 	Insurances	 	8
	10	 	Total Loss and damage	 	8
	11	 	Risk, requisition and salvage	 	8
	12	 	Covenants	 	8
	13	 	Title and ownership of the Equipment	 	8
	14	 	Termination	 	9
	15	 	Re-delivery and sale of the Equipment	 	10
	16	 	Proceeds of Sale	 	12
	17	 	General indemnity	 	13
	18	 	General Tax indemnity and other tax provisions	 	13
	19	 	Assignment	 	13
	20	 	Miscellaneous	 	13
	21	 	Preservation of indemnities	 	17
	Schedule 1 Description of the Equipment	 	18
	Schedule 2 Part 1 Representations and warranties by PPC	 	19
	Part 2 Representations and warranties by the Standby Purchaser	 	20
	Schedule 3 Form of Acceptance Certificate	 	22

   THIS AGREEMENT dated 8 April, 2003 is made 

BETWEEN:  

	(1)
	OLA DUNK II FOUNDATION, a stichting established under the laws of the Netherlands Antilles whose registered office is at Landhuis
Joonchi, Kaya Richard J Beaujon, z/n Curaçao, Netherlands Antilles (the "Standby Purchaser");

	(2)
	BLUEWATER HOLDING B.V., a company incorporated under the laws of The Netherlands with company registration number 3492253, whose
registered office is at Marsstraat 33, 2132 HR Hoofddorp, The Netherlands, (the "Lessee"); and

	(3)
	PIERCE PRODUCTION COMPANY LIMITED, a company incorporated in England with its registered office at c/o Watson, Farley &
Williams, 15 Appold Street, London EC2A 2HB, England (the "Sub-Lessee"). 

WHEREAS:  

	(A)
	By
a standby put option deed entered into or, as the context may require, to be entered into on or about the date of this Agreement between the Standby Purchaser and Hill Samuel
Leasing (No. 4) Limited (the "Lessor") (the "Standby Put Option Deed") the Standby Purchaser
granted or, as the context may require, will grant the Lessor an option to dispose of the Lessor's rights in the Equipment to the Standby Purchaser in accordance with the terms of the Standby Put
Option Deed.

	(B)
	The
parties hereto have agreed that upon the completion of the Equipment Purchase (as defined below), in accordance with the terms of the Standby Put Option Deed, the Standby
Purchaser shall lease the Equipment to the Lessee and the Lessee shall take the Equipment on lease on the terms of this Agreement and the Lessee will let and the Sub-Lessee will hire the
Equipment on the terms of the Standby Sub-Lease (the "Standby Sub-Lease") for the purpose of, inter alia, allowing the
Sub-Lessee to continue providing services to the Field Contractor under the Field Contract. 

NOW IT IS AGREED:  

	1	Definitions and interpretation
	

1.1	

Definitions
	

 	

Words and expressions defined in the Standby Sub-Lease and the Deed of Proceeds and Priorities, including words and expressions incorporated therein by reference to other Transaction Documents, shall, unless defined herein, or the context otherwise
requires, have the same meaning when used herein and in addition, in this Agreement the following words and expressions shall each have the meaning respectively attributed to them below:
	

 	

"Acceptance Certificate" means the certificate given by the Lessee pursuant to clause 4.2, in or substantially in the form of Schedule 3;
	

 	

"Date of Total Loss" shall have the meaning attributed to such term in clause 10.2;
	

 	

"Delivery" means delivery of the Equipment by the Standby Purchaser to the Lessee in accordance with clause 4.2;
	

 	

"Delivery Date" means the date on which the Equipment is delivered by the Standby Purchaser to the Lessee in accordance with clause 4.2;
	

 	

"End Date" means the day on which leasing of the Equipment under the Standby Sub-Lease terminates;
	 	 	 

1

 

	

 	

"Equipment Purchase" means the purchase of the Equipment by the Standby Purchaser in accordance with the Standby Put Option Deed;
	

 	

"Head Lease" means the lease agreement entered or to be entered into on or about the date of this Agreement between the Lessor, PPC and Bluewater Energy pursuant to which the Lessor has agreed to lease
the Equipment to PPC and PPC has agreed to take the Equipment on lease from the Lessor, subject to the terms and conditions therein contained;
	

 	

"Initial Rent" means an amount in Sterling exactly equal to the Required Purchase Price (as such term is defined in the Standby Put Option Deed) as such amount shall be notified to the Lessee by the
Standby Purchaser or the Standby Lender, as the case may be, immediately upon the Standby Purchaser receiving a Standby Put Option Notice (as defined in the Standby Put Option Deed) from the Lessor, in accordance with the terms of the Standby Put
Option Deed;
	

 	

"Losses" shall have the meaning attributed to that term in clause 16;
	

 	

"Notice" shall have the meaning attributed thereto in clause 19.5.1;
	

 	

"Standby Lease Period" means the period during which the Lessee shall be entitled to possession and use of the Equipment in accordance with this Agreement being the period, if any, commencing on (and
including) the Delivery Date and ending on the End Date;
	

 	

"Standby Lender" means the bank or financial institution which funds the purchase of the Equipment by the Standby Purchaser pursuant to the terms of the Standby Put Option Deed;
	

 	

"Standby Purchaser Assigned Account" means the interest bearing Dollar account of the Standby Purchaser with ING Bank N.V. acting through its Amsterdam head office]designated "Haewene Brim Standby
Purchaser Assigned Account" and includes any redesignation or sub-accounts thereof;
	

 	

"Sterling" and "£" and "pounds" means the lawful currency for the time being of the United
Kingdom;
	

 	

"Total Loss" has the same meaning as in the Standby Sub-Lease but includes Compulsory Acquisition (as defined in the Standby Sub-Lease).
	
1.2	

Interpretation
	

1.2.1	

The expression "this Agreement" includes the recitals hereto and each schedule as the same may from time to time be amended, supplemented or substituted in accordance with the Deed of Proceeds and Priorities.
	

1.2.2	

In this Agreement, unless the contrary intention is stated the rules of interpretation set out in clause 1.3 of the Standby Sub-Lease shall apply (mutatis mutandis) to this Agreement as if each reference in that clause to "this Agreement" were a
reference to this Agreement.
	
2	

Representations and warranties
	
2.1	

Representations and warranties by the Lessee and the Sub-Lessee
	

 	

The Lessee and the Sub-Lessee hereby acknowledge that the Standby Purchaser has entered into this Agreement in full reliance on the representations by the Lessee in the terms set out in Schedule 2, Part 1 and the representation by the
Sub-Lessee in terms set out in Schedule 2, Part 2. The Lessee and the Sub-Lessee each warrant to the Standby Purchaser that their statements made in Schedule 2, Part 1 and Part 2 respectively are as at the date hereof true
and accurate.
	 	 	 

2

 

	
2.2	

Representations and warranties by the Standby Purchaser
	

 	

The Standby Purchaser acknowledges that the Lessee and the Sub-Lessee have each entered into this Agreement in full reliance on representations by the Standby Purchaser to the Lessee and the Sub-Lessee in the terms set out in Schedule 2
Part 3 and the Standby Purchaser warrants to the Lessee and the Sub-Lessee that the statements made in Schedule 2 Part 3 are as at the date hereof are true and accurate.
	
2.3	

Survival of representations and warranties
	

 	

The representations and warranties referred to in clauses 2.1 and 2.2 and the respective rights of the Standby Purchaser, the Lessee and the Sub-Lessee in respect thereof shall survive the execution and delivery of this Agreement and
Delivery.
	
3	

Conditions precedent
	

 	

The obligations of each of the Standby Purchaser, the Lessee and the Sub-Lessee under this Agreement shall be subject to (i) the completion, in accordance with the terms of the Standby Put Option Deed, of the Equipment Purchase and (ii) the
payment by the Lessee of the Initial Rent, but to no other condition.
	
4	

Leasing and delivery and acceptance of the Equipment
	
4.1	

Leasing
	

 	

Subject to the provisions of this Agreement, the Standby Purchaser agrees to lease the Equipment to the Lessee, and the Lessee agrees to lease the Equipment from the Standby Purchaser, on and subject to the terms and conditions herein
contained.
	
4.2	

Delivery and acceptance of the Equipment
	

 	

Delivery of the Equipment by the Standby Purchaser to the Lessee, and acceptance thereof by the Lessee, shall be deemed to take place immediately upon the satisfaction of the conditions precedent set out in clause 3. Simultaneously with that
deemed delivery, the Standby Purchaser shall deliver to the Lessee and the Sub-Lessee an Acceptance Certificate dated the date of such delivery. Each of the Lessee and the Sub-Lessee agree that upon receipt of such Acceptance Certificate they will
forthwith execute the Acceptance Certificate and such executed Acceptance Certificate shall, without further act, constitute irrevocable evidence of Delivery and acceptance thereof for all purposes of this Agreement.
	
5	

Disclaimers and exclusions, Standby Purchaser's covenants
	
5.1	

Disclaimers and exclusions
	

5.1.1	

Each of the Lessee and the Sub-Lessee acknowledge and agree that:
	

 	

(a)	

the Equipment has been designed, manufactured, assembled, constructed and converted without reference to or involvement of the Standby Purchaser and that the Sub-Lessee alone has selected the Equipment for leasing by the Standby Purchaser to the
Lessee hereunder and for sub-leasing by the Lessee to the Sub-Lessee under the Standby Sub-Lease;
	 	 	 

3

 

	

 	

(b)	

the Standby Purchaser has not made or given nor shall be deemed to have made or given any term, condition, representation, warranty or covenant, express or implied (whether statutory or otherwise), as to the suitability, capacity, age, state, value,
quality, durability, condition, appearance, safety, design, construction, operation, performance, description, merchantability, fitness for use or purpose or any particular use or purpose or suitability of the Equipment or any part thereof, as to the
absence of latent or other defects, whether or not discoverable, as to the absence of any infringement of any patent, trademark or copyright, or as to title to the Equipment or any other representation or warranty whatsoever, express or implied, with
respect to the Equipment (except representations and warranties expressly or specifically stated in this Agreement), all of which are hereby excluded; and
	

 	

(c)	

the Lessee is leasing the Equipment from the Standby Purchaser "as is, where is, and with all faults", and that the Lessee's acceptance of Delivery from the Standby Purchaser in accordance with clause 4.2 shall be conclusive evidence as between
the Standby Purchaser, the Lessee and the Sub-Lessee that the Equipment is complete, in good order and condition, of satisfactory quality, fit for any purpose for which it may be intended or required and in every way satisfactory.
	

5.1.2	

Save as otherwise expressly and specifically provided by this Agreement or any Standby Document, each of the Lessee and the Sub-Lessee hereby waive as between themselves and the Standby Purchaser all their respective rights, express or implied
(whether statutory or otherwise), either against the Standby Purchaser in respect of the Equipment and against the Equipment (except rights arising out of any act or omission of the Standby Purchaser which is a breach by the Standby Purchaser of its
express and specific obligations to the Lessee under this Agreement or any other Standby Document).
	

5.1.3	

The Standby Purchaser shall be under no obligation to provide to the Lessee, the Sub-Lessee or any other person any replacement for the Equipment or any part thereof during any period when the Equipment is unavailable for use for any reason whatever
nor otherwise to compensate either of the Lessee or the Sub-Lessee in respect of such unavailability for use.
	

5.1.4	

Save as expressly provided in this Agreement or the other Standby Documents, and without prejudice to the generality of clause 5.1.1 and 5.1.2, the Standby Purchaser shall be under no liability to the Lessee or the Sub-Lessee whatsoever and
howsoever arising, and from whatever cause, and whether in contract, tort or otherwise, in respect of any loss (consequential or otherwise), liability or damage of, or to, or in connection with, the Equipment (including delay of any nature
whatsoever) or any person or property whatsoever irrespective of whether such loss, liability or damage shall arise from any action or omission of the Standby Purchaser and whether or not the same shall arise from the Standby Purchaser's negligence,
actual or imputed (other than any action or omission of the Standby Purchaser which is a breach by the Standby Purchaser of its express and specific obligations to the Lessee under clause 5.2 of this Agreement).
	 	 	 

4

 

	
5.2	

Standby Purchaser's covenants etc.
	

5.2.1	

The Standby Purchaser covenants to the Lessee and the Sub-Lessee that unless and until the leasing of the Equipment terminates hereunder the Standby Purchaser (other than through the acts or omissions of any party to the Standby Documents (other than
the Standby Purchaser), or any of such party's agents or representatives, acting as agent or representative of the Standby Purchaser) will not, otherwise than pursuant to its rights under any of the Standby Documents or which may exist under any
applicable law and except as may be required by law, interfere with the quiet use, operation, possession and quiet enjoyment of the Equipment by the Lessee or the Sub-Lessee. Each of the Lessee or the Sub-Lessee acknowledge that the covenant by the
Standby Purchaser contained in this clause 5.2 is the only covenant by the Standby Purchaser in respect of quiet enjoyment and is in substitution for, and to the exclusion of, any other covenant for quiet enjoyment which may have otherwise been
given or implied at law or otherwise, all of which are hereby expressly excluded and waived by each of the Lessee and the Sub-Lessee.
	

5.2.2	

The Standby Purchaser covenants with each of the Lessee and the Sub-Lessee that it will not by its own act create any Lien over the Equipment, other than for the benefit of the General Security Trustee or any of the other Beneficiaries.
	
5.3	

Unfair Contract Terms Act 1977
	

 	

Without prejudice to the indemnities of the Standby Purchaser by the Sub-Lessee contained in this Agreement, nothing in this clause 5 shall afford to the Standby Purchaser any wider exclusion of any liability of the Standby Purchaser to any
person for death or personal injury than the Standby Purchaser may effectively exclude having regard to the provisions of the Unfair Contract Terms Act 1977.
	
6	

Lease Period
	

 	

The leasing of the Equipment hereunder shall commence on Delivery and shall continue until the End Date.
	
7	

Rent
	
7.1	

Initial Rent
	

 	

The Lessee shall pay the Initial Rent to the Standby Purchaser on the Delivery Date.
	
7.2	

Annual Rent and Termination Sum
	

7.2.1	

On each anniversary of the Delivery Date the Lessee shall pay to the Standby Purchaser the sum of one Dollar ($1.00) by way of annual rent.
	

7.2.2	

On the termination of the leasing of the Equipment under this Agreement the Lessee shall pay to the Standby Purchaser a termination sum of five hundred Dollars ($500.00).
	
7.3	

Payment of the Initial Rent
	

7.3.1	

The payment of the Initial Rent in accordance with clause 7.1 shall be paid in full without set-off or counterclaim whatsoever and free and clear of all deductions or withholdings whatsoever save only as may be required by law.
	

7.3.2	

If any deduction or withholding is required by law in respect of the payment by the Lessee of the Initial Rent in accordance with clause 7.1, the Lessee shall (subject to the Standby Purchaser's rights under clause 11 of the Deed of
Proceeds and Priorities):
	

 	

(a)	

ensure or procure that the deduction or withholding is made and that it does not exceed the minimum legal requirement therefor;
	 	 	 

5

 

	

 	

(b)	

pay, or procure the payment of, the full amount deducted or withheld to the relevant Taxation or other authority in accordance with the applicable law; and
	

 	

(c)	

promptly deliver or procure the delivery to the Standby Purchaser of the appropriate receipts evidencing the deduction or withholding which has been made.
	

7.3.3	

In circumstances where the amount received by the Lessee by way of rebate of rent pursuant to clause 20.4 of the Head Lease consequent upon the sale of the Equipment by the Lessor is reduced by reason of a breach by the Lessor of its rebate
obligations under clause 20.4, the Lessee's obligation to pay the Initial Rent in accordance with clause 7.1 shall be limited to the amount actually received by the Lessee by way of rebate of rent pursuant to clause 20.4 of the Head
Lease.
	
8	

Payments
	
8.1	

Standby Purchaser's account for the Initial Rent
	

 	

The Lessee shall pay the Initial Rent to such account as the Lessee shall be notified by either the Standby Purchaser or the Standby Lender (as assignee of the Standby Purchaser) as being the account to which payments are to be made pursuant to the
terms of the Standby Assignment. In respect of any other payments to be made pursuant to this Agreement, such payments shall be made to such bank account as the Standby Purchaser may from time to time designate by notice to the Lessee and the
Sub-Lessee.
	
8.2	

Payments unconditional
	

 	

The Lessee's and the Sub-Lessee's obligations to make any payments under this Agreement shall be absolute and unconditional and shall not be affected by and shall be irrespective of any contingency whatsoever including (but not limited
to):
	

8.2.1	

any right of set-off, counterclaim, recoupment, defence, deduction, withholding or other right, save as the same may be required by law;
	

8.2.2	

any unavailability of the Equipment for any reason, including, but not limited to, requisition thereof, or any prohibition or interruption of or other restriction against the use, operation or possession of the Equipment by the Standby Purchaser, the
Lessee, the Sub-Lessee, Enterprise or any other Field Contractor or any other person's use, operation or possession of the Equipment, any interference with such use, operation or possession or failure to deliver any part of the Equipment or any lack
or invalidity of title or any other defect in the title, suitability, merchantability, fitness for any purpose, condition, appearance, safety, design, or operation of any kind or nature of the Equipment, or the ineligibility of the Equipment for any
particular use or trade, or for want of registration or the absence or withdrawal of any permit, licence, authorisation or other documentation required under the applicable law of any relevant jurisdiction for the ownership, leasing, use, operation
or location of the Equipment or any part thereof or, subject to clause 10.1, the Total Loss of, or any damage to, the Haewene Brim or the Equipment or any part thereof;
	

8.2.3	

any insolvency, bankruptcy, winding-up, administration, reorganisation, reconstruction, arrangement, readjustment or rescheduling of debt, dissolution, liquidation or similar proceedings by or against any persons;
	

8.2.4	

any invalidity or unenforceability or lack of due authorisation of, or other defect in, this Agreement or any of the other Transaction Documents or any particular provision hereof or thereof;
	 	 	 

6

 

	

8.2.5	

any failure or delay on the part of any party, whether with or without fault on its part, duly to perform or comply with its obligations under this Agreement or any of the other Transaction Documents; and
	

8.2.6	

any other cause which but for this provision would or might have the effect of terminating or in any way affecting any obligation of the Lessee and the Sub-Lessee hereunder (but without prejudice to the rights of the Lessee and the Sub-Lessee to
damages or specific performance or any other injunctive relief in respect of this Agreement or any of the other Transaction Documents).
	
8.3	

Interest on overdue amounts
	

8.3.1	

If any amount payable by the Lessee or the Sub-Lessee to the Standby Purchaser under this Agreement or any of the other Transaction Documents is not paid in full on the date such amount becomes due and payable hereunder or thereunder, the Standby
Purchaser shall be entitled, in addition, to demand interest on the unpaid sum at the Default Rate from and including such date to and including the date of actual payment (after as well as before judgment). Such interest at the Default Rate shall
accrue on a day to day basis and be compounded quarterly.
	

8.3.2	

All interest under this clause 8.3 shall be calculated on the basis of the actual number of days elapsed and (in respect of Sterling amounts or where that is the normal bank basis for interest calculations under the relevant currency) a three
hundred and sixty-five (365) day year or (in respect of amounts in other currencies) a three hundred and sixty (360) day year.
	
8.4	

Time of the essence
	

 	

Punctual payment of amounts payable by the Lessee and the Sub-Lessee to the Standby Purchaser shall be of the essence and shall be a condition of this Agreement.
	
8.5	

Business Days
	

 	

If any payment is due on a day which is not a Business Day, it shall, unless expressly provided to the contrary in this Agreement, be paid on the immediately succeeding Business Day, together with interest from the due date, on a daily basis at LIBOR
for the relevant period, unless that day falls in the calendar month succeeding that in which the date on which the payment is due falls, in which case it shall be due on the immediately preceding Business Day, but the amount of such payment shall
not be adjusted in consequence thereof.

7

  

	9	Insurances
	

 	

Each of the Lessee and the Sub-Lessee hereby covenants with the Standby Purchaser and undertakes that, throughout the Standby Lease Period and thereafter until the sale of the Equipment, the Sub-Lessee shall observe and perform in favour of the
Standby Purchaser all of the obligations of the Lessee in respect of the Insurances as are set out in clause 13 of the Standby Sub-Lease provided however, for the avoidance of doubt, that the Standby Purchaser's interest in the Insurances shall
be limited to an interest in the Agreed Proportion of the Insurances.
	
10	

Total Loss and damage
	

10.1	

In the event of a Total Loss, the Standby Lease Period shall end on the date of the termination of the Standby Sub-Lease pursuant to clause 14 of the Standby Sub-Lease.
	

10.2	

The Sub-Lessee hereby covenants and agrees with the Standby Purchaser that the Sub-Lessee shall observe and perform in favour of the Standby Purchaser all of its obligations as are set out in clause 13.8 of the Standby Sub-Lease and the
Sub-Lessee shall procure that the payments referred to in clause 13.10 of the Standby Sub-Lease are made in accordance with that clause.
	

10.3	

The parties hereto agree that following a Total Loss any insurance moneys payable in respect of the Total Loss shall be paid to the Standby Purchaser Assigned Account and applied in accordance with the terms of the Deed of Proceeds and
Priorities.
	
11	

Risk and requisition
	

 	

The Standby Purchaser, the Lessee and the Sub-Lessee hereby agree that clauses 13.2 and 14.6 of the Standby Sub-Lease shall be deemed incorporated in this Agreement as if the same were set out in extenso and the Lessee covenants to perform the
obligations of the Lessee set out therein in favour of the Standby Purchaser.
	
12	

Covenants
	
12.1	

Notification and information covenants
	

 	

The Sub-Lessee hereby covenants and agrees with the Standby Purchaser that, with effect from the Delivery Date, the Sub-Lessee shall observe and perform in favour of the Standby Purchaser the notification and information requirements set out in
clause 9.2 of the Standby Sub-Lease.
	
12.2	

Operational covenants
	

 	

The Sub-Lessee hereby covenants and agrees with the Standby Purchaser that with effect from the Delivery Date, the Sub-Lessee shall observe and perform in favour of the Standby Purchaser all of its obligations in relation to the operation of the
Equipment as are set out in clause 10 of the Standby Sub-Lease, as if such clause were set out in extenso herein.
	
13	

Title and ownership of the Equipment
	
13.1	

Title
	

 	

During the Standby Lease Period the Equipment shall at all times be the property of and belong to the Standby Purchaser. Nothing in the Transaction Documents shall have effect or be deemed to have effect to pass title or beneficial ownership of the
Equipment or any part thereof or interest to the Lessee, the Sub-Lessee or Enterprise or other Field Contractor except the right to use the Equipment upon the terms and conditions contained in this Agreement and/or the Standby Sub-Lease and/or the
applicable Field Contract.
	 	 	 	 

8

 

	
13.2	

Encumbrances
	

 	

The Sub-Lessee hereby covenants and agrees with the Standby Purchaser that, with effect from the Delivery Date, the Sub-Lessee shall observe and perform in favour of the Standby Purchaser all of its obligations under 12.2 of the Standby
Sub-Lease.
	
13.3	

Notice of Lease
	

 	

The Sub-Lessee agrees to place and keep or procure that there is placed and kept and displayed conspicuously and to keep so fastened and displayed during the Standby Lease Period a framed printed notice in plain type in English of such size that the
paragraph of reading matter shall cover a space of not less than six (6) inches wide by nine (9) inches high, substantially reading as follows:
	

 	

"This floating production storage and offloading facility (the "FPSO") is registered in the name of Bluewater (Haewene Brim) N.V. ("BHB"). The hull (the
"Hull") is the property of BHB and is subject to a lease agreement in favour of Pierce Production Company Limited ("PPC"). The topsides processing plant and
equipment (the "Equipment") attached to the Hull is the property of Ola Dunk II Foundation (the "Owner") and is the subject of a lease granted by Bluewater
Holding B.V. in favour of PPC. Neither PPC nor the Master nor any servant or agent thereof has any right, power or authority whatsoever to contract on behalf of the Owner or to pledge the Owner's credit or to involve the Owner in any liability
whatsoever to create, incur, or permit to be imposed on the Vessel any lien whatsoever except for general average, crew's wages and salvage. BHB has also granted a first priority mortgage over the FPSO in favour of Barclays Bank plc on behalf of
syndicate of banks and financial institutions."
	

 	

or in such form as the Standby Purchaser may reasonably require from time to time.
	

 	

The Sub-Lessee undertakes not to remove or cover up such notice, and will not place or (save as required pursuant to the Deed of Proceeds and Priorities) permit to be placed any other notice (affecting the ownership of the Equipment or the FPSO or
otherwise relating to the rights of the Standby Purchaser in or on the Equipment or the FPSO or any part thereof) without the prior written consent of the Standby Purchaser.
	

 	

The Sub-Lessee agrees to give written instructions with regard to the foregoing matters to the Master of the Vessel, such instructions to be in such terms as may from time to time be required by the Standby Purchaser.
	
14	

Termination
	

14.1	
Automatic termination
	

 	

Each of the Standby Purchaser, the Lessee and the Sub-Lessee hereby agree that the leasing of the Equipment under this Agreement will terminate immediately without the need for any notice or declaration or other act on the part of the Standby
Purchaser by and upon termination, for any reason, of the sub-leasing of the Equipment under the Standby Sub-Lease, such termination hereunder to be simultaneous with the termination of the sub-leasing of the Equipment under the Standby
Sub-Lease.
	 	 	 	 

9

 

	
15	

Re-delivery and sale of the Equipment
	
15.1	

Re-delivery of the Equipment
	

15.1.1	

Except in the event of a Total Loss of the Equipment, (in which event clause 15.1.3 shall apply), and subject to the provisions of clause 14.6(c) of the Standby Sub-Lease (as incorporated into this Agreement), the Sub-Lessee shall, on
behalf of the Lessee, at the end of the Standby Lease Period re-deliver the Equipment together with all applicable certificates relating to the Equipment to the Standby Purchaser free of all Liens (other than Liens falling within paragraphs (i),
(ii) or (vii) of the definition of Permitted Liens), and the Standby Purchaser shall accept such re-delivery, at the re-delivery location to be mutually agreed between the parties or, in the absence of such agreement, at such nearby safe
port as the Standby Purchaser may require. Subject to the provisions of clause 14.6(c) of the Standby Sub-Lease (as incorporated into this Agreement), the Sub-Lessee shall, on behalf of the Lessee, at its expense before such re-delivery make all
such repairs and do all such work as may be necessary so that the Equipment at the date of re-delivery shall be:
	

 	

(a)	

unless otherwise agreed by the Standby Purchaser in writing, in the same class and in such state of repair and operating condition as the Equipment is required to be maintained in accordance with clause 10 of the Standby Sub-Lease (as
incorporated into this Agreement), fair wear and tear and changes and alterations properly made by the Sub-Lessee as permitted under this Agreement and/or the Standby Sub-Lease excepted;
	

 	

(b)	

with all required certificates in full force and effect and (in the case of any certificates relating to the Equipment) valid for a period of no less than ninety (90) days from redelivery; and
	

 	

(c)	

with all equipment, fittings, spare and replacement parts installed in or on or which are attached to, or which are part of the Equipment, in accordance with this Agreement other than those which belong to PPC and which have been removed prior to
re-delivery in accordance with the provisions of clause 9.4 of the Standby Sub-Lease (as incorporated into this Agreement);
	

 	

The cost of satisfying the requirements specified in paragraphs (a)—(c) above and remedying any defects or deficiencies shall be borne by the Sub-Lessee and the Sub-Lessee shall pay to the Standby Purchaser the cost of effecting the
same.
	

15.1.2	

At or about the time of re-delivery following a termination of the leasing of the Equipment pursuant to clause 14.1 or following the end of a period of requisition for hire which ends after the expiration of the Standby Lease Period a survey
shall, if the Standby Purchaser so requires, be made to determine the state and condition of the Equipment. In that event, the Lessee and the Standby Purchaser shall each appoint surveyors to be present at such survey and the surveyors present shall
determine the condition of the Equipment and shall state the repairs or work necessary to place the Equipment at the date of re-delivery in the structure state and condition referred to in clause 15.1.1(a). If the said surveyors disagree they
shall refer the matter to a senior surveyor of the classification society with which the Haewene Brim is then classed whose decision shall be final and binding on the parties hereto. All reasonable costs occasioned by any such survey including the
costs of the said surveyors appointed by the Lessee and the Standby Purchaser and, if appointed, the costs of the senior surveyor of the said classification society shall be payable by the Lessee. If the Lessee fails to appoint a surveyor as
specified, the survey shall be conducted by the Standby Purchaser's appointee alone and references to the "senior surveyor" in this clause 15.1.2 shall be ignored.
	 	 	 	 

10

 

	

15.1.3	

In the event of a Total Loss (to the extent that the insurers have satisfied or admitted in full their obligations under the Insurances and have expressly waived any rights they may have, or would or might require, in the Equipment), the Lessee shall,
 at the Sub-Lessee's cost and expense, redeliver the Equipment and all Surviving Parts to the Standby Purchaser at such location and upon such other terms and conditions as the Standby Purchaser, the Lessee and the Sub-Lessee may agree at such
time.
	
15.2	

Sale of the Equipment
	

15.2.1	

Upon any termination of the leasing of the Equipment (or, as the case may be, the right of the Lessee to take the Equipment on Lease) under this Agreement through effluxion of time or otherwise (but in the case of a Total Loss, only to the extent
that the Standby Purchaser is free to dispose of the same) the Equipment shall be sold and, to the extent applicable, any Equipment Rights shall be transferred in accordance with the remaining provisions of this clause 15.2.1 and in accordance
with the Deed of Proceeds and Priorities.
	

15.2.2	

Subject to the rights of the Lessee under clause 15.2.3(d) and subject further to the provisions of the Deed of Proceeds and Priorities, the Standby Purchaser shall have the sole right of deciding the means, timing and terms of disposal of the
Equipment including, for the avoidance of doubt, and to the extent applicable, any Equipment Rights and in particular whether to sell by public auction or tender, with or without reserve or by private treaty.
	

15.2.3	

Any sale pursuant to this clause 15.2 shall be in accordance with clause 14 of the Deed of Proceeds and Priorities and any sale shall otherwise comply with the following conditions:
	

 	

(a)	

the sale shall be at a cash price payable by the purchaser in full on completion in Dollars or such other currency as the Standby Purchaser may agree (such agreement not to be unreasonably withheld) direct to the Standby Purchaser for credit to the
Standby Purchaser Assigned Account;
	

 	

(b)	

the sale shall be at a price which (excluding VAT or other similar taxes wheresoever and howsoever arising) shall be not less than open market value of the Equipment;
	

 	

(c)	

the sale may be to any person other than:
	

 	

 	

(i)	

PPC; or
	

 	

 	

(ii)	

any person who is purchasing on behalf of or in trust for PPC; or
	

 	

 	

(iii)	

any person who is controlled by PPC (as the term "control" is defined in s840 of ICTA); or
	

 	

 	

(iv)	

any person who is purchasing as part of an arrangement under which title will or may pass to any of the persons mentioned in (i), (ii) (iii) and (iv) above;
	

 	

(d)	

the sale shall be made upon terms which do not expose the Standby Purchaser to any liability, including but not limited to any Tax Liability which it would not have had but for execution of the relevant sale documents (save for liability for breach
of the warranty set out in this clause 15.2.3(d)) and otherwise without any representation, recourse or warranty whatsoever to or on the part of the Standby Purchaser other than a warranty that the Standby Purchaser shall pass such title to the
Equipment as the Standby Purchaser has acquired pursuant to the Standby Put Option Deed subject to Liens, save for Liens knowingly created by the Standby Purchaser;
	

 	

(e)	

a sale shall be on an "as is, where is and with all faults" basis and governed by the laws of England;
	 	 	 	 

11

 

	

 	

(f)	

a sale shall exclude, so far as permitted by the laws of England and any other laws governing or applicable to the sale of the Equipment, all liability of the Standby Purchaser, in contract or tort, in relation to the Equipment to the same extent as
such liabilities are excluded by clause 5 but save for the warranty given by the Standby Purchaser under clause 15.2.3(d) above; and
	

 	

(g)	

if the Haewene Brim is at the date of entry into any contract for the sale of the Equipment subject to any requisition for hire, the sale shall be subject to such requisition.
	

 	

The Sub-Lessee shall, whether or not the Equipment is sold through its assignee (the General Security Trustee) as sales agent pursuant to clause 15.2.3(d) and whether or not the Equipment is in the possession of the Standby Purchaser, the Lessee,
 the Sub-Lessee or Enterprise indemnify the Standby Purchaser on demand and keep the Standby Purchaser indemnified on a full indemnity basis against all Losses from time to time suffered or incurred by or made against the Standby Purchaser which are
connected with the repossession, re-delivery, storage, maintenance, protection, sale or attempted sale of the Equipment including, for the avoidance of doubt, and to the extent applicable, any Equipment Rights.
	

15.2.4	

Sales agency
	

 	

Subject to the provisions of the Deed of Proceeds and Priorities, the Lessee is hereby appointed by the Standby Purchaser as its sole and exclusive marketing agent for the Equipment, including, for the avoidance of doubt, and to the extent applicable,
 any Equipment Rights any such sale of the Equipment to be completed only at the time of or following the End Date, PROVIDED THAT: the authority of the Lessee is limited to the extent that the Lessee shall not be authorised to sell the Equipment or
any part thereof or to approve or execute on behalf of the Standby Purchaser any document (including, but not limited to, any term sheet or heads of terms) relating to the sale of the Equipment, but the Standby Purchaser agrees that it shall at the
Sub-Lessee's cost and expense upon reasonable notice execute such agreement as may be requested for sale of the Equipment provided that the same complies with the provisions of clause 15.2.3.
	
16	

Proceeds of Sale
	
16.1	

Proceeds of Sale
	

 	

The "Proceeds of Sale" of the Equipment shall be the total proceeds of sale thereof (excluding Value Added Tax and other similar taxes wheresoever and howsoever arising) unconditionally received by the Standby Purchaser.
	
16.2	

Application of Proceeds of Sale
	

 	

Whilst any of the Secured Obligations remain outstanding, the Proceeds of Sale of the Equipment shall be paid directly to the General Security Trustee as assignee of the Standby Purchaser, credited to the Standby Purchaser Assigned Account and
applied in accordance with the Deed of Proceeds and Priorities provided that, upon the payment and satisfaction in full of all the Secured Obligations the Proceeds of Sale shall be paid directly to the Standby Purchaser for credit to the Standby
Purchaser Proceeds Account and applied by way of rebate of rent to the Lessee in accordance with the Deed of Proceeds and Priorities.
	 	 	 	 

12

 

	
17	

General indemnity
	
17.1	

General indemnity
	

 	

The Sub-Lessee hereby agrees at all times to pay promptly or, as the case may be, indemnify and hold the Standby Purchaser and its officer, directors, secondees, agents and employees (together the "Indemnified
Persons") harmless on a full indemnity basis from and against each and every liability, loss, charge, claim, demand, action, proceeding, damage, judgment, order or other sanction, enforcement, penalty, fine, fee, commission,
interest, Liens, salvage, general average cost and expense of whatsoever nature suffered or incurred by or imposed on any Indemnified Person (together "Losses") which relate to any matter specified in
any of paragraphs (a) to (g) both inclusive) of clause 7.1 of the Standby Sub-Lease.
	

17.2	

The Sub-Lessee further agrees that the provisions of clauses 7.2 and 7.3 (both inclusive) of the Standby Sub-Lease shall be deemed to be incorporated herein as if set out in extenso and as if each reference to "Indemnified Person" were to each
Indemnified Person as defined in clause 17.1, and as if each reference therein to "clause 7" were a reference to this clause 17.
	
18	

General Tax indemnity and other tax provisions
	
18.1	

General
	

18.1.1	

The Sub-Lessee shall pay promptly and indemnify the Standby Purchaser on demand against all Taxes levied or assessed on or in respect of the Equipment, any payments made under this Agreement or any of the other Standby Documents or any of the
transactions contemplated by any of the Transaction Documents but subject to the remaining provisions of this clause 18.
	

18.1.2	

The Sub-Lessee further agrees that the provision of clause 8 of the Standby Sub-Lease shall be deemed to be incorporated herein as if set out in extenso and as if each reference to "this Agreement" were a reference to this Agreement, and as if
each reference therein to "this clause 8" were a reference to this clause 18.
	
19	

Assignment
	

 	

Save for the assignment by the Standby Purchaser pursuant to the Standby Assignment and the assignment by the Sub-Lessee pursuant to the terms of the General Assignment, none of the parties to this Agreement may assign, transfer, novate or part with
any of their respective rights under or the benefits of this Agreement without the prior written consent of the other parties.
	
20	

Miscellaneous
	
20.1	

Expenses
	

 	

The Sub-Lessee shall on demand:
	

20.1.1	

pay or reimburse to each of the Standby Purchaser and the Lessee all costs and expenses (including, without limitation, survey costs and expenses and costs and expenses in establishing and maintaining the existence of the Standby Purchaser) of the
Standby Purchaser and the Lessee properly incurred in connection with the negotiation, preparation or execution of the Standby Documents and any amendment, variation or waiver from time to time hereto or thereto or any consent from time to time
hereunder or thereunder and with delivery to or by the Standby Purchaser, redelivery or sale of the Equipment or any part thereof;
	 	 	 	 

13

 

	

20.1.2	

pay or reimburse to the Standby Purchaser all costs and expenses (including, without limitation, legal fees and survey costs and expenses) properly incurred by the Standby Purchaser in connection with or incidental to the breach by any party (other
than the Standby Purchaser) of any of its respective obligations under the Standby Documents, the protection, preservation or enforcement of any right or remedy conferred upon the Standby Purchaser under any of the Standby Documents or by law, or to
any action or act to recover possession of the Equipment or any part thereof, whether or not any such action progresses to judgment;
	

20.1.3	

pay or reimburse to the Standby Purchaser all costs and expenses (including, without limitation, fees of legal and other advisers) incurred in connection with any action or act brought by the Standby Purchaser to recover any payments due from any
party (other than the Standby Purchaser), under this Agreement or any of the other Standby Documents; and
	

20.1.4	

pay or reimburse to the Standby Purchaser all costs and expenses (including without limitation, legal, insurance and other advisers) properly incurred by the Standby Purchaser in connection with a Total Loss of the Haewene Brim or the
Equipment.
	
20.2	

Delay in enforcement, waivers etc.
	

 	

All waivers of any right, power and privilege by any of the Standby Purchaser, the Lessee or the Sub-Lessee shall be in writing signed by the Standby Purchaser, the Lessee or the Sub-Lessee. No failure or delay on the part of the Standby Purchaser,
the Lessee or the Sub-Lessee in exercising any power or right hereunder shall operate as a waiver thereof nor shall any single or partial exercise of any such right or power preclude any other or further exercise of any such right or power. The
rights and remedies herein provided are cumulative and not exclusive of any rights or remedies provided by law or in equity.
	
20.3	

Variation
	

 	

This Agreement shall only be varied by an instrument in writing executed by the parties hereto and subject to and in accordance with the provisions of the Deed of Proceeds and Priorities.
	
20.4	

Invalidity
	

 	

If any term or provision of this Agreement or the application thereof to any person or circumstance shall to any extent be invalid or unenforceable the remainder of this Agreement or application of such term or provision to persons or circumstances
other than those as to which it is already invalid or unenforceable shall not be affected thereby and each term and provision of this Agreement shall be valid and shall be enforceable to the fullest extent permitted by law.
	
20.5	

Notices
	

20.5.1	

Any demand, consent, record, election or notice (a "Notice") required or permitted to be given by any party to another party under this Agreement shall be in writing and sent by first class prepaid
airmail post or by facsimile transmission or delivered by hand addressed as follows:
	

 	

(a)	

if to the Standby Purchaser to:
	

 	

 	

Ola Dunk Ii Foundation,

Landhuis Joonchi,

Kaya Richard J Beaujon,

z/n Curaçao,

Netherlands Antilles
	 	 	 	 

14

 

	

 	

(b)	

if to the Lessee to:
	

 	

 	

Bluewater Holding B.V.,

Marsstraat 33,

2132 HR Hoofddorp,

The Netherlands
	

 	

 	

Fax:    +31 23 554 2112

Attention:    Jeroen Dicker, Manager, Corporate Finance
	

 	

(c)	

if to the Sub-Lessee to:
	

 	

 	

Pierce Production Company Limited

c/o Watson, Farley & Williams

15 Appold Street

London EC2A 2HB
	

 	

 	

Fax:    +44 207 814 8141

Attention:    M J Lawson
	

 	

or in each case to such address or facsimile number as one party may, by not less than three (3) Business Days' notice, notify in writing to the other party hereto.
	

20.5.2	

Any Notice shall be deemed to have been given or received to or by the party to whom it is addressed ten (10) days following posting, if posted by first class prepaid airmail post and on receipt, if delivered by hand and in the case of facsimile
transmission, upon receipt by the sender of a transmission report showing the Notice has been sent in its entirety. The sender of a Notice by facsimile shall despatch an original of such communication in the first class air mail post with postage
prepaid in a envelope addressed to the recipient of the facsimile at its address stated in clause 20.5.1(a) but the facsimile Notice shall be the definitive Notice for the purposes of this Agreement.
	
20.6	

Counterparts
	

 	

This Agreement may be executed in several counterparts and any single counterpart or set of counterparts, signed in either case by all of the parties, shall be deemed to be an original, and all taken together shall constitute one and the same
instrument.
	
20.7	

Further assurances
	

 	

PPC agrees from time to time, to do and perform such other and further acts and execute and deliver any and all such other instruments as may be required by law or reasonably requested by the Standby Purchaser to establish, maintain and protect the
rights and remedies of the Standby Purchaser and to carry out and effect the intent and purpose of this Agreement and the other Standby Documents.
	
20.8	

Entire agreement
	

 	

This Agreement, in conjunction with the other Transaction Documents and any letter agreements of even date herewith or subsequent hereto between the Standby Purchaser and any other party to the Transaction Documents, constitute the entire agreement
between the parties hereto in relation to the leasing of the Equipment by the Standby Purchaser to the Lessee, and supersede all previous proposals, agreements and other written and oral communications in relation thereto. For the avoidance of doubt,
each of the Lessee and the Sub-Lessee agree that none of the provisions of the Standby Sub-Lease and the rights and obligations of the Lessee and the Sub-Lessee under the Standby Sub-Lease shall be affected by the provisions of this
Agreement.
	 	 	 	 

15

 

	
20.9	

Applicable law
	

 	

This Agreement shall be governed by and construed, and performance thereof shall be determined, in accordance with the laws of England.
	
20.10	

Submission to jurisdiction
	

 	

Each of the Standby Purchaser, the Lessee and the Sub-Lessee (which shall include their respective successors and assigns from time to time) hereby submits to the non-exclusive jurisdiction of the courts of England with regard to this Agreement and
the other Standby Documents. Any legal action or proceedings with respect to this Agreement and the other Standby Documents may be brought in the courts of England or such other jurisdiction, as the Standby Purchaser may elect. By its execution and
delivery of this Agreement, each of the Standby Purchaser, the Lessee and the Sub-Lessee:
	

20.10.1	

hereby accept for themselves and in respect of their respective property, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts with respect to this Agreement and the other Standby Documents;
	

20.10.2	

waive any objections on the grounds of venue or forum non conveniens or any similar grounds and agree that legal proceedings in any one or more jurisdictions shall not preclude legal proceedings in any other jurisdiction with respect to this
Agreement and the other Standby Documents;
	

20.10.3	

agree that final judgment against any of the Standby Purchaser, the Lessee or the Sub-Lessee in any action or proceedings shall be conclusive and may be enforced in any other jurisdiction with respect to this Agreement and the other Standby Documents
within or outside England by suit on the judgment, a certified copy of which shall be conclusive evidence of the fact and of the amount of its indebtedness; and
	

20.10.4	

hereby consent generally in respect of any legal action or proceeding arising out of or in connection with this Agreement and the other Standby Documents to the giving of any relief or the issue of any process in connection with such action or
proceeding including, without limitation, the making, enforcement or execution against any property whatsoever (irrespective of its use or intended use) of any order or judgment which may be made or given in such action or proceeding.
	
20.11	

Appointment of process agent
	

 	

Each of the Lessee, the Sub Lessee and the Standby Purchaser hereby designates, appoints and empowers WFW Legal Services Limited presently of 15 Appold Street, London EC2A 2HB to receive for it and on behalf of it, service of process in any legal
action or proceedings with respect to this Agreement or the other Standby Documents. Each of the Lessee and the Standby Purchaser agrees that it will at all times continually maintain an agent to receive service of process in England on its behalf
and on behalf of its property with respect to this Agreement, the Standby Documents and the Lease Documents to which it is a party and if, for any reason, such agent named above or its successor shall no longer serve as agent of the Lessee or the
Standby Purchaser (as the case may be) to receive service of process in England, the Lessee or the Standby Purchaser (as the case may be) shall promptly appoint a successor in England and advise the other parties to this Agreement thereof. It is
understood that a copy of any process served as above will be promptly forwarded (if necessary) by first class pre-paid air mail post to the Lessee or the Standby Purchaser (as the case may be), but the failure of the Lessee or the Standby Purchaser
(as the case may be) to receive such copy shall not affect in any way the service of process on the said person as the agent of the Lessee or the Standby Purchaser (as the case may be).
	 	 	 	 

16

 

	
21	

Preservation of indemnities
	

 	

Without prejudice to any right to damages or other claim which any party to this Agreement may, at any time, have against any of the other parties hereunder or under any of the Standby Documents it is hereby agreed and declared that the indemnities
given by the Sub-Lessee in favour of the Standby Purchaser contained in this Agreement or any of the Standby Documents to which the Sub-Lessee is a party shall continue in full force and effect notwithstanding any sale or other disposition of the
Equipment, a Total Loss having occurred or any breach of the terms hereof or thereof by the Standby Purchaser (including fundamental breach), the repudiation by the Standby Purchaser, the Lessee or the Sub-Lessee of this Agreement or any of the
Standby Documents or the expiration of the Standby Lease Period or the termination of the hire or sale of the Equipment hereunder or any other circumstance whatsoever.
	
AS WITNESS this Agreement is executed by the parties hereto on the day and year first above written

17

  

 
 

Schedule 1    
    
    Description of the Equipment    
    

 
  The Haewene Brim Equipment—Topsides Facilities Description    
    

        The "FPSO topsides" are the facilities that perform the oil and gas processing, provide the main utilities required for such processing and the auxiliary system
supporting the production. 

        The
topsides will perform the above duties whilst some utilities are supplied from the Haewene Brim Hull machinery. 

        The
topsides comprise following duties: 

	•
	Two
stage 3 phase Crude oil separation system plus test separator

	•
	Gas
treatment and 4 stages of compression with dehydration facilities utilising a Tri Ethylene Glycol system (produced gas is being re-injected in the reservoir
to stimulate oil recovery and minimise emission)

	•
	Produced
water will be treated via centrifugal hydro-cyclones, treatment through slop tanks is available for back-up purposes

	•
	Power
generation

	•
	Process
supporting utilities including:

	•
	a
closed loop flare system, which is only ignited when the flare system is activated

	•
	open
and closed drain systems collecting fluids for recycling and safe disposal overboard within the Montreal Protocol Limitations

	•
	a
chemical injection package, provided for processing chemicals

	•
	Process
control system 

        Currently
feasibility studies and Front End Engineering Design is being executed to enable the Field Contractor to judge the feasibility of integrating a seawater injection system to the
topsides. 

        The
existing topsides facilities are pre-assembled skid mounted modules or PAU's which have been installed on supporting stools integrated with the tanker hull structure. 

        Connection
to the wells is being established by means of a STP (Submerged Turret Production) Buoy, which allows the vessel to weathervane. Subsea and topsides emergency shutdown valves
are operated by a dedicated hydraulic package. Marine thrusters and a dynamic positioning system is available to improve station keeping and heading control. 

        The
Process Control system is based on a DCS system. The DCS allows the control room Operations personnel to communicate with the topside facilities from remote. 

        The
safety and automation system (SAS) provided by Kongsberg Simrad covers both marine and topsides incorporating: 

	•
	Fire
and gas detection

	•
	CO2

	•
	Deluge

	•
	Emergency
shutdown

	•
	Process
shutdown etc. 

18

 

	•
	Vessel
management e.g. ballast, bilge and cargo transfer. 

        The
Haewene Brim Equipment is more particularly described in the Sale Agreement. 

19

  

 
 

Schedule 2    
    
    Part 1    
    
    Representations and warranties by the Lessee    
    

	1
	The
Lessee is a company duly incorporated with limited liability and validly existing under the laws of England and has the corporate power to own its assets and carry on its business
as it is being presently conducted.

	2
	The
Lessee has the corporate power and authority to enter into and perform its obligations under each of the Transaction Documents to which each of the Lessee and the Standby Purchaser
are a party and to consummate the transactions contemplated thereby.

	3
	The
execution, delivery and performance of each of the Transaction Documents to which each of the Lessee and the Standby Purchaser are a party and the consummation of the transactions
contemplated thereby have been duly authorised by all necessary or appropriate corporate action on the part of the Lessee, do not require any shareholder approval, or approval or consent of any
trustee or holders of any indebtedness or obligations of the Lessee except such as have been duly obtained and are in full force and effect, and do not contravene any law, governmental rule,
regulation or decree, judgment, injunction or order binding on the Lessee or any of its assets, or the Constitutive Documents of the Lessee or contravene the provisions of, or constitute a default
under, any mortgage, contract or other agreement or instrument to which the Lessee is a party or by which it or any of its assets is bound or affected, or will result in the creation of any Lien upon
the property or assets of the Lessee (other than as provided in the Transaction Documents).

	4
	Neither
the execution nor the delivery nor the performance by the Lessee of any of the Transaction Documents to which each of the Lessee and the Standby Purchaser are a party nor the
consummation by the Lessee of any of the transactions contemplated thereby, require the consent or approval of, the giving of notice to, the registration with, or the taking of any other action in
respect of, any governmental or other authority or agency.

	5
	Each
of the Transaction Documents to which each of the Lessee and the Standby Purchaser are a party constitute, or when executed and delivered will constitute, the legal, valid and
binding obligations of the Lessee.

	6
	There
are no pending or threatened litigation, arbitration or administrative actions or proceedings against the Lessee or any of its property or assets before any court, arbitrator or
administrative agency or authority which will or might reasonably be expected to have a materially adverse effect on the financial condition, business or operation of the Lessee or on the ability of
the Lessee to perform at all times its obligations under each of the Transaction Documents to which each of the Lessee and the Standby Purchaser are a party.

	7
	The
claims of the Standby Purchaser against the Lessee under this Agreement and under any of the other Transaction Documents to which the Lessee and the Standby Purchaser are parties
will rank at least pari passu with the claims of all its other unsecured creditors save those whose claims are preferred solely by any bankruptcy, insolvency, liquidation or other analogous
laws of general application. 

19

 
 
 

SCHEDULE 2    
    
    Part 2    
    
    Representations and warranties by the Sub-Lessee    
    

	1
	The
Sub-Lessee is a company duly incorporated with limited liability and validly existing under the laws of England and has the corporate power to own its assets and carry
on its business as it is being presently conducted.

	2
	The
Sub-Lessee has the corporate power and authority to enter into and perform its obligations under each of the Transaction Documents to which each of the
Sub-Lessee and the Standby Purchaser are a party and to consummate the transactions contemplated thereby.

	3
	The
execution, delivery and performance of each of the Transaction Documents to which each of the Sub-Lessee and the Standby Purchaser are a party and the consummation of
the transactions contemplated thereby have been duly authorised by all necessary or appropriate corporate action on the part of the Sub-Lessee, do not require any shareholder approval, or
approval or consent of any trustee or holders of any indebtedness or obligations of the Sub-Lessee except such as have been duly obtained and are in full force and effect, and do not
contravene any law, governmental rule, regulation or decree, judgment, injunction or order binding on the Sub-Lessee or any of its assets, or the Constitutive Documents of the
Sub-Lessee or contravene the provisions of, or constitute a default under, any mortgage, contract or other agreement or instrument to which the Sub-Lessee is a party or by
which it or any of its assets is bound or affected, or will result in the creation of any Lien upon the property or assets of the Sub-Lessee (other than as provided in the Transaction
Documents).

	4
	Neither
the execution nor the delivery nor the performance by the Sub-Lessee of any of the Transaction Documents to which each of the Sub-Lessee and the Standby
Purchaser are a party nor the consummation by the Sub-Lessee of any of the transactions contemplated thereby, require the consent or approval of, the giving of notice to, the registration
with, or the taking of any other action in respect of, any governmental or other authority or agency.

	5
	Each
of the Transaction Documents to which each of the Sub-Lessee and the Standby Purchaser are a party constitute, or when executed and delivered will constitute, the
legal, valid and binding obligations of the Sub-Lessee.

	6
	There
are no pending or threatened litigation, arbitration or administrative actions or proceedings against the Sub-Lessee or any of its property or assets before any court,
arbitrator or administrative agency or authority which will or might reasonably be expected to have a materially adverse effect on the financial condition, business or operation of the
Sub-Lessee or on the ability of the Sub-Lessee to perform at all times its obligations under each of the Transaction Documents to which each of the Sub-Lessee and
the Standby Purchaser are a party.

	7
	The
claims of the Standby Purchaser against the Sub-Lessee under this Agreement and under any of the other Transaction Documents to which the Sub-Lessee and the
Standby Purchaser are parties will rank at least pari passu with the claims of all its other unsecured creditors save those whose claims are preferred solely by any bankruptcy, insolvency,
liquidation or other analogous laws of general application. 

20

 
 
 

Part 2    
    
    Representations and warranties by the Standby Purchaser    
    

	1
	The
Standby Purchaser is a stichting duly formed and validly existing under the laws of the Netherlands Antilles and has the corporate power to own its assets and to carry on its
business as it is being presently conducted.

	2
	The
Standby Purchaser has the power to execute, deliver and perform all its obligations under the Transaction Documents to which it is a party and all necessary corporate action has
been duly or taken to authorise the execution, delivery and performance of the same.

	3
	To
the actual knowledge of the Standby Purchaser's officers there is no pending or threatened litigation, nor any arbitration or administrative actions or proceedings against the
Standby Purchaser or any of its property or assets before any court, arbitrator or administrative agency or authority which in the opinion of the officers of the Standby Purchaser would have a
material adverse effect on the ability of the Standby Purchaser to perform at all times its obligations under the Transaction Documents to which it is a party. 

21

 
 
 

Schedule 3    
    
    Form of Acceptance Certificate    
    

        Acceptance Certificate dated [            ] pursuant to a standby lease agreement dated
[                        ], 2003
(the "Standby Lease") between [the Standby Purchaser] (the "Standby Purchaser"
as lessor, Bluewater Holding B.V. as lessee (the "Lessee") and Pierce Production Company Limited (the
"Sub-Lessee"). 

        Terms
used herein shall each have the meaning given thereto in the Standby Lease. 

	1
	Each
of the Lessee and the Sub-Lessee confirm that the Equipment specified in the schedule hereto has been delivered by the Standby Purchaser to the Lessee and accepted by
the Lessee from the Standby Purchaser as of [            ] in a condition and otherwise all in accordance with the Standby Lease free of all Liens other than Permitted
Liens.

	2
	Each
of the Lessee and the Sub-Lessee confirm that on the above mentioned date of delivery the Equipment became subject to and governed by the provisions of the Standby
Lease.

	3
	Each
of the Lessee and the Sub-Lessee confirm that as at the date hereof the representations set out in schedule 2, Part 1 and Part 2 of the Standby
Lease are true and accurate. 

	SIGNED	)	 	 
	by	)	 	 
	a duly authorised attorney-in-fact	)	 	 
	for and on behalf of	)	 	 
	PIERCE PRODUCTION COMPANY LIMITED	)	 	 
	
SIGNED	
)	

 	
 
	by	)	 	 
	a duly authorised attorney-in-fact	)	 	 
	for and on behalf of	)	 	 
	BLUEWATER HOLDING B.V.	)	 	 

22

 
 
 

Schedule to Form of Acceptance Certificate    
    
    Description of the Equipment    
    

	SIGNED	)	 	 
	for and on behalf of	)	 	 
	OLA DUNK II FOUNDATION	)	 	 
	by Cornelis Voormolen	)	 	 
	its duly authorised attorney-in-fact	)	 	 
	
SIGNED	
)	

 	
 
	for and on behalf of	)	 	 
	BLUEWATER HOLDING B.V.	)	 	 
	by Cornelis Voormolen	)	 	 
	its duly authorised attorney-in-fact	)	 	 
	
SIGNED	
)	

 	
 
	for and on behalf of	)	 	 
	PIERCE PRODUCTION COMPANY LIMITED	)	 	 
	by Cornelis Voormolen	)	 	 
	its duly authorised attorney-in-fact	)	 	 

23

QuickLinks

Exhibit 10.60

Contents

Schedule 1 Description of the Equipment

The Haewene Brim Equipment—Topsides Facilities Description

Schedule 2 Part 1 Representations and warranties by the Lessee

SCHEDULE 2 Part 2 Representations and warranties by the Sub-Lessee

Part 2 Representations and warranties by the Standby Purchaser

Schedule 3 Form of Acceptance Certificate

Schedule to Form of Acceptance Certificate Description of the Equipment

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