Document:

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                                                                   Exhibit 10.1

                         PLATFORM CONSTRUCTION AGREEMENT

                                 BY AND BETWEEN

                               KEPPEL FELS LIMITED

                                       AND

                               CHILES OFFSHORE LLC

                                  APRIL 6, 2000

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                                    CONTENTS

SECTION

1.       DESIGN APPROVAL AND EFFECTIVE DATE
2.       COMMENCEMENT AND PROSECUTION OF THE WORK
3.       CONTRACT PRICE
4.       REPRESENTATIVES AND PROGRESS OF PLATFORM
5.       CHANGES AND ADDITIONAL WORK
6.       OWNER FURNISHED EQUIPMENT
7.       LIENS
8.       INSURANCE
9.       TITLE AND RISK OF LOSS
10.      DELIVERY
11.      WARRANTY
12.      INDEMNIFICATION PROVISIONS
13.      PATENT INDEMNITY
14.      FORCE MAJEURE
15.      INDEPENDENT CONTRACTOR
16.      DEFAULT
17.      LITIGATION
18.      NOTICE
19.      SUCCESSORS AND ASSIGNS
20.      GOVERNING LAW
21.      MODIFICATION OR WAIVER
22.      RELIANCE
23.      COMPUTATION OF TIME
24.      GENERAL LIMITATION OF LIABILITY
25.      WAIVER OF  CONSUMER RIGHTS AND REPRESENTATIONS OF  OWNER
26.      SEVERABILITY
27.      CONSTRUCTION
28.      VARIABLE LOAD
29.      TAXES AND DUTIES

EXHIBIT A
         PAYMENT SCHEDULE

EXHIBIT B
         SPECIFICATIONS AND DESIGN DRAWINGS
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                         PLATFORM CONSTRUCTION AGREEMENT
                         -------------------------------

         This Agreement including Exhibits A through B attached hereto which are
incorporated by reference herein and made a part hereof ("Agreement"), entered
into on the 6th day of April, 2000, by and between Chiles Offshore LLC a company
organized under the laws of the State of Delaware ("Owner") and Keppel FELS
Limited, a corporation organized under the laws of the Republic of Singapore
(hereinafter referred to as "Builder") for the construction by Builder and
Purchase by Owner of one mobile, self-contained and self-elevating 475' leg
length platform (the "Platform").

1. DESIGN APPROVAL AND EFFECTIVE DATE

         (a)      In recognition (1) that Builder is the developer of the design
                  for the mobile, self-contained and elevating 475' leg length
                  platform embodied in Builder's Specification for the
                  Construction and Outfit of a Mobile Offshore Self-Elevating
                  Drilling Unit, Keppel FELS Class B, dated 5th April 2000
                  including the basic design drawings listed on Exhibit B, which
                  specification has been initialed by the parties hereto as
                  evidence of their agreement thereto (said specification, as
                  now existing and as further developed by Builder, and all
                  related drawings, plans and data, whether now or hereafter
                  prepared by Builder, herein the "Specifications" and said
                  design, as now existing and hereafter developed, the "Platform
                  Design"), , and (2) that no platforms have been constructed in
                  accordance with the Platform Design, Builder hereby
                  undertakes, at its own risk and expense, to obtain American
                  Bureau of Shipping ("ABS") approval of the Platform Design as
                  embodied in the Specifications, including the development of
                  any additional drawings, calculations or other design work
                  required by ABS for such approval.

         (b)      The effective date ("Effective Date") of this Agreement shall
                  be the date hereof.

Builder has heretofore provided to Owner the ABS approval of the base rig design
with 475 foot leg length and shall provide concurrently with the execution
hereof the calculations (which calculations shall be non-contractual and are for
information and comparison only without representation or warranty of any kind)
for conditions with 517 foot and 545 foot leg lengths.

2. COMMENCEMENT AND PROSECUTION OF THE WORK

         (a)      Builder hereby agrees with Owner to commence the construction
                  of the Platform at Builder's Shipyard at Jurong, Singapore,
                  being Builder's Yard No. B ("Builder's Yard"), to prosecute in
                  accordance with good shipyard practice to completion, and to
                  deliver the Platform to Owner twenty-two (22) months after the
                  Effective Date (such delivery date as the same may be extended
                  under the terms of this Agreement is referred to herein as the
                  "Delivery Date"), at Builder's Yard, in accordance with (i)
                  the Specifications (the said Specifications having been (or
                  shall be, in instances where specifications, drawings, plans,
                  and data are hereafter prepared) initialed by Builder and
                  Owner as evidence of the parties' agreement thereto and being
                  (and to be)

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                  hereby incorporated by reference as part of this Agreement),
                  (ii) the certain rules of the American Bureau of Shipping
                  (hereinafter referred to as the "ABS"), Rules for Building and
                  Classing Mobile Offshore Drilling Units, 1997, with all
                  amendments thereto issued to the date of Builder's request for
                  class, which request shall be made not later than April 15,
                  2000, and the ABS Guide for Shipbuilding & Repair Quality
                  Standard for Hull Structures During Construction with table
                  5.9 therein applicable in full without reservation, and (iii)
                  the requirements of any other regulatory body ("Regulatory
                  Body" or Regulatory Bodies") having jurisdiction in the
                  premises as listed in the Specifications. Owner hereby agrees
                  with Builder to purchase the Platform from Builder, and to pay
                  Builder for same, all in accordance with the provisions of
                  this Agreement.

         (b)      If any conflict or inconsistency shall arise between this
                  Agreement and the Specifications, this Agreement shall
                  prevail. Similarly, if any conflict or inconsistency shall
                  arise between the written Specifications and the Specification
                  drawings, the written Specifications shall prevail. In the
                  event of a dispute as to conformity with ABS classification
                  requirements, the decision of the ABS shall be final.

         (c)      In the event that any of the equipment or materials required
                  to be furnished by Builder in the performance of the work
                  under this Agreement cannot be timely procured or are in short
                  supply, Builder may supply other functionally equivalent
                  materials or equipment complying with the performance
                  requirements of this Agreement and the Specifications.

3. CONTRACT PRICE

         (a)      As consideration for Builder's construction of the Platform in
                  accordance with the terms of this Agreement, Owner agrees to
                  pay Builder the sum of U.S. Dollars Seventy-Two Million Eight
                  Hundred Thousand ($72,800,000) subject to adjustment as
                  provided in this Agreement (hereinafter referred to as the
                  "Contract Price") to Builder's account as provided herein or
                  at such other place as Builder may from time to time designate
                  in writing to Owner.

         (b)      The Contract Price shall be paid by Owner to Builder in
                  installments as provided in Exhibit "A" attached to and made a
                  part of this Agreement. Wire transfers shall be made to
                  Builder's account at Citibank N.A. as follows:

                           CITIBANK N.A.
                           3 TEMASEK AVENUE
                           #14-00 CENTENNIAL TOWER
                           SINGAPORE 039190
                           SWIFT CODE: CITISGSG
                           US$ A/C O-010547-O24
                           FAVORING KEPPEL FELS LIMITED

         (c)      Builder shall submit to Owner invoices at least seven (7)
                  working days prior to

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                  the date any payment is due under this Agreement.

         (d)      Any agreed lump sum change order price shall be paid 50% of
                  the change order price upon agreement thereto and the balance
                  of 50% of the agreed change order price shall be paid upon
                  delivery of the Platform. For change orders performed on time
                  and material basis, payments shall be made monthly, in
                  arrears, within ten (10) days of Owner's receipt of Builder's
                  invoice therefor and in any event upon delivery of the
                  Platform.

         (e)      All costs for ABS and any other Regulatory Body approvals for
                  the Platform are for the Builder's account with the exception
                  of Owner Furnished Equipment and materials as provided in
                  Section 6 hereof.

         (f)      Prior to delivery of the Platform, the Builder shall furnish
                  evidence satisfactory to the Owner showing that no liens,
                  claims, security interests or rights in rem of any kind have
                  been or can be acquired against the Platform by, through, or
                  under Builder.

         (g)      Except as provided in the next sentence of this paragraph (g),
                  all remaining payments, including progress payments, payments
                  for change orders, and other sums owing by Owner to Builder
                  under this Agreement must be paid in full at the time of
                  delivery of the Platform under this Agreement and in any event
                  prior to departure of the Platform from Builder's Yard. If
                  Owner disputes in good faith any sums claimed by Builder under
                  or in connection with this Agreement, Owner shall provide to
                  Builder a corporate surety bond from a first class U.S. surety
                  acceptable to Builder in a form reasonably satisfactory to
                  Builder. Such bond shall be in an amount equal to 150% of the
                  disputed sum. The bond must be executed and delivered to
                  Builder at the time of delivery of the Platform under this
                  Agreement and in any event prior to departure of the Platform
                  from Builder's Yard.

         (h)      All amounts owing to Builder by Owner hereunder shall bear
                  interest at the lesser of the highest lawful rate or the rate
                  of fifteen percent (15%) per annum from thirty (30) days after
                  the date notice of failure to pay is received by Owner until
                  paid in full.

4. REPRESENTATIVES AND PROGRESS OF PLATFORM

         (a)      Builder will furnish office space and parking facilities at
                  the Yard for Owner's authorized representatives (the
                  "Representatives"), who will have complete and unrestricted
                  access to the Yard of Builder, or its subcontractors, where
                  the Platform, or any portions thereof, or materials or
                  equipment therefor are being stored, manufactured or
                  constructed pursuant to this Agreement. The office provided to
                  Owner will be complete with furniture and will have telephone,
                  telefax, and duplicating facilities. Costs for long distance
                  telephone calls, telefaxes, and duplicating supplies will be
                  for Owner's account. Such Representatives shall have the right
                  to make inspection of workmanship, material, equipment and
                  supplies as the construction of the Platform progresses and
                  shall notify Builder in writing of any deficiencies noted
                  therein, and

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                  Builder will then take such steps as are necessary to correct
                  such deficiencies. Builder shall give notice to Owner and its
                  Representatives at least forty-eight (48) hours in advance of
                  the date and place of all tests, trials, and inspections.
                  Inspections shall be made so as not to impede the progress of
                  the construction of the Platform and if defective or
                  non-conforming workmanship or material is rejected, rejection
                  shall be made promptly in order that Builder may minimize the
                  expense and disruption of construction. In the event Owner's
                  Representatives shall fail to be present at any properly
                  notified test, trial, or inspection, the results thereof shall
                  be binding on Owner. Owner shall ensure that its
                  Representatives shall not in performing their inspections
                  obstruct the construction schedule for the Platform. Builder's
                  obligation to construct and deliver the Platform in accordance
                  with this Agreement and the Specifications, and Builder's
                  warranty under this Agreement, shall not, except as otherwise
                  provided herein, be affected by any inspection or failure to
                  inspect by Owner's Representatives or by their failure to
                  detect any deficiencies. If Owner's Representatives fail to
                  promptly notify Builder of any non-conforming work discovered
                  by Owner's Representatives, Owner shall be deemed to have
                  approved such item and Owner shall be precluded from making
                  demand for correction of such item, refusing to accept tender
                  of delivery of the Platform, or claiming such item as a
                  warranty defect under Builder's warranty set forth in Section
                  11 hereinbelow.

         (b)      In all working hours during the construction of the Platform
                  until delivery thereof, the Representatives and all assistants
                  shall be given free and ready access to the Platform and to
                  any other place where construction of the Platform is being
                  done or materials are being processed or stored in connection
                  with the construction of the Platform, including the yards,
                  workshops, stores and offices of Builder, and the premises of
                  subcontractors of Builder who are doing work for the Platform
                  or storing materials at such premises in connection with the
                  Platform's construction.

         (c)      Builder shall designate a single project manager in writing to
                  Owner, with full authority to act for Builder under this
                  Agreement. Owner shall designate a single project manager in
                  writing to Builder, with full authority to act for Owner under
                  this Agreement. Builder and Owner may from time to time
                  designate substitute project managers in writing with such
                  authority.

         (d)      If any difference in opinion between parties hereto shall
                  arise during the construction of the Platform concerning
                  technical matters in respect of the materials and workmanship
                  covered by the ABS rules or the guide referred to in Section
                  2, paragraph (a) of this Agreement, such difference in opinion
                  shall be referred to ABS whose opinion thereon shall be final
                  and binding upon both parties.

         (e)      Within thirty (30) days of the Effective Date of this
                  Agreement the Builder shall deliver to the Owner a key event
                  production schedule (the "Production Schedule") showing
                  planned construction progress of the Platform. The Production
                  Schedule shall be reasonably acceptable to the Owner and the
                  Builder shall develop an overall Platform erection plan that
                  integrates material

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                  delivery and assembly actions needed to schedule work flow
                  during all phases of construction. This plan shall encompass
                  sufficient planning data to assure that all phases of
                  construction can be adequately accomplished so as to deliver
                  the Platform on or before the Delivery Date. The Platform
                  erection/construction plan shall be furnished to Owner within
                  sixty (60) days after the Effective Date of this Agreement and
                  shall, upon acceptance by Owner, become by reference an
                  integral part of the Production Schedule. The Delivery Date
                  shall be extended by any delay caused by act or omission of
                  Owner, failure to timely deliver to Builder any Owner
                  Furnished Equipment (as defined in Section 6 hereof), delays
                  caused by ABS or any governmental agency, changes as provided
                  in Section 5 hereof and events of Force Majeure as provided in
                  Section 14 hereof.

         (f)      Included in the Specifications is a list of tests and trials
                  to be performed by Builder in connection with the completion
                  of the Platform. Owner's Representatives shall be given the
                  number of days of prior notice for each applicable test or
                  trial as set forth in the Specifications.

5.       CHANGES AND ADDITIONAL WORK

         Owner shall have the right, at any time or times, to request that
         reasonable change or changes be made in any of the Specifications, and
         Owner shall issue to Builder a written change order to be executed by
         Owner and Builder; provided, however, if such requested change or
         changes in the aggregate would materially increase the overall scope of
         work so as to adversely impact Builder's other work or commitments or
         if Builder and Owner cannot reach agreement as to a lump sum price or
         credit or change in the Scheduled Delivery Date or other terms and
         conditions of this Agreement or the Specifications, Builder shall have
         no obligation to Owner to perform same. If any change necessitates an
         increase or decrease in the quantity or quality of the materials or the
         nature of the labor to be furnished by Builder for the Platform, then
         the Contract Price shall be increased or decreased on a lump sum basis
         in accordance with the mutual agreement of the parties. If any change
         will prolong the time for completion of the Platform, the Delivery Date
         shall be extended accordingly. Builder shall be entitled to make minor
         changes to the Specifications, if found necessary, for the introduction
         of improved production methods or otherwise, subject to Owner's
         approval, which is not to be unreasonably withheld.

6.       OWNER FURNISHED EQUIPMENT

         (a)      Within forty-five (45) days of the Effective Date of this
                  Agreement, Builder and Owner shall agree upon a schedule of
                  in-yard delivery dates of those items of material, equipment,
                  engineering data and information ("Owner Furnished
                  Equipment"), as are set forth in the Specifications to be
                  provided by Owner. The time for delivery of the Owner
                  Furnished Equipment as detailed on such delivery schedule
                  shall be such so as to not cause Builder to be delayed in the
                  timely prosecution of the work in accordance with the
                  Production Schedule.

         (b)      Builder shall at its own cost install the Owner Furnished
                  Equipment and obtain ABS approval of such installation.
                  Builder's scope of work includes all

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                  necessary foundations and supplies, such as, but not limited
                  to, electric, instrumentation, controls and hydraulic power,
                  air, fuel, steam, etc., in each case including all necessary
                  connections such as electric wiring and piping. All Owner
                  Furnished Equipment shall be delivered by Owner to Builder at
                  Builder's Yard in their assembled form to the extent
                  reasonably feasible, tested and in proper condition, ready for
                  installation in or on the Platform, in accordance with the
                  Production Schedule. Builder will unload all Owner Furnished
                  Equipment. Suitable storage will be provided by Builder for
                  all Owner Furnished Equipment. The cost of such storage is
                  included in the Contract Price. The Owner Furnished Equipment
                  shall be at Builder's risk from the time of their delivery to
                  the shipyard until the time of their redelivery to Owner
                  either as part of the Platform or otherwise. Upon delivery of
                  each item of Owner Furnished Equipment, unless such item is
                  accompanied by a weight certificate issued by a reputable
                  body, Builder shall weigh at Owner's expense such item in
                  order to incorporate the actual weight in the Lightship Weight
                  calculations.

         (c)      In order to facilitate installation by Builder of the Owner
                  Furnished Equipment on the Platform, Owner shall furnish the
                  Builder with all reasonably necessary information including
                  specifications, plans, drawings, instruction books, manuals,
                  test reports and certificates. Owner, if so requested by
                  Builder, shall without any charge to Builder cause specialist
                  engineers and representatives of the manufacturers of the
                  Owner Furnished Equipment to provide technical assistance to
                  Builder in installation thereof in or on the Platform or to
                  make necessary adjustments thereof at the Yard. Builder's
                  scope of work under this Agreement excludes any adjustment,
                  repair or modification of any Owner Furnished Equipment.
                  Builder's scope of work under this Agreement includes any
                  testing of installed Owner Furnished Equipment required by the
                  Specifications, any Regulatory Body or ABS.

         (d)      In the event of a delay in delivery of any Owner Furnished
                  Equipment, then Owner and Builder shall mutually agree on a
                  new installation date of the delayed Owner Furnished
                  Equipment. If no agreement is reached between both parties
                  within twenty (20) days, and the absence of the delayed Owner
                  Furnished Equipment is impacting the critical path to
                  completion of the Platform, then Builder shall have the right
                  to proceed with the construction of the Platform without
                  installation of the delayed Owner Furnished Equipment on the
                  Platform, without prejudice to Builder's other rights as
                  hereinabove provided, and Owner shall accept and take delivery
                  of the Platform as so constructed.

         (e)      On delivery of each consignment of Owner Furnished Equipment,
                  Builder shall assist Owner in the inspection of the
                  consignment delivered. Any and all of the Owner Furnished
                  Equipment shall be subject to Builder's reasonable right
                  of rejection as and if they are found to be unsatisfactory or
                  in improper condition for installation. In such instances,
                  Builder shall first give adequate notice to Owner and a
                  reasonable opportunity for correction by Owner before being
                  entitled to reject the Owner Furnished Equipment.

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         (f)      Should Owner fail to timely deliver the Owner Furnished
                  Equipment as provided in this Agreement and such delay results
                  in increased costs to Builder, Owner and Builder shall agree
                  upon the appropriate increase in the Contract Price and Owner
                  shall reimburse Builder for such increased cost. If Owner and
                  Builder are unable to agree upon the appropriate increase in
                  the Contract Price for such delay, then Owner shall prior to
                  delivery of the Platform post a bond pursuant to the
                  requirements of Section 3, paragraph (g) hereof.

7. LIENS

         Provided Builder is paid all amounts owing to Builder by Owner under
         this Agreement as and when due, Builder shall not place or create or
         permit to be placed or created, any liens, charges, or encumbrances on,
         or security interests as to, or pledges of, the Platform, and any lien,
         charge, encumbrance or security interest so placed or created by or
         through Builder, its subcontractors and suppliers, or any of them,
         shall be forthwith released by the Builder. The Builder shall release
         and cause to be discharged any such lien, charge, encumbrance or
         security interest. In the event Builder fails to secure the discharge
         or release of any such lien, charge, encumbrance or security interest,
         after notice to Builder the Owner may secure the removal of same, in
         which event the Builder shall reimburse the Owner for its costs of
         securing such discharge or release (which cost shall include any
         expenses, including, without limiting the generality of the foregoing,
         attorneys' fees incurred in connection therewith) or at Owner's sole
         option by deducting such sum from any payments due or to become due the
         Builder under this Agreement. In the event such cost is in excess of
         the amount of any such reimbursement by deductions, the Builder further
         agrees to pay the amount of such excess to the Owner upon demand.

8. INSURANCE

         Builder shall obtain and maintain during all times hereunder the
         following insurance in form reasonably acceptable to Owner and Owner's
         underwriters:

         (a)      Broad Form Comprehensive General Liability Insurance covering
                  all of the operations of Builder, including Contractual
                  Liability and Contractor's Protective Liability with a
                  combined single limit of not less than U.S. $1,000,000 per
                  occurrence for bodily injury and/or property damage, including
                  products and completed operations coverage, with excess
                  liability limits of not less than U.S. $1,000,000 per
                  occurrence.

         (b)      Each of the foregoing insurance policies shall, either on the
                  face thereof or by appropriate endorsement name (except for
                  the policies specified in subparagraph (a) above) Owner as
                  an additional assured with respect to the indemnities of
                  Builder assumed under this Agreement, provide that the
                  insurance policy shall not be cancelled or coverage reduced
                  except upon 30 days prior written notice to Owner, contain
                  waivers of subrogation pursuant to which the insurer waives
                  all express or implied rights of subrogation against Owner,
                  provide that Owner shall not be liable for premiums or
                  calls, and be retained in full force and effect by Builder
                  until the completion of the Platform hereunder as provided

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                  below. Builder shall be responsible for all deductibles and
                  self insured retentions, to the extent the loss or claim would
                  otherwise be covered by Builder's indemnities contained in
                  this Agreement. Concurrently with the execution of this
                  Agreement, Builder shall furnish to Owner certificates or
                  other evidence satisfactory to the other of the insurance
                  required hereunder.

         (c)      Until final delivery of the Platform, Builder shall its own
                  cost and expense, keep the Platform and all materials either
                  delivered to the Yard or being handled by Builder for the
                  Platform or built into, or installed in or upon the Platform
                  fully insured under coverage and with underwriters
                  satisfactory to the Owner and not more restrictive than the
                  current form of London or American Institute Clauses for
                  Builder's Risks or equivalent form, including tests and trials
                  clauses. The Builder's Risks insurance shall include
                  supplemental coverage for war risks, strikes, lockouts, labor
                  disturbances, riot or civil commotion, earthquakes, and
                  protection and indemnity risks. The amount of such insurance
                  coverage shall be in an amount at least equal to the Contract
                  Price and shall be increased from time to time to cover the
                  cost of all changes, alterations, or modifications.

         (d)      The Builder's Risks policy shall be taken out in the joint
                  names of Builder and Owner and all losses under such policy
                  shall be payable to the Builder and Owner in accordance with
                  their respective interests. The policies shall provide that
                  there shall be no recourse against the Owner for the payment
                  of premiums or other charges and shall further provide that at
                  least thirty (30) days' prior written notice of any material
                  alteration, cancellation, or cancellation for the non-payment
                  of premiums or other charges shall be given to the Owner by
                  the insurance underwriters. Any deductible under this
                  insurance policy shall be for the account of Builder.

9. TITLE AND RISK OF LOSS

         (a)      Title to the Platform, to the extent completed and all
                  materials destined for incorporation therein, whether located
                  at Builder's Yard or elsewhere, shall immediately vest in
                  Owner when the same is paid for by Owner, whether prior to or
                  after incorporation into the Platform. The vesting of title
                  shall not relieve Builder of its obligation to replace damaged
                  or defective materials at Builder's expense and to complete
                  and deliver the Platform in accordance with the provisions of
                  this Agreement. Risk of loss of the Platform shall pass to
                  Owner upon delivery and acceptance thereof in accordance with
                  this Agreement.

         (b)      To the extent that title to any part of the Platform or the
                  materials destined for incorporation in the Platform has
                  passed from Builder to Owner or Owner otherwise obtains any
                  rights therein, whether now owned or hereafter acquired,
                  Owner as debtor hereby grants to Builder as a secured party
                  a security interest and lien upon same and all right,
                  title, and interest of Owner thereto and the proceeds and
                  products thereof, to secure the performance of Owner under
                  this Agreement and the payment to Builder of all payments
                  required to be paid by Owner to Builder under this
                  Agreement; provided, however, the security

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                  interest granted to the Builder by this Section 9(b) shall
                  be subordinate to any liens or security interests granted
                  by Owner to its lenders on Owner's interest in this
                  contract and the Platform. In connection herewith, Builder
                  shall upon Owner's default under this Agreement have all
                  rights and remedies of a secured party under the law of
                  Singapore. The security interest and lien granted to
                  Builder hereunder and the rights and remedies of Builder
                  herein shall be deemed cumulative and in addition to the
                  rights and remedies otherwise available to Builder at law
                  or in equity or in contract, which shall not be subordinate
                  to any liens or security interests granted by Owner to its
                  lenders.

         (c)      If the Platform or any Owner Furnished Equipment shall be
                  damaged by any insured cause whatsoever prior to acceptance
                  thereof by Owner and such damage does not constitute an actual
                  or a constructive total loss of the Platform, Builder and/or
                  Owner shall apply the amount recovered under the insurance
                  policy referred to in Paragraph 8(d) of this Agreement to the
                  repair of such damage and Owner shall accept the Platform
                  under this Agreement if completed in accordance with this
                  Agreement and the Specifications. The Production Schedule
                  including the Delivery Date shall be deemed extended by the
                  time necessary to repair such damage. In the event of an
                  actual or constructive total loss of the Platform prior to
                  delivery, this Agreement shall automatically be deemed
                  terminated, and Builder shall retain all installment payments
                  made pursuant to Section 3, Paragraph 2(b) of this Agreement
                  and shall be paid by Owner for the price for that portion of
                  the Platform then constructed for which progress payments have
                  not yet been made and all work in progress (including profit
                  on all to Builder). In the event that the actual or
                  constructive total loss of the Platform results from the
                  operation of an insurable risk covered by insurance as
                  required under Paragraph 8(d) of this Agreement, all of the
                  proceeds of such insurance payable as a result of such loss
                  shall be paid to the Owner and the Builder as their interests
                  may appear.

10.      DELIVERY

         (a)      Upon completion of the construction of the Platform and the
                  tests and trials as provided in the Specifications, and after
                  having obtained all required approvals and certifications from
                  ABS and the Regulatory Bodies, Builder shall tender delivery
                  of the Platform to Owner. Prior to tendering delivery, Builder
                  shall have remedied at Builder's sole cost and expense any
                  defects discovered by Owner, Builder or ABS in Builder's
                  workmanship or materials including installation of Owner
                  Furnished Equipment or any other non-conformity of the
                  Platform with the requirements of the Specifications and this
                  Agreement and shall have performed any re-tests necessary to
                  ensure that such items have been fully corrected. Owner shall
                  accept such tender of delivery, and Owner shall not have the
                  right to refuse to accept delivery of the Platform provided
                  the same is substantially completed, except for minor items
                  acceptable to Owner to be completed as mutually agreed
                  between Owner and Builder, and capable of being utilized by
                  Owner. Any remaining items shall be completed by Builder
                  following delivery and prior to departure of the Platform
                  from Builder's yard, or Owner and Builder may mutually
                  agree on an appropriate reduction of the Contract Price for
                  such remaining items.

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         (b)      To evidence acceptance of the Platform by Owner, Builder and
                  Owner shall execute and deliver a Protocol of Acceptance and
                  Delivery acknowledging delivery of the Platform. Builder shall
                  further deliver to Owner a Bill of Sale confirming the
                  conveyance of title to the Platform to the Owner, which Bill
                  of Sale shall (i) generally describe the Platform as a mobile,
                  self-contained and elevating platform, (ii) contain a general
                  warranty of title and freedom from liens (except as to matters
                  arising by, through, or under Owner) in favor of the Owner,
                  and (iii) be deemed to contain the additional warranties and
                  covenants set forth in Section 11 of this Agreement without
                  the necessity of making any reference to such warranties in
                  the Bill of Sale. Builder shall also deliver to Owner the
                  remaining delivery documents set forth in the Specifications.

         (c)      Builder shall deliver the Platform along side Builder's dock
                  at Builder's Yard. Following delivery and acceptance, Owner
                  shall have the right to dock the Platform at Builders Yard for
                  a period not to exceed thirty (30) days, after which time the
                  Platform must depart from Builder's Yard. During such
                  post-delivery docking period, Owner shall pay to Builder its
                  standard charges for shore power, potable water, and security
                  guard service. All such charges must be paid by Owner to
                  Builder prior to departure of the Platform from Builder's
                  Yard.

11.      WARRANTY

         Builder hereby warrants to Owner that (i) Builder's workmanship and
         materials shall be free from material defects, and (ii) that the
         systems designed, supplied, and installed by Builder are in compliance
         with this Agreement and the Specifications (any failure to meet the
         requirements of (i) or (ii) being herein a "Warranty Deficiency"). The
         warranty set forth in the preceding sentence (the "Warranty") shall
         commence on the date of delivery of the Platform and expire twelve (12)
         months thereafter (provided, however, that if any of the equipment of
         the Platform, including without limitation any cranes or winches, is
         put into service by Builder prior to said delivery, (i) Builder shall
         at its own cost and expense restore such equipment to like new
         condition, ordinary wear and tear excepted and (ii) the twelve (12)
         months warranty period shall commence with delivery of the Platform )
         and shall be subject to the following provisions:

         (a)      The Warranty shall not apply to any part of the Platform which
                  (i) has been misused or structurally repaired or altered after
                  acceptance of the Platform by Owner by anyone other than
                  Builder or its duly authorized representative, or (ii) has
                  been damaged because of it's use, or the use of any other
                  materials or equipment, after Owner (or any other person or
                  firm operating the Platform or its equipment) has knowledge
                  of such defect. Equipment or other components of the
                  Platform sold to Owner pursuant to this Agreement but not
                  manufactured by Builder are not warranted to any extent,
                  but Builder shall assign (to the extent same are assignable
                  by Builder) to Owner, without recourse, any warranties
                  furnished to Builder by the vendors of such equipment or
                  other components. If any such warranties are not
                  assignable, Builder shall permit Owner to seek performance
                  or damages in Builder's

                                      10
<PAGE>

                  name. Owner shall seek performance or damages under such
                  warranties only from such vendors and not from Builder.
                  Builder shall use reasonable efforts to secure the best
                  available warranties available from such vendors and shall
                  cooperate with Owner in any resulting dispute Owner may
                  have with such vendors.

         (b)      The extent of Builder's liability for any breach of the
                  Warranty shall be limited to (i) repairing or replacing, as
                  elected by Builder, any defective materials, workmanship or
                  components to correct such Warranty Deficiency at Builder's
                  Yard or at any other shipyard of Builder or its affiliates
                  (hereinafter collectively referred to as a "Keppel FELS
                  Yard"), with the Platform to be brought to a Keppel FELS Yard
                  at Owner's sole risk and expense, or (ii) reimbursing Owner
                  for the cost of such correction in accordance with the
                  provisions of subparagraph (c) hereinbelow.

         (c)      Owner, at its discretion, may elect to cause the necessary
                  repairs or replacements to be made at a non-Keppel FELS Yard.
                  In such event, Builder's sole obligation shall be to reimburse
                  Owner for the cost of such repairs or replacements, provided,
                  however, that in no event shall the sum to be paid to Owner by
                  Builder exceed the cost that Builder would have borne, based
                  on Builder's normal rates, if the repairs or replacements had
                  been made at the Builder's Yard. If Owner elects to proceed
                  under the provisions of this subparagraph (c), Owner shall, as
                  soon as possible after such election (but in any event prior
                  to the commencement of such repairs or replacements), notify
                  Builder of the time, place, and estimated cost of such repairs
                  and replacements. Builder shall have the right to verify, at
                  its sole cost and expense, by its own representative, the
                  nature and extent of the defects complained of. Except in the
                  case of emergency repairs needed to protect life or property
                  or in the event Builder's representative shall not have
                  arrived to perform such inspection within seventy-two (72)
                  hours of Owner's notice to Builder if reasonably possible and
                  the repairs are necessary to meet operating commitments of
                  Owner, such inspection shall be prior to the time that the
                  repairs or replacements are made and if in fact no breach of
                  the Warranty made by Builder herein has occurred, Owner shall
                  pay to Builder a per diem equal to Builder's then current
                  labor rate schedule and the reasonable expenses incurred by
                  such representative.

         (d)      The REMEDIES provided in subparagraphs (b) and (c) hereinabove
                  are EXCLUSIVE. Such Warranty shall not include transportation,
                  towage, insurance, or other incidental expenses. In no event
                  shall the obligation of Builder to repair or replace (or to
                  reimburse Owner pursuant to paragraph (c) hereinabove for the
                  cost of repairing or replacing) defective workmanship or
                  materials be construed to require Builder to repair or
                  replace more than the actual workmanship or material that is
                  found to be defective.

         (e)      The Warranty shall not be effective unless Builder receives
                  from Owner a written notice of the Warranty Deficiency (i)
                  within thirty (30) days after the date of discovery of such
                  defect or failure and (ii) within thirty (30) days after the
                  expiration of the prescribed Warranty period.

                                      11
<PAGE>

         (f)      Any work performed or materials furnished by Builder pursuant
                  to the Warranty shall be warranted for the remaining term of
                  the original Warranty, and nothing in subparagraph (b) or (c)
                  shall extend the Warranty period beyond the Warranty period
                  specified in this Section 11.

         (g)      THE WARRANTY AS DEFINED HEREINABOVE IS IN LIEU OF ALL OTHER
                  WARRANTIES (EXCEPT OF TITLE), EXPRESS OR IMPLIED, STATUTORY OR
                  AT COMMON LAW, AND ALL OTHER LIABILITIES (AT COMMON LAW OR IN
                  CONTRACT, TORT, OR OTHERWISE, RELATING IN ANY WAY TO THE
                  PLATFORM OR COMPONENTS THEREOF OR SERVICES TO BE PROVIDED
                  UNDER THIS AGREEMENT INCLUDING, WITHOUT LIMITATION, STRICT
                  LIABILITY AND NEGLIGENCE). WITHOUT LIMITATION OF THE
                  GENERALITY OF THE IMMEDIATELY PRECEDING SENTENCE, BUILDER
                  EXPRESSLY DISCLAIMS AND NEGATES (i) ANY IMPLIED OR EXPRESS
                  WARRANTY OF MERCHANTABILITY, (ii) ANY IMPLIED OR EXPRESS
                  WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, (iii) ANY
                  IMPLIED OR EXPRESS WARRANTY OF CONFORMITY TO MODELS OR SAMPLES
                  (iv) ANY IMPLIED OR EXPRESS WARRANTY OF DILIGENCE, (v) ANY
                  IMPLIED OR EXPRESS WARRANTY OF WORKMANLIKE SERVICE, (vi) ANY
                  IMPLIED OR EXPRESS WARRANTY OF SEAWORTHINESS, AND (vii) ALL
                  OTHER LIABILITY, AT COMMON LAW OR IN CONTRACT OR TORT OR
                  OTHERWISE, INCLUDING, WITHOUT LIMITATION, STRICT LIABILITY
                  (WHETHER FOUNDED IN SECTION 402(A) OF THE RESTATEMENT OF TORTS
                  OR OTHERWISE) AND NEGLIGENCE, WHETHER OCCASIONED BY ACTS OR
                  OMISSIONS OF SOLE OR CONCURRENT NEGLIGENCE OF BUILDER, ITS
                  AFFILIATES AND/OR OTHERS. BUILDER DISCLAIMS LIABILITY FOR, AND
                  IN NO EVENT WHATEVER SHALL BE LIABLE FOR, ANY LOSS OF PROFITS
                  OF OWNER OR OTHERS OR ANY OTHER INCIDENTAL, CONSEQUENTIAL,
                  PUNITIVE OR SPECIAL DAMAGES.

         (h)      Builder's warranty with respect to the Owner Furnished
                  Equipment shall extend only to installation thereof in
                  accordance with the certified equipment drawings furnished by
                  Owner in those instances where such Equipment is actually
                  installed by Builder. In all other instances (including,
                  without limitation, those instances in which Owner does not
                  furnish certified equipment drawings to Builder), the sole
                  risk and responsibility for the proper installation of the
                  Owner Furnished Equipment shall, as between Builder and
                  Owner, be borne by Owner. The sole risk and responsibility
                  for the operability of the Owner Furnished Equipment shall,
                  as between Builder and Owner, be borne by Owner, provided
                  Builder shall have installed the equipment in accordance
                  with the certified equipment drawings furnished by Owner.

         (i)      No employee or representative of Builder is authorized to
                  change the Warranty in any way or to grant any other warranty.

                                      12

<PAGE>

         (j)      Owner understands and agrees that any modification to the
                  design, construction, or components of the Platform made by
                  the Owner are the responsibility of Owner and not the
                  responsibility of the Builder for any purpose whatsoever,
                  including claims for damages or other liability asserted by
                  Owner, its customers or any third party. In the event such
                  modifications require ABS or Regulatory Body approval, Owner
                  shall be responsible for obtaining such approval unless
                  Builder accepts the responsibility by executing a change order
                  to perform the work under this Agreement.

         (k)      Except as expressly provided in Section 28 hereinbelow, Owner
                  understands and agrees that the information contained in this
                  Agreement and the Specifications relating to the Platform does
                  not guarantee a fixed or variable weight of the Platform or
                  designate the use of equipment or other components other than
                  the equipment or other components to be provided by Builder
                  under this Agreement and the Specifications. The fixed and
                  variable weight of the Platform and the selection of equipment
                  or other components other than those to be provided by Builder
                  under this Agreement and the Specifications are decisions of
                  the Owner, including outfitting and fabrication decisions. The
                  weight information provided by Builder is for information only
                  and reflects historical information or estimated and
                  approximate data. Builder is unable to predict actual weights
                  for the Platform to be constructed by Builder. Builder does
                  not warrant or represent that Builder's sale or construction
                  of the Platform will meet the historical or approximate data
                  supplied to Owner.

12. INDEMNIFICATION PROVISIONS

         A.       BUILDER INDEMNITIES

         (A)      BUILDER HEREBY AGREES TO DEFEND, INDEMNIFY AND HOLD HARMLESS
                  OWNER, ITS CUSTOMERS, AND THEIR RESPECTIVE PARENT, HOLDING AND
                  AFFILIATED COMPANIES, AND THEIR EMPLOYEES, OFFICERS,
                  DIRECTORS, AND AGENTS (COLLECTIVELY THE "OWNER INDEMNITEES"),
                  FROM AND AGAINST ALL LIABILITIES, LOSSES, CLAIMS, DEMANDS OR
                  CAUSES OF ACTION (COLLECTIVELY "CLAIMS"), BY BUILDER OR ITS
                  SUBCONTRACTORS OF ANY TIER OR THEIR RESPECTIVE EMPLOYEES,
                  OFFICERS AND AGENTS, BASED ON ILLNESS, INJURY OR DEATH OR
                  DAMAGE OR DESTRUCTION OR LOSS OF USE OF PROPERTY THEREOF
                  INCLUDING WITHOUT LIMITATION THE YARD, OCCURRING PRIOR TO THE
                  DELIVERY TO AND ACCEPTANCE BY OWNER OF THE PLATFORM, INCIDENT
                  TO OR CONNECTED WITH OR ARISING OUT OF OR IN ANY WAY RELATED
                  DIRECTLY OR INDIRECTLY TO THE PERFORMANCE OF THIS AGREEMENT OR
                  BREACH HEREOF, REGARDLESS OF CAUSE, INCLUDING THE SOLE OR
                  CONCURRENT NEGLIGENCE OR FAULT OF ANY OF BUILDER OR THE OWNER
                  INDEMNITEES OR THEIR OFFICERS, AGENTS, EMPLOYEES, OR
                  SUBCONTRACTORS OF ANY TIER OR THEIR EMPLOYEES OR AGENTS,
                  UNSEAWORTHINESS,

                                      13
<PAGE>

                  STRICT LIABILITY, OR ANY OTHER EVENT OR CONDITION WHETHER
                  OR NOT ANTICIPATED BY ANY PERSON OR PARTY, REGARDLESS OF
                  WHETHER PREEXISTING THE EXECUTION OF THIS AGREEMENT.

         (B)      BUILDER SHALL BE LIABLE FOR ALL COSTS, EXPENSES, AND
                  REASONABLE ATTORNEYS FEES INCURRED BY OWNER INDEMNITEES IN
                  DEFENDING ANY COVERED CLAIMS AND IN ASSERTING THE INDEMNITIES
                  AS SET FORTH HEREIN AGAINST BUILDER. BUILDER SHALL BE
                  OBLIGATED TO BEAR THE EXPENSE OF THE INVESTIGATIONS AND
                  EXPENSES OF ALL CLAIMS ARISING THEREFROM AND TO PAY THE FULL
                  AMOUNT OF ANY JUDGMENT OR SETTLEMENT RENDERED AGAINST THE
                  OWNER INDEMNITEES, IT BEING STIPULATED THAT ALL OBLIGATIONS OF
                  INDEMNITY ASSUMED HEREIN SHALL SURVIVE THE TERMINATION OF THIS
                  AGREEMENT, REGARDLESS OF HOW SUCH TERMINATION IS EFFECTED. THE
                  OWNER INDEMNITEES SHALL PROVIDE REASONABLE ASSISTANCE TO
                  BUILDER IN RELATION TO THE DEFENSE OF CLAIMS WHICH ARE SUBJECT
                  TO INDEMNITY HEREUNDER

         B.       OWNER INDEMNITIES

         (A)      OWNER HEREBY AGREES TO DEFEND, INDEMNIFY AND HOLD HARMLESS
                  BUILDER AND ITS PARENTS, HOLDING AND AFFILIATED COMPANIES, AND
                  THEIR RESPECTIVE EMPLOYEES, OFFICERS, DIRECTORS, AND AGENTS
                  AND THE SUBCONTRACTORS OF BUILDER AND THEIR SERVANTS
                  (COLLECTIVELY THE "BUILDER INDEMNITEES"), FROM AND AGAINST ALL
                  LIABILITIES, LOSSES, CLAIMS, DEMANDS, COSTS, OR CAUSES OF
                  ACTION (COLLECTIVELY "CLAIMS"), BY OWNER OR ITS CONTRACTORS
                  AND SUBCONTRACTORS OF ANY TIER OTHER THAN BUILDER OR ITS
                  SUBCONTRACTORS OR THEIR RESPECTIVE EMPLOYEES, OFFICERS AND
                  AGENTS, BASED ON ILLNESS, INJURY OR DEATH OR DAMAGE OR
                  DESTRUCTION OR LOSS OF USE OF PROPERTY OTHER THAN THE
                  PLATFORM, OCCURRING PRIOR TO THE DELIVERY TO AND ACCEPTANCE BY
                  OWNER OF THE PLATFORM, INCIDENT TO OR CONNECTED WITH OR
                  ARISING OUT OF OR IN ANY WAY RELATED DIRECTLY OR INDIRECTLY TO
                  THE PERFORMANCE OF THIS AGREEMENT OR BREACH HEREOF, REGARDLESS
                  OF CAUSE, INCLUDING THE SOLE OR CONCURRENT NEGLIGENCE OR FAULT
                  OF ANY OF OWNER OR THE BUILDER INDEMNITEES OR THEIR OFFICERS,
                  AGENTS, EMPLOYEES, OR SUBCONTRACTORS OF ANY TIER OR THEIR
                  EMPLOYEES OR AGENTS, UNSEAWORTHINESS, STRICT LIABILITY OR
                  ANY OTHER EVENT OR CONDITION WHETHER OR NOT ANTICIPATED BY
                  ANY PERSON OR PARTY, REGARDLESS OF WHETHER PREEXISTING THE
                  EXECUTION OF THIS AGREEMENT.

                                      14
<PAGE>

         (B)      OWNER SHALL BE LIABLE FOR ALL COSTS, EXPENSES, AND REASONABLE
                  ATTORNEYS FEES INCURRED BY BUILDER INDEMNITEES IN DEFENDING
                  ANY COVERED CLAIMS AND IN ASSERTING THE INDEMNITIES AS SET
                  FORTH IN PARAGRAPH (A) HEREINABOVE AGAINST OWNER. OWNER SHALL
                  BE OBLIGATED TO BEAR THE EXPENSE OF THE INVESTIGATIONS AND
                  EXPENSES OF ALL CLAIMS ARISING THEREFROM AND TO PAY THE FULL
                  AMOUNT OF ANY JUDGMENT OR SETTLEMENT RENDERED AGAINST THE
                  BUILDER INDEMNITEES, IT BEING STIPULATED THAT ALL OBLIGATIONS
                  OF INDEMNITY ASSUMED HEREIN SHALL SURVIVE THE TERMINATION OF
                  THIS AGREEMENT, REGARDLESS OF HOW SUCH TERMINATION IS
                  EFFECTED. THE BUILDER INDEMNITEES SHALL PROVIDE REASONABLE
                  ASSISTANCE TO OWNER IN RELATION TO THE DEFENSE OF CLAIMS,
                  WHICH ARE SUBJECT TO INDEMNITY HEREUNDER.

         C.       AS USED HEREIN "AFFILIATES" OR "AFFILIATED COMPANIES" SHALL
                  MEAN AN ENTITY WHICH, DIRECTLY OR INDIRECTLY, THROUGH ONE OR
                  MORE INTERMEDIARIES, CONTROLS, IS CONTROLLED BY, OR IS UNDER
                  COMMON CONTROL WITH, THE PARTY IN QUESTION.

13. PATENT INDEMNITY

         (a)      Builder hereby agrees to defend any claim or suit and to
                  indemnify and save Owner harmless from and against any damages
                  (including the costs of the suit and reasonable attorney's
                  fees) awarded against Owner in a suit arising out of any
                  infringement of any U.S. or Singapore letters patent by reason
                  of the incorporation into the Platform in accordance with this
                  Agreement, the Specifications or the Platform Design of any
                  items manufactured or designed by Builder; provided that

                           (i)      the indemnity contained in this Section 13
                                    shall not apply to any claim or suit arising
                                    out of the construction or use of processes,
                                    devices, apparatus, or equipment specified
                                    or furnished by Owner or anyone else other
                                    than Builder, for which Owner shall
                                    indemnify and defend Builder, and mounted
                                    upon or used in connection with the
                                    Platform, and

                           (ii)     Owner shall give Builder prompt written
                                    notice of any such claim or suit and shall
                                    permit Builder to control settlement
                                    negotiations and any litigation in
                                    connection therewith;
                                    provided, however, no settlement which
                                    purports to acknowledge, on Owner's
                                    behalf the validity of the patent
                                    involved shall be entered into by Builder
                                    without Owner's consent. As to any
                                    Equipment components purchased by
                                    Builder, Builder shall assign (to the
                                    extent same is assignable) to Owner,
                                    without recourse, any patent indemnity
                                    coverage granted to Builder by any vendor
                                    thereof. Owner shall seek

                                      15

<PAGE>

                                    performance or damages under such Patent
                                    indemnities only from such vendors and
                                    not from Builder. Builder shall cooperate
                                    with Owner in any resulting dispute Owner
                                    may have with such vendors, including
                                    permitting Owner to assert such
                                    indemnities in Builder's name when any
                                    such indemnities are not assignable. It
                                    is understood and agreed that the
                                    Platform Design and the Specifications
                                    were developed by Builder, and the
                                    inclusion in the Platform Design or the
                                    Specifications of any process, method of
                                    construction, construction equipment,
                                    device, or apparatus (other than Owner
                                    Furnished Equipment) are the sole and
                                    exclusive responsibility of Builder and
                                    that any claims of patent infringement
                                    arising therefrom are within the terms of
                                    Builder's patent indemnity.

         (b)      Owner agrees to defend any claim, suit, or proceeding brought
                  against Builder alleging that the construction or use by
                  Builder, pursuant to this Agreement, of any process, method of
                  construction, construction equipment, device, or apparatus
                  (including, without limitation, Owner Furnished Equipment)
                  specified or furnished by Owner or mounted upon or used in
                  connection with the Platform constitutes infringement of any
                  letters patent, and Owner agrees to indemnify and save Builder
                  harmless from and against any judgment rendered against
                  Builder as a result of such claim, suit, or proceeding.
                  Builder shall promptly notify Owner in writing of any such
                  claim, suit, or proceeding and shall permit Owner to control
                  the conduct and settlement of such claim, suit, or proceeding,
                  provided, however, no settlement shall be entered into without
                  Builder's consent which purports to acknowledge on Builder's
                  behalf the validity of any patent. Builder shall provide
                  information and assistance to Owner, at Builder's expense, as
                  may be reasonably necessary to aid in the conduct and
                  settlement of the claim, suit, or proceeding. Builder shall be
                  entitled to participate, at its own expense, in the conduct
                  and settlement of such claim, suit, or proceeding through its
                  selected representatives and attorneys.

14. FORCE MAJEURE

         (a)      For purposes of this Agreement, events of "Force Majeure"
                  shall be defined to mean all causes beyond the reasonable
                  control of the party asserting the benefit of this Article,
                  and shall include but not be limited to fire, explosion,
                  breakdown of machinery or equipment, shortage or
                  unavailability of materials or equipment (provided the
                  responsible party shall have taken reasonable measures to
                  overcome such shortage or unavailability), delay in
                  transportation (provided the responsible party shall have
                  taken reasonable measures to overcome such delay), government
                  order, edict, or other governmental action, storms, abnormal
                  weather that prevents blasting or painting, strikes or other
                  labor disturbances, destruction or damage to Builder's Yard or
                  equipment or any Owner Furnished Equipment or the Platform or
                  any part thereof from any cause; acts of Owner or regulatory
                  bodies having or purporting to have jurisdiction; late
                  delivery of Owner Furnished Equipment or failure to furnish in
                  a timely manner necessary information concerning the Owner
                  Furnished

                                      16

<PAGE>

                  Equipment or the installation thereof; and any other causes
                  or accidents of the same or similar nature which are beyond
                  the control of the Builder or Owner or any or their
                  respective subcontractors or suppliers, provided, however,
                  that any increased costs to Builder caused by ABS shall not
                  be an event of Force Majeure. In case either party shall be
                  unable, wholly or in part, because of any such event of
                  Force Majeure to carry out its obligations under this
                  Agreement, the time for performance, other than the
                  obligation to make payments, shall be extended by the
                  period of such actual delay due to Force Majeure for which
                  notices are given as provided hereinbelow. Performance of
                  any obligations suspended while any Force Majeure is
                  operative shall be resumed as soon as possible after such
                  Force Majeure ceases. The party seeking benefit of this
                  paragraph shall notify the other of the occurrence of each
                  event of Force Majeure within seven (7) days after
                  commencement of such event. Any increased costs to Builder
                  resulting from any event of Force Majeure shall be
                  compensated by Owner to Builder to the extent (a) Builder
                  maintains the Builder's Risk insurance required by Section
                  8 hereof, and (b) not compensated to Builder under such
                  Builder's Risk insurance. After ninety (90) continuous days
                  of delay in the construction of the Platform due to Force
                  Majeure, Builder and Owner shall each have the right to
                  terminate this Agreement without further liability of
                  either party to the other except that (1) Builder shall
                  retain all progress payments pursuant to Paragraph 2(b)
                  hereinabove and shall be paid by Owner for the price for
                  that portion of the Platform then constructed for which
                  progress payments have not yet been made and all work in
                  process (including profit on all to Builder), and (2)
                  Builder shall (a) permit the Platform, work in process and
                  Owner Furnished Equipment to remain in Builder's yard for a
                  period of ninety (90) days following such termination to
                  permit the Owner time to dispose of such, and (b) on a time
                  and materials basis at Builder's customary rates, perform
                  such work on the Platform, work in process or Owner
                  Furnished Equipment as Owner reasonably requires to
                  facilitate such disposition. Owner shall pay to Builder its
                  standard charges for shore power, potable water, and
                  security guard service.

15.      INDEPENDENT CONTRACTOR

         (a)      Throughout the entire term of this Agreement, Builder shall be
                  an independent contractor with full power and authority to
                  select the means, methods and manner of performing its work
                  hereunder.

         (b)      All operations shall be conducted in Builder's own name and as
                  an independent contractor and not in the name of, or as an
                  agent for, Owner. In the event Builder shall sublet or
                  subcontract any of the construction of the Platform
                  provided for herein, Builder nevertheless shall remain
                  primarily responsible for compliance with all of the
                  provisions hereof and for the construction of the Platform,
                  including the portion of the construction of the Platform
                  performed by the party to whom the work is sublet or
                  subcontracted, and Builder shall require each such
                  subcontractor and each such subcontractor's employees,
                  agents and representatives to comply with all the
                  agreements, covenants, terms, conditions, and provisions on
                  the part of

                                      17

<PAGE>
                  Builder to be performed hereunder, insofar as applicable to
                  the work to be performed by each such subcontractor.

16.      DEFAULT

         (a)      Builder's Default

                  Builder shall be in default of its obligations under this
                  Agreement if any of the following events occur:

                  (i)      The failure of the Builder to perform or breach of
                           any of the material covenants, agreements, or
                           undertakings on its part to be performed under this
                           Agreement, provided that the Owner shall give notice
                           to the Builder as to such failure and the Builder
                           shall not, within thirty (30) days after being so
                           notified, commence and diligently prosecute remedial
                           action to cure such failure to perform or breach
                           which shall in any event be cured within one hundred
                           twenty (120) days of the date of such notice from
                           Owner;

                  (ii)     Builder goes into liquidation, whether voluntary or
                           compulsory, or enters into a scheme of arrangement,
                           or makes a general assignment of its assets for the
                           benefit of its creditors, or a receiver or receivers
                           of any kind whatsoever, whether temporary or
                           permanent, is appointed for the property of Builder,
                           or Builder institutes proceedings for its
                           reorganization or the institution of such proceedings
                           by creditors and approval thereof by the court,
                           whether proposed by a creditor, a stockholder or any
                           other person whomsoever, or Builder suffers any
                           execution against a major portion of its assets which
                           is not satisfied within seven (7) days, or Builder
                           fails generally, or admits in writing its inability,
                           to pay its debts generally as they become due.

         (b)      If any default by Builder occurs as defined in Subparagraph
                  (a) of this Section 16, Owner, at its election, may upon
                  prompt notice to Builder terminate this Agreement without
                  prejudice and exercise all rights and remedies available to
                  Owner at law, in admiralty, or in equity. Prior to exercise of
                  any remedy involving or which includes any attempt to take
                  control or possession of the Platform or any components
                  thereof or work in progress, if Builder disputes that it is in
                  default, Owner shall first be required to post with Builder a
                  corporate surety bond from a first class U.S. surety
                  acceptable to Builder in a form reasonably satisfactory to
                  Builder. Such bond shall be in an amount equal to 150% of any
                  sum claimed by Builder under this Agreement.

         (c)      Owner's Default

                  Owner shall be in default of its obligations under this
                  Agreement if any of the following events occurs:

                                      18

<PAGE>

                  (i)      In the event of failure by Owner to pay to Builder
                           any installments which are properly payable pursuant
                           to Section 3, Paragraph 2(b) of this Agreement or the
                           failure of the Owner to perform or breach of any of
                           the other material covenants, agreements, or
                           undertakings on its part to be performed under this
                           Agreement, provided that the Builder shall give
                           notice to the Owner as to such failure and the Owner
                           shall not, within seven (7) days in the case of
                           failure to pay or to take delivery of the Platform
                           when completed under the terms of this Agreement and
                           thirty (30) days in the case of other defaults after
                           being so notified, cure such failure to perform or
                           breach;

                  (ii)     Owner goes into liquidation, whether voluntary or
                           compulsory, or enters into a scheme of arrangement,
                           or makes a general assignment of its assets for the
                           benefit of its creditors, or a receiver or receivers
                           of any kind whatsoever, whether temporary or
                           permanent, is appointed for the property of Owner, or
                           Owner institutes proceedings for its reorganization
                           or the institution of such proceedings by creditors
                           and approval thereof by the court, whether proposed
                           by a creditor, a stockholder or any other person
                           whomsoever, or Owner suffers any execution against a
                           major portion of its assets which is not satisfied
                           within seven (7) days, or Owner fails generally, or
                           admits in writing its inability, to pay its debts
                           generally as they become due.

         (d)      If any default by Owner occurs as defined in subparagraph (c)
                  of this Section 16, Builder, at its election, may upon prompt
                  notice to Owner suspend its performance under this Agreement
                  and at any time thereafter may terminate this Agreement
                  without prejudice to all rights and remedies available to
                  Builder at law, in admiralty, or in equity.

17. LITIGATION

         (a)      Owner and Builder agree that any and all disputes arising from
                  or in connection with this Agreement shall be determined by,
                  and any legal suit, action, or proceeding arising out of or
                  relating to this Agreement may be instituted only in, the High
                  Courts of the Republic of Singapore to which jurisdiction the
                  parties hereby irrevocably submit.

         (b)      Owner hereby designates and appoints Sovereign Corporate
                  Services (South East Asia), 16 Collyer Quay, #12-02 Hitachi
                  Tower, Singapore 049 348 ("Sovereign") as Owner's authorized
                  agent and acknowledges on its behalf service of any and all
                  process and, if through reasonable efforts, service on
                  Sovereign has been unsuccessful, Owner hereby agrees that
                  Builder may effect service of any and all process which may be
                  served in any such suit, action, or proceeding in the High
                  Courts of the Republic of Singapore by registered mail
                  addressed to Owner at the address specified for Owner in
                  Article 18 of this Agreement, and such service shall be deemed
                  in every respect effective service of process upon Owner in
                  any suit, action or proceeding and shall be taken and held to
                  be valid personal service upon Owner. whether or not Owner
                  shall then be doing, or at any time shall have done, business
                  within the Republic of

                                      19

<PAGE>

                  Singapore, and that any such service of process shall be of
                  the same force and validity as if service were made upon it
                  according to the laws governing the validity and requirements
                  of such service in the Republic of Singapore, and waives all
                  claims of error by reason of such service.

         (c)      Builder hereby designates and appoints the Secretary of
                  Builder the "Company Secetary"), at Builder's registered
                  office at the address set forth in Section 18 hereof, as
                  Builder's authorized agent and acknowledges on its behalf
                  service of any and all process and, if through reasonable
                  efforts, service on the Company Secretary has been
                  unsuccessful, Builder hereby agrees that Owner my effect
                  service of any and all process which may be served in any such
                  suit, action, or proceeding in the High Courts of the Republic
                  of Singapore by registered mail to Builder at the address
                  specified for Builder in Article 18 of this Agreement, and
                  such service shall be deemed in every respect effective
                  service of process upon Builder in any suit, action or
                  proceeding and shall be taken and held to be valid personal
                  service upon Builder, whether or not Builder shall then be
                  doing, or at any time shall have done, business within the
                  Republic of Singapore, and that any such service of process
                  shall be of the same force and validity as if service were
                  made upon it according to the laws governing the validity and
                  requirements of such service in the Republic of Singapore, and
                  waives all claims of error by reason of such service.

18.      NOTICE

         Any notice provided for under this Agreement must be given in writing,
         but may be served by depositing same in the mail, addressed to the
         party to be notified, postage paid, and registered or certified with
         return receipt requested, or by delivering same in person to such other
         party, or by pre-paid telegram, telex, facsimile confirmed by mail, or
         cable. For purposes of notice, the addresses of the parties shall be:

                           If to Owner:     Chiles Offshore LLC
                                            11200 Richmond Ave.
                                            Suite 490
                                            Houston TX 77082
                           Telephone:       713-339-3997
                           Facsimile:       713-339-3888
                           Attention:       William E. Chiles
                                            President

                           If to Builder:   Keppel FELS Limited
                                            31 Shipyard Road
                                            Singapore 628130
                           Telephone:       65-267-6700
                           Facsimile:       65-261-7719 / 265-1927
                           Attention:       C. H. Tong
                                            Managing Director

         Provided, however, that each party shall have the continuing right to
         change its address of notice at any time or times by the giving of 10
         days notice in the manner

                                      20

<PAGE>

         hereinabove described. Notices shall be deemed given only upon receipt
         or by facsimile confirmation.

19.      SUCCESSORS AND ASSIGNS

         This Agreement shall inure to the benefit of, and shall be binding
         upon, the parties hereto, and their respective successors and assigns.
         It is expressly understood and agreed that neither party shall assign
         any of its rights, title and interest in this Agreement without the
         prior written consent of the other party, except Builder hereby
         consents to an assignment of this Agreement by Owner to a wholly-owned
         subsidiary of Owner, provided that Owner shall remain primarily liable
         for the full and timely performance by such assignee of the obligations
         of such assignee under this Agreement.

20.      GOVERNING LAW

         This Agreement shall be deemed to have been made under, shall be
         construed and interpreted in accordance with the laws of the Republic
         of Singapore, excluding any conflicts of law rule or law which might
         refer such construction and interpretation to the laws of another
         state, republic or country; provided, however, that all matters
         relating to the interpretation of any patent or patent application will
         be decided in accordance with the laws of the country which issued the
         patent to be interpreted or in which the patent applications to be
         interpreted have been filed.

21.      MODIFICATION OR WAIVER

         This Agreement, which incorporates all prior negotiations and
         understandings relating to the subject matter thereof, sets forth the
         entire agreement of the parties hereto and shall not be modified except
         by a written instrument executed by the duly authorized representatives
         of Builder and Owner. The failure of either party to insist upon strict
         performance of any provision hereof shall not constitute a waiver of or
         estoppel against asserting the right to require such performance in the
         future, nor shall a waiver or estoppel in any one instance, constitute
         a waiver or estoppel with respect to a later breach of a similar nature
         or otherwise.

22.      RELIANCE

         AS MORE FULLY SET FORTH IN OTHER PROVISIONS OF THIS AGREEMENT, BUILDER
         AND OWNER HAVE REACHED EXPRESS AGREEMENT WITH RESPECT TO THE LIMITATION
         OF THEIR RESPECTIVE LIABILITIES IN CONNECTION WITH THIS AGREEMENT.
         BUILDER AND OWNER EXPRESSLY RECOGNIZE THAT (A) THE PRICE FOR WHICH
         BUILDER HAS AGREED TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT HAS
         BEEN PREDICATED ON THE AFORESAID LIMITATION OF LIABILITY AND WAIVER (IT
         BEING ACKNOWLEDGED THAT OWNER COULD HAVE NEGOTIATED WITH BUILDER FOR
         MODIFICATIONS TO THE

                                      21

<PAGE>

         LIMITATION OF BUILDER'S LIABILITY BUT THAT THE PRICE OF THE PLATFORM
         WOULD HAVE BEEN INCREASED TO REFLECT SUCH MODIFICATIONS), (B) BUILDER,
         IN DETERMINING TO PROCEED WITH THE PERFORMANCE OF ITS OBLIGATIONS
         PURSUANT TO THIS AGREEMENT, HAS EXPRESSLY RELIED ON SUCH LIMITATION OF
         LIABILITY AND WAIVER AND WOULD NOT HAVE EXECUTED THIS AGREEMENT BUT FOR
         SUCH LIMITATION OF LIABILITY, AND (C) OWNER, IN ACCEPTING THE PRICE FOR
         THE PLATFORM (IT BEING ACKNOWLEDGED THAT BUILDER COULD HAVE NEGOTIATED
         FOR MODIFICATIONS TO THE LIMITATION OF OWNER'S LIABILITIES BUT THAT THE
         PRICE OWNER WOULD HAVE BEEN WILLING TO PAY FOR THE PLATFORM WOULD HAVE
         BEEN DECREASED DUE TO SUCH MODIFICATIONS), AND IN DETERMINING TO
         UNDERTAKE THE OWNER'S OBLIGATIONS UNDER THIS AGREEMENT, RELIED UPON
         SUCH LIMITATION OF LIABILITY.

23.      COMPUTATION OF TIME

         All periods of time shall be computed by including Saturdays, Sundays
         and holidays except that if such period terminates on a Saturday,
         Sunday or holiday it shall be deemed extended to the business day next
         succeeding. All references in this Agreement to days shall mean
         calendar days.

24.      GENERAL LIMITATION OF LIABILITY

         IN NO EVENT SHALL BUILDER OR ITS AFFILIATES OR THE AGENTS, OFFICERS,
         EMPLOYEES, INVITEES, REPRESENTATIVES OR SUBCONTRACTORS OF BUILDER OR
         THEIR SERVANTS BE LIABLE TO OWNER OR ITS AFFILIATES OR THE AGENTS,
         OFFICERS, EMPLOYEES, INVITEES, REPRESENTATIVES, CONTRACTORS, OR
         SUBCONTRACTORS OF ANY TIER, EXCLUDING BUILDER AND ITS SUBCONTRACTORS,
         OR TO ANY THIRD PARTIES FOR PHYSICAL HARM, INCIDENTAL, CONSEQUENTIAL,
         PUNITIVE OR SPECIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, LOSS OF
         PROFITS AND LOSS OF BUSINESS OPPORTUNITIES), ARISING OUT OF, RESULTING
         FROM OR RELATING IN ANY WAY TO THIS AGREEMENT OR ANY ACTIVITIES OR
         OMISSIONS OR DELAYS IN CONNECTION HEREWITH OR THEREWITH INCLUDING,
         WITHOUT LIMITATION, THE PERFORMANCE (WHETHER TIMELY OR NOT) OR THE
         NON-PERFORMANCE OF THIS AGREEMENT, BREACH OF ANY WARRANTY OR THE LOSS
         OF OR LOSS OF USE OF THE PLATFORM OR ANY PART THEREOF OR ANY OTHER
         EQUIPMENT, MATERIALS, OR PROPERTY, REGARDLESS OF CAUSE AND REGARDLESS
         OF WHETHER BUILDER OR ITS AFFILIATES, AND/OR THEIR RESPECTIVE OFFICERS,
         EMPLOYEES, AGENTS, REPRESENTATIVES, SUBCONTRACORS, OR THEIR SERVANTS
         AND/OR OTHERS MAY BE WHOLY, PARTIALLY, OR SOLELY NEGLIGENT OR OTHERWISE
         AT FAULT, UNSEAWORTHINESS, STRICT LIABILITY, OR ANY DEFECT IN PREMISES,
         EQUIPMENT OR MATERIALS, OR ANY OTHER EVENT OR

                                      22

<PAGE>

         CONDITION WHETHER OR NOT ANTICITPATED BY ANY PERSON OR PARTY,
         REGARDLESS OF WHETHER PREEXISTING THE EXECUTION OF THIS AGREEMENT.

25.      WAIVER OF CONSUMER RIGHTS AND REPRESENTATIONS OF OWNER

         OWNER HEREBY WAIVES ITS RIGHTS UNDER THE TEXAS DECEPTIVE TRADE
         PRACTICE-CONSUMER PROTECTION ACT, CHAPTER 17, SUBCHAPTER E, SECTIONS
         17.41, ET SEQ, VERNON'S TEXAS CODES ANNOTATED, BUSINESS AND COMMERCE
         CODE, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS. AFTER
         CONSULTATION WITH AN ATTORNEY OF IT OWN SELECTION, OWNER VOLUNTARILY
         CONSENTS TO THIS WAIVER. TO EVIDENCE ITS ABILITY TO GRANT SUCH WAIVER,
         OWNER HEREBY REPRESENTS AND WARRANTS TO BUILDER THAT OWNER (a) IS IN
         THE BUSINESS OF SEEKING OR ACQUIRING, BY PURCHASE OR LEASE, GOODS OR
         SERVICES FOR COMMERCIAL OR BUSINESS USE AND IS ACQUIRING THE GOODS AND
         SERVICES COVERED BY THIS AGREEMENT FOR COMMERCIAL OR BUSINESS USE AND
         IS ACQUIRING THE GOODS AND SERVICES COVERED BY THIS AGREEMENT FOR
         COMMERCIAL USE, (b) HAS ASSETS OF $25,000,000 OR MORE, OR IS OWNED BY A
         CORPORATION OR OTHER ENTITY WHICH HAS ASSETS OF $25,000,000 OR MORE,
         ACCORDING TO ITS MOST RECENT FINANCIAL STATEMENT PREPARED IN ACCORDANCE
         WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPALS, (c) HAS KNOWLEDGE AND
         EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS THAT ENABLE IT TO EVALUATE
         THE MERITS AND RISKS OF THE TRANSACTIONS CONTEMPLATED HEREBY, (d) IS
         NOT IN A SIGNIFICANTLY DISPARATE BARGAINING POSITION, AND (e) IS
         REPRESENTED BY LEGAL COUNSEL IN THIS TRANSACTION WHICH WAS NOT DIRECTLY
         OR INDIRECTLY IDENTIFIED, SUGGESTED OR SELECTED BY BUILDER. OWNER'S
         REPRESENTATIONS AND WARRNTIES SHALL SURVIVE THE PERFORMANCE OF ALL WORK
         IN CONNECTION WITH THIS AGREEMENT AND SHALL REMAIN EFFECTIVE REGARDLESS
         OF ANY INVESTIGATION AT ANY TIME MADE BY OR ON BEHALF OF BUILDER OR ANY
         INFORMATION BUILDER MAY HAVE WITH RESPECT THERETO. OWNER HEREBY AGREES
         TO PROTECT, INDEMNIFY AND HOLD BUILDER AND ITS AFFILIATES HARMLESS FROM
         AND AGAINST ANY AND ALL LOSSES, COSTS (INCLUDING, WITHOUT LIMITATION,
         THE COST OF THE SUIT AND REASONABLE ATTORNEYS' FEES), CLAIMS, CAUSES OF
         ACTION, AND LIABILITIES ARISING OUT OF OR RESULTING FROM, OR RELATING
         IN ANY WAY TO THE BREACH OF THE AFORESAID REPRESENTATIONS AND
         WARRANTIES.

                                                 CHILES OFFSHORE LLC

                                                 By: /s/ William E. Chiles
                                                    ------------------------

26       SEVERABILITY

                                      23

<PAGE>

         If any of the terms and conditions of this Agreement are held by any
         court of competent jurisdiction to contravene or to be invalid under
         the laws of any political body having jurisdiction over the subject
         matter hereof, such contravention or invalidity shall not invalidate
         the entire Agreement, but, instead, this Agreement shall be construed
         as if not containing the particular provision or provisions held to be
         invalid and the rights and obligations of the parties shall be
         construed and enforced accordingly and this Agreement shall thereupon
         and thereafter remain in full force and effect.

27.      CONSTRUCTION

         The parties to this Agreement having been represented by legal counsel
         of their own choosing in connection with the negotiation and drafting
         of this Agreement, this Agreement shall be construed and interpreted
         for all purposes without regard to the author of any specific language
         appearing herein. The headings contained in this Agreement are for
         reference purposes only and shall not affect in any way the meaning or
         interpretation of this Agreement.

28.     VARIABLE LOADS

         (a)      Builder shall endeavor, without guarantee or warranty, to meet
                  the target figures set out for variable loads in Section 1 of
                  the Specifications; provided, however, Builder shall guarantee
                  no less than the following variable loads (as approved by ABS)
                  for the 475' leg length Platform:

                  Variable Load Elevated Storm:              3,600 kips

         These values are based on the weight of Owner Furnished Equipment that
         will be permanently affixed to the Platform not to exceed 1800 kips.
         Prior to delivery of the Platform, the variable loads shall be
         determined by an inclining experiment.

         (b)      In the event that the Variable Load Elevated Storm calculated
                  at the 475' leg length is less than 3,600 kips, and Builder
                  shall not have corrected such deficiency pursuant to paragraph
                  (e) hereof, Builder shall pay to Owner as liquidated damages
                  and not as a penalty the following cumulative amounts for such
                  deficiency up to a maximum of $3,000,000:

                  (i)      If less than 3,600 kips but more than 3,400 kips-
                           for each full 10 kips reduction within such range-
                           $30,000
                  (ii)     If less than 3,400 kips but more than 3,200 kips-
                           for each full 10 kips reduction within such range-
                           $50,000
                  (iii)    If less than 3,200 kips but more than 3,000 kips-
                           for each full 10 kips reduction within such range-
                           $70,000

(c)      In the event the Variable Load Elevated Storm calculated at the 475'
         leg length is less than 3,000 kips, and Builder shall not have
         corrected such deficiency pursuant to paragraph (e) hereof, Owner shall
         have the right to reject the Platform, in which event (i) Builder shall
         not be liable to Owner for liquidated damages, and (ii) Owner's sole
         and exclusive remedy shall be to terminate this Agreement and receive a
         refund of all

                                      24

<PAGE>

         progress payments theretofore made to Builder under this Agreement with
         interest thereon at the rate of eight percent (8%) per annum on such
         sums commencing from the date of payment of such progress payments
         until the same are refunded to Owner plus the delivered invoice cost of
         all Owner Furnished Equipment which has been incorporated in the
         Platform. Upon payment of all sums due Owner under this provision, all
         right, title, and interest in the Platform shall be conveyed to Builder
         "As Is, Where Is" and free and clear of all liens, claims and
         encumbrances created by, through or under Owner.

(d)      In the event the Variable Load Elevated Storm calculated at the 475'
         leg length is in excess of 4,000 kips, Owner shall pay to Builder as a
         bonus the following cumulative amounts for such excess up to a maximum
         of $3,000,000:

         (i)      If greater than 4,000 kips but less than 4,200 kips-
                  for each full 10 kips increase within such range-     $30,000
         (ii)     If greater than 4,200 kips but less than 4,400 kips-
                  for each full 10 kips increase within such range-     $50,000
         (iii)    If greater than 4,400 kips-
                  for each full 10 kips increase within such range-     $70,000

(e)      In the event the Variable Load Elevated Storm calculated at the 475'
         leg length is less than 3,000 kips, Builder shall have the option to
         make modifications to the Platform in order to increase the Variable
         Load Elevated Storm, provided that such modifications (i) are approved
         in advance by ABS, (ii) do not materially affect the motion
         characteristics or operational performance of the Platform, and (iii)
         are accomplished within one hundred twenty (120) days of the Delivery
         Date. In the event such modifications increase the Variable Load
         Elevated Storm, the liquidated damages provided in paragraph (c) hereof
         and the bonus provided in paragraph (d) hereof shall be calculated on
         the basis of such increased Variable Load Elevated Storm.

29.      TAXES AND DUTIES

         Builder shall pay or cause to be paid all Singapore taxes, duties, fees
         and stamp duties of whatsoever nature imposed by any governmental
         entity in connection with Builder's performance of its obligations
         under this Agreement, including any tax on the sale and delivery of the
         Platform to Owner, excluding any such taxes, duties, fees and stamp
         duties imposed by any governmental entity on the Owner Furnished
         Equipment.

30.      CONFIDENTIALITY AND GRANT OF LICENSE

(a)      Owner recognizes and agrees that confidential information of Builder
         has or will be provided to Owner in connection with the design and
         construction of the Platform. Builder shall mark any such confidential
         information as "Confidential" (any such information as so marked,
         herein "Confidential Information") Owner agrees to maintain in
         confidence and not to exhibit, sell, lease, or otherwise commercialize,
         disclose, or use such Confidential

                                      25

<PAGE>

         Information, in whatever form provided including without limitation
         descriptions, drawings, specifications, and calculations, except as is
         reasonably necessary in connection with the ownership, operation,
         repair, and maintenance of the Platform. Such obligation of
         confidentiality shall extend to and cover information which is
         discovered as a result of inspection or reverse engineering. In
         connection therewith, if disclosure of Confidential Information must be
         made to vendors, suppliers, contractors, or subcontractors, Owner shall
         disclose only such portion of such Confidential Information as is
         reasonably necessary to enable such parties to perform the needed work
         on the Platform. Further, Owner shall first obtain an obligation of
         confidentiality from such parties with regard to such Confidential
         Information on substantially the same terms and conditions as set forth
         herein, which obligation of confidentiality shall expressly be
         enforceable by and in the name of Builder. Such obligation of
         confidentiality by such parties shall further provide that all such
         Confidential Information in whatever form and all copies thereof shall
         be immediately returned by such parties upon the request of Owner or
         Builder.

(b)      All documents of any kind embodying any substantive part of such
         Confidential Information shall be conspicuously marked with a stamp or
         legend with a proprietary notice reading as follows:

                                     "NOTICE

                  THIS DOCUMENT AND THE INFORMATION CONTAINED HEREIN ARE THE
                  PROPERTY OF KEPPEL FELS LTD, A COPRORATION ORGANIZED UNDER THE
                  LAWS OF SINGAPORE, AND ARE MAINTAINED IN CONFIDENCE THEREBY,
                  AND RECEIPT OF THIS DOCUMENT AND THE INFORMATION CONTAINED
                  HEREIN CONSTITUTES THE AGREEMENT OF THE PERSON OR ENTITY
                  RECEIVING SAME TO MAINTAIN THIS DOCUMENT AND THE INFORMATION
                  CONTAINED HEREIN IN CONFIDENCE. RECEIPT OR POSSESSION OF THIS
                  DOCUMENT DOES NOT CONVEY ANY RIGHTS TO REPRODUCE THIS DOCUMENT
                  OR TO DISCLOSE ITS CONTENTS, OR TO MANUFACTURE, USE OR SELL
                  ANYTHING SHOWN OR DESCRIBED IN THIS DOCUMENT. REPRODUCTION,
                  DISCLOSURE, OR USE OF THIS DOCUMENT OR ANY INFORMATION
                  CONTAINED HEREIN WITHOUT SPECIFIC WRITTEN AUTHORIZATION OF
                  KEPPEL FELS LTD IS STRICTLY FORBIDDEN."

(c)      The obligation of confidentiality provided in this Section 30 shall not
         apply to such portion of the Confidential Information which now or
         hereafter is described in an issued Singapore or foreign letters patent
         or is now or hereafter published in a printed publication generally
         available in the industry (except where published in violation of this
         Agreement).

(d)      The design of the Platform and the descriptions, drawings,
         specifications, and

                                      26

<PAGE>

         calculations prepared by Builder in connection with the design and
         construction of the Platform are and shall remain the property of
         Builder. Owner shall have no right to use, sell, license, or otherwise
         commercialize such design or any such descriptions, drawings,
         specifications, and calculations except in connection with the
         ownership and operation of the Platform. Builder hereby grants to Owner
         upon delivery of the Platform an irrevocable, non-exclusive, royalty
         free, perpetual license to use, lease, sell, or otherwise dispose of
         (but not to duplicate or manufacture) all or any of Builder's interest
         in the Platform or the design thereof which has heretofore been
         patented by Builder, or for which patents may be pending by Builder, or
         for which patent applications may hereafter be filed by Builder. Owner
         shall have the right to transfer the license referred to hereinabove
         along with the Platform whenever Owner sells the Platform, provided
         Owner obtains from the purchaser an agreement in writing (an executed
         original of which shall be promptly delivered to Builder) providing
         that such party undertakes the same obligations as Owner has pursuant
         to this Section 30.

(e)      The license herein granted shall apply only to the one Platform to be
         constructed pursuant to this Agreement. If at any time Owner is in
         default of any of its obligations under this Section 30, Builder may
         cancel and terminated the licenses granted by Builder herein, by giving
         Owner ten (10) days prior written notice of the intention to terminate;
         provided, however, termination shall not relieve Owner of its
         obligations set forth in this Section 30, and the same shall continue
         in full force and effect. Owner shall promptly notify Builder in the
         event Owner knows or learns of any unauthorized use of the
         descriptions, drawings, specifications, and calculations prepared by
         Builder in connection with the design and construction of the Platform
         by any person or party or if Owner learns of any infringement of any
         patent held by Builder in connection with the design or construction of
         the Platform. Nevertheless, without the prior written consent of
         Builder, Owner shall initiate no notices of unlawful use of or
         infringement to the party or person using the descriptions, drawings,
         specifications, and calculations prepared by Builder in connection with
         the design and construction of the Platform or the applicable letters
         patent, and shall engage in no positive or overt acts toward such party
         or person which would create a justiciable controversy between such
         party or person and Builder with respect thereto.

         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on their behalf by their respective duly authorized representatives on
the date first shown above.

KEPPEL FELS LIMITED

By:  /s/ C.H. Tong
------------------------------
Name:    C.H. TONG
Title:   MANAGING DIRECTOR

                                      27

<PAGE>

CHILES OFFSHORE  LLC

By:      /s/ WILLIAM E. CHILES
         ---------------------
Name:    WILLIAM E. CHILES
Title:   PRESIDENT

                                      28

<PAGE>

                                    EXHIBIT A

                       TO PLATFORM CONSTRUCTION AGREEMENT

                                PAYMENT SCHEDULE

Buyer shall make payment to Builder as follows:
<TABLE>
<CAPTION>
                  EVENT                          PERCENTAGE OF CONTRACT PRICE
                  -----                          ----------------------------

                <S>                                    <C>
                  Contract Signing                            20%

                  Start of Fabrication                        10%

                  Keel Laying                                 15%

                  Install 3rd Spud Can                        15%

                  Launching                                   20%

                  Delivery                                    20%
</TABLE>

                                      29

<PAGE>

                                    EXHIBIT B

                       TO PLATFORM CONSTRUCTION AGREEMENT

                       SPECIFICATIONS AND DESIGN DRAWINGS

Specification for the Construction and Outfit of a Mobile Offshore
Self-elevating Drilling Unit, Keppel FELS Class B dated 5th April 2000

General Arrangement Drawings:

-    General Arrangement, Outboard Profile D001

     -    General Arrangement, Inner Bottom Tank Arrangement D002
     -    General Arrangement, Machinery Deck (5 ft level) D003
     -    General Arrangement, Machinery Deck. (16 ft level) D004
     -    General Arrangement, Main Deck 25ft level D005-01
     -    General Arrangement, Main Deck 30ft level D005-02
     -    General Arrangement, Main Deck 40ft level D005-03
     -    General Arrangement, Main Deck 50ft level D006-04
     -    General Arrangement, Main Deck 60ft level D006-05
     -    General Arrangement, Main Deck 70ft level D006-06

Schematic Drawings:

     -    A.C. One Line Diagram E02
     -    D.C. One Line Diagram E03
     -    Preload Fill & Dump System P101
     -    Salt Water System P104
     -    Drill Water System P106
     -    H.P. & L.P. Air Systems P113
     -    Low Pressure Mud Systems P115
     -    High Pressure Mud and Cement P117
     -    Fuel Oil System P110
     -    Bilge System P102
     -    Drain System P112
     -    Fire Fighting System P105
     -    Heliport Foam System P119
     -    Exhaust System P121
     -    Engine Cooling System P108
     -    Leg Jetting System P103

                                      30<PAGE>

                                                                Exhibit 10.2

                         PLATFORM CONSTRUCTION AGREEMENT

                                 BY AND BETWEEN

                                  AMFELS, INC.

                                       AND

                               CHILES OFFSHORE LLC

                                  April 6, 2000

<PAGE>

                                    CONTENTS

SECTION

1.       EFFECTIVE DATE
2.       COMMENCEMENT AND PROSECUTION OF THE WORK
3.       CONTRACT PRICE
4.       REPRESENTATIVES AND PROGRESS OF PLATFORM
5.       CHANGES AND ADDITIONAL WORK
6.       OWNER FURNISHED EQUIPMENT
7.       LIENS
8.       INSURANCE
9.       TITLE AND RISK OF LOSS
10.      DELIVERY
11.      WARRANTY
12.      INDEMNIFICATION PROVISIONS
13.      PATENT INDEMNITY
14.      FORCE MAJEURE
15.      INDEPENDENT CONTRACTOR
16.      DEFAULT
17.      LITIGATION
18.      NOTICE
19.      SUCCESSORS AND ASSIGNS
20.      GOVERNING LAW
21.      MODIFICATION OR WAIVER
22.      RELIANCE
23.      COMPUTATION OF TIME
24.      GENERAL LIMITATION OF LIABILITY
25.      WAIVER OF  CONSUMER RIGHTS AND REPRESENTATIONS OF  OWNER
26.      SEVERABILITY
27.      CONSTRUCTION
28.      VARIABLE LOAD
29.      TAXES AND DUTIES
30.      TITLE XI AMENDMENT
31.      CONFIDENTIALITY AND GRANT OF LICENSE

EXHIBIT A
         PAYMENT SCHEDULE

EXHIBIT B
         SPECIFICATIONS AND DESIGN DRAWINGS

EXHIBIT C
         TITLE XI PROVISIONS
<PAGE>

                         PLATFORM CONSTRUCTION AGREEMENT

         This Agreement including Exhibits A through C attached hereto which are
incorporated by reference herein and made a part hereof ("Agreement"), entered
into on the 6th day of April, 2000, by and between Chiles Offshore LLC a company
organized under the laws of the State of Delaware ("Owner") and AMFELS, Inc, a
corporation organized under the laws of the State of Texas (hereinafter referred
to as "Builder") for the construction by Builder and purchase by Owner of one
mobile, self-contained and self-elevating 475' leg length Keppel FELS MOD V-B
class platform (the "Platform").

1.       EFFECTIVE DATE

                 The effective date ("Effective Date") of this Agreement shall
        be the date upon which the last of the following conditions shall have
        been met:

                  (i)      Owner shall have raised equity for its investment in
                           the Platform on terms satisfactory to the Owner and
                           in an amount sufficient to satisfy the requirements
                           of the United States Secretary of Transportation
                           acting by and through the Maritime Administrator (the
                           "Secretary") for the issuance of a letter commitment
                           to guarantee obligations for the financing of the
                           construction of the Platform under Title XI of the
                           Merchant Marine Act, 1936 (such letter commitment the
                           "Commitment") and shall have notified Builder thereof
                           in writing; and

                  (ii)     The Secretary shall have issued the Commitment on
                           terms satisfactory to Owner, which Commitment may be
                           conditioned upon additional requirements of the
                           Secretary, provided such requirements are
                           satisfactory to Owner, and Owner shall have notified
                           Builder thereof in writing.

                 In the event that the Effective Date shall not have occurred by
         October 6, 2000, unless the parties shall otherwise agree, this
         Agreement shall terminate and shall be null and void and of no effect
         and neither party shall have any obligation to the other hereunder.

2.       COMMENCEMENT AND PROSECUTION OF THE WORK

         (a)      Builder hereby agrees with Owner to commence the construction
                  of the Platform at Builder's Shipyard at Brownsville, Texas
                  ("Builder's Yard"), to prosecute in accordance with good
                  shipyard practice to completion, and to deliver the Platform
                  to Owner twenty-two (22) months after the Effective Date (such
                  delivery date as the same may be extended under the terms of
                  this Agreement is referred to herein as the "Delivery Date"),
                  at Builder's Yard, a mobile, self contained and elevating
                  platform (the "Platform"), in accordance with (i) the
                  specifications for a 475' leg length platform developed by
                  Keppel FELS Limited ("Keppel") for that certain contract
                  between Keppel and Owner dated April 6, 2000 (said
                  specifications the "Specifications" and said contract

                                                                             1

<PAGE>

                  the "First Contract") (the said Specifications having been (or
                  shall be, in instances where specifications, drawings, plans,
                  and data are hereafter prepared) initialed by Builder and
                  Owner as evidence of the parties' agreement thereto and being
                  (and to be) hereby incorporated by reference as part of this
                  Agreement), (ii) the certain rules of the American Bureau of
                  Shipping (hereinafter referred to as the "ABS"), Rules for
                  Building and Classing Mobile Offshore Drilling Units, 1997,
                  with all amendments thereto issued to the date of Builder's
                  request for class (provided, however, any amendments thereto
                  issued subsequent to Keppel FELS Limited's request for class
                  under the First Contract shall be changes subject to the
                  provisions of Section 5 hereof) and the ABS Guide for
                  Shipbuilding & Repair Quality Standard for Hull Structures
                  During Construction with table 5.9 therein applicable in full
                  without reservation, and (iii) the requirements of any other
                  regulatory body ("Regulatory Body" or Regulatory Bodies")
                  having jurisdiction in the premises as listed in the
                  Specifications. Owner hereby agrees with Builder to purchase
                  the Platform from Builder, and to pay Builder for same, all in
                  accordance with the provisions of this Agreement.

         (b)      If any conflict or inconsistency shall arise between this
                  Agreement and the Specifications, this Agreement shall
                  prevail. Similarly, if any conflict or inconsistency shall
                  arise between the written Specifications and the Specification
                  drawings, the written Specifications shall prevail. In the
                  event of a dispute as to conformity with ABS classification
                  requirements, the decision of the ABS shall be final.

         (c)      In the event that any of the equipment or materials required
                  to be furnished by Builder in the performance of the work
                  under this Agreement cannot be timely procured or are in short
                  supply, Builder may supply other functionally equivalent
                  materials or equipment complying with the performance
                  requirements of this Agreement and the Specifications.

3.       CONTRACT PRICE

         (a)      As consideration for Builder's construction of the Platform in
                  accordance with the terms of this Agreement, Owner agrees to
                  pay Builder the sum of U.S. Dollars Seventy-Five Million
                  ($75,000,000) subject to adjustment as provided in this
                  Agreement (hereinafter referred to as the "Contract Price") to
                  Builder's account as provided herein or at such other place as
                  Builder may from time to time designate in writing to Owner.

         (b)      The Contract Price shall be paid by Owner to Builder in
                  installments as provided in Exhibit "A" attached to and made a
                  part of this Agreement. Wire transfers shall be made to
                  Builder's account at Citibank N.A. as follows:

                           Chase Bank of Texas, NA
                           1034 East Levee St.
                           Brownsville, Texas 78520

                           ACCOUNT NUMBER :06700278275

                                                                             2

<PAGE>

                           ROUTING NUMBER: 113000609
                           Attention: Irv Downing

         (c)      Builder shall submit to Owner invoices at least seven (7)
                  working days prior to the date any payment is due under this
                  Agreement.

         (d)      Any agreed lump sum change order price shall be paid 50% of
                  the change order price upon agreement thereto and the balance
                  of 50% of the agreed change order price shall be paid upon
                  delivery of the Platform. For change orders performed on time
                  and material basis, payments shall be made monthly, in
                  arrears, within ten (10) days of Owner's receipt of Builder's
                  invoice therefor and in any event upon delivery of the
                  Platform.

         (e)      All costs for ABS and any other Regulatory Body approvals for
                  the Platform are for the Builder's account with the exception
                  of Owner Furnished Equipment and materials as provided in
                  Section 6 hereof.

         (f)      Prior to delivery of the Platform, the Builder shall furnish
                  evidence satisfactory to the Owner showing that no liens,
                  claims, security interests or rights in rem of any kind have
                  been or can be acquired against the Platform by, through, or
                  under Builder.

         (g)      Except as provided in the next sentence of this paragraph (g),
                  all remaining payments, including progress payments, payments
                  for change orders, and other sums owing by Owner to Builder
                  under this Agreement must be paid in full at the time of
                  delivery of the Platform under this Agreement and in any event
                  prior to departure of the Platform from Builder's Yard. If
                  Owner disputes in good faith any sums claimed by Builder under
                  or in connection with this Agreement, Owner shall provide to
                  Builder a corporate surety bond from a first class U.S. surety
                  acceptable to Builder in a form reasonably satisfactory to
                  Builder. Such bond shall be in an amount equal to 150% of the
                  disputed sum. The bond must be executed and delivered to
                  Builder at the time of delivery of the Platform under this
                  Agreement and in any event prior to departure of the Platform
                  from Builder's Yard.

         (h)      All amounts owing to Builder by Owner hereunder shall bear
                  interest at the lesser of the highest lawful rate or the rate
                  of fifteen percent (15%) per annum from thirty (30) days after
                  the date notice of failure to pay is received by Owner until
                  paid in full.

4.       REPRESENTATIVES AND PROGRESS OF PLATFORM

         (a)      Builder will furnish office space and parking facilities at
                  the Yard for Owner's authorized representatives (the
                  "Representatives"), who will have complete and unrestricted
                  access to the Yard of Builder, or its subcontractors, where
                  the Platform, or any portions thereof, or materials or
                  equipment therefor are being stored, manufactured or
                  constructed pursuant to this Agreement. The office provided to
                  Owner will be complete with furniture and will have telephone,

                                                                             3

<PAGE>

                  telefax, and duplicating facilities. Costs for long distance
                  telephone calls, telefaxes, and duplicating supplies will be
                  for Owner's account. Such Representatives shall have the right
                  to make inspection of workmanship, material, equipment and
                  supplies as the construction of the Platform progresses and
                  shall notify Builder in writing of any deficiencies noted
                  therein, and Builder will then take such steps as are
                  necessary to correct such deficiencies. Builder shall give
                  notice to Owner and its Representatives at least forty-eight
                  (48) hours in advance of the date and place of all tests,
                  trials, and inspections. Inspections shall be made so as not
                  to impede the progress of the construction of the Platform and
                  if defective or non-conforming workmanship or material is
                  rejected, rejection shall be made promptly in order that
                  Builder may minimize the expense and disruption of
                  construction. In the event Owner's Representatives shall fail
                  to be present at any properly notified test, trial, or
                  inspection, the results thereof shall be binding on Owner.
                  Owner shall ensure that its Representatives shall not in
                  performing their inspections obstruct the construction
                  schedule for the Platform. Builder's obligation to construct
                  and deliver the Platform in accordance with this Agreement and
                  the Specifications, and Builder's warranty under this
                  Agreement, shall not, except as otherwise provided herein, be
                  affected by any inspection or failure to inspect by Owner's
                  Representatives or by their failure to detect any
                  deficiencies. If Owner's Representatives fail to promptly
                  notify Builder of any non-conforming work discovered by
                  Owner's Representatives, Owner shall be deemed to have
                  approved such item and Owner shall be precluded from making
                  demand for correction of such item, refusing to accept tender
                  of delivery of the Platform, or claiming such item as a
                  warranty defect under Builder's warranty set forth in Section
                  11 hereinbelow.

         (b)      In all working hours during the construction of the Platform
                  until delivery thereof, the Representatives and all assistants
                  shall be given free and ready access to the Platform and to
                  any other place where construction of the Platform is being
                  done or materials are being processed or stored in connection
                  with the construction of the Platform, including the yards,
                  workshops, stores and offices of Builder, and the premises of
                  subcontractors of Builder who are doing work for the Platform
                  or storing materials at such premises in connection with the
                  Platform's construction.

         (c)      Builder shall designate a single project manager in writing to
                  Owner, with full authority to act for Builder under this
                  Agreement. Owner shall designate a single project manager in
                  writing to Builder, with full authority to act for Owner under
                  this Agreement. Builder and Owner may from time to time
                  designate substitute project managers in writing with such
                  authority.

         (d)      If any difference in opinion between parties hereto shall
                  arise during the construction of the Platform concerning
                  technical matters in respect of the materials and workmanship
                  covered by the ABS rules or the guide referred to in Section
                  2, paragraph (a) of this Agreement, such difference in opinion
                  shall be referred to ABS whose opinion thereon shall be final
                  and binding upon both parties.

                                                                             4

<PAGE>

         (e)      Within thirty (30) days of the Effective Date of this
                  Agreement the Builder shall deliver to the Owner a key event
                  production schedule (the "Production Schedule") showing
                  planned construction progress of the Platform. The Production
                  Schedule shall be reasonably acceptable to the Owner and the
                  Builder shall develop an overall Platform erection plan that
                  integrates material delivery and assembly actions needed to
                  schedule work flow during all phases of construction. This
                  plan shall encompass sufficient planning data to assure that
                  all phases of construction can be adequately accomplished so
                  as to deliver the Platform on or before the Delivery Date. The
                  Platform erection/construction plan shall be furnished to
                  Owner within sixty (60) days after the Effective Date of this
                  Agreement and shall, upon acceptance by Owner, become by
                  reference an integral part of the Production Schedule. The
                  Delivery Date shall be extended by any delay caused by act or
                  omission of Owner, failure to timely deliver to Builder any
                  Owner Furnished Equipment (as defined in Section 6 hereof),
                  delays caused by ABS or any governmental agency, delays caused
                  by the Secretary (as defined in Section 30 hereof) or his
                  representatives, changes as provided in Section 5 hereof and
                  events of Force Majeure as provided in Section 14 hereof.

         (f)      Included in the Specifications is a list of tests and trials
                  to be performed by Builder in connection with the completion
                  of the Platform. Owner's Representatives shall be given the
                  number of days of prior notice for each applicable test or
                  trial as set forth in the Specifications.

5.       CHANGES AND ADDITIONAL WORK

         Owner shall have the right, at any time or times, to request that
         reasonable change or changes be made in any of the Specifications, and
         Owner shall issue to Builder a written change order to be executed by
         Owner and Builder; provided, however, if such requested change or
         changes in the aggregate would materially increase the overall scope of
         work so as to adversely impact Builder's other work or commitments or
         if Builder and Owner cannot reach agreement as to a lump sum price or
         credit or change in the Scheduled Delivery Date or other terms and
         conditions of this Agreement or the Specifications, Builder shall have
         no obligation to Owner to perform same. If any change necessitates an
         increase or decrease in the quantity or quality of the materials or the
         nature of the labor to be furnished by Builder for the Platform, then
         the Contract Price shall be increased or decreased on a lump sum basis
         in accordance with the mutual agreement of the parties. If any change
         will prolong the time for completion of the Platform, the Delivery Date
         shall be extended accordingly. Builder shall be entitled to make minor
         changes to the Specifications, if found necessary, for the introduction
         of improved production methods or otherwise, subject to Owner's
         approval, which is not to be unreasonably withheld.

6.       OWNER FURNISHED EQUIPMENT

         (a)      Within forty-five (45) days of the Effective Date of this
                  Agreement, Builder and Owner shall agree upon a schedule of
                  in-yard delivery dates of those items of material, equipment,
                  engineering data and information ("Owner Furnished
                  Equipment"), as are set forth in the Specifications to be
                  provided by Owner.

                                                                             5

<PAGE>

                  The time for delivery of the Owner Furnished Equipment as
                  detailed on such delivery schedule shall be such so as to not
                  cause Builder to be delayed in the timely prosecution of the
                  work in accordance with the Production Schedule.

         (b)      Builder shall at its own cost install the Owner Furnished
                  Equipment and obtain ABS approval of such installation.
                  Builder's scope of work includes all necessary foundations and
                  supplies, such as, but not limited to, electric,
                  instrumentation, controls and hydraulic power, air, fuel,
                  steam, etc., in each case including all necessary connections
                  such as electric wiring and piping. All Owner Furnished
                  Equipment shall be delivered by Owner to Builder at Builder's
                  Yard in their assembled form to the extent reasonably
                  feasible, tested and in proper condition, ready for
                  installation in or on the Platform, in accordance with the
                  Production Schedule. Builder will unload all Owner Furnished
                  Equipment. Suitable storage will be provided by Builder for
                  all Owner Furnished Equipment. The cost of such storage is
                  included in the Contract Price. The Owner Furnished Equipment
                  shall be at Builder's risk from the time of their delivery to
                  the shipyard until the time of their redelivery to Owner
                  either as part of the Platform or otherwise. Upon delivery of
                  each item of Owner Furnished Equipment, unless such item is
                  accompanied by a weight certificate issued by a reputable
                  body, Builder shall weigh at Owner's expense such item in
                  order to incorporate the actual weight in the Lightship Weight
                  calculations.

         (c)      In order to facilitate installation by Builder of the Owner
                  Furnished Equipment on the Platform, Owner shall furnish the
                  Builder with all reasonably necessary information including
                  specifications, plans, drawings, instruction books, manuals,
                  test reports and certificates. Owner, if so requested by
                  Builder, shall without any charge to Builder cause specialist
                  engineers and representatives of the manufacturers of the
                  Owner Furnished Equipment to provide technical assistance to
                  Builder in installation thereof in or on the Platform or to
                  make necessary adjustments thereof at the Yard. Builder's
                  scope of work under this Agreement excludes any adjustment,
                  repair or modification of any Owner Furnished Equipment.
                  Builder's scope of work under this Agreement includes any
                  testing of installed Owner Furnished Equipment required by the
                  Specifications, any Regulatory Body or ABS.

         (d)      In the event of a delay in delivery of any Owner Furnished
                  Equipment, then Owner and Builder shall mutually agree on a
                  new installation date of the delayed Owner Furnished
                  Equipment. If no agreement is reached between both parties
                  within twenty (20) days, and the absence of the delayed Owner
                  Furnished Equipment is impacting the critical path to
                  completion of the Platform, then Builder shall have the right
                  to proceed with the construction of the Platform without
                  installation of the delayed Owner Furnished Equipment on the
                  Platform, without prejudice to Builder's other rights as
                  hereinabove provided, and Owner shall accept and take delivery
                  of the Platform as so constructed.

         (e)      On delivery of each consignment of Owner Furnished Equipment,
                  Builder shall assist Owner in the inspection of the
                  consignment delivered. Any and all

                                                                             6
<PAGE>

                  of the Owner Furnished Equipment shall be subject to Builder's
                  reasonable right of rejection as and if they are found to be
                  unsatisfactory or in improper condition for installation. In
                  such instances, Builder shall first give adequate notice to
                  Owner and a reasonable opportunity for correction by Owner
                  before being entitled to reject the Owner Furnished Equipment.

         (f)      Should Owner fail to timely deliver the Owner Furnished
                  Equipment as provided in this Agreement and such delay results
                  in increased costs to Builder, Owner and Builder shall agree
                  upon the appropriate increase in the Contract Price and Owner
                  shall reimburse Builder for such increased cost. If Owner and
                  Builder are unable to agree upon the appropriate increase in
                  the Contract Price for such delay, then Owner shall prior to
                  delivery of the Platform post a bond pursuant to the
                  requirements of Section 3, paragraph (g) hereof.

7.       LIENS

         Provided Builder is paid all amounts owing to Builder by Owner under
         this Agreement as and when due, Builder shall not place or create or
         permit to be placed or created, any liens, charges, or encumbrances on,
         or security interests as to, or pledges of, the Platform, and any lien,
         charge, encumbrance or security interest so placed or created by or
         through Builder, its subcontractors and suppliers, or any of them,
         shall be forthwith released by the Builder. The Builder shall release
         and cause to be discharged any such lien, charge, encumbrance or
         security interest. In the event Builder fails to secure the discharge
         or release of any such lien, charge, encumbrance or security interest,
         after notice to Builder the Owner may secure the removal of same, in
         which event the Builder shall reimburse the Owner for its costs of
         securing such discharge or release (which cost shall include any
         expenses, including, without limiting the generality of the foregoing,
         attorneys' fees incurred in connection therewith) or at Owner's sole
         option by deducting such sum from any payments due or to become due the
         Builder under this Agreement. In the event such cost is in excess of
         the amount of any such reimbursement by deductions, the Builder further
         agrees to pay the amount of such excess to the Owner upon demand.

8.       INSURANCE

         Builder shall obtain and maintain during all times hereunder the
         following insurance in form reasonably acceptable to Owner and Owner's
         underwriters:

         (a)      Broad Form Comprehensive General Liability Insurance covering
                  all of the operations of Builder, including Contractual
                  Liability and Contractor's Protective Liability with a
                  combined single limit of not less than U.S. $1,000,000 per
                  occurrence for bodily injury and/or property damage, including
                  products and completed operations coverage, with excess
                  liability limits of not less than U.S. $1,000,000 per
                  occurrence.

         (b)      Each of the foregoing insurance policies shall, either on the
                  face thereof or by appropriate endorsement name (except for
                  the policies specified in subparagraph (a) above) Owner as an
                  additional assured with respect to the

                                                                             7
<PAGE>

                  indemnities of Builder assumed under this Agreement, provide
                  that the insurance policy shall not be cancelled or coverage
                  reduced except upon 30 days prior written notice to Owner,
                  contain waivers of subrogation pursuant to which the insurer
                  waives all express or implied rights of subrogation against
                  Owner, provide that Owner shall not be liable for premiums or
                  calls, and be retained in full force and effect by Builder
                  until the completion of the Platform hereunder as provided
                  below. Builder shall be responsible for all deductibles and
                  self insured retentions, to the extent the loss or claim would
                  otherwise be covered by Builder's indemnities contained in
                  this Agreement. Concurrently with the execution of this
                  Agreement, Builder shall furnish to Owner certificates or
                  other evidence satisfactory to the other of the insurance
                  required hereunder.

         (c)      Until final delivery of the Platform, Builder shall its own
                  cost and expense, keep the Platform and all materials either
                  delivered to the Yard or being handled by Builder for the
                  Platform or built into, or installed in or upon the Platform
                  fully insured under coverage and with underwriters
                  satisfactory to the Owner and not more restrictive than the
                  current form of London or American Institute Clauses for
                  Builder's Risks or equivalent form, including tests and trials
                  clauses. The Builder's Risks insurance shall include
                  supplemental coverage for war risks, strikes, lockouts, labor
                  disturbances, riot or civil commotion, earthquakes, and
                  protection and indemnity risks. The amount of such insurance
                  coverage shall be in an amount at least equal to the Contract
                  Price and shall be increased from time to time to cover the
                  cost of all changes, alterations, or modifications.

         (d)      The Builder's Risks policy shall be taken out in the joint
                  names of Builder and Owner and all losses under such policy
                  shall be payable to the Builder and Owner in accordance with
                  their respective interests. The policies shall provide that
                  there shall be no recourse against the Owner for the payment
                  of premiums or other charges and shall further provide that at
                  least thirty (30) days' prior written notice of any material
                  alteration, cancellation, or cancellation for the non-payment
                  of premiums or other charges shall be given to the Owner by
                  the insurance underwriters. Any deductible under this
                  insurance policy shall be for the account of Builder.

9.       TITLE AND RISK OF LOSS

         (a)      Title to the Platform, to the extent completed and all
                  materials destined for incorporation therein, whether located
                  at Builder's Yard or elsewhere, shall immediately vest in
                  Owner when the same is paid for by Owner, whether prior to or
                  after incorporation into the Platform. The vesting of title
                  shall not relieve Builder of its obligation to replace damaged
                  or defective materials at Builder's expense and to complete
                  and deliver the Platform in accordance with the provisions of
                  this Agreement. Risk of loss of the Platform shall pass to
                  Owner upon delivery and acceptance thereof in accordance with
                  this Agreement.

         (b)      To the extent that title to any part of the Platform or the
                  materials destined for incorporation in the Platform has
                  passed from Builder to Owner or Owner

                                                                             8
<PAGE>

                  otherwise obtains any rights therein, whether now owned or
                  hereafter acquired, Owner as debtor hereby grants to Builder
                  as a secured party a security interest and lien upon same and
                  all right, title, and interest of Owner thereto and the
                  proceeds and products thereof, to secure the performance of
                  Owner under this Agreement and the payment to Builder of all
                  payments required to be paid by Owner to Builder under this
                  Agreement; provided, however, the security interest granted to
                  the Builder by this Section 9(b) shall be subordinate to any
                  liens or security interests granted by Owner to its lenders on
                  Owner's interest in this contract and the Platform. In
                  connection herewith, Builder shall upon Owner's default under
                  this Agreement have all rights and remedies of a secured party
                  under the law of the State of Texas. The security interest and
                  lien granted to Builder hereunder and the rights and remedies
                  of Builder herein shall be deemed cumulative and in addition
                  to the rights and remedies otherwise available to Builder at
                  law or in equity or in contract, which shall not be
                  subordinate to any liens or security interests granted by
                  Owner to its lenders.

         (c)      If the Platform or any Owner Furnished Equipment shall be
                  damaged by any insured cause whatsoever prior to acceptance
                  thereof by Owner and such damage does not constitute an actual
                  or a constructive total loss of the Platform, Builder and/or
                  Owner shall apply the amount recovered under the insurance
                  policy referred to in Paragraph 8(d) of this Agreement to the
                  repair of such damage and Owner shall accept the Platform
                  under this Agreement if completed in accordance with this
                  Agreement and the Specifications. The Production Schedule
                  including the Delivery Date shall be deemed extended by the
                  time necessary to repair such damage. In the event of an
                  actual or constructive total loss of the Platform prior to
                  delivery, this Agreement shall automatically be deemed
                  terminated, and Builder shall retain all installment payments
                  made pursuant to Section 3, Paragraph 2(b) of this Agreement
                  and shall be paid by Owner for the price for that portion of
                  the Platform then constructed for which progress payments have
                  not yet been made and all work in progress (including profit
                  on all to Builder). In the event that the actual or
                  constructive total loss of the Platform results from the
                  operation of an insurable risk covered by insurance as
                  required under Paragraph 8(d) of this Agreement, all of the
                  proceeds of such insurance payable as a result of such loss
                  shall be paid to the Owner and the Builder as their interests
                  may appear.

10.      DELIVERY

         (a)      Upon completion of the construction of the Platform and the
                  tests and trials as provided in the Specifications, and after
                  having obtained all required approvals and certifications from
                  ABS and the Regulatory Bodies, Builder shall tender delivery
                  of the Platform to Owner. Prior to tendering delivery, Builder
                  shall have remedied at Builder's sole cost and expense any
                  defects discovered by Owner, Builder or ABS in Builder's
                  workmanship or materials including installation of Owner
                  Furnished Equipment or any other non-conformity of the
                  Platform with the requirements of the Specifications and this
                  Agreement and shall have performed any re-tests necessary to
                  ensure that such items have been fully corrected. Owner shall
                  accept such tender of delivery, and Owner

                                                                             9
<PAGE>

                  shall not have the right to refuse to accept delivery of the
                  Platform provided the same is substantially completed, except
                  for minor items acceptable to Owner to be completed as
                  mutually agreed between Owner and Builder, and capable of
                  being utilized by Owner. Any remaining items shall be
                  completed by Builder following delivery and prior to departure
                  of the Platform from Builder's yard, or Owner and Builder may
                  mutually agree on a appropriate reduction of the Contract
                  Price for such remaining items.

         (b)      To evidence acceptance of the Platform by Owner, Builder and
                  Owner shall execute and deliver a Protocol of Acceptance and
                  Delivery acknowledging delivery of the Platform. Builder shall
                  further deliver to Owner a Bill of Sale confirming the
                  conveyance of title to the Platform to the Owner, which Bill
                  of Sale shall (i) generally describe the Platform as a mobile,
                  self-contained and elevating platform, (ii) contain a general
                  warranty of title and freedom from liens (except as to matters
                  arising by, through, or under Owner) in favor of the Owner,
                  and (iii) be deemed to contain the additional warranties and
                  covenants set forth in Section 11 of this Agreement without
                  the necessity of making any reference to such warranties in
                  the Bill of Sale. Builder shall also deliver to Owner the
                  remaining delivery documents set forth in the Specifications.

         (c)      Builder shall deliver the Platform along side Builder's dock
                  at Builder's Yard. Following delivery and acceptance, Owner
                  shall have the right to dock the Platform at Builders Yard for
                  a period not to exceed thirty (30) days, after which time the
                  Platform must depart from Builder's Yard. During such
                  post-delivery docking period, Owner shall pay to Builder its
                  standard charges for shore power, potable water, and security
                  guard service. All such charges must be paid by Owner to
                  Builder prior to departure of the Platform from Builder's
                  Yard.

11.      WARRANTY

         Builder hereby warrants to Owner that (i) Builder's workmanship and
         materials shall be free from material defects, and (ii) that the
         systems designed, supplied, and installed by Builder are in compliance
         with this Agreement and the Specifications (any failure to meet the
         requirements of (i) or (ii) being herein a "Warranty Deficiency"). The
         warranty set forth in the preceding sentence (the "Warranty") shall
         commence on the date of delivery of the Platform and expire twelve (12)
         months thereafter (provided, however, that if any of the equipment of
         the Platform, including without limitation any cranes or winches, is
         put into service by Builder prior to said delivery, (i) Builder shall
         at its own cost and expense restore such equipment to like new
         condition, ordinary wear and tear excepted and (ii) the twelve (12)
         months warranty period shall commence with delivery of the Platform )
         and shall be subject to the following provisions:

         (a)      The Warranty shall not apply to any part of the Platform which
                  (i) has been misused or structurally repaired or altered after
                  acceptance of the Platform by Owner by anyone other than
                  Builder or its duly authorized representative, or (ii) has
                  been damaged because of it's use, or the use of any other
                  materials or equipment, after Owner (or any other person or
                  firm operating the Platform or

                                                                            10
<PAGE>

                  its equipment) has knowledge of such defect. Equipment or
                  other components of the Platform sold to Owner pursuant to
                  this Agreement but not manufactured by Builder are not
                  warranted to any extent, but Builder shall assign (to the
                  extent same are assignable by Builder) to Owner, without
                  recourse, any warranties furnished to Builder by the vendors
                  of such equipment or other components. If any such warranties
                  are not assignable, Builder shall permit Owner to seek
                  performance or damages in Builder's name. Owner shall seek
                  performance or damages under such warranties only from such
                  vendors and not from Builder. Builder shall use reasonable
                  efforts to secure the best available warranties available from
                  such vendors and shall cooperate with Owner in any resulting
                  dispute Owner may have with such vendors.

         (b)      The extent of Builder's liability for any breach of the
                  Warranty shall be limited to (i) repairing or replacing, as
                  elected by Builder, any defective materials, workmanship or
                  components to correct such Warranty Deficiency at Builder's
                  Yard or at any other shipyard of Builder or its affiliates
                  (hereinafter collectively referred to as a "Keppel FELS
                  Yard"), with the Platform to be brought to a Keppel FELS Yard
                  at Owner's sole risk and expense, or (ii) reimbursing Owner
                  for the cost of such correction in accordance with the
                  provisions of subparagraph (c) hereinbelow.

         (c)      Owner, at its discretion, may elect to cause the necessary
                  repairs or replacements to be made at a non-Keppel FELS Yard.
                  In such event, Builder's sole obligation shall be to reimburse
                  Owner for the cost of such repairs or replacements, provided,
                  however, that in no event shall the sum to be paid to Owner by
                  Builder exceed the cost that Builder would have borne, based
                  on Builder's normal rates, if the repairs or replacements had
                  been made at the Builder's Yard. If Owner elects to proceed
                  under the provisions of this subparagraph (c), Owner shall, as
                  soon as possible after such election (but in any event prior
                  to the commencement of such repairs or replacements), notify
                  Builder of the time, place, and estimated cost of such repairs
                  and replacements. Builder shall have the right to verify, at
                  its sole cost and expense, by its own representative, the
                  nature and extent of the defects complained of. Except in the
                  case of emergency repairs needed to protect life or property
                  or in the event Builder's representative shall not have
                  arrived to perform such inspection within seventy-two (72)
                  hours of Owner's notice to Builder if reasonably possible and
                  the repairs are necessary to meet operating commitments of
                  Owner, such inspection shall be prior to the time that the
                  repairs or replacements are made and if in fact no breach of
                  the Warranty made by Builder herein has occurred, Owner shall
                  pay to Builder a per diem equal to Builder's then current
                  labor rate schedule and the reasonable expenses incurred by
                  such representative.

         (d)      The REMEDIES provided in subparagraphs (b) and (c) hereinabove
                  are EXCLUSIVE. Such Warranty shall not include transportation,
                  towage, insurance, or other incidental expenses. In no event
                  shall the obligation of Builder to repair or replace (or to
                  reimburse Owner pursuant to paragraph (c) hereinabove for the
                  cost of repairing or replacing) defective workmanship or

                                                                            11
<PAGE>

                  materials be construed to require Builder to repair or replace
                  more than the actual workmanship or material that is found to
                  be defective.

         (e)      The Warranty shall not be effective unless Builder receives
                  from Owner a written notice of the Warranty Deficiency (i)
                  within thirty (30) days after the date of discovery of such
                  defect or failure and (ii) within thirty (30) days after the
                  expiration of the prescribed Warranty period.

         (f)      Any work performed or materials furnished by Builder pursuant
                  to the Warranty shall be warranted for the remaining term of
                  the original Warranty, and nothing in subparagraph (b) or (c)
                  shall extend the Warranty period beyond the Warranty period
                  specified in this Section 11.

         (g)      THE WARRANTY AS DEFINED HEREINABOVE IS IN LIEU OF ALL OTHER
                  WARRANTIES (EXCEPT OF TITLE), EXPRESS OR IMPLIED, STATUTORY OR
                  AT COMMON LAW, AND ALL OTHER LIABILITIES (AT COMMON LAW OR IN
                  CONTRACT, TORT, OR OTHERWISE, RELATING IN ANY WAY TO THE
                  PLATFORM OR COMPONENTS THEREOF OR SERVICES TO BE PROVIDED
                  UNDER THIS AGREEMENT INCLUDING, WITHOUT LIMITATION, STRICT
                  LIABILITY AND NEGLIGENCE). WITHOUT LIMITATION OF THE
                  GENERALITY OF THE IMMEDIATELY PRECEDING SENTENCE, BUILDER
                  EXPRESSLY DISCLAIMS AND NEGATES (i) ANY IMPLIED OR EXPRESS
                  WARRANTY OF MERCHANTABILITY, (ii) ANY IMPLIED OR EXPRESS
                  WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, (iii) ANY
                  IMPLIED OR EXPRESS WARRANTY OF CONFORMITY TO MODELS OR SAMPLES
                  (iv) ANY IMPLIED OR EXPRESS WARRANTY OF DILIGENCE, (v) ANY
                  IMPLIED OR EXPRESS WARRANTY OF WORKMANLIKE SERVICE, (vi) ANY
                  IMPLIED OR EXPRESS WARRANTY OF SEAWORTHINESS, AND (vii) ALL
                  OTHER LIABILITY, AT COMMON LAW OR IN CONTRACT OR TORT OR
                  OTHERWISE, INCLUDING, WITHOUT LIMITATION, STRICT LIABILITY
                  (WHETHER FOUNDED IN SECTION 402(A) OF THE RESTATEMENT OF TORTS
                  OR OTHERWISE) AND NEGLIGENCE, WHETHER OCCASIONED BY ACTS OR
                  OMISSIONS OF SOLE OR CONCURRENT NEGLIGENCE OF BUILDER, ITS
                  AFFILIATES AND/OR OTHERS. BUILDER DISCLAIMS LIABILITY FOR, AND
                  IN NO EVENT WHATEVER SHALL BE LIABLE FOR, ANY LOSS OF PROFITS
                  OF OWNER OR OTHERS OR ANY OTHER INCIDENTAL, CONSEQUENTIAL,
                  PUNITIVE OR SPECIAL DAMAGES.

         (h)      Builder's warranty with respect to the Owner Furnished
                  Equipment shall extend only to installation thereof in
                  accordance with the certified equipment drawings furnished by
                  Owner in those instances where such Equipment is actually
                  installed by Builder. In all other instances (including,
                  without limitation, those instances in which Owner does not
                  furnish certified equipment drawings to Builder), the sole
                  risk and responsibility for the proper installation of the
                  Owner Furnished Equipment shall, as between Builder and Owner,
                  be borne by Owner. The sole risk and responsibility for the

                                                                            12
<PAGE>

                  operability of the Owner Furnished Equipment shall, as between
                  Builder and Owner, be borne by Owner, provided Builder shall
                  have installed the equipment in accordance with the certified
                  equipment drawings furnished by Owner.

         (i)      No employee or representative of Builder is authorized to
                  change the Warranty in any way or to grant any other warranty.

(j)               Owner understands and agrees that any modification to the
                  design, construction, or components of the Platform made by
                  the Owner are the responsibility of Owner and not the
                  responsibility of the Builder for any purpose whatsoever,
                  including claims for damages or other liability asserted by
                  Owner, its customers or any third party. In the event such
                  modifications require ABS or Regulatory Body approval, Owner
                  shall be responsible for obtaining such approval unless
                  Builder accepts the responsibility by executing a change order
                  to perform the work under this Agreement.

         (k)      Except as expressly provided in Section 28 hereinbelow, Owner
                  understands and agrees that the information contained in this
                  Agreement and the Specifications relating to the Platform does
                  not guarantee a fixed or variable weight of the Platform or
                  designate the use of equipment or other components other than
                  the equipment or other components to be provided by Builder
                  under this Agreement and the Specifications. The fixed and
                  variable weight of the Platform and the selection of equipment
                  or other components other than those to be provided by Builder
                  under this Agreement and the Specifications are decisions of
                  the Owner, including outfitting and fabrication decisions. The
                  weight information provided by Builder is for information only
                  and reflects historical information or estimated and
                  approximate data. Builder is unable to predict actual weights
                  for the Platform to be constructed by Builder. Builder does
                  not warrant or represent that Builder's sale or construction
                  of the Platform will meet the historical or approximate data
                  supplied to Owner.

12.             INDEMNIFICATION PROVISIONS

         A.       BUILDER INDEMNITIES

         (A)      BUILDER HEREBY AGREES TO DEFEND, INDEMNIFY AND HOLD HARMLESS
                  OWNER, ITS CUSTOMERS, AND THEIR RESPECTIVE PARENT, HOLDING AND
                  AFFILIATED COMPANIES, AND THEIR EMPLOYEES, OFFICERS,
                  DIRECTORS, AND AGENTS (COLLECTIVELY THE "OWNER INDEMNITEES"),
                  FROM AND AGAINST ALL LIABILITIES, LOSSES, CLAIMS, DEMANDS OR
                  CAUSES OF ACTION (COLLECTIVELY "CLAIMS"), BY BUILDER OR ITS
                  SUBCONTRACTORS OF ANY TIER OR THEIR RESPECTIVE EMPLOYEES,
                  OFFICERS AND AGENTS, BASED ON ILLNESS, INJURY OR DEATH OR
                  DAMAGE OR DESTRUCTION OR LOSS OF USE OF PROPERTY THEREOF
                  INCLUDING WITHOUT LIMITATION THE YARD, OCCURRING PRIOR TO THE
                  DELIVERY TO AND ACCEPTANCE BY OWNER OF THE PLATFORM, INCIDENT
                  TO OR

                                                                            13
<PAGE>

                  CONNECTED WITH OR ARISING OUT OF OR IN ANY WAY RELATED
                  DIRECTLY OR INDIRECTLY TO THE PERFORMANCE OF THIS AGREEMENT OR
                  BREACH HEREOF, REGARDLESS OF CAUSE, INCLUDING THE SOLE OR
                  CONCURRENT NEGLIGENCE OR FAULT OF ANY OF BUILDER OR THE OWNER
                  INDEMNITEES OR THEIR OFFICERS, AGENTS, EMPLOYEES, OR
                  SUBCONTRACTORS OF ANY TIER OR THEIR EMPLOYEES OR AGENTS,
                  UNSEAWORTHINESS, STRICT LIABILITY, OR ANY OTHER EVENT OR
                  CONDITION WHETHER OR NOT ANTICIPATED BY ANY PERSON OR PARTY,
                  REGARDLESS OF WHETHER PREEXISTING THE EXECUTION OF THIS
                  AGREEMENT.

         (B)      BUILDER SHALL BE LIABLE FOR ALL COSTS, EXPENSES, AND
                  REASONABLE ATTORNEYS FEES INCURRED BY OWNER INDEMNITEES IN
                  DEFENDING ANY COVERED CLAIMS AND IN ASSERTING THE INDEMNITIES
                  AS SET FORTH HEREIN AGAINST BUILDER. BUILDER SHALL BE
                  OBLIGATED TO BEAR THE EXPENSE OF THE INVESTIGATIONS AND
                  EXPENSES OF ALL CLAIMS ARISING THEREFROM AND TO PAY THE FULL
                  AMOUNT OF ANY JUDGMENT OR SETTLEMENT RENDERED AGAINST THE
                  OWNER INDEMNITEES, IT BEING STIPULATED THAT ALL OBLIGATIONS OF
                  INDEMNITY ASSUMED HEREIN SHALL SURVIVE THE TERMINATION OF THIS
                  AGREEMENT, REGARDLESS OF HOW SUCH TERMINATION IS EFFECTED. THE
                  OWNER INDEMNITEES SHALL PROVIDE REASONABLE ASSISTANCE TO
                  BUILDER IN RELATION TO THE DEFENSE OF CLAIMS WHICH ARE SUBJECT
                  TO INDEMNITY HEREUNDER

         B.       OWNER INDEMNITIES

         (A)      OWNER HEREBY AGREES TO DEFEND, INDEMNIFY AND HOLD HARMLESS
                  BUILDER AND ITS PARENTS, HOLDING AND AFFILIATED COMPANIES, AND
                  THEIR RESPECTIVE EMPLOYEES, OFFICERS, DIRECTORS, AND AGENTS
                  AND THE SUBCONTRACTORS OF BUILDER AND THEIR SERVANTS
                  (COLLECTIVELY THE "BUILDER INDEMNITEES"), FROM AND AGAINST ALL
                  LIABILITIES, LOSSES, CLAIMS, DEMANDS, COSTS, OR CAUSES OF
                  ACTION (COLLECTIVELY "CLAIMS"), BY OWNER OR ITS CONTRACTORS
                  AND SUBCONTRACTORS OF ANY TIER OTHER THAN BUILDER OR ITS
                  SUBCONTRACTORS OR THEIR RESPECTIVE EMPLOYEES, OFFICERS AND
                  AGENTS, BASED ON ILLNESS, INJURY OR DEATH OR DAMAGE OR
                  DESTRUCTION OR LOSS OF USE OF PROPERTY OTHER THAN THE
                  PLATFORM, OCCURRING PRIOR TO THE DELIVERY TO AND ACCEPTANCE BY
                  OWNER OF THE PLATFORM, INCIDENT TO OR CONNECTED WITH OR
                  ARISING OUT OF OR IN ANY WAY RELATED DIRECTLY OR INDIRECTLY TO
                  THE PERFORMANCE OF THIS AGREEMENT OR BREACH HEREOF, REGARDLESS
                  OF CAUSE, INCLUDING THE SOLE OR CONCURRENT NEGLIGENCE OR FAULT
                  OF ANY OF OWNER OR

                                                                            14
<PAGE>

                  THE BUILDER INDEMNITEES OR THEIR OFFICERS, AGENTS, EMPLOYEES,
                  OR SUBCONTRACTORS OF ANY TIER OR THEIR EMPLOYEES OR AGENTS,
                  UNSEAWORTHINESS, STRICT LIABILITY OR ANY OTHER EVENT OR
                  CONDITION WHETHER OR NOT ANTICIPATED BY ANY PERSON OR PARTY,
                  REGARDLESS OF WHETHER PREEXISTING THE EXECUTION OF THIS
                  AGREEMENT.

         (B)      OWNER SHALL BE LIABLE FOR ALL COSTS, EXPENSES, AND REASONABLE
                  ATTORNEYS FEES INCURRED BY BUILDER INDEMNITEES IN DEFENDING
                  ANY COVERED CLAIMS AND IN ASSERTING THE INDEMNITIES AS SET
                  FORTH IN PARAGRAPH (A) HEREINABOVE AGAINST OWNER. OWNER SHALL
                  BE OBLIGATED TO BEAR THE EXPENSE OF THE INVESTIGATIONS AND
                  EXPENSES OF ALL CLAIMS ARISING THEREFROM AND TO PAY THE FULL
                  AMOUNT OF ANY JUDGMENT OR SETTLEMENT RENDERED AGAINST THE
                  BUILDER INDEMNITEES, IT BEING STIPULATED THAT ALL OBLIGATIONS
                  OF INDEMNITY ASSUMED HEREIN SHALL SURVIVE THE TERMINATION OF
                  THIS AGREEMENT, REGARDLESS OF HOW SUCH TERMINATION IS
                  EFFECTED. THE BUILDER INDEMNITEES SHALL PROVIDE REASONABLE
                  ASSISTANCE TO OWNER IN RELATION TO THE DEFENSE OF CLAIMS,
                  WHICH ARE SUBJECT TO INDEMNITY HEREUNDER.

         C.       AS USED HEREIN "AFFILIATES" OR "AFFILIATED COMPANIES" SHALL
                  MEAN AN ENTITY WHICH, DIRECTLY OR INDIRECTLY, THROUGH ONE OR
                  MORE INTERMEDIARIES, CONTROLS, IS CONTROLLED BY, OR IS UNDER
                  COMMON CONTROL WITH, THE PARTY IN QUESTION.

13.      PATENT INDEMNITY

         (a)      Builder hereby agrees to defend any claim or suit and to
                  indemnify and save Owner harmless from and against any damages
                  (including the costs of the suit and reasonable attorney's
                  fees) awarded against Owner in a suit arising out of any
                  infringement of any U.S. or Singapore letters patent by reason
                  of the incorporation into the Platform in accordance with this
                  Agreement, the Specifications or the Platform Design of any
                  items manufactured or designed by Builder; provided that

                  (i)      the indemnity contained in this Section 13 shall not
                           apply to any claim or suit arising out of the
                           construction or use of processes, devices, apparatus,
                           or equipment specified or furnished by Owner or
                           anyone else other than Builder, for which Owner shall
                           indemnify and defend Builder, and mounted upon or
                           used in connection with the Platform, and

                  (ii)     Owner shall give Builder prompt written notice of any
                           such claim or suit and shall permit Builder to
                           control settlement negotiations and any litigation in
                           connection therewith;

                                                                            15
<PAGE>

                           provided, however, no settlement which purports to
                           acknowledge, on Owner's behalf the validity of the
                           patent involved shall be entered into by Builder
                           without Owner's consent. As to any Equipment
                           components purchased by Builder, Builder shall assign
                           (to the extent same is assignable) to Owner, without
                           recourse, any patent indemnity coverage granted to
                           Builder by any vendor thereof. Owner shall seek
                           performance or damages under such Patent indemnities
                           only from such vendors and not from Builder. Builder
                           shall cooperate with Owner in any resulting dispute
                           Owner may have with such vendors, including
                           permitting Owner to assert such indemnities in
                           Builder's name when any such indemnities are not
                           assignable. It is understood and agreed that the
                           Platform Design and the Specifications were developed
                           by Builder, and the inclusion in the Platform Design
                           or the Specifications of any process, method of
                           construction, construction equipment, device, or
                           apparatus (other than Owner Furnished Equipment) are
                           the sole and exclusive responsibility of Builder and
                           that any claims of patent infringement arising
                           therefrom are within the terms of Builder's patent
                           indemnity.

         (b)      Owner agrees to defend any claim, suit, or proceeding brought
                  against Builder alleging that the construction or use by
                  Builder, pursuant to this Agreement, of any process, method of
                  construction, construction equipment, device, or apparatus
                  (including, without limitation, Owner Furnished Equipment)
                  specified or furnished by Owner or mounted upon or used in
                  connection with the Platform constitutes infringement of any
                  letters patent, and Owner agrees to indemnify and save Builder
                  harmless from and against any judgment rendered against
                  Builder as a result of such claim, suit, or proceeding.
                  Builder shall promptly notify Owner in writing of any such
                  claim, suit, or proceeding and shall permit Owner to control
                  the conduct and settlement of such claim, suit, or proceeding,
                  provided, however, no settlement shall be entered into without
                  Builder's consent which purports to acknowledge on Builder's
                  behalf the validity of any patent. Builder shall provide
                  information and assistance to Owner, at Builder's expense, as
                  may be reasonably necessary to aid in the conduct and
                  settlement of the claim, suit, or proceeding. Builder shall be
                  entitled to participate, at its own expense, in the conduct
                  and settlement of such claim, suit, or proceeding through its
                  selected representatives and attorneys.

14.      FORCE MAJEURE

         (a)      For purposes of this Agreement, events of "Force Majeure"
                  shall be defined to mean all causes beyond the reasonable
                  control of the party asserting the benefit of this Article,
                  and shall include but not be limited to fire, explosion,
                  breakdown of machinery or equipment, shortage or
                  unavailability of materials or equipment (provided the
                  responsible party shall have taken reasonable measures to

                                                                            16
<PAGE>

                  overcome such shortage or unavailability), delay in
                  transportation (provided the responsible party shall have
                  taken reasonable measures to overcome such delay), government
                  order, edict, or other governmental action, storms, abnormal
                  weather that prevents blasting or painting, strikes or other
                  labor disturbances, destruction or damage to Builder's Yard or
                  equipment or any Owner Furnished Equipment or the Platform or
                  any part thereof from any cause; acts of Owner or regulatory
                  bodies having or purporting to have jurisdiction; late
                  delivery of Owner Furnished Equipment or failure to furnish in
                  a timely manner necessary information concerning the Owner
                  Furnished Equipment or the installation thereof; delays caused
                  by the Secretary (as defined in Section 30 hereof) or his
                  representatives; and any other causes or accidents of the same
                  or similar nature which are beyond the control of the Builder
                  or Owner or any or their respective subcontractors or
                  suppliers provided, however, that any increased costs to
                  Builder caused by ABS shall not be an event of Force Majeure.
                  In case either party shall be unable, wholly or in part,
                  because of any such event of Force Majeure to carry out its
                  obligations under this Agreement, the time for performance,
                  other than the obligation to make payments, shall be extended
                  by the period of such actual delay due to Force Majeure for
                  which notices are given as provided hereinbelow. Performance
                  of any obligations suspended while any Force Majeure is
                  operative shall be resumed as soon as possible after such
                  Force Majeure ceases. The party seeking benefit of this
                  paragraph shall notify the other of the occurrence of each
                  event of Force Majeure within seven (7) days after
                  commencement of such event. Any increased costs to Builder
                  resulting from any event of Force Majeure shall be compensated
                  by Owner to Builder to the extent (a) Builder maintains the
                  Builder's Risk insurance required by Section 8 hereof, and (b)
                  not compensated to Builder under such Builder's Risk
                  insurance. After ninety (90) continuous days of delay in the
                  construction of the Platform due to Force Majeure, Builder and
                  Owner shall each have the right to terminate this Agreement
                  without further liability of either party to the other except
                  that (1) Builder shall retain all progress payments pursuant
                  to Paragraph 2(b) hereinabove and shall be paid by Owner for
                  the price for that portion of the Platform then constructed
                  for which progress payments have not yet been made and all
                  work in process (including profit on all to Builder), and (2)
                  Builder shall (a) permit the Platform, work in process and
                  Owner Furnished Equipment to remain in Builder's yard for a
                  period of ninety (90) days following such termination to
                  permit the Owner time to dispose of such, and (b) on a time
                  and materials basis at Builder's customary rates, perform such
                  work on the Platform, work in process or Owner Furnished
                  Equipment as Owner reasonably requires to facilitate such
                  disposition. Owner shall pay to Builder its standard charges
                  for shore power, potable water, and security guard service.

15.      INDEPENDENT CONTRACTOR

         (a)      Throughout the entire term of this Agreement, Builder shall be
                  an independent contractor with full power and authority to
                  select the means, methods and manner of performing its work
                  hereunder.

         (b)      All operations shall be conducted in Builder's own name and as
                  an independent contractor and not in the name of, or as an
                  agent for, Owner. In

                                                                            17
<PAGE>

                  the event Builder shall sublet or subcontract any of the
                  construction of the Platform provided for herein, Builder
                  nevertheless shall remain primarily responsible for compliance
                  with all of the provisions hereof and for the construction of
                  the Platform, including the portion of the construction of the
                  Platform performed by the party to whom the work is sublet or
                  subcontracted, and Builder shall require each such
                  subcontractor and each such subcontractor's employees, agents
                  and representatives to comply with all the agreements,
                  covenants, terms, conditions, and provisions on the part of
                  Builder to be performed hereunder, insofar as applicable to
                  the work to be performed by each such subcontractor.

16.      DEFAULT

         (a)      Builder's Default

                  Builder shall be in default of its obligations under this
                  Agreement if any of the following events occur:

                  (i)      The failure of the Builder to perform or breach of
                           any of the material covenants, agreements, or
                           undertakings on its part to be performed under this
                           Agreement, provided that the Owner shall give notice
                           to the Builder as to such failure and the Builder
                           shall not, within thirty (30) days after being so
                           notified, commence and diligently prosecute remedial
                           action to cure such failure to perform or breach
                           which shall in any event be cured within one hundred
                           twenty (120) days of the date of such notice from
                           Owner;

                  (ii)     Builder goes into liquidation, whether voluntary or
                           compulsory, or enters into a scheme of arrangement,
                           or makes a general assignment of its assets for the
                           benefit of its creditors, or a receiver or receivers
                           of any kind whatsoever, whether temporary or
                           permanent, is appointed for the property of Builder,
                           or Builder institutes proceedings for its
                           reorganization or the institution of such proceedings
                           by creditors and approval thereof by the court,
                           whether proposed by a creditor, a stockholder or any
                           other person whomsoever, or Builder suffers any
                           execution against a major portion of its assets which
                           is not satisfied within seven (7) days, or Builder
                           fails generally, or admits in writing its inability,
                           to pay its debts generally as they become due.

         (b)      If any default by Builder occurs as defined in Subparagraph
                  (a) of this Section 16, Owner, at its election, may upon
                  prompt notice to Builder terminate this Agreement without
                  prejudice and exercise all rights and remedies available to
                  Owner at law, in admiralty, or in equity. Prior to exercise of
                  any remedy involving or which includes any attempt to take
                  control or possession of the Platform or any components
                  thereof or work in progress, if Builder disputes that it is in
                  default, Owner shall first be required to post with Builder a
                  corporate surety bond from a first class U.S. surety
                  acceptable to Builder in a form reasonably satisfactory to
                  Builder. Such bond

                                                                            18
<PAGE>

                  shall be in an amount equal to 150% of any sum claimed by
                  Builder under this Agreement.

         (c)      Owner's Default

                  Owner shall be in default of its obligations under this
                  Agreement if any of the following events occurs:

                  (i)      In the event of failure by Owner to pay to Builder
                           any installments which are properly payable pursuant
                           to Section 3, Paragraph 2(b) of this Agreement or the
                           failure of the Owner to perform or breach of any of
                           the other material covenants, agreements, or
                           undertakings on its part to be performed under this
                           Agreement, provided that the Builder shall give
                           notice to the Owner as to such failure and the Owner
                           shall not, within seven (7) days in the case of
                           failure to pay or to take delivery of the Platform
                           when completed under the terms of this Agreement and
                           thirty (30) days in the case of other defaults after
                           being so notified, cure such failure to perform or
                           breach;

                  (ii)     Owner goes into liquidation, whether voluntary or
                           compulsory, or enters into a scheme of arrangement,
                           or makes a general assignment of its assets for the
                           benefit of its creditors, or a receiver or receivers
                           of any kind whatsoever, whether temporary or
                           permanent, is appointed for the property of Owner, or
                           Owner institutes proceedings for its reorganization
                           or the institution of such proceedings by creditors
                           and approval thereof by the court, whether proposed
                           by a creditor, a stockholder or any other person
                           whomsoever, or Owner suffers any execution against a
                           major portion of its assets which is not satisfied
                           within seven (7) days, or Owner fails generally, or
                           admits in writing its inability, to pay its debts
                           generally as they become due.

         (d)      If any default by Owner occurs as defined in subparagraph (c)
                  of this Section 16, Builder, at its election, may upon prompt
                  notice to Owner suspend its performance under this Agreement
                  and at any time thereafter may terminate this Agreement
                  without prejudice to all rights and remedies available to
                  Builder at law, in admiralty, or in equity.

17.      LITIGATION

         (a)      Owner and Builder agree that any and all disputes arising from
                  or in connection with this Agreement shall be determined by,
                  and any legal suit, action, or proceeding arising out of or
                  relating to this Agreement may be instituted only in, a state
                  or federal court in Harris County, Texas, United States of
                  America to whose jurisdiction the parties hereby irrevocably
                  submit.

         (b)      Owner hereby designates and appoints CT Corporations Systems,
                  Inc., 811Dallas, Ave., Houston, Texas 77002 ("CT") as Owner's
                  authorized agent and acknowledges on its behalf service of any
                  and all process and, if through reasonable efforts, service on
                  CT has been unsuccessful, Owner hereby designates

                                                                            19
<PAGE>

                  and appoints the Secretary of State, State of Texas as Owner's
                  authorized agent to accept and acknowledge on it's behalf
                  service of any and all process which may be served in any such
                  suit, action, or proceeding in any such state or federal court
                  in the State of Texas and agrees that service of process upon
                  said agent or the Assistant Secretary of State or any clerk
                  having charge of the corporation department of the office of
                  said Secretary of State at his office in Austin, Texas, and
                  written notice of said service to Owner, mailed or delivered
                  to Owner at the address specified for Owner in Article 18 of
                  this Agreement, shall be deemed in every respect effective
                  service of process upon Owner in any suit, action or
                  proceeding and shall be taken and held to be valid personal
                  service upon Owner, whether or not Owner shall then be doing,
                  or at any time shall have done, business within the State of
                  Texas, and that any such service of process shall be of the
                  same force and validity as if service were made upon it
                  according to the laws governing the validity and requirements
                  of such service in the State of Texas, and waives all claims
                  of error by reason of such service.

         (c)      Builder hereby designates and appoints Frank Puglisi, AMFELS,
                  Inc., Highway 48, Port of Brownsville, Brownsville, TX 78523,
                  as Builder's authorized agent and acknowledges on its behalf
                  service of any and all process and, if through reasonable
                  efforts, service on Frank Puglisi has been unsuccessful,
                  Builder hereby designates and appoints the Secretary of State,
                  State of Texas as Builder's authorized agent to accept and
                  acknowledge on it's behalf service of any and all process
                  which may be served in any such suit, action, or proceeding in
                  any such state or federal court in the State of Texas and
                  agrees that service of process upon said agent or the
                  Assistant Secretary of State or any clerk having charge of the
                  corporation department of the office of said Secretary of
                  State, at his office in Austin, Texas, and written notice of
                  said service to Builder, mailed or delivered to Builder at the
                  address specified for Builder in Article 18 of this Agreement,
                  shall be deemed in every respect effective service of process
                  upon Builder in any suit, action or proceeding and shall be
                  taken and held to be valid personal service upon Builder,
                  whether or not Builder shall then be doing, or at any time
                  shall have done, business within the State of Texas, and that
                  any such service of process shall be of the same force and
                  validity as if service were made upon it according to the laws
                  governing the validity and requirements of such service in the
                  State of Texas, and waives all claims of error by reason of
                  such service.

18.      NOTICE

         Any notice provided for under this Agreement must be given in writing,
         but may be served by depositing same in the mail, addressed to the
         party to be notified, postage paid, and registered or certified with
         return receipt requested, or by delivering same in person to such other
         party, or by pre-paid telegram, telex, facsimile confirmed by mail, or
         cable. For purposes of notice, the addresses of the parties shall be:

                           If to Owner:     Chiles Offshore LLC
                                            11200 Richmond Ave.
                                            Suite 490
                                            Houston, TX 77082
                           Telephone:       713-339-3997

                                                                            20
<PAGE>

                           Facsimile:       713-339-3888
                           Attention:       William E. Chiles
                                            President

                           If to Builder:   AMFELS, Inc.
                                            20,000 Highway 48
                                            Port of Brownsville
                                            Brownsville, Texas 78563
                           Telephone:       956-831-8200
                           Facsimile:       956-831-6220
                           Attention:       Y.Y. Chow
                                            President

         Provided, however, that each party shall have the continuing right to
         change its address of notice at any time or times by the giving of 10
         days notice in the manner hereinabove described. Notices shall be
         deemed given only upon receipt or by facsimile confirmation.

19.      SUCCESSORS AND ASSIGNS

         This Agreement shall inure to the benefit of, and shall be binding
         upon, the parties hereto, and their respective successors and assigns.
         It is expressly understood and agreed that neither party shall assign
         any of its rights, title and interest in this Agreement without the
         prior written consent of the other party, except Builder hereby
         consents to an assignment of this Agreement by Owner to a wholly-owned
         subsidiary of Owner, provided that Owner shall remain primarily liable
         for the full and timely performance by such assignee of the obligations
         of such assignee under this Agreement.

20.      GOVERNING LAW

         This Agreement shall be deemed to have been made under, shall be
         construed and interpreted in accordance with the laws of the State of
         Texas, excluding any conflicts of law rule or law which might refer
         such construction and interpretation to the laws of another state,
         republic or country; provided, however, that all matters relating to
         the interpretation of any patent or patent application will be decided
         in accordance with the laws of the country which issued the patent to
         be interpreted or in which the patent applications to be interpreted
         have been filed.

21.      MODIFICATION OR WAIVER.

         This Agreement, which incorporates all prior negotiations and
         understandings relating to the subject matter thereof, sets forth the
         entire agreement of the parties hereto and shall not be modified except
         by a written instrument executed by the duly authorized representatives
         of Builder and Owner. The failure of either party to insist upon strict
         performance of any provision hereof shall not constitute a waiver of or
         estoppel against asserting the right to require such performance in the
         future, nor shall a waiver or estoppel in any one instance, constitute
         a waiver or estoppel with respect to a later breach of a similar nature
         or otherwise.

                                                                            21
<PAGE>

22.      RELIANCE

         AS MORE FULLY SET FORTH IN OTHER PROVISIONS OF THIS AGREEMENT, BUILDER
         AND OWNER HAVE REACHED EXPRESS AGREEMENT WITH RESPECT TO THE LIMITATION
         OF THEIR RESPECTIVE LIABILITIES IN CONNECTION WITH THIS AGREEMENT.
         BUILDER AND OWNER EXPRESSLY RECOGNIZE THAT (A) THE PRICE FOR WHICH
         BUILDER HAS AGREED TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT HAS
         BEEN PREDICATED ON THE AFORESAID LIMITATION OF LIABILITY AND WAIVER (IT
         BEING ACKNOWLEDGED THAT OWNER COULD HAVE NEGOTIATED WITH BUILDER FOR
         MODIFICATIONS TO THE LIMITATION OF BUILDER'S LIABILITY BUT THAT THE
         PRICE OF THE PLATFORM WOULD HAVE BEEN INCREASED TO REFLECT SUCH
         MODIFICATIONS), (B) BUILDER, IN DETERMINING TO PROCEED WITH THE
         PERFORMANCE OF ITS OBLIGATIONS PURSUANT TO THIS AGREEMENT, HAS
         EXPRESSLY RELIED ON SUCH LIMITATION OF LIABILITY AND WAIVER AND WOULD
         NOT HAVE EXECUTED THIS AGREEMENT BUT FOR SUCH LIMITATION OF LIABILITY,
         AND (C) OWNER, IN ACCEPTING THE PRICE FOR THE PLATFORM (IT BEING
         ACKNOWLEDGED THAT BUILDER COULD HAVE NEGOTIATED FOR MODIFICATIONS TO
         THE LIMITATION OF OWNER'S LIABILITIES BUT THAT THE PRICE OWNER WOULD
         HAVE BEEN WILLING TO PAY FOR THE PLATFORM WOULD HAVE BEEN DECREASED DUE
         TO SUCH MODIFICATIONS), AND IN DETERMINING TO UNDERTAKE THE OWNER'S
         OBLIGATIONS UNDER THIS AGREEMENT, RELIED UPON SUCH LIMITATION OF
         LIABILITY.

23.      COMPUTATION OF TIME

         All periods of time shall be computed by including Saturdays, Sundays
         and holidays except that if such period terminates on a Saturday,
         Sunday or holiday it shall be deemed extended to the business day next
         succeeding. All references in this Agreement to days shall mean
         calendar days.

24.      GENERAL LIMITATION OF LIABILITY

         IN NO EVENT SHALL BUILDER OR ITS AFFILIATES OR THE AGENTS, OFFICERS,
         EMPLOYEES, INVITEES, REPRESENTATIVES OR SUBCONTRACTORS OF BUILDER OR
         THEIR SERVANTS BE LIABLE TO OWNER OR ITS AFFILIATES OR THE AGENTS,
         OFFICERS, EMPLOYEES, INVITEES, REPRESENTATIVES, CONTRACTORS, OR
         SUBCONTRACTORS OF ANY TIER, EXCLUDING BUILDER AND ITS SUBCONTRACTORS,
         OR TO ANY THIRD PARTIES FOR PHYSICAL HARM, INCIDENTAL, CONSEQUENTIAL,
         PUNITIVE OR SPECIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, LOSS OF
         PROFITS AND LOSS OF BUSINESS OPPORTUNITIES), ARISING OUT OF, RESULTING
         FROM OR RELATING IN ANY WAY TO THIS AGREEMENT OR ANY ACTIVITIES OR
         OMISSIONS OR DELAYS IN CONNECTION

                                                                            22
<PAGE>

         HEREWITH OR THEREWITH INCLUDING, WITHOUT LIMITATION, THE PERFORMANCE
         (WHETHER TIMELY OR NOT) OR THE NON-PERFORMANCE OF THIS AGREEMENT,
         BREACH OF ANY WARRANTY OR THE LOSS OF OR LOSS OF USE OF THE PLATFORM OR
         ANY PART THEREOF OR ANY OTHER EQUIPMENT, MATERIALS, OR PROPERTY,
         REGARDLESS OF CAUSE AND REGARDLESS OF WHETHER BUILDER OR ITS
         AFFILIATES, AND/OR THEIR RESPECTIVE OFFICERS, EMPLOYEES, AGENTS,
         REPRESENTATIVES, SUBCONTRACORS, OR THEIR SERVANTS AND/OR OTHERS MAY BE
         WHOLY, PARTIALLY, OR SOLELY NEGLIGENT OR OTHERWISE AT FAULT,
         UNSEAWORTHINESS, STRICT LIABILITY, OR ANY DEFECT IN PREMISES, EQUIPMENT
         OR MATERIALS, OR ANY OTHER EVENT OR CONDITION WHETHER OR NOT
         ANTICITPATED BY ANY PERSON OR PARTY, REGARDLESS OF WHETHER PREEXISTING
         THE EXECUTION OF THIS AGREEMENT.

25.      WAIVER OF CONSUMER RIGHTS AND REPRESENTATIONS OF OWNER

         OWNER HEREBY WAIVES ITS RIGHTS UNDER THE TEXAS DECEPTIVE TRADE
         PRACTICE-CONSUMER PROTECTION ACT, CHAPTER 17, SUBCHAPTER E, SECTIONS
         17.41, ET SEQ, VERNON'S TEXAS CODES ANNOTATED, BUSINESS AND COMMERCE
         CODE, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS. AFTER
         CONSULTATION WITH AN ATTORNEY OF IT OWN SELECTION, OWNER VOLUNTARILY
         CONSENTS TO THIS WAIVER. TO EVIDENCE ITS ABILITY TO GRANT SUCH WAIVER,
         OWNER HEREBY REPRESENTS AND WARRANTS TO BUILDER THAT OWNER (a) IS IN
         THE BUSINESS OF SEEKING OR ACQUIRING, BY PURCHASE OR LEASE, GOODS OR
         SERVICES FOR COMMERCIAL OR BUSINESS USE AND IS ACQUIRING THE GOODS AND
         SERVICES COVERED BY THIS AGREEMENT FOR COMMERCIAL OR BUSINESS USE AND
         IS ACQUIRING THE GOODS AND SERVICES COVERED BY THIS AGREEMENT FOR
         COMMERCIAL USE, (b) HAS ASSETS OF $25,000,000 OR MORE, OR IS OWNED BY A
         CORPORATION OR OTHER ENTITY WHICH HAS ASSETS OF $25,000,000 OR MORE,
         ACCORDING TO ITS MOST RECENT FINANCIAL STATEMENT PREPARED IN ACCORDANCE
         WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPALS, (c) HAS KNOWLEDGE AND
         EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS THAT ENABLE IT TO EVALUATE
         THE MERITS AND RISKS OF THE TRANSACTIONS CONTEMPLATED HEREBY, (d) IS
         NOT IN A SIGNIFICANTLY DISPARATE BARGAINING POSITION, AND (e) IS
         REPRESENTED BY LEGAL COUNSEL IN THIS TRANSACTION WHICH WAS NOT DIRECTLY
         OR INDIRECTLY IDENTIFIED, SUGGESTED OR SELECTED BY BUILDER. OWNER'S
         REPRESENTATIONS AND WARRNTIES SHALL SURVIVE THE PERFORMANCE OF ALL WORK
         IN CONNECTION WITH THIS AGREEMENT AND SHALL REMAIN EFFECTIVE REGARDLESS
         OF ANY INVESTIGATION AT ANY TIME MADE BY OR ON BEHALF OF BUILDER OR ANY
         INFORMATION BUILDER MAY HAVE WITH RESPECT THERETO. OWNER HEREBY AGREES
         TO PROTECT, INDEMNIFY AND HOLD BUILDER AND ITS AFFILIATES HARMLESS FROM
         AND AGAINST ANY AND ALL

                                                                            23
<PAGE>

         LOSSES, COSTS (INCLUDING, WITHOUT LIMITATION, THE COST OF THE SUIT AND
         REASONABLE ATTORNEYS' FEES), CLAIMS, CAUSES OF ACTION, AND LIABILITIES
         ARISING OUT OF OR RESULTING FROM, OR RELATING IN ANY WAY TO THE BREACH
         OF THE AFORESAID REPRESENTATIONS AND WARRANTIES.

                                                 CHILES OFFSHORE LLC
                                                 By: /s/ William E. Chiles
                                                     -------------------------

26.      SEVERABILITY

         If any of the terms and conditions of this Agreement are held by any
         court of competent jurisdiction to contravene or to be invalid under
         the laws of any political body having jurisdiction over the subject
         matter hereof, such contravention or invalidity shall not invalidate
         the entire Agreement, but, instead, this Agreement shall be construed
         as if not containing the particular provision or provisions held to be
         invalid and the rights and obligations of the parties shall be
         construed and enforced accordingly and this Agreement shall thereupon
         and thereafter remain in full force and effect.

27.      CONSTRUCTION

         The parties to this Agreement having been represented by legal counsel
         of their own choosing in connection with the negotiation and drafting
         of this Agreement, this Agreement shall be construed and interpreted
         for all purposes without regard to the author of any specific language
         appearing herein. The headings contained in this Agreement are for
         reference purposes only and shall not affect in any way the meaning or
         interpretation of this Agreement.

28.      VARIABLE LOADS

         (a)      Builder shall endeavor, without guarantee or warranty, to meet
                  the target figures set out for variable loads in Section 1 of
                  the Specifications; provided, however, Builder shall guarantee
                  no less than the following variable loads (as approved by ABS)
                  for the 475' leg length Platform:

                  Variable Load Elevated Storm:                3,600 kips

         These values are based on the weight of Owner Furnished Equipment that
         will be permanently affixed to the Platform not to exceed 1800 kips.
         Prior to delivery of the Platform, the variable loads shall be
         determined by an inclining experiment.

         (b)      In the event that the Variable Load Elevated Storm calculated
                  at the 475' leg length is less than 3,600 kips, and Builder
                  shall not have corrected such deficiency pursuant to paragraph
                  (e) hereof, Builder shall pay to Owner as liquidated damages
                  and not as a penalty the following cumulative amounts for such
                  deficiency up to a maximum of $3,000,000:
<TABLE>
                  <S>                                                         <C>
                  (i)      If less than 3,600 kips but more than 3,400 kips-

                                                                            24
<PAGE>

                  <S>                                                         <C>
                           for each full 10 kips reduction within such range-     $30,000
                  (ii)     If less than 3,400 kips but more than 3,200 kips- for
                           each full 10 kips reduction within such range-         $50,000
                  (iii)    If less than 3,200 kips but more than 3,000 kips- for
                           each full 10 kips reduction within such range-         $70,000
</TABLE>

         (c)      In the event the Variable Load Elevated Storm calculated at
                  the 475' leg length is less than 3,000 kips, and Builder shall
                  not have corrected such deficiency pursuant to paragraph (e)
                  hereof, Owner shall have the right to reject the Platform, in
                  which event (i) Builder shall not be liable to Owner for
                  liquidated damages, and (ii) Owner's sole and exclusive remedy
                  shall be to terminate this Agreement and receive a refund of
                  all progress payments theretofore made to Builder under this
                  Agreement with interest thereon at the rate of eight percent
                  (8%) per annum on such sums commencing from the date of
                  payment of such progress payments until the same are refunded
                  to Owner plus the delivered invoice cost of all Owner
                  Furnished Equipment which has been incorporated in the
                  Platform. Upon payment of all sums due Owner under this
                  provision, all right, title, and interest in the Platform
                  shall be conveyed to Builder "As Is, Where Is" and free and
                  clear of all liens, claims and encumbrances created by,
                  through or under Owner.

         (d)      In the event the Variable Load Elevated Storm calculated at
                  the 475' leg length is in excess of 4,000 kips, Owner shall
                  pay to Builder as a bonus the following cumulative amounts for
                  such excess up to a maximum of $3,000,000:
<TABLE>
                  <S>                                                             <C>
                  (i)      If greater than 4,000 kips but less than 4,200 Kips-
                           for each full 10 kips increase within such range-        $30,000

                  (ii)     If greater than 4,200 kips but less than 4,400 kips
                           for each full 10 kips increase within such range-        $50,000

                  (iii)    If greater than 4,400 kips
                           for each full 10 kips increase within such range-        $70,000
</TABLE>

         (e)      In the event the Variable Load Elevated Storm calculated at
                  the 475' leg length is less than 3,000 kips, Builder shall
                  have the option to make modifications to the Platform in order
                  to increase the Variable Load Elevated Storm, provided that
                  such modifications (i) are approved in advance by ABS, (ii) do
                  not materially affect the motion characteristics or
                  operational performance of the Platform, and (iii) are
                  accomplished within one hundred twenty (120) days of the
                  Delivery Date. In the event such modifications increase the
                  Variable Load Elevated Storm, the liquidated damages provided
                  in paragraph (c) hereof and the bonus provided in paragraph
                  (d) hereof shall be calculated on the basis of such increased
                  Variable Load Elevated Storm.

29.      TAXES AND DUTIES

         Builder shall pay or cause to be paid all United States and State of
         Texas taxes, duties, fees and stamp duties of whatsoever nature imposed
         by any governmental entity in connection with Builder's performance of
         its obligations under this Agreement, including any tax on the sale and
         delivery of the Platform to Owner, excluding any such taxes, duties,
         fees and stamp duties imposed by any governmental entity on the

                                                                            25
<PAGE>

         Owner Furnished Equipment.

30.      TITLE XI AMENDMENT

         In the event Buyer obtains a letter commitment from the United States
         Secretary of Transportation, acting by and through the Maritime
         Administrator (the "Secretary"), to guarantee the financing (such
         commitment the "Letter Commitment" and such guarantee the "Guarantee")
         for the Platform under Title XI of the Merchant Marine Act, 1936,
         Builder and Owner agree to amend this Agreement as required by the
         Secretary as a condition to such Guarantee, including, without limiting
         the generality of the foregoing, if so required by the Secretary,
         elimination of the reservations to Builder in the final two sentences
         of paragraph (b) of Section 9 hereof. It is expected that such
         amendment of this Agreement will be substantially in the form of
         Exhibit C hereto.

31.      CONFIDENTIALITY AND GRANT OF LICENSE

         (a)      Owner recognizes and agrees that confidential information of
                  Builder has or will be provided to Owner in connection with
                  the design and construction of the Platform. Builder shall
                  mark any such confidential information as "Confidential" (any
                  such information as so marked, herein "Confidential
                  Information") Owner agrees to maintain in confidence and not
                  to exhibit, sell, lease, or otherwise commercialize, disclose,
                  or use such Confidential Information, in whatever form
                  provided including without limitation descriptions, drawings,
                  specifications, and calculations, except as is reasonably
                  necessary in connection with the ownership, operation, repair,
                  and maintenance of the Platform. Such obligation of
                  confidentiality shall extend to and cover information which is
                  discovered as a result of inspection or reverse engineering.
                  In connection therewith, if disclosure of Confidential
                  Information must be made to vendors, suppliers, contractors,
                  or subcontractors, Owner shall disclose only such portion of
                  such Confidential Information as is reasonably necessary to
                  enable such parties to perform the needed work on the
                  Platform. Further, Owner shall first obtain an obligation of
                  confidentiality from such parties with regard to such
                  Confidential Information on substantially the same terms and
                  conditions as set forth herein, which obligation of
                  confidentiality shall expressly be enforceable by and in the
                  name of Builder. Such obligation of confidentiality by such
                  parties shall further provide that all such Confidential
                  Information in whatever form and all copies thereof shall be
                  immediately returned by such parties upon the request of Owner
                  or Builder.

         (b)      All documents of any kind embodying any substantive part of
                  such Confidential Information shall be conspicuously marked
                  with a stamp or legend with a proprietary notice reading as
                  follows:

                                     "NOTICE

                           THIS DOCUMENT AND THE INFORMATION CONTAINED HEREIN
                           ARE THE PROPERTY OF AMFELS, INC., A COPRORATION
                           ORGANIZED UNDER THE LAWS OF THE STATE OF TEXAS , AND
                           ARE MAINTAINED IN CONFIDENCE

                                                                            26
<PAGE>

                           THEREBY, AND RECEIPT OF THIS DOCUMENT AND THE
                           INFORMATION CONTAINED HEREIN CONSTITUTES THE
                           AGREEMENT OF THE PERSON OR ENTITY RECEIVING SAME TO
                           MAINTAIN THIS DOCUMENT AND THE INFORMATION CONTAINED
                           HEREIN IN CONFIDENCE. RECEIPT OR POSSESSION OF THIS
                           DOCUMENT DOES NOT CONVEY ANY RIGHTS TO REPRODUCE THIS
                           DOCUMENT OR TO DISCLOSE ITS CONTENTS, OR TO
                           MANUFACTURE, USE OR SELL ANYTHING SHOWN OR DESCRIBED
                           IN THIS DOCUMENT. REPRODUCTION, DISCLOSURE, OR USE OF
                           THIS DOCUMENT OR ANY INFORMATION CONTAINED HEREIN
                           WITHOUT SPECIFIC WRITTEN AUTHORIZATION OF AMFELS,
                           INC. IS STRICTLY FORBIDDEN."

         (c)      The obligation of confidentiality provided in this Section 30
                  shall not apply to such portion of the Confidential
                  Information which now or hereafter is described in an issued
                  Singapore or foreign letters patent or is now or hereafter
                  published in a printed publication generally available in the
                  industry (except where published in violation of this
                  Agreement).

         (d)      The design of the Platform and the descriptions, drawings,
                  specifications, and calculations prepared by Builder in
                  connection with the design and construction of the Platform
                  are and shall remain the property of Builder. Owner shall have
                  no right to use, sell, license, or otherwise commercialize
                  such design or any such descriptions, drawings,
                  specifications, and calculations except in connection with the
                  ownership and operation of the Platform. Builder hereby grants
                  to Owner upon delivery of the Platform an irrevocable,
                  non-exclusive, royalty free, perpetual license to use, lease,
                  sell, or otherwise dispose of (but not to duplicate or
                  manufacture) all or any of Builder's interest in the Platform
                  or the design thereof which has heretofore been patented by
                  Builder, or for which patents may be pending by Builder, or
                  for which patent applications may hereafter be filed by
                  Builder. Owner shall have the right to transfer the license
                  referred to hereinabove along with the Platform whenever Owner
                  sells the Platform, provided Owner obtains from the purchaser
                  an agreement in writing (an executed original of which shall
                  be promptly delivered to Builder) providing that such party
                  undertakes the same obligations as Owner has pursuant to this
                  Section 30.

         (e)      The license herein granted shall apply only to the one
                  Platform to be constructed pursuant to this Agreement. If at
                  any time Owner is in default of any of its obligations under
                  this Section 30, Builder may cancel and terminated the
                  licenses granted by Builder herein, by giving Owner ten (10)
                  days prior written notice of the intention to terminate;
                  provided, however, termination shall not relieve Owner of its
                  obligations set forth in this Section 30, and the same shall
                  continue in full force and effect. Owner shall promptly notify
                  Builder in the event Owner knows or learns of any unauthorized
                  use of the descriptions, drawings, specifications, and
                  calculations prepared by Builder in connection with the design
                  and construction of the Platform by any person or party or if
                  Owner learns of any infringement of any patent held by Builder
                  in connection with the design or construction of the Platform.
                  Nevertheless, without the prior written consent of Builder,
                  Owner shall

                                                                            27
<PAGE>

                  initiate no notices of unlawful use of or infringement to the
                  party or person using the descriptions, drawings,
                  specifications, and calculations prepared by Builder in
                  connection with the design and construction of the Platform or
                  the applicable letters patent, and shall engage in no positive
                  or overt acts toward such party or person which would create a
                  justiciable controversy between such party or person and
                  Builder with respect thereto.

         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on their behalf by their respective duly authorized representatives on
the date first shown above.

AMFELS, INC.

By:      /s/ C. H. Tong
         --------------
Name:    C. H. Tong
Title:   Director

CHILES OFFSHORE LLC

By: /s/ William E. Chiles
    ----------------------
Name:   William E. Chiles
Title:  President

                                                                            28
<PAGE>

                                    EXHIBIT A

                       TO PLATFORM CONSTRUCTION AGREEMENT

                                PAYMENT SCHEDULE

Buyer shall make payment to Builder as follows:
<TABLE>
<CAPTION>
                  EVENT                          PERCENTAGE OF CONTRACT PRICE

                  <S>                                     <C>
                  Contract Signing                            15%

                  Start of Fabrication                        15%

                  Keel Laying                                 20%

                  Install 3rd Spud Can                        20%

                  Launching                                   20%

                  Delivery                                    10%

</TABLE>

                                                                            29
<PAGE>

                                    EXHIBIT B

                       TO PLATFORM CONSTRUCTION AGREEMENT

                       SPECIFICATIONS AND DESIGN DRAWINGS

                  Specification for the Construction and Outfit of a Mobile
                  Offshore Self-elevating Drilling Unit, Keppel FELS Class B
                  dated 5th April 2000

General Arrangement Drawings:

-        General Arrangement, Outboard Profile D001
         -        General Arrangement, Inner Bottom Tank Arrangement D002
         -        General Arrangement, Machinery Deck (5 ft level) D003
         -        General Arrangement, Machinery Deck. (16 ft level) D004
         -        General Arrangement, Main Deck 25ft level D005-01
         -        General Arrangement, Main Deck 30ft level D005-02
         -        General Arrangement, Main Deck 40ft level D005-03
         -        General Arrangement, Main Deck 50ft level D006-04
         -        General Arrangement, Main Deck 60ft level D006-05
         -        General Arrangement, Main Deck 70ft level D006-06

Schematic Drawings:

-        A.C. One Line Diagram E02
-        D.C. One Line Diagram E03
-        Preload Fill & Dump System P101
-        Salt Water System P104
-        Drill Water System P106
-        H.P. & L.P. Air Systems P113
-        Low Pressure Mud Systems P115
-        High Pressure Mud and Cement P117
-        Fuel Oil System P110
-        Bilge System P102
-        Drain System P112
-        Fire Fighting System P105
-        Heliport Foam System P119
-        Exhaust System P121
-        Engine Cooling System P108
-        Leg Jetting System P103

                                                                            30
<PAGE>

                                    EXHIBIT C

TITLE XI PROVISIONS

         1.       INSPECTION BY THE SECRETARY'S REPRESENTATIVES. The Shipyard
                  shall permit inspection by, supply information to, and
                  cooperate with representatives of the Secretary of
                  Transportation acting by and through the Maritime
                  Administrator (the "Secretary") at its yard where the assembly
                  of the Vessel is now taking place and at such other yards of
                  the Shipyard, its affiliates and subcontractors where parts of
                  the Construction Contract or subcontracts may be performed.
                  Shipyard acknowledges that such cooperation may include, but
                  is not limited, to providing the Secretary: 1) access to the
                  Vessel and areas of the Shipyard where work related to the
                  Vessel is being performed by the Shipyard, its contractors and
                  subcontractors, at all reasonable times during normal working
                  hours to inspect performance of the Work, and to observe
                  trials and other tests; 2) copies of detailed production and
                  construction schedules for the Vessel along with changes to
                  such documents as they occur; 3) access to contract plans and
                  specifications for the Vessel; 4) reasonable access to
                  Shipyard's production manager or supervisor; 5) information on
                  the origination and source of materials; and 6) access to
                  progress payment and construction milestone information. In
                  conjunction with any such inspections by the Secretary, the
                  Shipyard will furnish, on a temporary basis, reasonable space
                  at its yard for the Secretary's representatives and
                  communication, copying and other facilities as appropriate.
                  The Secretary's access to the Vessel shall be at the
                  Secretary's and Shipowner's sole risk. The Shipyard assumes no
                  responsibility for its own negligence, and Shipowner assumes
                  full liability for any injury that the Secretary or its
                  representatives, agents or contractors may sustain on the
                  Vessel during its construction and the Shipowner hereby fully
                  releases and discharges and shall defend and indemnify the
                  Shipyard from any liability with respect thereto.

         2.       CHANGES IN CONSTRUCTION CONTRACT. Notwithstanding anything to
                  the contrary contained in the Construction Contract, the
                  Construction Contract shall not be amended, modified or
                  terminated except in writing duly signed by the Shipyard and
                  Shipowner with the Secretary's prior written consent, PROVIDED
                  THAT the Secretary's prior written consent shall not be
                  necessary, but prior written notice to the Secretary shall be
                  given, for (a) any mandatory changes to the Construction
                  Contract as a result of any requirements of the classification
                  society or any governmental agency, or (b) any non-mandatory
                  changes that Shipyard and Shipowner desire to make which do
                  not exceed, with respect to any item of the Vessel's
                  construction, one (1%) percent of the Vessel's Contract Price
                  and which do not, in the aggregate, cause the Vessel's
                  Contract Price to be increased more than five (5%) percent or
                  the delivery and completion date of the Vessel to be extended
                  more than ten (10) days. Notwithstanding the foregoing, no
                  change shall be made in the general dimensions and/or
                  characteristics of the Vessel which would diminish the
                  capacity of the Vessel to perform as originally intended by
                  the Construction Contract, without the Secretary's prior
                  written consent.

         3.       INSURANCE. A. Until each Vessel has been completed, physically
                  delivered at the place of delivery and accepted by Shipowner,
                  Shipyard shall cause such Vessel and all materials,

                                                                            31
<PAGE>

                  outfitting, equipment and appliances to be installed in the
                  Vessel including all materials, outfitting, equipment and
                  appliances provided by the Shipowner and delivered to Shipyard
                  for the construction of the Vessel or in the construction
                  thereof, to be insured under a full form Builder's Risk Policy
                  under the latest American Institute Builder's Risk Form in
                  force and effect at the time that the construction of the
                  Vessel is Commenced when the Vessel's keel is laid, all at
                  Shipyard's expense. Such policy(ies) shall name the Shipyard,
                  the Shipowner and the United States of America as assureds.
                  The policy(ies) shall provide that there shall be no recourse
                  against the Shipowner and the United States of America for
                  payment of any premiums. The policy(ies) shall also provide a
                  30 day prior written notice of cancellation or material change
                  in the policy to the Shipowner and the United States of
                  America (U.S. Department of Transportation, Maritime
                  Administration 400 Seventh St. S.W., Washington D.C. 20590
                  Attention, Chief, Division of Marine Insurance). The amounts,
                  terms and conditions, deductibles and underwriters of the
                  Builder's Risk Policy(ies) shall at all times be satisfactory
                  to the Shipowner and the Secretary.

         B.       The Builder's Risk policy(ies) shall provide that all losses
                  in excess of $100,000 shall be paid to the Secretary for
                  distribution by him to himself, the Shipyard and the Shipowner
                  in accordance with the Security Agreement between the
                  Shipowner and the Secretary, MA- _________, dated __________,
                  involving the Vessel.

                  c.       Shipyard shall also purchase and maintain, at its
                           expense, during the life of the Construction
                           Contract, Worker's Compensation Insurance at
                           statutory amounts, with Longshoreman & Harbor Workers
                           Compensation Act coverage endorsements, Employer's
                           Liability Insurance in the amount of at least
                           $10,000,000 and Public Liability Insurance against
                           property damage, death and bodily injury in the
                           amount of not less than $10,000,000.

                                                                            32
<PAGE>

                  d.       A satisfactory confirmation of insurance outlining
                           the pertinent terms and conditions of the Builder's
                           Risk Policy(ies) referred to above shall be provided
                           to the Shipowner and the Secretary. The Shipowner
                           shall be furnished a certificate of insurance for all
                           other policies required hereunder. The original of
                           the said Builder's Risk Policy shall be available in
                           the Shipyard's office. All of the policies of
                           insurance and certificates referred to herein shall
                           contain a provision requiring the insurer at risk to
                           give Shipowner and the Secretary thirty (30) days'
                           notice, in writing prior to cancellation of any such
                           insurance.

         4.       PROGRESS PAYMENTS. Notwithstanding any provisions in the
                  Construction Contract to the contrary. the Construction
                  Contract and related contracts shall contain provisions for
                  making periodic payments for the work performed based on the
                  percentage of physical completion of the Vessel, after such
                  percentage and satisfactory performance are certified by the
                  Shipowner, the Shipyard and a representative of the Secretary
                  as to each payment

         5.       CERTIFICATE OF NO LIENS. At the time of any Closing and at the
                  time of delivery of the Vessel and from time to time as
                  payments will be requested from amounts held in escrow by the
                  Secretary, the Shipyard agrees, on behalf of itself, or any
                  party claiming through the Shipyard, to execute certificates
                  of no liens, in form and substance reasonably satisfactory to
                  the Secretary, with respect to the applicable Vessel, hull or
                  component parts for which payment is requested and with
                  respect to all work that has previously been accomplished.

         6.       TITLE. Notwithstanding anything to the contrary contained in
                  the Construction Contract, title to all work, materials and
                  components, incorporated in, or to be incorporated in the
                  bulls and in each Vessel (the "Equipment") shall vest in
                  Shipowner on the earliest of, a) when Shipowner pays Shipyard
                  for the Equipment, or b) when (i) such work is performed on
                  the hull of each Vessel, (ii) such materials are installed in
                  the hull of each Vessel, or

                                                                            33
<PAGE>

                  (iii) such components are fabricated and installed in the hull
                  of each Vessel.

         7.       SUBORDINATION. The Shipyard agrees to, and does hereby fully
                  subordinate to the rights of the Secretary all liens and
                  security rights and remedies to enforce such rights which the
                  Shipyard has or may have with respect to the Equipment to
                  which title has passed to Shipowner, and to the Equipment that
                  has not been paid for by the Shipowner to the extent that such
                  Equipment has actually been incorporated into the Equipment
                  for which title has passed to the Shipowner. Prior to
                  commencement of any work under this Construction Contract, the
                  Shipyard shall provide to the Secretary the release or
                  subordination of any claim to a security interest or other
                  encumbrance, and the remedies to enforce such rights, held or
                  claimed by any of the Shipyard's lenders. Said release or
                  subordination shall be in form and substance satisfactory to
                  the Secretary.

         8.       EQUIPMENT PROCEEDS. In the event that prior to delivery of the
                  Vessel and (i) following the occurrence or during the
                  continuance of any default by Shipowner under the Security
                  Agreement executed in favor of the Secretary by the Shipowner
                  in connection with the financing of the construction of the
                  Vessel under the Construction Contract or (ii) the occurrence
                  or during the continuation of any material default by the
                  Shipyard under the Construction Contract which would permit
                  the Shipowner to cancel the Construction Contract,, the
                  Secretary shall have the sole right to sell the Equipment. Any
                  proceeds the Secretary receives from the sale of the
                  Equipment, after deducting any fees or costs it incurs in
                  connection with the enforcement of its rights under the
                  Security Agreement, shall be distributed promptly to the
                  Secretary for payment of the all amounts secured by the
                  Security Agreement.

         9.       CONSENT OF SHIPYARD. The Shipyard will separately enter into a
                  Consent of Shipyard allowing the assignment by Shipowner to
                  the Secretary, for purposes of security, of all of Shipowner's
                  right, title and interest in the Construction Contract, and
                  the proceeds thereof,

                                                                            34
<PAGE>

                  if any such exists or shall exist in the future. Such proceeds
                  include any amounts that may be due to be refunded to
                  Shipowner by the Shipyard or by any subcontractor or supplier
                  to the Shipyard arising out of the Construction Contract, as
                  amended, and any subcontracts or supply contracts into which
                  the Shipyard has entered into or may enter into as a part of
                  construction process. In the event of a default of the
                  Shipyard under the Construction Contract, the Secretary may
                  enforce Shipowner's rights hereunder. In the event of any
                  discrepancy between a position of the Secretary and a position
                  of the Shipowner, the Secretary's decision shall be binding on
                  the Shipowner.

         10.      DISTINCT OBLIGATIONS. Shipyard hereby agrees and acknowledges
                  that the obligations of Shipowner under the Construction
                  Contract with regard to the Vessel are separate, distinct and
                  independent of any other obligation or agreement of Shipowner
                  and that a default by Shipowner under such other obligation or
                  agreement shall not in any way affect the obligations of
                  Shipyard under the Construction Contract with regard to the
                  Vessel or permit Shipyard to exercise any right of set-off or
                  other remedy (all of which Shipyard expressly waives and
                  agrees not to assert) which could materially adversely affect
                  the Construction Contract, the Vessel or the construction
                  thereof.

         11.      RIGHT TO CURE. Notwithstanding anything to the contrary
                  contained in the Construction Contract, Shipyard agrees to
                  give the Secretary written notice, concurrent with any notice
                  given to the Shipowner under the Construction Contract of any
                  default by Shipowner and hereby grants the Secretary thirty
                  (30) days from the receipt of any such notice to cure any
                  default under the Construction Contract, and Shipyard agrees
                  to take no action to enforce its rights Pursuant to the
                  Construction Contract until the lapse of said thirty (30)
                  days.

         12.      SHIPYARD PLANS. Upon the delivery of the Vessel, or earlier if
                  feasible, upon the Secretary's request, Shipyard and Shipowner
                  agree to submit to the Secretary one set of

                                                                            35
<PAGE>

                  Shipyard plans, in form and substance satisfactory to the
                  Secretary, for the Vessel as built.

         13.      NOTICES. Any notice or other communication required or
                  permitted to the Secretary hereunder shall be sent by (i)
                  certified mail, postage prepaid, (ii) by nationally recognized
                  overnight courier service, (iii) or by facsimile transmission,
                  confirmed by certified mail, postage prepaid, or by nationally
                  recognized overnight courier service, addressed as follows:

                                    United States Maritime Administration
                                    400 Seventh Street, S.W.
                                    Washington, D.C. 20590
                                    Attention:   Office of Ship Finance

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00010-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00010-of-00352.parquet"}]]