Document:

EXECUTION COPY

                  AMENDED AND RESTATED PARTICIPATION AGREEMENT

                          dated as of December 18, 2001

                                      among

                          DEEPWATER DRILLING II L.L.C.,

                       DEEPWATER INVESTMENT TRUST 1999-A,
                              as Investment Trust,

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

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

                        VARIOUS FINANCIAL INSTITUTIONS,
                           as Certificate Purchasers,

                          HATTERAS FUNDING CORPORATION,
                           as the Conduit (Hatteras),

                              PARADIGM FUNDING LLC,
                           as the Conduit (Paradigm),

                          LIBERTY STREET FUNDING CORP.,
                            as the Conduit (Liberty),

                        VARIOUS FINANCIAL INSTITUTIONS,
                            as Liquidity Purchasers,

                             BANK OF AMERICA, N.A.,
                            as Administrative Agent

                  THE ROYAL BANK OF SCOTLAND, NEW YORK BRANCH,
                            as Co-Syndication Agent

                              FORTIS CAPITAL CORP.,
                            as Co-Syndication Agent

                            THE BANK OF NOVA SCOTIA,
                            as Co-Documentation Agent

             WESTDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH,
                            as Co-Documentation Agent

       THE PERSON NAMED ON SCHEDULE II TO THE INVESTMENT TRUST AGREEMENT,
                        as Investment Trust Beneficiary

                VARIOUS FINANCIAL INSTITUTIONS AS ADMINISTRATORS
                            AND AS LIQUIDITY AGENTS

      solely with respect to Sections 2.15, 9.4, 12.13(b), and 12.13(d)
                             -------------  ---  --------      --------
                        TRANSOCEAN SEDCO FOREX INC. and
                                  CONOCO INC.,

                                      and
               solely with respect to Sections 5.2 and 6.4,
                                      ------------     ---

                      RBF DEEPWATER EXPLORATION II INC. and
                           CONOCO DEVELOPMENT II INC.

<PAGE>
<TABLE>
<CAPTION>
                                      SECTION 1
                             DEFINITIONS; INTERPRETATION

                                      SECTION 2
                             COMMITMENTS OF THE PARTIES

<S>                                                                               <C>
SECTION 2.1     Certain Documentation Date Events. . . . . . . . . . . . . . . .   2
SECTION 2.2     Certain Refinancing Date Events. . . . . . . . . . . . . . . . .   2
SECTION 2.3     Contributions by Certificate Purchasers; Advance by the Conduit.   3
SECTION 2.4     Certificates and Payments. . . . . . . . . . . . . . . . . . . .   3
SECTION 2.5     Limitations on Contributions and Advances. . . . . . . . . . . .   4
SECTION 2.6     Application of Proceeds. . . . . . . . . . . . . . . . . . . . .   5
SECTION 2.7     [Intentionally Omitted]. . . . . . . . . . . . . . . . . . . . .   5
SECTION 2.8     Postponement . . . . . . . . . . . . . . . . . . . . . . . . . .   5
SECTION 2.9     Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7
SECTION 2.10    [Intentionally Omitted]. . . . . . . . . . . . . . . . . . . . .   7
SECTION 2.11    Refinancing Request; Timing of Advances and Contributions. . . .   7
SECTION 2.12    Computations . . . . . . . . . . . . . . . . . . . . . . . . . .   7
SECTION 2.13    Charter Hire Payments. . . . . . . . . . . . . . . . . . . . . .   8
SECTION 2.14    Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
SECTION 2.15    Payments Under the Ship Mortgage; Limitation on Foreclosure. . .   8
SECTION 2.16    Payment to each Conduit on Charter Hire Payment Date . . . . . .   9

                                    SECTION 3
          DOCUMENTATION DATE; DOCUMENTATION DATE CONDITIONS PRECEDENT

SECTION 3.1     Documentation Date . . . . . . . . . . . . . . . . . . . . . . .   9
SECTION 3.2     Conditions Precedent to Documentation Date . . . . . . . . . . .   9

                                    SECTION 4
              EFFECTIVE DATE; REFINANCING DATE CONDITIONS PRECEDENT

SECTION 4.1     Effective Date . . . . . . . . . . . . . . . . . . . . . . . . .  12
SECTION 4.2     Conditions Precedent to Refinancing Date . . . . . . . . . . . .  12
SECTION 4.3     Head Lease Transaction . . . . . . . . . . . . . . . . . . . . .  15
SECTION 4.4     Replacement Conditions . . . . . . . . . . . . . . . . . . . . .  15
SECTION 4.5     Accounting Changes . . . . . . . . . . . . . . . . . . . . . . .  16

                                    SECTION 5
                         REPRESENTATIONS AND WARRANTIES

SECTION 5.1     Representations and Warranties of Deepwater. . . . . . . . . . .  17

                                        i
<PAGE>
                                TABLE OF CONTENTS
                                    (Cont.)

                                                                                 Page
                                                                                 ----

SECTION 5.2     Representations and Warranties of Members. . . . . . . . . . . .  21
SECTION 5.3     Representations and Warranties of the Investment Trust and
                the Investment Trust Beneficiary . . . . . . . . . . . . . . . .  22
SECTION 5.4     Representations and Warranties of the Liquidity Purchasers
                and Certificate Purchasers . . . . . . . . . . . . . . . . . . .  23
SECTION 5.5     Representations and Warranties of the Trustees . . . . . . . . .  25

                                    SECTION 6
                        CERTAIN COVENANTS AND AGREEMENTS

SECTION 6.1     Covenants of Deepwater . . . . . . . . . . . . . . . . . . . . .  27
SECTION 6.2     Certain Covenants of the Charter Trustee, the Investment
                Trustee, the Investment Trust and Investment Trust Beneficiary .  31
SECTION 6.3     Covenants of the Funding Participants. . . . . . . . . . . . . .  33
SECTION 6.4     Covenants of the Members . . . . . . . . . . . . . . . . . . . .  34
SECTION 6.5     Hedging Agreements . . . . . . . . . . . . . . . . . . . . . . .  35
SECTION 6.6     [Intentionally Omitted]. . . . . . . . . . . . . . . . . . . . .  36
SECTION 6.7     Charter Extension Option . . . . . . . . . . . . . . . . . . . .  36
SECTION 6.8     Excessive Use Indemnity. . . . . . . . . . . . . . . . . . . . .  36

                                    SECTION 7
                               CERTAIN PROCEDURES

SECTION 7.1     Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . .  36
SECTION 7.2     Increased Costs and Reduction of Return. . . . . . . . . . . . .  37
SECTION 7.3     Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . .  38
SECTION 7.4     Inability to Determine Rates . . . . . . . . . . . . . . . . . .  38
SECTION 7.5     Reserves on Base Rate Advances . . . . . . . . . . . . . . . . .  39
SECTION 7.6     Certificates of Funding Participants . . . . . . . . . . . . . .  39
SECTION 7.7     Substitution of Funding Participants;
                Change in Applicable Office; Prepayments . . . . . . . . . . . .  39
SECTION 7.8     Legal and Tax Representation . . . . . . . . . . . . . . . . . .  40
SECTION 7.9     Failure of a Certificate Purchaser to Fund . . . . . . . . . . .  40

                                    SECTION 8
                          PAYMENT OF CERTAIN EXPENSES

SECTION 8.1     Transaction Expenses . . . . . . . . . . . . . . . . . . . . . .  42
SECTION 8.2     Transaction Expenses if Closing does not Occur . . . . . . . . .  42
SECTION 8.3     On-Going Expenses. . . . . . . . . . . . . . . . . . . . . . . .  42

                                       ii
<PAGE>
                                TABLE OF CONTENTS
                                    (Cont.)

                                                                                 Page
                                                                                 ----

                                    SECTION 9
          RESTRICTIONS ON TRANSFERS; CHANGE OF CONTROL; MEMBER TRANSFER

SECTION 9.1     Restrictions on the Funding Participants . . . . . . . . . . . .  43
SECTION 9.2     Restrictions on Trustees and Investment Trust Beneficiary. . . .  45
SECTION 9.3     Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . .  45
SECTION 9.4     Change of Control. . . . . . . . . . . . . . . . . . . . . . . .  45
SECTION 9.5     Member Transfer. . . . . . . . . . . . . . . . . . . . . . . . .  47

                                   SECTION 10
                                INDEMNIFICATION

SECTION 10.1    General Indemnity. . . . . . . . . . . . . . . . . . . . . . . .  47
SECTION 10.2    General Indemnity Exclusions . . . . . . . . . . . . . . . . . .  48
SECTION 10.3    Proceedings in Respect of Claims . . . . . . . . . . . . . . . .  50
SECTION 10.4    General Tax Indemnity. . . . . . . . . . . . . . . . . . . . . .  51

                                   SECTION 11
                                     AGENTS

SECTION 11.1    Appointment of Administrative Agent and Investment Trust
                Beneficiary; No Duties . . . . . . . . . . . . . . . . . . . . .  60
SECTION 11.2    Delegation of Duties . . . . . . . . . . . . . . . . . . . . . .  61
SECTION 11.3    Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . .  61
SECTION 11.4    Reliance by Administrative Agent and the Investment Trust
                Beneficiary. . . . . . . . . . . . . . . . . . . . . . . . . . .  62
SECTION 11.5    [Intentionally Omitted]. . . . . . . . . . . . . . . . . . . . .  62
SECTION 11.6    Non-Reliance on Administrative Agent or Investment Trust
                Beneficiary and Other Funding Participants . . . . . . . . . . .  62
SECTION 11.7    Indemnification. . . . . . . . . . . . . . . . . . . . . . . . .  63
SECTION 11.8    Administrative Agent and Investment Trust Beneficiary. . . . . .  64
SECTION 11.9    Successor Administrative Agent and Investment Trust
                Beneficiary. . . . . . . . . . . . . . . . . . . . . . . . . . .  64

                                   SECTION 12
                                  MISCELLANEOUS

SECTION 12.1    Survival of Agreements . . . . . . . . . . . . . . . . . . . . .  66
SECTION 12.2    No Broker; etc . . . . . . . . . . . . . . . . . . . . . . . . .  66
SECTION 12.3    Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  66
SECTION 12.4    Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . .  68
SECTION 12.5    Amendments, Waivers and Consents . . . . . . . . . . . . . . . .  68

                                      iii
<PAGE>
                                TABLE OF CONTENTS
                                    (Cont.)

                                                                                 Page
                                                                                 ----

SECTION 12.6    Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . .  70
SECTION 12.7    Headings; etc. . . . . . . . . . . . . . . . . . . . . . . . . .  70
SECTION 12.8    Parties in Interest. . . . . . . . . . . . . . . . . . . . . . .  71
SECTION 12.9    Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . .  71
SECTION 12.10   Severability . . . . . . . . . . . . . . . . . . . . . . . . . .  71
SECTION 12.11   Further Assurances . . . . . . . . . . . . . . . . . . . . . . .  71
SECTION 12.12   Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . .  71
SECTION 12.13   Limitations on Recourse. . . . . . . . . . . . . . . . . . . . .  71
SECTION 12.14   Applicable Laws. . . . . . . . . . . . . . . . . . . . . . . . .  73
SECTION 12.15   Right to Inspect . . . . . . . . . . . . . . . . . . . . . . . .  73
SECTION 12.16   Accounts, Distribution of Payments and Flow of Funds . . . . . .  73
SECTION 12.17   Attorneys-in-Fact. . . . . . . . . . . . . . . . . . . . . . . .  74
SECTION 12.18   Successor Trustees; Jurisdiction of Trust. . . . . . . . . . . .  74
SECTION 12.19   Third-Party Beneficiaries. . . . . . . . . . . . . . . . . . . .  74
SECTION 12.20   Consent to Jurisdiction. . . . . . . . . . . . . . . . . . . . .  74
SECTION 12.21   Deepwater Acknowledgment With Respect to Charter Trust Agreement  75
SECTION 12.22   Appointment of Wilmington Trust FSB as Attorney-in-Fact
                on behalf of the Beneficial Owners; Powers of Attorney . . . . .  75
SECTION 12.23   Non-Defaulting Drilling Party's Right to Pursue Contests . . . .  75
SECTION 12.24   Non-Petition . . . . . . . . . . . . . . . . . . . . . . . . . .  76
SECTION 12.25   Payments to Conduits . . . . . . . . . . . . . . . . . . . . . .  76
SECTION 12.26   UCC-1 Authorization. . . . . . . . . . . . . . . . . . . . . . .  76
</TABLE>

                                       iv
<PAGE>
                                    EXHIBITS

EXHIBIT A          -     Form of Funding Indemnity Letter
EXHIBIT B          -     Form of Notice of Return Rate
EXHIBIT C                Form of Opinion of Baker Botts L.L.P., special counsel
                         to Deepwater
EXHIBIT D                Form of Opinion of Wayne K. Anderson, Corporate Counsel
                         to Conoco
EXHIBIT E                Form of Opinion of William E. Turcotte, Associate
                         General Counsel to Transocean
EXHIBIT F          -     Form of Opinion of Arias, Fabrega & Fabrega
EXHIBIT G          -     Form of Opinion of Richards Layton & Finger
EXHIBIT H-1        -     Form of Deepwater Member's Secretary's Certificate
EXHIBIT H-2        -     Form of Conoco Member Secretary's Certificate
EXHIBIT H-3        -     Form of Transocean Member Secretary's Certificate
EXHIBIT H-4        -     Form of Conoco's Secretary's Certificate
EXHIBIT H-5        -     Form of Transocean's Secretary's Certificate
EXHIBIT H-6        -     Form of Deepwater Member's Certificate
EXHIBIT H-7        -     Form of Conoco Member Officer's Certificate
EXHIBIT H-8        -     Form of Transocean Member Officer's Certificate
EXHIBIT H-9        -     Form of Conoco's Officer's Certificate
EXHIBIT H-10       -     Form of Transocean's Officer's Certificate
EXHIBIT I-1        -     Form of Investment Trustee's Officer's Certificate
EXHIBIT I-2        -     Form of Charter Trustee's Officer's Certificate
EXHIBIT J          -     Form of Refinancing Request
EXHIBIT K          -     Form of Assignment and Assumption Agreement
EXHIBIT L-1        -     Hedging Agreements
EXHIBIT L-2        -     Deepwater Hedging Agreements
EXHIBIT M          -     Form of Subcharter
EXHIBIT N-1        -     Special Power of Attorney on Behalf of Wilmington
                         Trust FSB and the Beneficial Owners
EXHIBIT N-2        -     Special Power of Attorney on Behalf of Wilmington Trust
                         Company
EXHIBIT O          -     Form of Opinion of Walkers, Cayman counsel to
                         Transocean
EXHIBIT P          -     Form of Offer Letter

                                        v
<PAGE>
                                    SCHEDULES

SCHEDULE 1         -     List of UCC and Other Necessary Security Filings
SCHEDULE 2         -     Funding Participant Notice Addresses, Payment
                         Instructions and Responsible Officers
SCHEDULE 3         -     OFE
SCHEDULE 4         -     Terms of Subordination for Subordinated Debt
SCHEDULE 5         -     Transaction Documents

                                       vi
<PAGE>
     THIS AMENDED AND RESTATED PARTICIPATION AGREEMENT, dated as of December 18,
2001  (this  "Agreement"  or  "Participation Agreement"), is entered into by and
              ---------        -----------------------
among  DEEPWATER  DRILLING  II  L.L.C.,  a  Delaware  limited  liability company
("Deepwater"),  WILMINGTON  TRUST  FSB,  a  Federal  savings  bank,  not  in its
------------
individual  capacity  except as expressly provided herein, but solely as trustee
under  the  Investment  Trust  Agreement  (the  "Investment Trustee"), DEEPWATER
                                                 ------------------
INVESTMENT  TRUST  1999-A,  a  Delaware business trust (the "Investment Trust"),
                                                             ----------------
WILMINGTON  TRUST COMPANY, a Delaware banking corporation, not in its individual
capacity  except  as  expressly provided herein, but solely as trustee under the
Charter  Trust  Agreement  (the  "Charter  Trustee"),  VARIOUS  FINANCIAL
                                  ----------------
INSTITUTIONS,  as  Certificate  Purchasers (as defined herein), HATTERAS FUNDING
CORPORATION,  as  the  Conduit  (Hatteras), LIBERTY STREET FUNDING CORP., as the
Conduit  (Liberty),  PARADIGM  FUNDING  LLC,  as the Conduit (Paradigm), VARIOUS
FINANCIAL  INSTITUTIONS,  as  Liquidity  Purchasers (as defined herein), BANK OF
AMERICA,  N.A.,  as Administrative Agent, the Person named on Schedule II to the
Investment  Trust  Agreement,  as  Investment  Trust  Beneficiary,  various
ADMINISTRATORS  (as  defined  herein)  and LIQUIDITY AGENTS (as defined herein),
solely with respect to Sections 2.15, 9.4 and 12.13(b), and 12.13(d), TRANSOCEAN
                       -------------  ---     --------      --------
SEDCO  FOREX  INC.  and CONOCO INC., and solely with respect to Sections 5.2 and
                                                                ------------
6.4,  RBF  DEEPWATER  EXPLORATION  II  INC.,  a  Nevada  corporation, and CONOCO
DEVELOPMENT  II  INC.,  a  Delaware  corporation  (each,  a  "Member").

                              W I T N E S S E T H
                              - - - - - - - - - -

     WHEREAS,  Deepwater  supervised  the construction of the Vessel pursuant to
the  Construction  Contract  and  the  acquisition  and installation of the OFE;

     WHEREAS,  on  the  Closing  Date,  the Original Certificate Purchasers made
advances  to  the  Charter  Trustee and the Investment Trust (and the Investment
Trust  advanced  such  amounts  advanced  to  it  from  the Original Certificate
Purchasers to the Charter Trustee) pursuant to the Participation Agreement dated
as of the Closing Date, among Deepwater, the Investment Trust, the Trustees, the
Documentation  Agent  (as  defined  therein), various financial institutions, as
Certificate  Purchasers, the Drilling Parties, R&B Falcon Corporation and Conoco
Inc.,  RBF  Deepwater  Exploration  II Inc. and Conoco Development II, Inc. (the
"Original  Participation  Agreement"),  to fund the acquisition of the Drillship
 ----------------------------------
and  certain  other  costs;

     WHEREAS,  on the Closing Date, (i) in exchange for the advances made by the
Original Certificate Purchasers to the Charter Trustee and the Investment Trust,
as  applicable,  the  Charter  Trustee  issued  Original  Series A Charter Trust
Certificates  to  the  Original  Certificate Purchasers and the Investment Trust
issued  Original  Investment  Trust  Certificates  to  the  Original Certificate
Purchasers and (ii) in exchange for the advances made by the Investment Trust to
the  Charter  Trustee,  the  Charter  Trustee  issued  a  Series B Charter Trust
Certificate  to  the  Investment  Trust;

     WHEREAS,  the  Charter  Trustee  advanced  to  Deepwater all funds received
directly  and  indirectly  from the Original Certificate Purchasers primarily to
reimburse  or  to  pay for costs it incurred in connection with the construction
(and  financing  thereof)  and  acquisition  of  the  Drillship;

<PAGE>
     WHEREAS,  on  the  Closing  Date, the Charter Trustee acquired title to the
Drillship  from  Deepwater  and  the  Charter Trustee chartered the Drillship to
Deepwater;

     WHEREAS,  each  of  the  parties  hereto  desires to refinance the Original
Series  A  Trust Certificates and the Original Investment Trust Certificates and
otherwise amend and restate the Original Participation Agreement in its entirety
as  set  forth  herein;  and

     WHEREAS, as of the date hereof, each of the Original Certificate Purchasers
entered  into a Consent and Amendment to the Participation Agreement and Certain
Transaction  Documents  with Deepwater and the Trustees, to, among other things,
consent  to the amendments contained herein and the other Transaction Documents;

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

                                    SECTION 1

                          DEFINITIONS; INTERPRETATION

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

                                    SECTION 2

                           COMMITMENTS OF THE PARTIES

     Subject  to  the  terms  and  conditions  of  this  Agreement and the other
Transaction  Documents and in reliance on the representations and warranties set
forth  herein  or  made  pursuant  hereto,  each of the parties hereto agrees to
participate  in  the  transactions  contemplated by this Agreement and the other
Transaction Documents and, among other things, to take each of the actions to be
taken  by  it  on the Documentation Date and the Refinancing Date, as more fully
described  in  this  Section  2.
                     ----------

     SECTION  2.1  Certain Documentation Date Events.  On the Documentation Date
                   ---------------------------------
each party thereto shall execute each Transaction Document set forth on Schedule
5.

     SECTION 2.2  Certain Refinancing Date Events.  On the Refinancing Date, the
                  -------------------------------
following  shall  occur:

     (a)     (i)  the  Certificate  Purchasers  shall  make Contributions to the
Charter  Trustee  pursuant to Section 2.3(a) in an aggregate amount equal to the
                              --------------
Series  A  Portion  of  the  Refinancing  Amount  and  (ii) in exchange for such
Contributions  the  Charter  Trustee  shall  issue  Series  A  Charter  Trust
Certificates  to  the  Certificate  Purchasers;

<PAGE>
     (b)     the  Charter  Trustee  shall apply the Contributions made in clause
                                                                          ------
(a)  above  to  pay, cancel and redeem the Original Series A Trust Certificates;
---

     (c)     (i) The Conduits or Liquidity Purchasers shall make Advances to the
Investment  Trust  pursuant  to  Section  2.3(b)  and  the  Loan Agreement in an
                                 ---------------
aggregate  amount equal to the Lender Portion of the Refinancing Amount and (ii)
in  exchange  for  such  Advances, the Investment Trust shall issue Notes to the
applicable  Conduits  and/or  Liquidity  Purchasers;

     (d)     the  Investment  Trust  shall apply the Advances to pay, cancel and
redeem  the  Original  Investment  Trust  Certificates  provided,  that no funds
                                                        --------
Advanced  by  the  Conduit  (Hatteras) shall be used to purchase any interest of
Bank  of  America  in  any  of  the  Original  Certificates;

     (e)     the  Series  B  Charter  Trust  Certificate  issued  by the Charter
Trustee  to  the  Investment  Trust  on  the  Closing  Date shall be amended and
restated  to  conform  to  the  transactions contemplated by this Agreement, but
shall  remain  outstanding;

     (f)     all  Fees  and  Transaction  Expenses then due and payable shall be
paid  in  full by, or on behalf of, Deepwater to the Persons entitled to receive
such  payments;  and

     (g)     when  the  Effective  Date  has occurred the Investment Trust shall
return  the  letter of credit maintained pursuant to Section 6.9 of the Original
Participation  Agreement  to  Transocean.

     SECTION  2.3  Contributions  by  Certificate  Purchasers;  Advance  by  the
                   -------------------------------------------------------------
Conduit.
-------

     (a)     Subject  to  the  terms  and  conditions  of  this  Agreement,  the
Depository  Agreement  and  the  Trust  Agreements  and  in  reliance  on  the
representations and warranties set forth herein or made hereto, after receipt of
a  Refinancing  Request  each  Certificate  Purchaser  shall  contribute  its
Certificate  Purchaser Commitment to the Charter Trustee on the Refinancing Date
in  immediately  available  funds  (each  a  "Contribution").
                                              ------------

     (b)     Subject  to  the  terms  and conditions of this Agreement, the Loan
Agreement,  the Depository Agreement and the Trust Agreements and in reliance on
the  representations  and  warranties  set  forth  herein  or made hereto, after
receipt of a Refinancing Request each Liquidity Purchaser shall extend Liquidity
Purchaser  Commitments  pursuant  to  each LAPA to make Liquidity Purchases from
time  to  time  in an amount outstanding at any time not to exceed its Liquidity
Purchaser  Commitment  Amount,  and  either  (x)  each  Conduit may, in its sole
discretion  elect  to  (A)  issue  Commercial Paper Notes or (B) sell Percentage
Interests  under  each LAPA to which it is a party, each in sufficient amount in
the  aggregate  to  generate  its  Conduit  Loan  Amount  and, from the proceeds
thereof,  advance  its  Conduit  Loan  Amount  to  the Investment Trustee on the
Refinancing Date in immediately available funds or (y) each Applicable Liquidity
Purchaser  shall  make  Facility  Loans  on  the Refinancing Date in immediately
available  funds  pursuant  to  the  Loan Agreement, in sufficient amount in the
aggregate  to  generate  its  Conduit's Conduit Loan Amount (each, an "Advance")
                                                                       -------
each  of  which  such Advance in the aggregate shall equal the Lender Portion of
the  Refinancing  Amount.

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

<PAGE>
     (a)     Certificate  Purchasers.  In exchange for each Contribution made by
             -----------------------
each  Certificate Purchaser pursuant to Section 2.3(a), the Charter Trustee will
                                        --------------
issue  and  deliver  to each such Certificate Purchaser: (i) one Conoco Series A
Charter  Trust  Certificate  representing  40%  of  such Certificate Purchaser's
Contribution  (which  together  with  all  other  Conoco  Series A Charter Trust
Certificates  shall  have,  in the aggregate, a principal amount equal to 40% of
the Series A Portion of the Refinancing Amount) and (ii) one Transocean Series A
Charter  Trust  Certificate  representing  60%  of  such Certificate Purchaser's
Contribution  (which  together  with all other Transocean Series A Charter Trust
Certificates  shall  have,  in the aggregate, a principal amount equal to 60% of
the  Series  A  Portion  of the Refinancing Amount).  Each Certificate Purchaser
shall  be  entitled to receive on the last day of any Return Period in which the
Charter  Balance  is  greater than zero (as measured before giving effect to any
amounts  paid in reduction of the Charter Balance on the last day of such Return
Period),  a return on its Certificate Purchaser Amount at the Certificate Return
Rate  to  but excluding the date of payment.  Any payment required to be made to
the  Certificate  Purchasers  by the Charter Trustee pursuant to any Transaction
Document  shall  be made in accordance with the Depository Agreement and Article
IV  of  the  Charter  Trust  Agreement,  as  applicable.

     (b)     Investment  Trust.  On  the  Closing  Date,  the  Investment  Trust
             -----------------
advanced  certain  funds to the Charter Trustee in exchange for a Series B Trust
Charter  Certificate  issued by the Charter Trustee.  The Investment Trust shall
be  entitled  to  receive on the last day of any Return Period (after January 1,
2002)  in  which  the  Lender  Balance  is greater than zero (as measured before
giving effect to any amounts paid in reduction of the Lender Balance on the last
day  of  such  Return Period), a return on the Lender Balance at the Loan Return
Rate  to  but excluding the date of payment.  Any payment required to be made to
the Investment Trust by the Charter Trustee pursuant to any Transaction Document
shall  be made in accordance with the Depository Agreement and Article IV of the
Charter  Trust  Agreement,  as  applicable.

     (c)     Counterpart  Certificates.  Series  A  Charter  Trust  Certificates
             -------------------------
shall  only  be  issued  by  the  Charter  Trustee  in  pairs  consisting of one
Transocean  Series  A  Charter Trust Certificate and one Conoco Series A Charter
Trust  Certificate  (each,  in  relation  to  the other, a "Counterpart Series A
                                                            --------------------
Charter Trust Certificate").  Each Series A Charter Trust Certificate shall bear
-------------------------
an  indication  of the number assigned to its Counterpart Series A Charter Trust
Certificate.

     SECTION  2.5  Limitations  on  Contributions  and  Advances.
                   ---------------------------------------------

     (a)     Limitation  on  Disbursements  and  Capitalizations.  The aggregate
             ---------------------------------------------------
amount  of  Contributions made by the Certificate Purchasers hereunder shall not
exceed  the Series A Portion of the Refinancing Amount, and the aggregate amount
of  each  Contribution  made  by  any  Certificate Purchaser hereunder shall not
exceed such Certificate Purchaser's Commitment.  The amount of the Advances made
by  the  Lenders,  hereunder  and under the Loan Agreement, shall not exceed the
Lender Portion of the Refinancing Amount and the amount of Advances made by each
Lender  on  the  Refinancing Date, hereunder and under the Loan Agreement, shall
not  exceed  (i)  with  respect to each Conduit, its Conduit Loan Amount or (ii)
with respect to each Liquidity Purchaser, its Facility Lender Commitment Amount.

     (b)     Contributions  and Advances.  The Charter Trustee shall be entitled
             ---------------------------
to  one  and  only  one Contribution from each Certificate Purchaser which shall
occur on the Refinancing

<PAGE>
Date  or  as  otherwise  permitted pursuant to Section 2.8. The Investment Trust
                                               -----------
shall  be entitled to no more than one and only one Advance from each Conduit or
its  Applicable  Liquidity Purchaser or Applicable Liquidity Purchasers (if such
Conduit  fails  to make such Advance), which shall occur on the Refinancing Date
in  accordance  with  the  Loan  Agreement or as otherwise permitted pursuant to
Section  2.8.
------------

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

     SECTION  2.6  Application  of  Proceeds.  On  the  Refinancing  Date:
                   -------------------------

     (a)     upon  receipt  by  the  Charter Trustee of the Contributions by the
Certificate Purchasers pursuant to Section 2.3(a) and the satisfaction or waiver
                                   --------------
in  writing by the Administrative Agent on behalf of the Funding Participants of
each  of  the  applicable conditions set forth in Sections 2.8, 3.2 and 4.2, the
                                                  ------------  ---     ---
Charter  Trustee  shall  pay,  cancel  and  redeem  each Original Series A Trust
Certificate;  provided that no funds advanced by the Conduit (Hatteras) shall be
              -------- ----
used  to  purchase  any  interest  of  Bank  of  America  in any of the Original
Certificates;  and

     (b)     upon  receipt  by  the Investment Trust of the Advances pursuant to
Section  2.3(b) and the Loan Agreement and the satisfaction or waiver in writing
---------------
by the Administrative Agent on behalf of the Funding Participants of each of the
applicable  conditions  set  forth  in Sections 2.8, 3.2 and 4.2, the Investment
                                       ------------  ---     ---
Trust  shall  pay, cancel and redeem each Original Investment Trust Certificate;
provided  that,  no  funds  advanced  by the Conduit (Hatteras) shall be used to
--------  ----
purchase  any  interest  of Bank of America in any of the Original Certificates;

     SECTION  2.7  [Intentionally  Omitted].

     SECTION  2.8  Postponement.
                   ------------

     (a)     If  any  Certificate  Purchasers  have  made  Contributions  on the
Refinancing Date and the conditions precedent to such Contribution have not been
satisfied  or  waived  on  such  date  (as  such,  a  "Postponed Contribution"),
                                                       ----------------------
Deepwater  shall pay to the Charter Trustee, for the benefit of such Certificate
Purchaser  which  has  made  a  Postponed Contribution, yield (the "Postponement
                                                                    ------------
Yield")  on  such  Postponed  Contribution  at  a  rate  per  annum equal to the
------
Certificate  Return  Rate,  from the time such Postponed Contribution is made to
but excluding the first to occur of (i) such Postponed Contribution being repaid
in  full,  (ii)  the  Effective  Date  (whereupon  the  Certificate  Return Rate
determined  in  accordance with Section 2.4(a) shall apply to any such Postponed
                                --------------
Contribution)  or (iii) the Postponed Contribution is returned to the applicable
Funding  Participant.  If  the  Refinancing has not occurred before December 28,
2001,  the  Charter Trustee shall immediately return the amount of the Postponed
Contribution  to  the  applicable  Certificate  Purchaser  upon  its  request.

     (b)     If  any  Lender has made an Advance on the Refinancing Date and the
conditions  precedent  to such Advance have not been satisfied or waived on such
date  (as  such,  a  "Postponed  Advance"),  Deepwater  shall pay to the Charter
                      ------------------
Trustee,  for the benefit of such Lender, interest

<PAGE>
(the "Postponement  Interest", and  together  with  the  Postponement Yield, the
      ----------------------
"Postponement  Payment")  on such Postponed Advance at a rate per annum equal to
 ---------------------
the  Loan  Return Rate, from the time such Conduit issues Commercial Paper Notes
or  sells Percentage Interests in order to make available such Postponed Advance
or  such  other  Lender makes its Advance to but excluding the first to occur of
(i)  such time as such Postponed Advance made or such Commercial Paper Notes are
repaid  in  full,  (ii)  the  Effective  Date  (whereupon  the  Loan Return Rate
determined  in  accordance with Section 2.4(b) shall apply to any such Postponed
                                --------------
Advance)  or  (iii)  the Postponed Advance is returned to the applicable Funding
Participant.  If  the Refinancing has not occurred before December 28, 2001, the
Investment  Trustee shall immediately return the amount of the Postponed Advance
to  the  applicable  Funding  Participant  upon  its  request.

     Neither  the  Investment Trust nor the Charter Trustee shall be required to
invest  the  Contributions or the Advances in interest-bearing accounts, but the
Charter  Trustee  shall, upon the direction of Deepwater (or, if a Charter Event
of  Default  exists,  the  Majority  Funding Participants), invest such funds in
Permitted  Investments  to  the extent it is able to do so.  Amounts held by the
Charter  Trustee and the Investment Trust may be pooled for this purpose and, if
so  pooled,  then  the Charter Trustee shall open a separate account for each of
the  Postponed  Contributions  (the  "Postponed  Contributions Account") and the
                                      --------------------------------
Postponed  Advance  (the  "Postponed  Advance Account"), and place the Postponed
                           --------------------------
Contributions  in such Postponed Contributions Account and the Postponed Advance
in  such  Postponed  Advance Account.  Any Postponement Payment shall be due and
payable  by  Deepwater  on  the  Effective  Date  and  such  payment shall be an
additional  condition  precedent to such Effective Date.  On the Effective Date,
the  Charter  Trustee  is  hereby  directed  (i)  to  liquidate  any  Permitted
Investments  then  held  pursuant  to  this  Section 2.8, (ii) to distribute the
                                             -----------
Postponed  Contribution  in  accordance with Section 2.6(a), (iii) to distribute
                                             --------------
the  Postponed  Advance in accordance with Section 2.6(b) and (iv) to distribute
                                           --------------
any  proceeds  of  Permitted Investments held pursuant to this Section 2.8:  (x)
                                                               -----------
with  respect  to the funds held in the Postponed Contribution Account in excess
of  the amount of the Postponed Contributions, to each Certificate Purchaser pro
                                                                             ---
rata  (based  on  the  relation  that  such  Certificate  Purchaser's  Postponed
----
Contribution  bears  to  the  aggregate  of all Postponed Contributions) and (y)
with respect to the funds held in the Postponed Advance Account in excess of the
amount  of  the  Postponed Advance, to each applicable Conduit and the Liquidity
Purchasers,  pro  rata  (based  on  the relation that such Conduits or Liquidity
             ---  ----
Purchaser's Postponed Advance bears to the aggregate of all Postponed Advances),
in each case for application to Deepwater's obligation to pay Postponement Yield
and  Postponement  Interest,  respectively.

     If the Refinancing Date has not occurred by December 28, 2001, then (1) the
Postponement  Payment  shall be due and payable on December 28, 2001 and (2) the
Charter  Trustee  is hereby directed to liquidate any Permitted Investments then
held  pursuant  to this Section 2.8 and to pay to (i) each Certificate Purchaser
                        -----------
on  December  28, 2001 (x) the Postponed Contribution funded by such Certificate
Purchaser  and  (y)  the  proceeds of any Permitted Investments held pursuant to
this  Section  2.8  in  the  Contribution Account in excess of the amount of the
      ------------
Postponed Contribution refunded to such Certificate Purchaser pro rata (based on
                                                              --------
the  relation  that such Certificate Purchaser's Postponed Contribution bears to
the  aggregate  of all Contributions) to be applied to Deepwater's obligation to
pay  Postponement  Yield  to such Certificate Purchaser and (ii) each Conduit or
Liquidity  Purchaser, as the case may be, on December 28, 2001 (x) the Postponed
Advance  funded  by such Conduit or Liquidity Purchaser,

<PAGE>
as  the  case  may  be,  and  (y) the proceeds of any Permitted Investments held
pursuant  to  this Section 2.8 in the Postponed Advance Account in excess of the
                   -----------
amount  of  the  Postponed  Advance  refunded to each applicable Conduit and the
Liquidity  Purchasers,  pro  rata  (based  on the relation that such Conduits or
                        ---  ----
Liquidity  Purchaser's Postponed Advance bears to the aggregate of all Postponed
Advances),  to be applied to Deepwater's obligation to pay Postponement Interest
to  such  Person.

     SECTION  2.9  Records.  Upon  the  making  of  its  Contribution,  each
                   -------
Certificate Purchaser shall make a notation in its records indicating the amount
of  such  Contribution  and the Certificate Purchaser Amount of such Certificate
Purchaser  as  of  the  Refinancing  Date.  Each Certificate Purchaser is hereby
authorized  to record the date and amount of its Contribution, each continuation
thereof,  the  date  and  amount  of  each payment or capitalization of Series A
Return with respect thereto, the date and amount of each payment or repayment of
Certificate  Purchaser  Amount  of  such Certificate Purchaser and the length of
each  Return  Period  with  respect  thereto,  in  its  records,  and  any  such
recordation  shall  constitute  prima  facie  evidence  of  the  accuracy of the
information  so recorded.  The failure to make any recordation described in this
Section  2.9 or any error in such recordation shall not affect the obligation of
------------
the  Charter  Trustee  with  respect  of such Certificates, or the obligation of
Deepwater  to  pay  Charter  Hire  in accordance with the Transaction Documents.

     SECTION  2.10  [Intentionally  Omitted].

     SECTION  2.11  Refinancing  Request;  Timing of Advances and Contributions.
                    -----------------------------------------------------------
With  respect  to  the  Contributions  and  Advances,  Deepwater  shall give the
Administrative  Agent  and Charter Trustee, either of which shall deliver a copy
thereof to the Investment Trustee, the Funding Participants and each other Agent
prior  written  notice  not  later than 10:00 a.m., New York time, not less than
three  (3)  Business  Days prior to the proposed Refinancing Date, pursuant to a
Refinancing  Request.  Any  Refinancing  Request  delivered  by Deepwater to the
Charter  Trustee later than 4:00 p.m., New York time, on any day shall be deemed
to  have been delivered on the next Business Day.  Subject to timely delivery of
the  Refinancing  Request (together with a funding indemnity letter from each of
Conoco  and  Transocean  in the form attached hereto as Exhibit A) and the other
                                                        ---------
terms  and  conditions  of  the  Transaction Documents, each Funding Participant
shall  make its Contribution or Advance, as applicable, available to the Charter
Trustee  and  the  Investment  Trust, respectively, in an account at the Charter
Trustee's  corporate trust department designated by the Charter Trustee by 12:00
noon,  New  York  time, on the Refinancing Date, and the Charter Trustee and the
Investment  Trust  shall  apply any such amounts so received not later than 3:00
p.m.,  New  York  time, on such Refinancing Date in accordance with, and subject
to,  Section  2.6  or  2.8,  as  applicable.
     ------------      ---

     SECTION  2.12  Computations.
                    ------------

     (a)     Determination  of  Return  Rates  and  Fees.  All  computations  of
             -------------------------------------------
accrued amounts pursuant to the Transaction Documents shall be made on the basis
of  the  actual  number  of  days  elapsed in a 360-day year; provided, that any
                                                              --------
amount  calculated  using the Alternate Rate shall be calculated on the basis of
the  actual  number of days elapsed in a 365-day or 366-day year, as applicable.
The  Charter  Trustee  shall, as soon as practicable, but in no event later than
11:00  a.m.,  New  York  time,  on  the  date  two  (2) Business Days before the
effectiveness  of each

<PAGE>
Return  Rate,  cause  to  be  determined  each  such Return Rate and notify each
Funding Participant and Deepwater thereof by delivery of a notice of Return Rate
in  substantially  the  form  of  Exhibit  B hereto; provided, however, that the
                                  ----------         --------  -------
Administrative  Agent  shall have the right to determine the Return Rates and to
deliver  notice  of  such  Return Rates instead of Charter Trustee in connection
with  the  Return  Period  beginning  on  the  Refinancing  Date.

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

     (c)     Conclusive Determinations.  All information provided by the Charter
             -------------------------
Trustee  or  Administrative  Agent, as the case may be, pursuant to this Section
                                                                         -------
2.12  for  the  purposes  of  any  Transaction  Document shall be conclusive and
----
binding on the Charter Trustee, the Investment Trust, Deepwater and each Funding
Participant  in  the  absence  of  manifest  error.

     SECTION  2.13  Charter  Hire Payments.  Charter Hire shall be paid by or on
                    ----------------------
behalf  of  Deepwater  in  immediately  available  funds  in accordance with the
Depository  Agreement  and  the Charter.  All such payments shall be paid by the
Depository to the Trustees, the Investment Trust or each Funding Participant, as
applicable,  not  later  than  2:00 p.m., New York time, on the date due.  Funds
received  after such time shall for all purposes of the Transaction Documents be
deemed  to  have  been  received  on  the  next  succeeding  Business  Day.

     SECTION  2.14  Fees.
                    ----

     (a)     Facility  Fee.  Deepwater  shall  pay to each Liquidity Purchaser a
             -------------
nonrefundable fee on each Charter Hire Payment Date, commencing with the January
2002  Charter  Hire  Payment  Date, (the "Facility Fee") equal to such Liquidity
                                          ------------
Purchaser  Commitment  Amount  for  the  immediately  preceding  Return  Period
multiplied  by  .25%.

     (b)     Program  Fee.  Deepwater  shall pay to each Conduit a nonrefundable
             ------------
Program  Fee on each Charter Hire Payment Date, commencing with the January 2002
Charter  Hire Payment Date, for the immediately preceding Return Period pursuant
to  the  terms  of  the  Conduit  Fee  Letter.

     (c)     Upfront  Fee.  Deepwater  shall  pay each Certificate Purchaser and
             ------------
Liquidity  Purchaser  a  non-refundable upfront fee pursuant to the terms of the
Upfront  Fee  Letters.

     SECTION  2.15  Payments Under the Ship Mortgage; Limitation on Foreclosure.
                    -----------------------------------------------------------
Notwithstanding  anything  to  the  contrary  in  any  Transaction Document, all
proceeds  from  any  foreclosure  under  the  Ship Mortgage shall not reduce the
maximum amount owed under the Conoco Guaranty and the Transocean Guaranty unless
such  maximum  amount  payable  thereunder  is  greater than the Charter Balance
(excluding  any  Purchasing  Party  Amounts)  at  the  time  such  proceeds  are
distributed to the Funding Participants, in which case such a reduction shall be
permitted only to the extent of such excess; provided, however, that in no event
                                             --------  -------
shall the Charter Trustee, the Investment Trust or the Funding Participants seek
to  foreclose  upon  the Drillship pursuant to the terms of the Ship Mortgage or
the  Master Charter unless the Charter Trustee shall first make a demand against
Deepwater  (and  under the Transocean Guaranty and

<PAGE>
Conoco  Guaranty  to the extent the obligations owed by Deepwater are guaranteed
thereunder)  for any amounts then due and owing under the Transaction Documents;
and  provided,  further,  that  in  no  event  shall  the  Charter  Trustee, the
     --------   -------
Investment  Trust  or  the  Funding  Participants  seek  to  foreclose  upon the
Drillship  pursuant  to  the terms of the Ship Mortgage following the receipt in
full  by such Persons of the Purchase Option Price (whether paid pursuant to the
exercise  of the Special Purchase Right under Section 16.4 of the Master Charter
or  otherwise).

     SECTION  2.16  Payment  to each Conduit on Charter Hire Payment Date.  With
                    -----------------------------------------------------
respect  to  the  payment made on the Charter Hire Payment Date occurring on the
Maturity  Date,  such payment with respect to any outstanding Lender Amount of a
Conduit shall include, in addition to any principal payable on such Charter Hire
Payment  Date,  fees  and  interest  which  are  payable  by Deepwater under the
Transaction Documents to such Conduit and which will accrue through such Charter
Hire  Payment  Date and have not been previously paid.  On the day which is five
(5)  Business  Days  prior to such Charter Hire Payment Date, each Administrator
shall deliver an invoice to Deepwater setting forth (i) such fees, (ii) interest
accrued through the date of delivery of such invoice and due to such Conduit and
(iii)  estimated  interest  due  to  such Conduit for the five (5) Business Days
between  such  date  and such Charter Hire Payment Date (the "Estimated Interest
                                                              ------------------
Period").  Each Conduit and Applicable Liquidity Purchasers hereby agree that if
------
the  actual  interest payable for the Estimated Interest Period is less than the
estimated  interest  amount, such Conduit or Applicable Liquidity Purchasers, as
applicable  will  promptly  refund the difference to Deepwater with a reasonably
detailed  computation  of  the calculation of such difference.  If, however, the
actual  interest  payable  for the Estimated Interest Period is greater than the
estimated  interest  amount,  Deepwater shall promptly pay the difference to the
applicable  Conduit  or  Applicable  Liquidity  Purchasers  after  delivery  to
Deepwater  of  a  reasonably  detailed  computation  of  such  difference.

                                    SECTION 3

          Documentation DATE; Documentation DATE CONDITIONS PRECEDENT

     SECTION  3.1  Documentation  Date.
                   -------------------

     (a)     The Documentation Date (the "Documentation Date") shall be December
                                          ------------------
18,  2001.

     (b)     All  documents  and  instruments  required  to  be delivered on the
Documentation  Date  shall  be delivered at the offices of Mayer, Brown & Platt,
1675  Broadway,  New  York,  New York 10019, or at such other location as may be
determined  by  the  Administrative  Agent  and  Deepwater.

     SECTION  3.2  Conditions  Precedent to Documentation Date.  The obligations
                   -------------------------------------------
of  each  of  the  parties  hereto  to  perform  its  respective  obligations as
contemplated  in  Section  2.1  on  the  Documentation  Date shall be subject to
                  ------------
satisfaction or waiver of the following conditions precedent (provided, that the
                                                              --------
obligations  of  any  party  shall not be subject to any conditions contained in
this Section 3.2 which are required to be performed or caused to be performed by
     -----------
such  party  or  any  of  its  respective  Affiliates):

<PAGE>
     (a)     Each  party  thereto  shall have executed and delivered each of the
Transaction  Documents.

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

     (c)     [Intentionally  Omitted]

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

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

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

     (g)     Deepwater,  each  Member,  Conoco  and  Transocean  shall have each
delivered,  or  shall  have caused to be delivered, to the Administrative Agent,
and  the Trustees the following, in each case in form and substance satisfactory
to  the  Administrative  Agent  (with  copies  for  each  Funding  Participant):

          (i)     Organizational  Documents.  (a)  Copies  of  its  articles  or
                  -------------------------
     certificate  of  incorporation,  certificate  of  formation,  memorandum of
     association  or  other  organizational  documents, certified to be true and
     complete as of a recent date by the appropriate Government Authority of the
     state,  province or country of its incorporation or formation and confirmed
     by  an  officer of such entity, (b) copies of its limited liability

<PAGE>
     company operating agreement, articles of association or bylaws, as the case
     may  be,  certified  by  an appropriate officer or representative as of the
     Documentation  Date  to be true and correct and in full force and effect as
     of such date and (c) incumbency certificates regarding the officers of such
     Person authorized to execute and deliver the Transaction Documents to which
     such  Person is a party and the other documents and agreements delivered in
     connection  therewith.

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

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

          (iv)     Officer's or Manager's Certificate.  An officer's certificate
                   ----------------------------------
     or  manager's  certificate,  dated the Documentation Date, substantially in
     the  form  of  Exhibit  H.
                    ----------

     (h)     Each  of the Trustees shall have delivered, or shall have caused to
be  delivered,  to  Deepwater,  the  Members,  and  each Funding Participant the
following:

          (i)     Organizational  Documents.  Copies  of  its  articles  of
                  -------------------------
     association  or  other  organizational  documents and a copy of the Charter
     Trustee's  and Investment Trust's certificate of trust (or, if certificates
     of  trust  are  not  issued  in the Charter Trustee's or Investment Trust's
     jurisdiction  of  organization,  other  similar  organizational documents),
     together with all amendments in each case certified to be true and complete
     as  of  a  recent  date  by  the  appropriate  Government Authority and (b)
     incumbency certificates regarding the officers of such Person authorized to
     execute  and  deliver  the  Transaction Documents to which such Person is a
     party  and  the  other  documents  and  agreements  delivered in connection
     therewith.

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

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

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

<PAGE>
     (i)     All Transaction Expenses then due  and  owing  for  which Deepwater
has  received  an  invoice  at  least  two  (2)  Business  Days  prior  to  the
Documentation  Date  and  which  will  not  be  paid  from  the  proceeds of the
Contribution  and  Advance  shall  have  been  paid  by  Deepwater.

     (j)     [Intentionally  Omitted].

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

     (l)     [Intentionally  Omitted].

     (m)     [Intentionally  Omitted].

     (n)     Bank  of  America shall have delivered to the Charter Trustee (with
copies  for  each  Funding Participant), the Investment Trust, Deepwater and the
Members a certificate, in form substantially similar to the form attached hereto
as  Exhibit  P.
    ----------

     (o)     No  change in Applicable Laws will have occurred that would make it
illegal  for  any  of the parties to the Transaction Documents to participate in
the  transaction.

                                    SECTION 4

              EFFECTIVE DATE; REFINANCING DATE CONDITIONS PRECEDENT

     SECTION  4.1  Effective Date.  The amendments and restatements reflected in
                   --------------
this Agreement and each of the other Transaction Documents shall be effective on
the date on which each of the conditions precedent detailed in Sections 2.8, 3.2
                                                               ------------  ---
and  4.2 are satisfied or waived (the "Effective Date"); provided, however, that
     ---                               --------------    --------  -------
if the Effective Date does not occur on or prior to December 28, 2001, then such
amendments  and  restatements  reflected in this Agreement and each of the other
Transaction  Documents  shall  automatically  terminate  (except  as provided in
Section  12.1), ("Termination of Refinancing"), and Lessee shall pay in full all
-------------     --------------------------
Transaction  Expenses  (for  which  invoices have been received) not theretofore
paid  by  it; provided, further, that such Termination of Refinancing shall have
              --------  -------
no  effect  on  the  effectiveness  of  the  Original Transaction Documents, the
documents  related  thereto  or  the  transactions  contemplated  therein.

     SECTION  4.2  Conditions Precedent to Refinancing Date.  The obligations of
                   ----------------------------------------
the  parties  hereto  to enter into the transactions to be entered into and take
the actions to be taken by each such party which are contemplated by Section 2.2
                                                                     -----------
to  occur  on the Refinancing Date shall be subject to satisfaction or waiver on
the  Refinancing  Date  of the conditions precedent set forth in Section 3.2 and
                                                                 -----------
the  following conditions precedent; provided, that the obligations of any party
                                     --------
shall  not  be  subject  to any condition contained in this Section 4.2 which is
                                                            -----------
required  to  be performed or caused to be performed by such party or any of its
respective  Affiliates:

     (a)     Each Certificate Purchaser shall have funded the Contribution to be
made  by  it  in  accordance  with  Section  2.3(a).
                                    ---------------

<PAGE>
     (b)     Each  Certificate  Purchaser  shall  have  received  its respective
Series  A  Charter  Trust  Certificate  in  accordance  with  Section  2.4(a).
                                                              ---------------

     (c)     The  Charter  Trustee  shall  have paid, canceled and redeemed each
Original Series A Charter Trust Certificate in accordance with Section 2.1(c) of
the  Charter  Trust  Agreement.

     (d)     Each  applicable Lender shall have funded its Advance in accordance
with  Section  2.3(b)  and  the  Loan  Agreement.
      ---------------

     (e)     Each Lender shall have received its Note in accordance with Section
2.3  of  the  Loan  Agreement.

     (f)     The  Investment  Trust  shall have paid, canceled and redeemed each
Original  Investment  Trust Certificate in accordance with Section 2.1(c) of the
Investment  Trust  Agreement.

     (g)     Each  Transaction  Document  listed  on  Schedule 5 shall have been
                                                      ----------
executed  and  delivered  by each of the parties thereto and no Charter Default,
Charter  Event  of  Default,  Loan Event of Default or Event of Loss shall exist
under any such Transaction Document (as if such Transaction Document was in full
force  and  effect  at such time of execution) or under any Original Transaction
Document.

     (h)     Deepwater  shall  have  delivered  the  Refinancing  Request  in
accordance  with  Section  2.11  and each Certificate Purchaser, each Lender and
                  -------------
each  Liquidity  Agent  (with a copy to the Administrator) shall have received a
funding indemnity letter from Transocean and Conoco in the form of Exhibit A not
                                                                   ---------
less  than  three  (3)  Business  Days  prior  to  the  Refinancing  Date.

     (i)     Each  of  the  Services  Agreements,  the  Drilling  Contracts, the
Drilling Contract Guaranties and the Drilling Consent shall be in full force and
effect  and  no  default  or  material  breach  shall  exist  thereunder.

     (j)     All  Fees  and  Transaction  Expenses  (including  registration and
recordation  fees  under Panamanian Law) then due and owing shall have been paid
in  full  on  or  prior  to  the  Refinancing  Date.

     (k)     The  Charter  Trustee,  the Investment Trust and the Administrative
Agent  (on  behalf of each Funding Participant) shall have received (i) a report
from a nationally recognized insurance broker confirming that the insurance then
in  effect  satisfies the insurance requirements set forth in Article XIV of the
Master  Charter,  such  report  being  satisfactory in form and substance to the
Administrative  Agent  and  (ii)  certificates  of  insurance  from  Deepwater's
insurance  broker(s) evidencing that all insurance required under Article XIV of
the  Master Charter is in effect and that all premiums have been paid; provided,
                                                                       --------
however,  that  nothing in the Transaction Documents shall be deemed to prohibit
-------
the  acceptance  by  the  Charter  Trustee  and Administrative Agent of a single
report  satisfying  both  the  conditions  set  forth  in  this  paragraph  (k).
                                                                 --------------

<PAGE>
     (l)     Each  of  the Charter Trustee, the Investment Trust and the Funding
Participants  shall  have received an Officer's Certificate of Deepwater stating
that the representations and warranties of Deepwater listed in Section 5.1 or in
                                                               -----------
any  other Transaction Document are true and correct in all material respects as
of  the  Refinancing  Date  (except  to the extent that such representations and
warranties  relate  solely to an earlier or to a later date, in which event such
representations  and warranties shall be true on and as of such earlier or later
date);  provided,  however, that if the Refinancing Date occurs within seven (7)
        --------   -------
days  of  the  Documentation  Date, the delivery by Deepwater of the certificate
listed  in  Section 3.2(g)(iv) shall be deemed to have satisfied its requirement
            ------------------
under  this  paragraph  (l).
             --------------

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

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

     (o)     As  of  the  Refinancing  Date,  there  shall not have occurred any
material  adverse  change  in  the consolidated assets, liabilities, operations,
business  or  financial  condition of:  (i) Deepwater from that set forth in its
financial  statements  for  the  fiscal  quarter  ended September 30, 2001, (ii)
Transocean  from  that  set  forth  in  its  financial statements for the fiscal
quarter  ended  September  30,  2001  or (iii) Conoco from that set forth in its
financial  statements  for the fiscal quarter ended September 30, 2001; provided
that the entry by Conoco into a merger agreement with Phillips Petroleum Company
shall  not  be  considered  a  material  adverse  change.

     (p)     All  UCC  and  other  applicable filings listed on Schedule 1 shall
                                                                ----------
have  been  duly  made  at  the  locations  set  forth beside the filing on such
schedule.  All  other  filings or recordings of any document in any jurisdiction
which  are required to establish the perfected security interests of the Charter
Trustee  and  the  Investment  Trust  in  the  Accounts  shall  have  been made.

     (q)     The Ship Mortgage and the Master Charter shall each have been filed
with  the  appropriate  public  register  in  Panama.

     (r)     (i)  Baker  Botts  L.L.P., special counsel to Deepwater, shall have
issued  its  opinion  to the effect and in the form set forth in Exhibit C; (ii)
                                                                 ---------
Wayne  K. Anderson, in-house counsel to Conoco, shall have delivered his opinion
to the effect and in the form set forth in Exhibit D; (iii) William E. Turcotte,
                                           ---------
in-house  counsel  to Transocean, shall have delivered his opinion to the effect
and  in  the  form  set  forth  in  Exhibit  E;  (iv)  Arias, Fabrega & Fabrega,
                                    ----------
Panamanian  counsel,

<PAGE>
shall  have  delivered  its  opinion  to the effect and in the form set forth in
Exhibit  F;  (v)  Richards,  Layton & Finger, counsel to the Charter Trustee and
-----------
Investment  Trust,  shall have delivered their opinions to the effect and in the
form  set  forth  in  Exhibit  G  and  (vi)  Walkers,  Cayman  Island counsel to
Transocean,   shall  have  delivered  their   opinions  to  the  effect  and  in
the  form  set forth in Exhibit O.  Each opinion listed in this clause (r) shall
                        ---------                               ----------
be  in  form  and  substance  reasonably  acceptable  to  the  Admininstrators.

     (s)     Each  Administrator  shall  have received a copy of a rating letter
from  its Conduit's Rating Agency or Rating Agencies stating that the applicable
Commercial  Paper  Notes  shall be rated P-1 by Moody's and A-1 by S&P and/or an
equivalent  rating  from  another  Rating  Agency.

     SECTION  4.3  Head Lease Transaction.  Deepwater shall, with the consent of
                   ----------------------
each Funding Participant, be permitted to enter into, and to require the Charter
Trustee to enter into, the following transactions (collectively, the "Head Lease
                                                                      ----------
Transaction")  on  or  after the Documentation Date:  (i) title to the Drillship
-----------
shall  be  transferred  to  the  Head Lessor; (ii) the Head Lessor shall charter
(directly  or through a sub-charter) the Drillship to the Charter Trustee; (iii)
the  Head  Lessor  shall  finance  its acquisition of title to the Drillship, in
part,  through  a  loan  (the  "Head  Lease Loan"); (iv) the Head Lessor and the
                                ----------------
Charter  Trustee  shall  enter  into  arrangements whereby the Charter Trustee's
payment  obligations  under  the  Head  Lease  are  defeased  (the  "Head  Lease
                                                                     -----------
Defeasance  Arrangements");  (v)  the economic benefit of entering into the Head
------------------------
Lease  Transaction shall be paid over to, or otherwise accrue to the benefit of,
Deepwater;  and  (vi)  if the Head Lease Transaction is entered into on or after
the  Documentation Date or any Funding Participant reasonably deems it necessary
for  the  protection of its rights in the Drillship, the Head Lessor shall enter
into  the  Ship  Mortgage.  If  Deepwater  shall  have  requested  the  Funding
Participants  to  consent  to  the  Head Lease Transaction not less than 45 days
prior  to the proposed closing date of the Head Lease Transaction (which request
shall  be accompanied by drafts of the documents relating thereto), each Funding
Participant  agrees  to  consider  such  request  in  good  faith.  Thereafter,
Deepwater shall promptly provide each Funding Participant with the drafts of the
Head  Lease  Documents  to  the  extent such drafts are distributed to the other
parties  to the Head Lease Transaction.  If each Funding Participant in its sole
discretion  approves the Head Lease Transaction, the Charter Trustee shall enter
into  the  Head  Lease  Transaction  on  the  date  proposed  by  Deepwater.
Notwithstanding the provisions of this Section 4.3, neither the consummation nor
                                       -----------
the  failure  to  consummate  the  Head  Lease  Transaction  on  or  before  the
Documentation Date shall be a condition to the obligation of any party hereto to
enter into the other transactions contemplated by this Agreement to occur on the
Documentation  Date  or  to  execute and deliver the Transaction Documents to be
executed  and delivered on the Documentation Date (other than those transactions
or  documents  reflecting  only  the  Head  Lease  Transaction).

     SECTION  4.4  Replacement  Conditions.  Deepwater  may,  in  its  sole
                   -----------------------
discretion,  elect  to  replace any Funding Participant that does not consent to
the Head Lease Transaction, that does not consent to an amendment proposed under
Section  4.5,  that  does  not  consent  to  a Qualified Transfer proposed under
------------
Section  9.5  or  that  does  not  submit  an  offer to extend (if such offer is
------------
requested by Deepwater) or rejects Deepwater's offer to extend the Charter Term,
by  having  another financial institution that meets the conditions set forth in
this  Section  4.4  (each  financial  institution  that  replaces  a  Funding
      ------------
Participant,  a  "Replacement Funding Participant") purchase such non-consenting
                  -------------------------------
Funding Participant's interest in accordance with this Section 4.4.
                                                       -----------

<PAGE>
Replacement  of a Funding Participant by a Replacement Funding Participant shall
be  subject  to  the  following conditions precedent (collectively, the "Funding
                                                                         -------
Participant  Replacement  Conditions"):
------------------------------------

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

          (ii)     the  Replacement  Funding  Participant  that  replaces  a
     Certificate Purchaser shall pay to such Certificate Purchaser the amount of
     its  outstanding Certificate Purchaser Amount and accrued and unpaid Series
     A  Return  with  respect  thereto  plus, any funding losses incurred by the
     Certificate  Purchaser pursuant to Section 7.3 as a result of the transfer,
                                        -----------
     plus  any  other  accrued  and  unpaid  amounts  owed  by Deepwater to such
     Certificate  Purchaser  under  the  Transaction  Documents,  including  any
     reasonable  expenses  relating  to  its  replacement;  if  such Replacement
     Funding  Participant  does  not  provide  sufficient  funds  to  allow  the
     Certificate Purchaser being replaced to receive such amounts, Deepwater may
     provide  funds  sufficient  to  cover  the  shortfall;

          (iii)     the  Replacement  Funding Participant that replaces a Lender
     shall  pay  to  such Lender the amount of its outstanding Lender Amount and
     its  accrued  and  unpaid  Series  B  Return with respect thereto plus, any
     funding  losses incurred by such Lender pursuant to Section 7.3 as a result
                                                         -----------
     of  the  transfer,  plus  any  other  accrued  and  unpaid  amounts owed by
     Deepwater  to  such  Lender  under the Transaction Documents, including any
     reasonable  expenses  relating  to  its  replacement;  if  such Replacement
     Funding  Participant  does not provide sufficient funds to allow the Lender
     being  replaced  to  receive  such  amounts,  Deepwater  may  provide funds
     sufficient  to  cover  the  shortfall;  provided that if any Conduit is the
                                             --------
     Lender  being  replaced,  Deepwater  shall  pay to the Conduit any breakage
     costs  (which  are  direct  loss,  costs or expense not consequential loss,
     costs  or  expense)  incurred  pursuant  to  such  replacement.

          (iv)     the  Replacement  Funding  Participant  shall  have agreed to
     execute  the  Assignment and Assumption Agreement in substantially the form
     of  Exhibit  K  hereto;  and
         ----------

          (v)     the  requirements  set  forth  in  Section 9.1 shall have been
                                                     -----------
     satisfied;  and

          (vi)     with  respect  to  the  replacement of a Liquidity Purchaser,
     such  Person  meets  the  requirements  of  the  applicable  LAPA;

     provided  that,  (i)  any replacement of the Conduit (Liberty) shall not be
     --------  ----
effective  unless  The  Bank  of  Nova  Scotia  is  also replaced as a Liquidity
Purchaser,  (ii)  any  replacement  of  The  Bank  of  Nova  Scotia shall not be
effective  unless  the Conduit (Liberty) is also replaced, (iii) any replacement
of  the Conduit (Paradigm) shall not be effective unless Westdeutsche Landesbank
Girozentrale, New York branch is also replaced as a Liquidity Purchaser and (iv)
any  replacement  of  Westdeutsche Landesbank Girozentrale, New York Branch as a
Liquidity Purchaser shall not be effective unless the Conduit (Paradigm) is also
replaced.

     SECTION  4.5  Accounting  Changes.  In  the  event  that  Deepwater, or its
                   -------------------
accountants,  shall  determine  that  any  change  in  the  applicable rules and
interpretations  of  the  Financial

<PAGE>
Accounting Standards Board and/or the Securities Exchange Commission (the "Lease
                                                                          ------
Accounting  Rules")  will preclude Deepwater (or raise a substantial question as
-----------------
to whether Deepwater is precluded) from continuing to account for the Charter as
an  operating lease with substantially the same financial accounting benefits as
before the change in the Lease Accounting Rules, then Deepwater and each Funding
Participant  agree  to review in good faith any proposal submitted by Deepwater,
or  its  accountants,  and  to  negotiate  in  good  faith  the structure of the
transactions  contemplated  by  the  Transaction  Documents.

     If  each  Funding  Participant in its sole discretion approves the proposed
amendment  or amendments to the Transaction Documents submitted by Deepwater, or
its  accountants,  the  Charter  Trustee shall enter into such amendments to the
Transaction  Documents on the date proposed by Deepwater.  Deepwater may, in its
sole  discretion, elect to replace any Funding Participant that does not consent
to  the  proposed amendment with a Replacement Funding Participant in accordance
with  Section  4.4.
      ------------

                                    SECTION 5

                         REPRESENTATIONS AND WARRANTIES

     SECTION  5.1  Representations  and  Warranties  of  Deepwater.  Deepwater
                   -----------------------------------------------
represents  and  warrants  to  each  of  the other parties hereto as of the date
hereof  as  follows:

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

     (b)     Authorization;  No  Conflict.  The  execution,  delivery  and
             ----------------------------
performance  by Deepwater of each Transaction Document to which it is or will be
a  party  (i)  is  within  its  company  powers  under  Delaware  law  and  its
organizational documents; (ii) has been duly authorized by all necessary company
action  on  the  part of Deepwater and its Members; (iii) requires no Government
Action  by,  or  filing  with,  any Government Authority which is required to be
obtained, given or made by Deepwater or its Members as of the date hereof (other
than such Government Action as has been duly obtained, given or made); (iv) does
not  and  will not contravene, or constitute a default under, any Applicable Law
or  its  organizational  documents,  or  of  any  material  agreement, judgment,
injunction,  order,  decree  or  other  instrument  binding  upon  or  affecting
Deepwater  or  the  Drillship;  and  (v)  does  not  and  will not result in the
creation,  imposition  or  violation of any Lien on any asset of Deepwater other
than  as  contemplated  or  permitted  by  the  terms  hereof  or  of  the other
Transaction  Documents.  Deepwater has obtained all Government Actions necessary
to  carry  on its business as now conducted, except for those

<PAGE>
Government  Actions  that are normally obtained at a later time and with respect
to  which  Deepwater  does  not  anticipate  any  problems  in  obtaining.

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

     (d)     Financial  Information.  The  balance  sheet  of  Deepwater  for
             ----------------------
September  30,  2001  fairly  presents,  in  conformity  with  GAAP consistently
applied,  the  financial position of Deepwater as of such date.  Since September
30,  2001,  no  event  has  occurred  with  respect  to the assets, liabilities,
operations,  business  or  financial  condition  of Deepwater which would have a
Material  Adverse  Effect.

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

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

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

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

     (i)     Investment  Company  Act  and  Public  Utility Holding Company Act.
             -------------------------------------------------------------------
Deepwater  is  not  an  "investment  company"  or  a  company  controlled  by an
"investment  company"  within the meaning of the Investment Company Act of 1940,
as  amended,  or  a  "holding  company"  or a "subsidiary company" of a "holding
company",  or an "affiliate" of a "holding company" or of a "subsidiary company"
of  a "holding company", within the meaning of the Public Utility Holding Act of
1935,  as  amended.

<PAGE>
     (j)     Securities  Act.  Neither  Deepwater  nor  any Person authorized by
             ---------------
Deepwater  to  act  on  its behalf has offered or sold any interest in the Trust
Estate, the Charter Trust, the Investment Trust, the Certificates, the Notes, or
in  any similar security (other than the Commercial Paper Notes) relating to the
transactions  contemplated  by the Transaction Documents, or in any security the
offering  of  which for the purposes of the Securities Act would be deemed to be
part  of  the  same  offering as the offering thereof, or solicited any offer to
acquire  any  of the same from, any Person other than the parties hereto and not
more than 70 other Institutional Investors, and neither Deepwater nor any Person
authorized  by  Deepwater  to act on its behalf will take any action which would
subject  the  issuance  or sale of any interest in the Trust Estate, the Charter
Trust,  the  Investment  Trust,  the  Certificates, the Notes, or in any similar
security  relating  to  the  Drillship  to  the  provisions  of Section 5 of the
Securities  Act  or  require the qualification of any Transaction Document under
the  Trust  Indenture  Act  of 1939, as amended.  The only Person which has been
authorized  to  act  on behalf of Deepwater for this purpose is Bank of America.
The  representation  in  this  paragraph  (j)  is being given in reliance on the
                               --------------
certificate  delivered  pursuant  to  Section  3.2(n).
                                      ---------------

     (k)     Chief  Place  of  Business; Location of Establishment.  Deepwater's
             -----------------------------------------------------
chief  place of business, chief executive office and office where the documents,
accounts and records relating to the transactions contemplated by this Agreement
and  each  other  Transaction  Document  are  kept  is located at c/o Transocean
Offshore  Deepwater  Drilling,  Inc.,  4  Greenway  Plaza, Houston, Texas 77046.
Deepwater  is  a  Delaware  limited  liability  company.

     (l)     Business  of  Deepwater.  (i)  Deepwater has engaged in no business
             -----------------------
activity  other than as contemplated by, or in connection with, the Construction
Contract,  the  Drilling  Contracts,  the  Rig  Sharing  Agreement, the Services
Agreements, the Drilling Contract Guaranties and the Transaction Documents; (ii)
Deepwater  has  no  subsidiaries;  (iii)  as  of  the  Closing  Date, all of the
membership  interests  in Deepwater are owned by the Members; and (iv) Deepwater
does  not  have  any  Indebtedness  except  for  Permitted  Indebtedness.

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

     (n)     Certain  Contracts.  From  and after the Closing Date, the Services
             ------------------
Agreements, the Drilling Contracts, the Drilling Contract Guaranties and the Rig
Sharing  Agreement are in full force and effect and have not been amended except
as  permitted or contemplated by the Transaction Documents.  Deepwater is not in
default under, and, to the knowledge of Deepwater, no other Person is in default
under,  any  of  the  Services  Agreements, the Drilling Contracts, the

<PAGE>
Drilling  Contract  Guaranties  or  the  Rig  Sharing  Agreement. The execution,
delivery  and  performance  by  Deepwater  of its obligations under the Services
Agreements,  the  Drilling  Contracts, the Rig Sharing Agreement, this Agreement
and  the other Transaction Documents to which it is a party, will not violate in
any  material  respect  any  provisions  of  any  Applicable  Law.

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

     (p)     Absence  of Events.  No Charter Default or Charter Event of Default
             ------------------
has  occurred  and is continuing and Deepwater is not in default in, nor has any
non-permanent waiver been granted to Deepwater with respect to, the performance,
observance  or  fulfillment  of  any of the obligations, conditions or covenants
contained  in the Construction Contract, the Drilling Contracts, the Rig Sharing
Agreement  or  the  Services  Agreements.

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

     (r)     Solvency.  Deepwater  does  not  have capital unreasonably small in
             --------
relation  to  its  business,  will  not  be rendered insolvent by the execution,
delivery and performance of its obligations under the Transaction Documents, and
does  not  intend  to  hinder,  delay or defraud its creditors by or through the
execution,  delivery and performance of the Transaction Documents to which it is
a party, including the Charter.  As of the Documentation Date, there were or are
no outstanding subject to Permitted Liens unsatisfied judgments, liens for Taxes
or  bankruptcy  proceedings  against  Deepwater.

     (s)     [Intentionally  Omitted].

     (t)     Accuracy  of  Information.  The  cash flow projections contained in
             -------------------------
Section  IV-6  of  the  Offering  Memorandum,  dated as of September, 2001, were
prepared  by  Deepwater  in good faith on the basis of reasonable investigation,
information, assumptions and procedures which Deepwater believed were reasonable
under  the  facts  and  circumstances  then existing, and since the date of such
projections  there  has  been  no  change  in  any  of  the  facts on which such
projections  were  based  that would result in a material adverse change in such
projections.

     (u)     Title  to  the  Drillship;  Documentation;  Condition.  The Charter
             -----------------------------------------------------
Trustee  has  valid title to the Drillship (including the OFE) and the Drillship
is  duly  documented  in  the  name of the Charter Trustee under the laws of the
Republic  of  Panama  free  and  clear  of  all liens, charges, encumbrances and
security  interests  other  than  Permitted  Liens.

<PAGE>
     (v)     Recording  of  Ship  Mortgage.  (i) the  Ship  Mortgage  has  been
             -----------------------------
duly  recorded  with  the  appropriate  Panamanian  authorities  in Panama City,
Republic  of  Panama  (which office is the only place in which such recording is
necessary),  (ii)  the  Ship  Mortgage constitutes a first naval mortgage on the
Drillship  in  favor  of  the  Investment  Trust  and  the  Hedging  Agreement
Counterparties,  if any, and, if the Head Lessor is the mortgagor under the Ship
Mortgage,  the  Charter  Trustee,  and  (iii)  no  other  recordings or periodic
rerecording  or  filing  or  periodic  filing of the Ship Mortgage are necessary
under  existing law to constitute the lien of the Ship Mortgage on the Drillship
(including  the  OFE)  and  the  Ship  Mortgage  is  in  effect.

     (w)     Other  Recordings  and  Filings.  All  filings  and  recordings
             -------------------------------
(including  filing  of the Master Charter in Panama City, Republic of Panama and
all filings of financing statements under the Uniform Commercial Code) have been
duly made in each jurisdiction in which such filings and recordings are required
or  reasonably requested by the Charter Trustee or the Investment Trust in order
to  perfect the security interests granted by the Deepwater Assignment, the Ship
Mortgage  and  the  other Security Documents and to make such security interests
valid  and  enforceable.

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

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

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

     (c)     Enforceability, etc.  Each Transaction Document to which the Member
             --------------------
is  or will be a party has been, or on or before the Documentation Date will be,
duly executed and delivered by such Member and each such Transaction Document to
which  such  Member  is a party constitutes, or upon execution and delivery will
constitute,  assuming  the  due authorization, execution and delivery thereof by
the  other parties thereto, a legal, valid and binding obligation of such Member
enforceable  against such Member in accordance with the terms thereof, except as
such  enforceability  may  be  limited  or  denied by (i) applicable bankruptcy,
insolvency,

<PAGE>
reorganization,  moratorium  or similar laws affecting creditors' rights and the
enforcement  of  debtors'  obligations generally, and (ii) general principles of
equity,  regardless of whether enforcement is pursuant to a proceeding in equity
or  at  law.

     (d)     Securities  Act.  Neither  such Member nor any Person authorized by
             ---------------
such  Member to act on its behalf has offered or sold any interest in Deepwater,
or  in  any  security  (other  than  the Commercial Paper Notes) relating to the
Drillship,  or  in  any  security  the offering of which for the purposes of the
Securities  Act  would be deemed to be part of the same offering as the offering
thereof,  or  solicited  any  offer  to acquire any of the same from, any Person
other  than  the  parties  hereto  and  not  more  than  70  other Institutional
Investors,  and  neither such Member nor any Person authorized by such Member to
act  on its behalf will take any action which would subject the issuance or sale
of  any  interest  in Deepwater to the provisions of Section 5 of the Securities
Act  or  require  the  qualification of any Transaction Document under the Trust
Indenture  Act of 1939, as amended.  The representation in this paragraph (d) is
                                                                -------------
being  given in reliance on the certificate delivered pursuant to Section 3.2(n)
                                                                  --------------
hereof.

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

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

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

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

     SECTION 5.3  Representations and Warranties of the Investment Trust and the
                  --------------------------------------------------------------
Investment  Trust  Beneficiary.  Each of the Investment Trust and the Investment
------------------------------
Trust  Beneficiary  (as to clauses (b) through (e) only) represents and warrants
                           -----------
to each of the other parties hereto as of the date hereof as follows:

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

<PAGE>
delivered by it in connection with, or as contemplated by, each such Transaction
Document  to  which  it  is  or  will  be  a  party.

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

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

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

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

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

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

     SECTION 5.4  Representations and Warranties of the Liquidity Purchasers and
                  --------------------------------------------------------------
Certificate  Purchasers.  Each  Liquidity Purchaser or Certificate Purchaser, as
-----------------------
applicable, individually and not jointly, represents and warrants to each of the
other  parties  hereto  as  of  the  date  hereof  as  follows:

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

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

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

     (d)     ERISA.  Either  (x)  such  Liquidity  Purchaser  or  Certificate
             -----
Purchaser,  as  applicable,  is  not  and will not be making any Contribution or
Advance,  as  the case may be, with the assets of an "employee benefit plan" (as
defined  in  Section  3(3)  of  ERISA) which is subject to Title I of ERISA or a
"plan" (as defined in Section 4975(e)(1) of the Code) or (y) the source of funds
for  any  Contribution  or  Advance,  as the case may be, made by such Liquidity
Purchaser  or

<PAGE>
Certificate  Purchaser,  as  applicable, is an insurance company general account
(as such term is defined in PTE 95-60 (issued July 12, 1995) in respect of which
the  reserves  and  liabilities  (as  defined  by  the annual statement for life
insurance  companies  approved  by  the  National  Association  of  Insurance
Commissioners)  (the  "NAIC  Annual  Statement"))  for  the  general  account
                       -----------------------
contract(s) held by or on behalf of any employee benefit plan, together with the
amount  of the reserves and liabilities for the general account contract(s) held
by  or  on  behalf  of  any  other employee benefit plans maintained by the same
employer  (or affiliate thereof as defined in PTE 95-60) or by the same employee
organization in the general account, do not exceed 10% of the total reserves and
liabilities  of  the general account (exclusive of separate account liabilities)
plus  surplus  as set forth in the NAIC Annual Statement filed with the state of
domicile  of  such Liquidity Purchaser or Certificate Purchaser, as the case may
be.

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

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

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

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

     (a)     Due  Organization,  etc.  It  is a banking corporation or a Federal
             ------------------------
savings  bank  (as  applicable),  duly  organized,  validly existing and in good
standing  under  the laws of the state of its incorporation or the United States
(as  applicable),  has  full  corporate  power  and  authority to enter into and
perform  its  obligations  under  the  Transaction  Documents  to  which  it
(individually

<PAGE>
or  as  trustee,  as  the  case  may  be)  is  or will be a party and each other
agreement,  instrument  and  document  to  be  executed  and  delivered  by  it
(individually  or  as  trustee,  as  the  case may be) in connection with, or as
contemplated  by,  each  such  Transaction  Document to which it is or will be a
party.

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

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

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

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

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

<PAGE>
Investment  Trust,  the Certificates or the Notes to the provisions of Section 5
of  the  Securities Act or require the qualification of any Transaction Document
under  the  Trust  Indenture  Act  of  1939,  as  amended.

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

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

                                    SECTION 6

                        CERTAIN COVENANTS AND AGREEMENTS

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

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

<PAGE>
     (b)     No  Profit-Sharing.  From  the  date  hereof  to  the expiration or
             ------------------
termination of the Charter Term, Deepwater shall not enter into any partnership,
profit-sharing  or  royalty  arrangement  or  other  similar arrangement whereby
Deepwater's income or profits are, or might be, shared with any other Person, or
enter  into  any management contract or similar arrangement whereby its business
or  operations  are  managed  by  any  other  Person, in each case other than as
provided  in  the  Transaction  Documents,  the  Head  Lease  Documents, the LLC
Agreement,  the  Drilling  Contracts,  the  Rig  Sharing Agreement, the Services
Agreements  or  any  other  agreement  incidental  to  the  performance  of  its
obligations  under the Transaction Documents; provided that, notwithstanding the
                                              -------- ----
foregoing,  this  Section  6.1(b) shall not prohibit profit-sharing arrangements
                  ---------------
made  pursuant  to  a  Plan  maintained  by Deepwater in accordance with Section
                                                                         -------
6.1(o).
------

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

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

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

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

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

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

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

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

     (k)     Notice  of  Material  Default,  Charter  Event  of  Default  or
             ---------------------------------------------------------------
Environmental  Claim; Other Certificates.  If a Responsible Officer of Deepwater
----------------------------------------
has  Actual  Knowledge  of  a  Material  Default,  Charter  Event  of Default or
Environmental  Claim with respect to the Drillship (to the extent that Deepwater
reasonably  expects  the  cost  to  remediate  or  liability to be incurred with
respect  to  all such Environmental Claims then outstanding to exceed $5,000,000
individually  or in the aggregate), Deepwater shall promptly give notice thereof
to  each  other  party  to  this  Agreement.

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

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

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

     (l)     Documentation  of Drillship and Ship Mortgage.  In the event that a
             ---------------------------------------------
successor  trustee  to the Charter Trustee shall have been appointed pursuant to
Section  5.10  of  the Charter Trust Agreement and Section 12.18, or the Charter
                                                   -------------
Trustee  shall  merge  or consolidate with any Person in accordance with Section
5.12  of  the  Charter Trust Agreement and Section 12.18, Deepwater, at its sole
                                           -------------
expense,  shall  cause the Drillship to be provisionally documented (if the Head
Lease  Transaction  has  not  been  entered  into) and the Ship Mortgage and the
Charter to be provisionally recorded under the laws of Panama in the name of any
successor  trustee  within  fifteen (15) Business Days of the receipt of written
notice of any such appointment, merger or consolidation; provided that Deepwater
                                                         -------- ----
shall  not  be  deemed  to  be  in  violation  of the covenant contained in this
sentence  to  the  extent  that  any  delay  in  procuring  such  provisional

<PAGE>
documentation or recordation results from the failure of any of the Participants
to  execute  any  necessary  documents or instruments promptly upon receipt from
Deepwater or to take any other action necessary to effectuate such documentation
or  recording  promptly  upon  request  by  Deepwater.  Deepwater,  at  its sole
expense,  shall thereafter cause the Drillship to be duly permanently documented
(if  the Head Lease Transaction has not been entered into) and the Ship Mortgage
and  the Charter to be duly permanently recorded at least 10 Business Days prior
to  the  end  of  the  six  (6) months following the issuance of the provisional
documentation.

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

          (i)     for  each  fiscal  year  ended on and after December 30, 1999,
     within  120  days  after  the  end  of  such  fiscal year, annual financial
     statements including a statement of earnings, a statement of cash flows and
     a  balance  sheet  of  Deepwater for the fiscal year then ended prepared in
     conformity  with GAAP, consistently applied, and audited by its independent
     outside  auditors;

          (ii)     for  each  fiscal  quarter of Deepwater, within 60 days after
     the end of such fiscal quarter, unaudited financial statements, including a
     statement  of  earnings,  a  statement of cash flows and a balance sheet of
     Deepwater  for  the  fiscal  quarter then ended prepared in conformity with
     GAAP,  consistently  applied;  and

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

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

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

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

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

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

     (p)     Deepwater  shall not create or suffer to exist (and shall discharge
promptly)  any  Lien  except  any  Lien  created  by,  or  contemplated  in, the
Transaction  Documents.

     (q)     Deepwater  shall  not  incur  any indebtedness except for Permitted
Indebtedness.

     SECTION  6.2  Certain  Covenants  of  the  Charter  Trustee, the Investment
                   -------------------------------------------------------------
Trustee,  the  Investment  Trust  and Investment Trust Beneficiary.  Each of the
------------------------------------------------------------------
Charter Trustee, the Investment Trustee, the Investment Trust and the Investment
Trust  Beneficiary  (solely  in  his  capacity as Investment Trust Beneficiary),
severally  and  not  jointly,  covenants  as  follows:

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

     (b)     Indebtedness;  Other  Business.  None  of the Investment Trust, the
             ------------------------------
Investment  Trust  Beneficiary  (solely  in  his  capacity  as  Investment Trust
Beneficiary)  nor  the  Trustees shall contract for, create, incur or assume any
Indebtedness,  or enter into any business or other activity, other than pursuant
to,  or  as  contemplated  by,  the  Transaction  Documents  and  the Head Lease
Documents.

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

     (d)     No  Voluntary  Bankruptcy  by  Investment  Trust.  None  of  the
             ------------------------------------------------
Investment  Trust or the Investment Trust Beneficiary (solely in his capacity as
Investment  Trust  Beneficiary) shall (i) commence any case, proceeding or other
action  under  any  existing  or future law, relating to bankruptcy, insolvency,
reorganization,  arrangement,  winding-up, liquidation, dissolution, composition
or  other  relief  with  respect  to it or its debts, (ii) seek appointment of a
receiver,  trustee,  custodian  or other similar official for them or for all or
any  substantial  part  of  its  assets  or property or (iii) take any action in
furtherance  of,  or indicating its consent to, approval of, or acquiescence in,
any  of  the  acts  set  forth  in  this  Section  6.2.
                                          ------------

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

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

     (g)     No  Sale  of Drillship.  None of the Trustees, the Investment Trust
             ----------------------
nor  the  Investment Trust Beneficiary shall transfer all or any of its interest
in  the  Drillship or the Transaction Documents except as expressly permitted in
the  Transaction  Documents.

     (h)     Trust  Agreements.  Without prejudice to any right of either of the
             -----------------
Trustees under the Trust Agreements to resign as trustee or the Investment Trust
Beneficiary  to  resign  as  Investment  Trust  Beneficiary, or the right of the
Funding Participants under the Trust Agreements to remove either of the Trustees
as  trustee, and in each case subject to the terms of the Transaction Documents,
none  of the Trustees, the Investment Trust nor the Investment Trust Beneficiary
shall  (i) terminate or revoke the trusts created by the Trust Agreements before
the later of the expiration or termination of the Charter or the payment in full
of  the  obligations  under  the  Certificates or the Notes, (ii) amend, modify,
supplement,  terminate  or  revoke  or  otherwise  modify  any  provision of any
Transaction  Document  (other than the Ship Mortgage) or any Head Lease Document
in  any  manner  that would have an adverse effect on the rights or interests of
Deepwater without the prior written consent of Deepwater, or (iii) amend, modify
or  supplement  the  Ship  Mortgage  without  Deepwater's prior written consent.

     (i)     Liens. None of  the Investment Trust  Beneficiary,  either  Trustee
             -----
(in  its  individual  capacity  or  as  beneficiary  or  trustee as the case may
be)  nor  the  Investment  Trust  shall  create  or  suffer  to exist (and shall
discharge  promptly) any Trust Lien; provided, however, that such Trustee or the
                                     --------  -------
Investment  Trust  shall  not  be required to remove a Trust Lien if it is being
contested  pursuant  to a Permitted Contest and is bonded to the satisfaction of
Deepwater.

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

<PAGE>
     (k)     Quiet Enjoyment.  So long as no Charter Event of Default shall have
             ---------------
occurred  and be continuing and Deepwater shall have received no notice thereof,
none  of  the  Investment  Trust Beneficiary, either Trustee (in its individual,
beneficiary  or  trustee capacities as the case may be) nor the Investment Trust
shall  take  any  action to interfere with or otherwise disturb Deepwater's, its
agents' or its permitted subcharterers' full use and possession of the Drillship
or  do or cause to be done any act which would deprive Deepwater, its agents, or
its  permitted  subcharterers of the full use and possession of the Drillship on
the  terms  provided  for  in  the  Transaction  Documents.

     (l)     Notices.  The  Charter Trustee shall deliver a copy of any notices,
             -------
financial  statements  or  any  other documents, received by the Charter Trustee
from  Deepwater,  any guarantor under the Transocean Guaranty or Conoco Guaranty
or  any  Drilling Party, to each Funding Participant at its address set forth in
Schedule  2.
-----------

     (m)     Compliance  by  Charter  Trustee.  Subject  to the terms of Section
             --------------------------------                            -------
12.13,  the  Investment  Trust  agrees  that  it  shall not instruct, or vote to
-----
instruct,  the  Investment  Trust Beneficiary or the Charter Trustee to take any
action  inconsistent  with,  contrary  to  or  in  violation  of the Transaction
Documents  or  the  Charter  Trustee's  obligations  thereunder, and each of the
Investment Trust and Investment Trust Beneficiary agrees that it shall instruct,
or  vote  to  instruct,  the  Charter  Trustee  to  take  any affirmative action
necessary  to  satisfy  the  Charter  Trustee's  obligations  under the Drilling
Consent  (including  any  obligation  to  enter  into  an  assumption agreement,
replacement  drilling  contract  or  similar  arrangement  and with respect to a
Non-Defaulting  Drilling  Party,  the  Cross-Default  cure  provision  and  the
assignment  of  rights  and  interests  upon  election  and  satisfaction of the
Purchase  Option,  all  in  accordance  with the terms of the Drilling Consent).

     SECTION  6.3  Covenants  of  the  Funding  Participants.
                   -----------------------------------------

     Each  Funding  Participant,  as  applicable,  individually and not jointly,
covenants  as  follows:

     (a)     Trust  Agreements.  Without  prejudice to any right of the Trustees
             -----------------
under  the  Trust  Agreements  to  resign  as  Trustees  or the Investment Trust
Beneficiary  to  resign  as  Investment  Trust  Beneficiary, or the right of the
Funding  Participants  under the Trust Agreements to remove the Trustees, and in
each  case  subject  to  the  terms  of  the Transaction Documents, such Funding
Participant  hereby  agrees  with  Deepwater  (i) not to terminate or revoke the
trusts  created  by  the  Trust Agreements before the later of the expiration or
termination  of the Charter Term or the payment in full of the obligations under
the  Certificates  and  the  Notes,  and  (ii) not to amend, modify, supplement,
terminate  or  revoke  or  otherwise  modify  any  provision  of any Transaction
Document  or  any  Head  Lease Document in any manner that would have an adverse
effect  on the rights or interests of Deepwater, the Drilling Parties, Conoco or
Transocean without the prior written consent of Deepwater, the Drilling Parties,
Conoco  or  Transocean,  respectively.

     (b)     Compliance by Charter Trustee and Investment Trust.  Subject to the
             --------------------------------------------------
terms  of  Section  12.13,  each  Funding  Participant  agrees that it shall not
           --------------
instruct,  or vote to instruct, the Charter Trustee, the Investment Trust or the
Investment  Trust  Beneficiary to take any action inconsistent with, contrary to
or  in  violation  of  the Transaction Documents or the Charter

<PAGE>
Trustee's  or  the  Investment  Trust's  or  the  Investment Trust Beneficiary's
obligations  thereunder,  and  each  Funding  Participant  agrees  that it shall
instruct,  or vote to instruct, the Investment Trust, the Charter Trustee or the
Investment Trust Beneficiary to take any affirmative action necessary to satisfy
the  Investment  Trust's  and  the  Charter Trustee's and the Investment Trust's
Beneficiary's  obligations  under the Drilling Consent (including any obligation
to  enter into an assumption agreement, replacement drilling contract or similar
arrangement  and  with  respect  to  a  Non-Defaulting  Drilling  Party,  the
Cross-Default  cure  provision  and  the assignment of rights and interests upon
election  and  satisfaction  of  the Purchase Option, all in accordance with the
terms  of  the  Drilling  Consent).

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

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

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

     (f)     Securities.  It shall not, nor shall it permit anyone authorized to
             ----------
act  on  its behalf to, take any action which would subject the issuance or sale
of  any  Certificates, Notes or Commercial Paper Notes, or any security or lease
the  offering  of  which,  for  purposes  of  the  Securities  Act  or any state
securities  laws,  would  be  deemed  to  be  a part of the same offering as the
offering  of  the  aforementioned  items,  to  the  registration requirements of
Section  5  of  the  Securities  Act  or  any  state  securities  laws.

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

     (a)     Bankruptcy.  Such  Member agrees that it shall not (i) commence any
             ----------
case,  proceeding  or  other  action  under  any  existing  or future law of any
jurisdiction,  domestic  or  foreign,  relating  to  bankruptcy,  insolvency,
reorganization,  arrangement,  winding-up,

<PAGE>
liquidation,  dissolution, composition or other relief with respect to Deepwater
or  its  debts; (ii) seek appointment of a receiver, trustee, custodian or other
similar  official  for  Deepwater  or  for  all  or  any substantial part of its
property;  or  (iii)  vote  its  interest  as  a  member  of Deepwater to, or to
otherwise,  cause  Deepwater  to  file  a voluntary petition in bankruptcy or an
answer  seeking  reorganization in a proceeding under any bankruptcy, insolvency
or  similar  laws  or an answer admitting the material obligations of a petition
filed  against  Deepwater  in  any  such  proceeding.

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

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

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

     (e)     Securities.  It shall not, nor shall it permit anyone authorized to
             ----------
act  on  its behalf to, take any action which would subject the issuance or sale
of  any  Certificates, Notes or any security or lease the offering of which, for
purposes  of the Securities Act or any state securities laws, would be deemed to
be  a  part of the same offering as the offering of the aforementioned items, to
the  registration  requirements  of Section 5 of the Securities Act or any state
securities  laws.

     SECTION  6.5  Hedging  Agreements.  At  any time after the Closing Date, if
                   -------------------
Deepwater  has  arranged  for  one  or  more interest rate swaps in an aggregate
notional  principal  amount  of  up to $195,000,000 in substantially the form of
Exhibit  L-1 hereto (the "Hedging Agreements") to be entered into by one or more
------------              ------------------
Hedging  Agreement  Counterparties, then upon the written request from Deepwater
the  Charter  Trustee shall enter into such Hedging Agreements and, concurrently
therewith,  Deepwater  and  the  Charter  Trustee  shall  enter into one or more
matching  interest  rate  swaps  in substantially the form of Exhibit L-2 hereto
                                                              -----------
(the  "Deepwater  Hedging  Agreements");  provided that, at the time any Hedging
       ------------------------------     -------- ----
Agreements  are  entered  into  after  the  Effective  Date, each of the Hedging
Agreement  Counterparties shall be a Funding Participant or an Affiliate thereof
and  each  of  the  Hedging  Agreement  Counterparties  shall  have  executed
acknowledgments  to the Depository Agreement, the Charter Trustee Assignment and
any  other  appropriate  Transaction  Document.  The  Charter  Trustee is hereby
instructed  and  agrees  to  deposit  all  amounts  owed  to Deepwater under the
Deepwater  Hedging  Agreements  (the "Deepwater Hedge Payments") and all amounts
                                      ------------------------
paid  to the Charter Trustee under the Hedging Agreements with the Depository to
be  applied  pursuant to the Depository Agreement, as applicable.  All Deepwater
Hedge  Payments

<PAGE>
deposited  pursuant  to  the  preceding sentence shall satisfy, to the extent so
deposited,  the  obligations  of the Charter Trustee under the Deepwater Hedging
Agreements. All payments made to the Hedging Agreement Counterparties of amounts
owed  to  the  Hedging  Agreement  Counterparties  under  the Hedging Agreements
pursuant to the Depository Agreement shall satisfy the corresponding obligations
of Deepwater under the Deepwater Hedging Agreements. If a Responsible Officer of
Deepwater  has  Actual Knowledge of a Charter Event of Default or Event of Loss,
Deepwater  shall  promptly  give notice thereof to each of the Hedging Agreement
Counterparties.  In  addition,  Deepwater  shall  provide to each of the Hedging
Agreement  Counterparties  a  copy of any notice of its election to exercise its
Special  Purchase  Right  under  Section 16.4 of the Master Charter. The Charter
Trustee  shall provide to each of the Hedging Agreement Counterparties a copy of
any  notice  given  to  Deepwater  under  Article  XVI  of  the  Master Charter.

     SECTION  6.6  [Intentionally  Omitted].

     SECTION  6.7  Charter Extension Option.  In the event that Deepwater elects
                   ------------------------
the  Charter  Extension  Option  in  accordance  with Section 20.2 of the Master
Charter,  Deepwater  may,  in  its sole discretion, elect to replace any Funding
Participant  that does not submit an offer to extend or whose offer to extend is
rejected  by Deepwater by having a Replacement Funding Participant purchase such
non-consenting Funding Participant's interest in accordance with this Agreement.
Replacement  of a Funding Participant by a Replacement Funding Participant shall
be  accomplished  in  accordance  with  Section  4.4.
                                        ------------

     SECTION  6.8  Excessive  Use  Indemnity.  In  the  event that (a) Deepwater
                   -------------------------
elects the Return Option and (b) after paying to the Charter Trustee all amounts
due  under  Section 20.3 of the Master Charter, including Net Sales Proceeds and
the  Residual  Guaranty  Amount, the Charter Trustee has not received sufficient
funds  to  reduce the Charter Balance (excluding any Purchasing Party Amount) to
zero,  then  Deepwater  shall  deliver  a  report  from an independent appraiser
acceptable  to the Majority Funding Participants establishing whether or not the
decline  in  the  fair  market  value of the Drillship from the anticipated fair
market value of the Drillship as of the Scheduled Charter Expiration Date in the
Appraiser's  report  delivered  pursuant  to  Section  3.2(f)  of  the  Original
Participation  Agreement  was due to wear and tear on the Drillship in excess of
ordinary  wear  and  tear.  Deepwater  shall pay to the Charter Trustee promptly
after  receipt  of  such  report  an  amount equal to the amount, if any, of the
decline  in  the  fair  market  value  of  the  Drillship that the appraiser has
attributed to such excess wear and tear; provided, however, that the amount owed
                                         --------  -------
by Deepwater pursuant to this Section 6.8 shall in no event exceed the amount of
                              -----------
funds  necessary  to  reduce the Charter Balance (excluding any Purchasing Party
Amount)  to  zero  and  to  pay  all  accrued  and  unpaid  Charter Return after
Deepwater's payment of all amounts due under Section 20.3 of the Master Charter.
The  appraiser's  determination shall be absolute and final and not contested by
any  of  the  parties  hereto,  absent  manifest  error.

<PAGE>
                                    SECTION 7

                               CERTAIN PROCEDURES

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

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

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

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

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

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

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

     SECTION 7.3  Funding Losses.  Deepwater shall reimburse each Affected Party
                  --------------
and  hold  each  Affected  Party  harmless  from  any direct loss or expense (as
opposed  to  consequential loss or expense) which the Affected Party may sustain
or  incur  as a consequence of: (a) the failure of Deepwater to make on a timely
basis  any  payment which it is required to make under the Transaction Documents
which  is  to  be  applied  to  the payment of principal of any Funding; (b) the
failure  of  Deepwater  to  accept,  continue  or  convert  the  proceeds of any
Contribution  or Advance paid to the Charter Trustee or Investment Trust, as the
case may be after Deepwater has given (or is deemed to have given) a Refinancing
Request;  (c)  the failure of Deepwater to make any payment which it is required
to make under the Transaction Documents which is to be applied to the prepayment
of  any  Funding  in  accordance  with  any  notice  delivered  pursuant to this
Agreement  or  any  Transaction  Document;  (d)  the prepayment or other payment
(including  after  acceleration  thereof)  of a Funding on a day that is not the
last  day  of the relevant Return Period; (e) the sale or transfer of a Series A
Charter  Trust  Certificate  or  Note  pursuant to Sections 4.4, 7.7 or 9.4, the
                                                   ------------  ---    ---
automatic  conversion of any Base Rate Funding to an Alternate Rate Funding or a
conversion  of  a Funding bearing interest at the CP Rate to a Base Rate Funding
or  Alternate  Rate  Funding  on  a day that is not the last day of the relevant
Return  Period,  including any such loss or expense arising from the liquidation
or  reemployment  of  funds obtained by it to maintain its Base Rate Fundings or
from fees payable to terminate the deposits from which such funds were obtained;
or (f) the prepayment or other payment (including after acceleration thereof) of
a  Conduit  Loan  on  a  day  other  than when due.  For purposes of calculating
amounts  payable by Deepwater to the Affected Party other than the Conduit under
this  Section 7.3 except with respect to clause (f) above and under Sections 2.4
      -----------                                                   ------------
and  2.8,  each  Base  Rate  Funding made by an Affected Party (and each related
     ---
reserve,  special  deposit or similar requirements) shall be

<PAGE>
conclusively  deemed  to  have  been funded at the LIBOR used in determining the
applicable Return Rate for such Base Rate Funding by a matching deposit or other
borrowing  in  the interbank Eurodollar market for a comparable amount and for a
comparable  period,  whether or not such Base Rate Funding is in fact so funded.

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

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

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

     SECTION  7.7  Substitution  of  Funding  Participants; Change in Applicable
                   -------------------------------------------------------------
Office; Prepayments.  Upon the receipt by Deepwater from any Funding Participant
-------------------
(an  "Affected  Funding  Participant") of a claim for compensation under Section
      ------------------------------                                     -------
7.2,  Deepwater  may:  (i)  request  the  Affected  Funding  Participant  to use
---
commercially  reasonable  efforts  to  obtain  a  replacement  bank or financial
institution  satisfactory  to  Deepwater (a "Substitute Funding Participant") to
                                             ------------------------------

<PAGE>
acquire  and  assume  all  or  a  ratable  part  of all of such Affected Funding
Participant's Certificate Purchaser Amount or Lender Amount, as the case may be,
and  Liquidity  Purchaser Commitment Amount and Facility Loan Commitment Amount,
as  the  case  may  be,  so long as the Affected Funding Participant is paid its
Certificate  Purchaser  Amount or Lender Amount, as the case may be, accrued and
unpaid Charter Return on such amount, any funding losses incurred by it pursuant
to  Section 7.3 as a result of the substitution and any other accrued and unpaid
    -----------
amount owed to it by Deepwater under the Transaction Documents; (ii) request one
or  more of the other Funding Participants, as applicable, to acquire and assume
all  or part of such Affected Funding Participant's Certificate Purchaser Amount
or  Lender Amount, as the case may be, and Liquidity Purchaser Commitment Amount
and Facility Loan Commitment Amount, as the case may be, so long as the Affected
Funding  Participant  is paid its Certificate Purchaser Amount or Lender Amount,
as  the  case  may  be,  accrued  and  unpaid Charter Return on such amount, any
funding  losses  incurred  by  it  pursuant  to  Section  7.3 as a result of the
                                                 ------------
substitution  and  any  other  accrued and unpaid amount owed to it by Deepwater
under  the  Transaction  Documents;  (iii)  designate  a  Substitute  Funding
Participant  and  require  the  Affected  Funding Participant to sell all of its
interests  in its Certificate Purchaser Amount or Lender Amount, as the case may
be,  and  Liquidity  Purchaser  Commitment  Amount  and Facility Loan Commitment
Amount, as the case may be, to such Substitute Funding Participant for an amount
equal  to its Certificate Purchaser Amount or Lender Amount, as the case may be,
accrued and unpaid Charter Return, any funding losses incurred by it pursuant to
Section  7.3  as  a  result of the substitution and all other accrued and unpaid
------------
amounts  owed  to  it by Deepwater under the Transaction Documents; (iv) request
the  Affected  Funding Participant to designate a different Applicable Office if
such  designation  will  avoid  the  need  for,  or  reduce  the amount of, such
compensation  and  will  not  be  illegal  or  otherwise  disadvantageous to the
Affected  Funding Participant; or (v) make payments to the Charter Trustee which
are  equal  to  the amounts necessary for the Charter Trustee to prepay all or a
portion  of  the  Certificate Purchaser Amount or Lender Amount, as the case may
be,  of  the  Affected  Funding Participant Purchaser, together with accrued and
unpaid  Charter  Return attributable to the amount being prepaid and any funding
losses incurred by the Affected Funding Participant pursuant to Section 7.3 as a
                                                                -----------
result  of the prepayment; provided that in the case of clauses (i), (ii), (iii)
                           -------- ----                ------- ---  ----  -----
or  (iv) above, if such Substitute Funding Participant is a Liquidity Purchaser,
    ----
such  action  shall  be  subject  to approval  by the Rating Agencies rating the
Commercial  Paper  Notes  and  the  applicable  Administrator and subject to the
                                                              ---
provisions  of  each respective LAPA; provided further, that (i) any replacement
                                      -------- -------
of  the  Conduit (Liberty) shall not be effective unless The Bank of Nova Scotia
is  also  replaced as a Liquidity Purchaser, (ii) any replacement of The Bank of
Nova  Scotia  shall  not  be  effective  unless  the  Conduit  (Liberty) is also
replaced, (iii) any replacement of the conduit (Paradigm) shall not be effective
unless Westdeutsche Landesbank Girozentrale, New York Branch is also replaced as
a  Liquidity  Purchaser  and  (iv)  any  replacement  of Westdeutsche Landesbank
Girozentrale,  New  York  Branch as a Liquidity Purchaser shall not be effective
unless  the  Conduit  (Paradigm) is also replaced; provided further, that in the
                                                   -------- -------
event  that  Conduit  (Liberty)  is  replaced  pursuant to this Section 7.3, (i)
Conduit (Hatteras) shall, subject to approval from the Rating Agencies, increase
its  Conduit  Loan  Amount  under  the  Loan Agreement in an amount equal to the
portion  of  Bank of America N.A.'s Facility Loan Commitment Amount with respect
to  Conduit  (Liberty)  and (ii) Bank of America N.A. shall, subject to approval
from  the  Rating  Agencies,  increase its Liquidity Purchaser Commitment Amount
with  respect  to  Conduit  (Hatteras)  in  an  amount  equal  to its terminated
Liquidity  Purchaser  Commitment  Amount with respect to Conduit (Liberty).  The

<PAGE>
Affected  Funding  Participant  shall  take  any commercially reasonable actions
necessary  to  carry  out  a request or election made by Deepwater in accordance
with  this Section 7.7 at Deepwater's sole cost and expense.  Any designation of
           -----------
a  Substitute Funding Participant under this Section 7.7 shall be subject to the
                                             -----------
prior  written  consent  of  the  Charter  Trustee  which  consent  shall not be
unreasonably  withheld,  delayed  or  conditioned.

     SECTION  7.8  Legal  and  Tax  Representation.  Deepwater  acknowledges and
                   -------------------------------
agrees that none of the Trustees, the Investment Trust, any Agent or any Funding
Participant  has  made  any  representation  or  warranty  concerning  the  tax,
accounting  or  legal  characteristics  of  the  Charter  or  any  of  the other
Transaction  Documents,  and that Deepwater has obtained and relied on such tax,
accounting  and  legal  advice  regarding  the Charter and the other Transaction
Documents  as  its  deems  appropriate.  Each of the Charter Trustee, Investment
Trust  and each Funding Participant acknowledges and agrees that it has obtained
and  reviewed  the  Transaction  Documents  and  the  various items delivered in
connection therewith, and on such tax, accounting and legal advice regarding the
Charter  and  the  other  Transaction  Documents  as  it  deems  appropriate.

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

<PAGE>
funded  in  an amount equal to the applicable Charter Return; provided, however,
                                                              --------  -------
that Deepwater shall not be deemed to be a Certificate Purchaser for purposes of
the  definition  of  "Majority  Funding  Participants".

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

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

          (ii)     [Intentionally  Omitted];

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

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

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

                                    SECTION 8

                          PAYMENT OF CERTAIN EXPENSES

     SECTION  8.1  Transaction  Expenses.  In  the  event  that the transactions
                   ---------------------
contemplated hereby are consummated, Deepwater shall pay or cause to be paid all
Transaction  Expenses in accordance with Sections 3.2(i) and 4.2(j), all Fees in
                                         ---------------     ------
accordance  with Sections 2.14 and 4.2(j) and all other fees, expenses and costs
                 -------------     ------
in  accordance  with  the  Transaction  Documents.  Deepwater  may  pay any such
Transaction  Expenses  out  of  the  proceeds of Contributions and Advances made
available  in  accordance  with  Section  2.3.  Any Transaction Expenses or Fees
                                 ------------

<PAGE>
submitted to Deepwater which were not paid on the Refinancing Date shall be paid
by  Deepwater  promptly  after  receipt  of  an  invoice  therefor.

     SECTION  8.2  Transaction Expenses if Closing does not Occur.  In the event
                   ----------------------------------------------
that  the  transactions  contemplated  hereby are not consummated for any reason
Deepwater  shall  promptly  pay  all  of  the  Transaction Expenses submitted to
Deepwater  as  they  become  due.

     SECTION 8.3  On-Going Expenses.  Deepwater shall, promptly upon demand, pay
                  -----------------
or reimburse the Charter Trustee, the Investment Trust, each Affected Party, the
Agents  or  the  other  Persons  entitled  thereto  for  all other out-of-pocket
expenses  (including  counsel  fees) reasonably incurred in connection with: (a)
entering  into,  or  the  giving  or  withholding  of,  any  future  amendments,
supplements,  waivers  or consents with respect to the Transaction Documents, to
the  extent  required  by  the  terms of the Transaction Documents, the Services
Agreements,  the  Drilling  Contracts, the Rig Sharing Agreement or the Drilling
Contract  Guaranties,  or requested or consented to by Deepwater (whether or not
consummated);  (b)  the  negotiation  and  documentation of any restructuring or
"workout"  whether or not consummated, of any Transaction Document to the extent
requested  or  consented  to  by  Deepwater;  (c)  the  enforcement,  attempted
enforcement  or  preservation  of  the  rights or remedies under the Transaction
Documents,  the  Services  Agreements,  the  Drilling Contracts, the Rig Sharing
Agreement  or the Drilling Contract Guaranties; (d) further assurances requested
by Deepwater pursuant to Section 12.11; (e) any transfer by the Charter Trustee,
                         -------------
the  Investment  Trust  or  any  Funding  Participant  of  any  interest  in the
Transaction  Documents during the continuance of a Charter Event of Default; (f)
the  ongoing  fees  (if  any)  and  expenses  of any Agent, the Trustees and the
Depository  pursuant  to separate agreements entered into by Deepwater with such
Persons;  (g)  the costs and expenses associated with the Documentation Date and
the  Refinancing  Date,  including  fees  and  expenses  of  U.S. and Panamanian
counsel,  recordation and recording fees and all other out-of-pocket expenses of
the parties hereto in connection with the Documentation Date and the Refinancing
Date  and the transactions contemplated herein (h) any reasonable legal fees and
expenses  incurred  by  a  single  counsel  to  any  Conduit  and its Applicable
Liquidity  Purchasers and related Agents in connection with the extension of the
LAPAs,  and  (i)  any  fees  and  expenses  incurred  by each Liquidity Agent in
connection with establishing and maintaining a segregated trust account pursuant
to  the applicable sections of the LAPA it is party to (provided, that Deepwater
                                                        --------
shall  only  be  responsible  for  fees and expenses of one U.S. counsel and one
Panamanian  counsel for all of the Funding Participants (other than the Conduits
in  the  case  of the U.S. counsel), the Agents, the Trustees and the Investment
Trust).

                                    SECTION 9

          RESTRICTIONS ON TRANSFERS; CHANGE OF CONTROL; MEMBER TRANSFER

     SECTION  9.1  Restrictions  on  the  Funding  Participants.  A  Funding
                   --------------------------------------------
Participant,  including a Purchasing Party, may transfer all or a portion of its
interest  in  its  Series A Charter Trust Certificates, Notes or Commitments, as
the  case  may  be,  in  the  following  circumstances:

     (a)     in  the  case  of  a  Funding  Participant that is not a Purchasing
Party,  such Person obtains the prior written consent of Deepwater and transfers
its  interests  in  its  Series  A  Charter

<PAGE>
Trust  Certificates,  Notes,  Loans  or  Commitments,  as  the case may be, to a
transferee  that  has  executed  an  Assignment  and  Assumption  Agreement  in
substantially  the form of Exhibit K by which such transferee assumes the duties
                           ---------
and  obligations  of  the transferring Funding Participant; provided that if any
                                                            -------- ----
Conduit  transfers  its  interests  in  its  Notes,  Loans  or Commitments to an
Affiliate  or  any  Program  Support  Provider  or  if  any  Liquidity Purchaser
transfers  its interests in its Notes, Loans or Commitments to its Conduit, such
Funding  Participant  will not be restricted by the provisions set forth in this
Section  9.1;
------------

     (b)     in  the case of any Certificate Purchaser, including any Purchasing
Party,  such  Person  transfers all or a portion of its interest in its Series A
Charter  Trust  Certificates  and  the  following  conditions  are  satisfied:

          (i)     such  transfer  is  equal to such Certificate Purchaser's then
     outstanding  Certificate  Purchaser  Amount;

          (ii)     if  the transferee is an Affiliate of a Certificate Purchaser
     and  does  not otherwise qualify under clause (iii) below, such Certificate
     Purchaser  unconditionally  and  irrevocably  guarantees  the  payment  and
     performance  obligations  of  the  transferee;

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

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

               (1)     the  transferee  or  guarantor  of  the  payment  and
          performance  obligations  of the transferee, if any, has a capital and
          surplus  of  at  least  $400  million  or a net worth of at least $150
          million;

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

               (3)     Deepwater, Conoco and Transocean have not previously been
          involved  in  material  litigation  with  the  proposed  transferee or
          guarantor  of  the  payment  and  performance  obligations  of  the
          transferee,  if  any,  and  are  not  currently  involved  in material
          litigation  proceedings  with  the proposed transferee or guarantor of
          the  payment  and  performance  obligations of the transferee, if any;

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

               (5)     neither  such  transferee  or  guarantor  nor  any of its
          Affiliates  is  a  Competitor;  and

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

     (c)     in  the  case  of  any  Liquidity  Purchaser, such person meets the
requirements  contained  in  Section  10  of  the  applicable  LAPA.

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

     Notwithstanding  any  other  provision  in  this  Section  9.1, any Funding
                                                       ------------
Participant may at any time create a security interest in, or pledge, all or any
portion  of its rights under its Series A Charter Trust Certificate or Notes, as
the  case  may  be,  together with the rights evidenced by such certificates, in
favor of (i) any Federal Reserve Bank in accordance with Regulation A of the FRB
or  U.S.  Treasury Regulation 31 C.F.R. Section 203.14, and (ii) with respect to
any  Conduit,  any  Program  Support  Provider, and such Person may enforce such
pledge  or  security  interest  in  any  manner  permitted under Applicable Law.

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

     SECTION  9.3  Expenses.  All  reasonable  and documented costs and expenses
                   --------
(including  counsel fees and disbursements) of the parties thereto in connection
with  any transfer permitted by Section 9.1 or Section 9.2 (excluding reasonable
                                -----------    -----------
out-of-pocket  costs  and  expenses relating to any transfer by a Conduit, which
such  costs  and expenses shall be the responsibility of Deepwater) shall be the
responsibility  of  the  transferor.

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

     If  a  Prepayment  Change  of  Control Trigger Event occurs, (i) the Person
suffering such Prepayment Change of Control Trigger Event must notify in writing
(the  "Prepayment  Change  of  Control  Trigger  Event  Notice"),  each  Funding
       -------------------------------------------------------
Participant  and the Charter Trustee of the occurrence of such Prepayment Change
of  Control  Trigger  Event within ten (10) days of the occurrence of such event
and  (ii)  each Funding Participant shall have the right, by written notice (the
"Prepayment  Notice") delivered to Deepwater, the relevant Purchasing Party, the
 ------------------
Charter  Trustee  and  the  Investment  Trust  within  10 days of receipt of the
Prepayment  Change  of  Control

<PAGE>
Trigger  Event Notice, to require such Purchasing Party to purchase (x) (1) such
Funding  Participant's  Conoco  Series A Charter Trust Certificates, if any, and
(2)  40%  of  such  Funding  Participant's Notes (where Conoco is the Purchasing
Party),  if  any,  or  (y)  (1)  such  Funding Participant's Transocean Series A
Charter  Trust  Certificates,  if any, and (2) 60% of such Funding Participant's
Notes (where Transocean is the Purchasing Party), if any, on a date set forth in
the  Prepayment  Notice  which  shall  be  no more than 7 Business Days from the
delivery of the Prepayment Notice to the Purchasing Party. On the date set forth
in  the  Prepayment  Notice,  the  Purchasing  Party  shall  make  payments  in
immediately  available  funds to the Charter Trustee in its individual capacity,
as  agent for the Purchasing Party, which will remit such amounts to the selling
Funding  Participant(s)  in an aggregate amount equal to (i) where Transocean is
the  Purchasing Party, (x) in exchange for the Transocean Series A Charter Trust
Certificates  of  a  selling  Certificate  Purchaser,  the outstanding principal
balance  of  the  Transocean  Series  A  Charter  Trust  Certificates  of  such
Certificate  Purchaser,  together  with  the  accrued  and unpaid Charter Return
thereon  and  any funding losses incurred by such Certificate Purchaser pursuant
to Section 7.3 as a result of the prepayment of such Transocean Series A Charter
   -----------
Trust  Certificates  and  (y)  60%  of the then outstanding Lender Amount of the
applicable  Lender,  together with the accrued and unpaid Charter Return thereon
and  any  funding  losses  incurred  by the Lenders pursuant to Section 7.3 as a
                                                                -----------
result of the prepayment of the Notes and (ii) where Conoco is Purchasing Party,
(x)  in  exchange  for  the  Conoco  Series A Charter Trust Certificates of such
Certificate  Purchaser, the outstanding principal balance of the Conoco Series A
Charter  Trust  Certificates  of  such  Certificate Purchaser, together with the
accrued and unpaid Certificate Return thereon and any funding losses incurred by
such Certificate Purchaser pursuant to Section 7.3 as a result of the prepayment
                                       -----------
of  such  Conoco  Series  A  Charter  Trust Certificates and (y) 40% of the then
outstanding  Lender  Amount  of the applicable Lender, together with the accrued
and unpaid Charter Return thereon and any funding losses incurred by the Lenders
pursuant  to Section 7.3 as a result of the prepayment of the Notes (the amounts
             -----------
specified  in  clauses  (i) and (ii), collectively being, the "Change of Control
               ------------     ----                           -----------------
Prepayment  Amount").  The  Purchasing  Party  shall make payment to the Charter
------------------
Trustee  in  its  individual  capacity,  in  immediately available funds, in the
amount  of the Change of Control Prepayment Amount. Upon receipt of such payment
from  the  Purchasing  Party,  the  Charter Trustee, as agent for the Purchasing
Party, shall pay the Series A Portion of the Change of Control Prepayment Amount
to  the  applicable Certificate Purchasers requiring prepayment pursuant to this
Section 9.4 and shall pay the Lender Portion of the Change of Control Prepayment
-----------
Amount  to  the  Investment  Trust, which, in turn, shall pay such amount to the
applicable  Lenders  requiring  prepayment  pursuant  to  this  Section  9.4.
                                                                ------------

     The Commitments and any outstanding Certificate Purchaser Amounts or Lender
Amount  of  any  Purchasing Party receiving its interest in the Series A Charter
Trust  Certificates  and/or  Notes  pursuant  to  this  Section 9.4 shall not be
                                                        -----------
counted  in  determining  any  actions  which  require the vote of the "Majority
Funding  Participants," nor shall a Purchasing Party, to the extent its interest
is  acquired  pursuant  to this Section 9.4, be considered a Funding Participant
                                -----------
for  purposes  of  any  voting  provisions  of  the  Transaction  Documents.  In
addition,  a  Purchasing  Party,  to  the extent it receives its interest in the
Series  A  Charter Trust Certificates and/or Notes pursuant to this Section 9.4,
                                                                    -----------
shall  not  be  considered a "Funding Participant" for the purposes of receiving
distributions  under the Depository Agreement but shall instead receive payments
thereunder  in  respect  of  the Purchased Interest only as a "Purchasing Party"
thereunder.  As  a  point  of  clarification only, except to the extent provided
above,  the  outstanding  Certificate

<PAGE>
Purchaser  Amount  relating to the Series A Charter Trust Certificates purchased
by  the  Purchasing  Party  shall continue to be deemed a "Certificate Purchaser
Amount" and shall be included as a part of the Certificate Purchaser Balance and
the outstanding Lender Amounts relating to the Notes purchased by the Purchasing
Party shall continue to be deemed "Lender Amounts" and shall be included as part
of  the "Lender Balance" and, as such, each shall be included in the calculation
of  any  Purchase  Option  Price,  Termination  Value, Residual Guaranty Amount,
Charter  Balance or other amount having the Certificate Purchaser Balance and/or
Lender  Balance,  as  the  case  may  be,  as a component thereof. The foregoing
restrictions  and  limitations  with respect to voting rights and the receipt of
distributions  under  the  Depository Agreement are applicable only in so far as
the  Purchasing  Party  (or  any  of  its Affiliates) remains the holder of such
Purchased  Interest.  Any  transferee  of  a  Purchasing  Party  (other  than  a
transferee  which is, or is an Affiliate of, Conoco, Transocean or Deepwater) of
its Purchased Interest (i) shall become a "Funding Participant" for all purposes
under  the  Transaction  Documents, (ii) shall not be deemed to be a "Purchasing
Party"  and  (iii)  shall not be subject to any such restrictions or limitations
not  otherwise  applicable  to  a  Funding  Participant.  Transferees  which are
Affiliates  of  Conoco, Transocean or Deepwater following the transfer of all or
any  portion of a Purchased Interest shall be deemed to be Purchasing Parties to
the  extent  of  the  interest  transferred.

     If  either  Conoco  or  Transocean  is required to make purchases set forth
above  then  the following events shall automatically be deemed to have occurred
immediately  after  such  purchases:

     (i)            the  Rig  Sharing  Agreement  and  (a)  if Transocean is the
               Purchasing Party, the Transocean Charter, the R&B Falcon Drilling
               Contract  and  the  Transocean  Drilling  Contract Guaranty shall
               terminate  or  (b)  if Conoco is the Purchasing Party, the Conoco
               Charter,  the  Conoco  Drilling  Contract and the Conoco Drilling
               Contract  Guaranty  shall  terminate;

     (ii)           the  non-purchasing  party will be treated as having entered
               into  a  subcharter, substantially in the form attached hereto as
               Exhibit  M,  with the Purchasing Party imposing on the Purchasing
               ----------
               Party  the  same obligations it had under the terminated Drilling
               Contract  and  Rig  Sharing  Agreement;

     (iii)          the  non-purchasing  party shall have the right to exclusive
               possession  of  the  Drillship  for  the remainder of the Charter
               Term;  and

     (iv)           The  obligations of such Purchasing Party listed in Sections
               2(a)(i)(x)(A),  2(a)(i)(y)(A),  2(a)(ii)(A)(1),  2(a)(ii)(B)(1),
               2(a)(vi)  and  2(a)(v)  of  (a)  the  Transocean  Guaranty,  if
               Transocean is the Purchasing Party or (b) the Conoco Guaranty, if
               Conoco  is  the  Purchasing  Party,  shall  be  terminated.

     The  rights  and  obligations  imposed  under this Section 9.4 shall at all
                                                        -----------
times  be subject to the Special Purchase Right of Deepwater pursuant to Section
16.4  of  the  Master  Charter.

     SECTION 9.5  Member Transfer.  Any Member or its affiliates (the "Acquiring
                  ---------------                                      ---------
Member")  may  acquire  from  any  other  Member or its affiliates (the "Selling
------                                                                   -------
Member")  all or any
------

<PAGE>
part of the membership interest in Deepwater (a "Qualified Transfer") so long as
                                                 ------------------
(a)  at  such  time, no Charter Event of Default has occurred and is continuing;
(b)  such  Acquiring  Member  has  assumed all obligations of the Selling Member
under  its  existing  Drilling  Contract,  related  Charter Supplement, Drilling
Consent  and  Service  Agreements and the Transaction Documents to which it is a
party  pursuant  to  an  assignment  and  assumption agreement acceptable to the
Funding  Participants;  (c)  such  Acquiring  Member's Guarantor has assumed all
obligations  of  the  Guarantor related to the Selling Member under its Drilling
Contract  Guaranty  and,  as  applicable,  the  Conoco  Guaranty  or  Transocean
Guaranty;  and  (d)  such  Acquiring  Member  has  obtained  the consent of each
Participant  for such Qualified Transfer; provided, that Deepwater will have the
                                          --------
right  to  replace  any  Participant  that  does  not  consent to such Qualified
Transfer  pursuant  to  Section  4.4.
                        ------------

                                   SECTION 10

                                INDEMNIFICATION

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

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

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

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

     (d)     the  transactions  contemplated  by  the  Transaction  Documents;

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

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

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

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

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

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

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

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

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

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

     (e)     transfers  (direct  or indirect) by: (i) the Charter Trustee or the
Investment  Trust  of  either of their interests in the Drillship or any portion
thereof  (other  than any such transfer pursuant to Sections 15.2, 16.4, 20.1 or
20.3 of the Master Charter, Sections 4.2 or 4.4 of either Charter Supplement No.
1  or  Charter  Supplement  No.  2)  or (ii) a Funding Participant of all or any
portion  of  its  interest  in  the  Trust  Estate,  the Investment Trust or the
Transaction  Documents,  other  than (x) a transfer upon an exercise of remedies
after  a  Charter  Event  of  Default  has occurred and is continuing and either
Charter  Supplement  No.  1  or  Charter  Supplement  No. 2 has been declared in
default  or  (y)  transfers  of Commercial Paper Notes or by the Conduits to any
Program  Support  Providers;

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

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

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

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

     SECTION 10.3  Proceedings in Respect of Claims.  With respect to any amount
                   --------------------------------
that  Deepwater is requested by an Indemnified Party to pay by reason of Section
                                                                         -------
10.1,  such  Indemnified  Party shall, if so requested by Deepwater and prior to
----
any  payment,  submit  such additional information to Deepwater as Deepwater may
reasonably  request  and which is in the possession of such Indemnified Party to
substantiate  properly  the  requested  payment.  In  case  any  action, suit or
proceeding  shall  be  brought  against  any Indemnified Party in respect of any
Claim,  such  Indemnified  Party  shall  notify  Deepwater  of  the commencement
thereof,  and  Deepwater  shall  be entitled, at its expense, to participate in,
and,  to  the  extent  that Deepwater desires to, assume and control the defense
thereof;  provided,  however,  that Deepwater shall have acknowledged in writing
          --------   -------
its  obligation  to  indemnify such Indemnified Party in respect of such action,
suit  or proceeding under Section 10.1, such acknowledgment to be conditioned on
                          ------------
the  accuracy,  timeliness  and  completeness  of  the  information  provided to
Deepwater  by  such  Indemnified Party with respect to the Claim;  and, provided
                                                                        --------
further,  that Deepwater shall not be entitled to assume and control the defense
-------
of  any  such  action,  suit or proceeding if and to the extent that, (A) in the
reasonable  opinion  of  such  Indemnified  Party,  (x)  such  action,  suit  or
proceeding  involves  any possibility of imposition of criminal liability or any
material  risk  of material civil liability on such Indemnified Party or (y) the
control  of such action, suit or proceeding would involve a conflict of interest
(in which case each Indemnified Party may retain separate counsel at the expense
of  Deepwater), (B) such proceeding involves Claims not indemnified by Deepwater
which  Deepwater  and  the  Indemnified Party have been unable to sever from the
indemnified  claim(s),  or  (C)  a  Charter Event of Default has occurred and is
continuing.  Deepwater  shall  keep such Indemnified Party fully apprised of the
status  of  such  action,  suit or proceeding and shall provide such Indemnified
Party  with  all  information  with respect to such action suit or proceeding as
such  Indemnified  Party  shall  reasonably  request.  The Indemnified Party may
participate  in  a reasonable manner at its own expense and with its own counsel
in  any  proceeding  conducted  by  Deepwater  in accordance with the foregoing.

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

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

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

     SECTION  10.4  General  Tax  Indemnity. (a) Without regard  to  any  of the
                    -----------------------
exclusions  set  forth in Section 10.4(b), if any amount payable by Deepwater as
                          ---------------
Charter  Hire  (or by the Charter Trustee to the Investment Trust or any Funding
Participant)  under  the Transaction Documents or otherwise payable by Deepwater
under  the  Head  Lease  Documents  becomes subject to any Tax imposed by way of
withholding  at  the source, Deepwater shall hold harmless the Indemnified Party
against  such Tax, and, if such withholding is required, shall, at the same time
that  any  such  payment is due and payable, either (i) pay such Tax directly to
the  appropriate  taxing  authority, (ii) indemnify such Person for such Tax, or
(iii)  pay  an  additional amount, such that the net amount actually received by
each  Indemnified  Party  entitled  thereto,  free  and  clear  of,  and without
deduction  for,  any  and all Taxes imposed by withholding will equal the amount
then  due  absent such withholding and shall pay any additional Taxes payable in
respect  of such payment, indemnity or additional amount, as the case may be, by
each  Indemnified  Party. In the event Deepwater is required to make any payment
or  indemnity  pursuant to this paragraph in respect of withholding Taxes on any
payment  made  to  any  Indemnified  Party,  Deepwater  shall  not be treated as
responsible  for  such withholding Taxes (1) if such withholding Taxes would not
have  been imposed but for (x) the failure of the Indemnified Party or a Related
Indemnified  Party  to  be incorporated in the United States or any state in the
United  States  (it  being  understood that, for this purpose, the Charter Trust
shall  not  be treated as failing to be incorporated in the United States or any
state in the United States merely as a result of the organization of the Charter
Trust  under  the  laws of Panama) or (y) the amount payable to such Indemnified
Party  being  attributable to a permanent establishment of the Indemnified Party
or  a Related Indemnified Party in any jurisdiction other than the United States
(unless  such permanent establishment results solely from the location of all or
any  part of the Drillship in, such jurisdiction) (it being understood that, for
this  purpose,  amounts  payable  to the Charter Trustee shall not be treated as
attributable  to a permanent establishment of the Charter Trust in Panama merely
as  a  result  of the organization of the Charter Trust under the laws of Panama
and/or  the  making  of  payments  and the performance of its obligations by the
Charter  Trustee  in  accordance  with,  and as contemplated by, the Transaction
Documents  ("Permitted  Charter  Trustee  Acts")),  (2)  if such withholding Tax
             ---------------------------------
results  from a breach of any covenant or undertaking in Section 10.4(i) of such
                                                         ---------------
Indemnified Party or any of its Related Indemnified Parties, (3) with respect to
any  such  Tax imposed in respect of any transferee of such Indemnified Party to
the  extent of the excess of such Taxes over the amount of such Taxes that would
have  been imposed and indemnified hereunder had such original Indemnified Party
from  which  such  Indemnified  Party  derives  its interest not

<PAGE>
sold,  assigned,  transferred  or  otherwise disposed of all or a portion of its
interest  in  the  Drillship  or  Transaction  Documents (unless such transferee
acquired its interest pursuant to the transferor's exercise of remedies), (4) if
such  withholding  Tax results from (x) the gross negligence, willful misconduct
or  fraud of such Indemnified Party or any of its Related Indemnified Parties or
(y)  the  inaccuracy  or  breach  of a representation, warranty, covenant or any
undertaking of such Indemnified Party or any of its Related Indemnified Parties,
(5)  if  such  withholding  Taxes  are  imposed by a taxing authority of or in a
country  other  than the United States or Panama and would not have been imposed
but  for  activities,  property or operations of the Indemnified Party or any of
its  Related  Indemnified  Parties  that  are  unrelated  to  the  transactions
contemplated  by the Transaction Documents, or (6) if such withholding Taxes are
imposed  by  a taxing authority in Panama as a result of the Indemnified Party's
(or  a Related Indemnified Party's) direction that Deepwater make payments to an
account  located  in  Panama  (except  if such direction is made while a Charter
Event  of Default exists). If, for any reason, Deepwater is required to make any
payment  to  an  Indemnified  Party  or  to  a taxing authority on behalf of any
Indemnified  Party  pursuant  to  this  Section 10.4(a) with respect to, or as a
                                        --------------
result  of,  any  withholding Tax imposed with respect to any payment of Charter
Hire  by  Deepwater  (or  by  the Charter Trustee to the Investment Trust or any
Funding  Participant)  pursuant to the Transaction Documents or other payment by
Deepwater  under  the  Head  Lease  Documents,  which withholding Tax is not the
responsibility  of  Deepwater  under this Section 10.4(a), then such Indemnified
                                          ---------------
Party  shall  pay  to  Deepwater  on written demand an amount which equals on an
After-Tax  Basis such additional amount paid by Deepwater with respect to, or as
a  result  of,  such withholding Tax plus interest at (i) the Certificate Return
Rate  or  Loan  Return Rate, as the case may be, during the period commencing on
the  date  Deepwater shall have paid an amount pursuant to the first sentence of
this  paragraph  and  ending on the date Deepwater demands in writing payment of
such  amount pursuant to this sentence and (ii) the Overdue Rate from the period
commencing  five  Business Days following the date Deepwater shall have demanded
in  writing  such  payment to the date Deepwater actually receives such payment.

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

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

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

          (iii)     the  hire,  receipts,  income  or  earnings arising from the
     purchase,  financing, ownership, delivery, redelivery, leasing, subleasing,
     possession,  use,  operation,  return,

<PAGE>
     storage,  transfer  of title, sale or other disposition of the Drillship or
     any  part  thereof  or  interest  therein;

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

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

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

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

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

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

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

          (iii)     Taxes  imposed  on or against or payable by such Indemnified
     Party  to  the  extent  of the excess of such Taxes over the amount of such
     Taxes  that would have been imposed and indemnified hereunder had there not
     been  a  transfer  by  the  original  Indemnified  Party  (from  which such
     Indemnified  Party  derives its interest) of any interest

<PAGE>
     in  the  Drillship,  the  Certificates,  the  Notes,  the Trust Estate, the
     Investment Trust, any Indemnified Party or the Transaction Documents or the
     Head  Lease  Documents; except (x) if such transferee acquired its interest
     in connection with the exercise of remedies with respect to a Charter Event
     of Default or (y) to the extent necessary to make indemnity payments to the
     transferee  on  an  After-Tax  Basis;

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

          (v)     Taxes  resulting  from  (x)  the  gross  negligence,  willful
     misconduct  or  fraud  of  the  Indemnified  Party  or  any  of its Related
     Indemnified Parties (except as solely attributed to such Party by virtue of
     its  having  executed  the  Transaction  Documents),  (y) the inaccuracy or
     breach  of  a  representation,  warranty  or covenant under the Transaction
     Documents  or  the  Head Lease Documents or any undertaking required by the
     Transaction Documents or the Head Lease Documents of such Indemnified Party
     or any of its Related Indemnified Parties (unless such inaccuracy or breach
     is caused by Deepwater's breach of any representation, warranty or covenant
     under the Transaction Documents or a breach by Deepwater or an Affiliate of
     Deepwater  under  the  Head  Lease  Documents),  or  (z) in the case of any
     Indemnified  Party,  any  Liens attributable to such Indemnified Party or a
     Related  Indemnified  Party;

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

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

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

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

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

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

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

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

     (d)     Calculation  of  Payments.  Any  payment  that  Deepwater  shall be
             -------------------------
required  to make to or for the account of any Indemnified Party with respect to
any Tax that is subject to

<PAGE>
indemnification  under this Section 10.4 shall be paid on an After-Tax Basis. If
                            ------------
an  Indemnified  Party  or any Affiliate of such Indemnified Party who files any
tax  return  on  a  combined,  consolidated,  unitary or similar basis with such
Indemnified  Party  shall actually realize any saving of any Tax not indemnified
by  Deepwater pursuant to the Transaction Documents (by way of credit (including
any  foreign  tax  credit),  deduction,  exclusion  from income or otherwise) by
reason  of  any  amount  with  respect  to  which Deepwater has indemnified such
Indemnified  Party  pursuant  to  this Section 10.4, and such tax saving was not
                                       ------------
taken  into account in determining the amount payable by Deepwater on account of
such  indemnification, such Indemnified Party shall pay to Deepwater, so long as
no  Charter Event of Default shall have occurred and be continuing (but shall be
required to make such payment at such time as the Charter Event of Default shall
have  been  cured  or  at  the  time  Deepwater  shall have fulfilled all of its
obligations  arising  upon  such Charter Event of Default), within 30 days after
such  Indemnified Party shall have actually realized such tax saving, the amount
of  such  saving,  together with the amount of any tax saving resulting from any
payment  pursuant  to  this  sentence;  provided,  that  Deepwater  shall not be
                                        --------
entitled  to  receive  an  amount  in  excess  of all amounts previously paid by
Deepwater  pursuant  to  this  Section 10.4, to such Indemnified Party or to the
                               ------------
relevant  taxing  authority  on  behalf  of  such  Indemnified  Party  (less the
aggregate  amount  of  all prior payments by such Indemnified Party to Deepwater
under  this  Section  10.4(d))  (but any excess amount described in this proviso
             ----------------
shall  reduce  pro  tanto any amount that Deepwater is subsequently obligated to
               ---  -----
pay  to  such  Indemnified  Party  pursuant  to  Section  10.4).
                                                 --------------

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

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

<PAGE>
shall  be  taken  with  respect  to  such  claim  or  Tax without the consent of
Deepwater  before  the end of such shorter period. If, within 30 days of receipt
of  such  notice  from  the  Indemnified  Party  (or  such shorter period as the
Indemnified  Party  has  notified Deepwater is required by law or regulation for
the  Indemnified  Party  to  commence  such contest), Deepwater shall request in
writing  that  such  Indemnified  Party  contest the imposition of such Tax, the
Indemnified  Party  shall,  at  the  expense of Deepwater, in good faith contest
(including,  without  limitation,  by  pursuit of appeals), and shall not settle
without Deepwater's good faith consent (or (i) if such contest can be pursued in
the  name  of  Deepwater and independently from any other proceeding involving a
tax  liability,  other than a net income or withholding Tax, of such Indemnified
Party,  the  Indemnified  Party  shall,  at  Deepwater's  sole discretion, allow
Deepwater  to  contest,  (ii)  if  such contest involves a Tax, other than a net
income  or withholding Tax, which must be pursued in the name of the Indemnified
Party,  but  can  be pursued independently from any other proceeding involving a
tax  liability  of  such  Indemnified  Party,  the Indemnified Party shall allow
Deepwater  to  contest  in the name of the Indemnified Party unless, in the good
faith  judgment of the Indemnified Party, such contest by Deepwater could have a
material  adverse impact on the business or operations of the Indemnified Party,
in  which  case  the  Indemnified Party may control such contest or (iii) in the
case of any contest, the Indemnified Party may request Deepwater to contest) the
validity,  applicability  or  amount of such Taxes by, in the sole discretion of
the  Person  conducting  such  contest,  (i) resisting payment thereof, (ii) not
paying  the same except under protest, if protest is necessary and proper, (iii)
if  the  payment be made, using reasonable efforts to obtain a refund thereof in
appropriate  administrative  and judicial proceedings; or (iv) taking such other
action  as  is  reasonably  requested  by  Deepwater  from  time  to  time.

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

<PAGE>
decline  to  take  further action with respect to the contest of any claim for a
Tax  and may settle such claim, if such Indemnified Party shall waive its rights
to  any  indemnity  from Deepwater that otherwise would be payable in respect of
such  claim  (or  any  logically  related  claim) and shall pay to Deepwater any
amount previously paid or advanced by Deepwater pursuant to this Section 10.4(f)
                                                                 ---------------
other  than  clause  (A) of this paragraph (by way of indemnification or advance
             -----------
for  the  payment  of  a  Tax)  with  respect  to  such  Taxes.

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

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

     (h)     Reports.  Deepwater  will  provide  such  information  as  may  be
             -------
available to it and reasonably requested in writing by an Indemnified Party that
is  required  to  enable  an  Indemnified  Party  to  fulfill  its  tax  filing
requirements  with  respect  to the transactions contemplated by the

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

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

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

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

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

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

<PAGE>
                                   SECTION 11

                                     AGENTS

     SECTION  11.1  Appointment  of  Administrative  Agent  and Investment Trust
                    ------------------------------------------------------------
Beneficiary;  No  Duties.
------------------------

     (a)     Each  Funding  Participant  hereby  designates and appoints Bank of
America  as  administrative  agent  of  such  Funding  Participant  under  the
Transaction  Documents, and each Funding Participant irrevocably authorizes Bank
of  America  to act as the administrative agent for such Funding Participant, to
take such action on its behalf under the provisions of the Transaction Documents
and  to  exercise such powers and perform such duties as are expressly delegated
to  such  administrative  agent  by  the  terms  of this Agreement and the other
Transaction  Documents,  together  with  such  other  powers  as  are reasonably
incidental  thereto (together with any successors and assigns, in such capacity,
the  "Administrative  Agent").
      ---------------------

     (b)     Each  Funding  Participant  hereby  designates  and appoints Donald
Puglisi  as  investment  trust beneficiary of such Funding Participant under the
Transaction  Documents  and  Donald  Puglisi hereby accepts such designation and
appointment  and  hereby  agrees  to act as the investment trust beneficiary for
such  Funding  Participants,  and  each  such  Funding  Participant  irrevocably
authorizes  Donald  Puglisi  to act as the investment trust beneficiary for such
Funding  Participant,  to take such action on its behalf under the provisions of
the Transaction Documents and to exercise such powers and perform such duties as
are  expressly  delegated  to  such investment trust beneficiary by the terms of
this  Agreement  and  the  other Transaction Documents, together with such other
powers  as  are  reasonably incidental thereto (together with any successors and
assigns,  in  such capacity, the "Investment Trust Beneficiary"); provided, that
                                  ----------------------------    --------
(1)  any  action  to  be  taken  or  consent  to  be given under the Transaction
Documents  shall  only  be taken or given, as the case may be, upon direction of
the  Majority  Funding  Participants,  (2) any notice received by the Investment
Trust  Beneficiary  under  the  Investment  Trust  Agreement  shall  be promptly
delivered  to  each  Funding Participant by the Investment Trust Beneficiary and
(3)  upon  the  written  instructions  at  any time and from time to time of the
Majority  Funding Participants, the Investment Trust Beneficiary shall take such
of the following actions as may be specified in such instructions: (x) give such
notice  or  direction or exercise such right or power under the Investment Trust
Agreement,  the  Participation  Agreement and any other Transaction Document, as
shall  be  specified in such instructions; (y) approve as satisfactory to it all
matters  required by the terms of any Transaction Document to be satisfactory to
the  Investment  Trust Beneficiary; and (z) any other action as specified by the
Investment  Trust  Beneficiary  acting  at  the  request of the Majority Funding
Participants.

Notwithstanding  any  provision  to  the  contrary  herein  or  elsewhere in the
Transaction Documents, neither the Administrative Agent nor the Investment Trust
Beneficiary shall not have any duties or responsibilities except those expressly
set  forth  herein  or  therein,  or any fiduciary relationship with any Funding
Participant,  and  no  implied  covenants,  functions, responsibilities, duties,
obligations  or  liabilities  shall  be  read  into the Transaction Documents or
otherwise  exist against either the Administrative Agent or the Investment Trust
Beneficiary,  as  the  case  may  be.

<PAGE>
     SECTION  11.2  Delegation  of Duties.  Each of the Administrative Agent and
                    ---------------------
the  Investment  Trust  Beneficiary  may  execute  any  of its duties under this
Agreement  and  the  other  Transaction  Documents  by  or  through  agents  or
attorneys-in-fact,  and  shall  be  entitled to advice of counsel concerning all
matters  pertaining  to  such  duties.  Neither the Administrative Agent nor the
Investment  Trust  Beneficiary  shall  be  responsible  for  the  negligence  or
misconduct  of  any  agents  or attorneys-in-fact selected by it with reasonable
care.

     SECTION  11.3  Exculpatory  Provisions.  Neither  the Administrative Agent,
                    -----------------------
the  Investment  Trust  Beneficiary  nor  any  of  their  officers,  directors,
employees,  agents,  attorneys-in-fact or Affiliates shall be (i) liable for any
action  taken or omitted to be taken by it or such Person under or in connection
with  the  Transaction  Documents  (except  for  its  or such Person's own gross
negligence  or willful misconduct), or (ii) except as expressly set forth in the
Transaction  Documents, responsible in any manner to any Funding Participant for
any recitals, statements, representations or warranties made by Deepwater or any
officer  thereof  contained  in the Transaction Documents or in any certificate,
report,  statement or other document referred to or provided for in, or received
by  such  Administrative  Agent,  Investment  Trust  Beneficiary or any of their
officers,  directors,  employees, agents, attorneys-in-fact or Affiliates, under
or  in  connection  with,  the  Transaction  Documents,  or  for  the  validity,
effectiveness,  genuineness,  enforceability  or  sufficiency of the Transaction
Documents,  including  the Series A Charter Trust Certificates and the Notes, or
for any failure of Deepwater to perform its obligations hereunder or thereunder.
Neither  the  Administrative  Agent, the Investment Trust Beneficiary nor any of
their  officers,  directors,  employees, agents, attorneys-in-fact or Affiliates
shall  be  under  any  obligation  to any Funding Participant to ascertain or to
inquire  as  to the observance or performance of any of the agreements contained
in,  or  conditions of, the Transaction Documents, or to inspect the properties,
books  or  records  of  Deepwater.

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

<PAGE>
pursuant  thereto  shall  be  binding  upon all the Funding Participants and all
future  holders of the Series A Charter Trust Certificates and the Notes, as the
case  may  be.

     SECTION  11.5  [Intentionally  Omitted].

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

     SECTION  11.7  Indemnification.  The  Funding  Participants  (excluding any
                    ---------------
Purchasing  Party  and  each  Conduit)  severally agree to indemnify each of the
Administrative  Agent,  in  its  capacity  as  such,  and  the  Investment Trust
Beneficiary,  in  its capacity as such (to the extent each of the Administrative
Agent  and  the  Investment  Trust  Beneficiary  are not reimbursed by Deepwater
within  a  reasonable  period  after demand has been made to Deepwater for those
amounts  owing by Deepwater, and without limiting the obligation of Deepwater to
do  so),  ratably according to their respective Certificate Purchaser Amounts or
Lender  Amounts,  as  the case may be, from and against any and all liabilities,
obligations,  losses,  damages,  penalties,

<PAGES>
actions,  judgments,  suits,  costs,  expenses  or  disbursements  of  any  kind
whatsoever  which  may  at  any time (including, without limitation, at any time
following  the payment of the Series A Charter Trust Certificates or the Conduit
Notes)  be  imposed on, incurred by or asserted against the Administrative Agent
or the Investment Trust Beneficiary in any way relating to or arising out of the
Transaction Documents, or any documents contemplated by or referred to herein or
therein  or  any  action  taken  or  omitted  by the Administrative Agent or the
Investment  Trust  Beneficiary under or in connection with any of the foregoing;
provided  that  no  Funding  Participant  shall be liable for the payment of any
--------
portion  of  such liabilities, obligations, losses, damages, penalties, actions,
judgments,  suits,  costs,  expenses  or disbursements resulting from either the
Administrative  Agent's  or  the Investment Trust Beneficiary's, as the case may
be,  gross negligence or willful misconduct; and provided, further, that neither
                                                 --------  -------
the  Administrative  Agent  nor  the Investment Trust Beneficiary shall make any
claim  under  this  Section 11.7 for any claim or expense indemnified against by
                    ------------
Deepwater  or  its  Affiliates  without  first  making demand on such Person for
payment of such claim or expense (unless such demand shall then be prohibited by
Applicable  Law).  Whenever,  at  any time after the Administrative Agent or the
Investment  Trust Beneficiary, as the case may be, has received from any Funding
Participant  such  Funding  Participant's  ratable share of amounts owing to the
Administrative  Agent  or  the Investment Trust Beneficiary, as the case may be,
pursuant  to this Section 11.7, the Administrative Agent or the Investment Trust
                  -------------
Beneficiary,  as the case may be, shall receive any reimbursement from Deepwater
on  account  of  such  amounts, the Administrative Agent or the Investment Trust
Beneficiary,  as  the  case may be, shall distribute to such Funding Participant
its  ratable share thereof in like funds as received; provided, however, that in
                                                      --------  -------
the  event  that the receipt by the Administrative Agent or the Investment Trust
Beneficiary,  as  the  case  may be, of such reimbursement is required by law or
court  or  administrative  order  to be returned, such Funding Participant shall
return  to  the Administrative Agent or the Investment Trust Beneficiary, as the
case  may  be,  any portion thereof previously distributed by the Administrative
Agent  or  the  Investment  Trust Beneficiary, as the case may be, to it in like
funds  as  such  reimbursement  is required to be returned by the Administrative
Agent  or  the  Investment  Trust  Beneficiary,  as  the  case  may  be.

     SECTION  11.8  Administrative  Agent and Investment Trust Beneficiary.  The
                    ------------------------------------------------------
Administrative  Agent, the Investment Trust Beneficiary and their Affiliates may
make loans to, issue letters of credit for the account of, accept deposits from,
acquire  equity  interests  in and generally engage in any kind of business with
Deepwater,  Conoco, Transocean and their Affiliates as though the Administrative
Agent  and the Investment Trust Beneficiary were not the Administrative Agent or
Investment  Trust  Beneficiary hereunder and without notice to or the consent of
the  Funding  Participants.  It  is  understood and acknowledged by each Funding
Participant  that  an  Affiliate of the Administrative Agent or Investment Trust
Beneficiary,  as  the case may be, may also separately be a Funding Participant.
It  is  further  understood  and  acknowledged by each Funding Participant that,
pursuant  to  the activities referenced in this Section 11.8, the Administrative
                                                ------------
Agent,  the  Investment  Trust  Beneficiary  and  their  Affiliates  may receive
information  regarding  Deepwater,  Conoco,  Transocean  and  their  Affiliates
(including  information  that  may  be subject to confidentiality obligations in
favor  of  Deepwater,  Conoco,  Transocean and their Affiliates) and acknowledge
that  the  Administrative Agent or the Investment Trust Beneficiary, as the case
may  be, shall be under no obligation to provide such information to them.  With
respect  to  its Certificate Purchaser Amount, if any, or Lender Amount, if any,
the  Administrative  Agent  and  the Investment Trust Beneficiary shall have the

<PAGE>
same rights and powers under this Agreement as any other Funding Participant and
may  exercise  the  same  as  though  it  were  not  the Administrative Agent or
Investment  Trust  Beneficiary,  as  the  case  may  be.

     SECTION  11.9  Successor  Administrative  Agent  and  Investment  Trust
                    --------------------------------------------------------
Beneficiary.
------------

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

     (b)     At any time during the term of this Agreement, the Investment Trust
Beneficiary may resign upon thirty (30) days' notice to the Funding Participants
and  Deepwater.  So  long  as no Charter Default or Charter Event of Default has
occurred  and  is  continuing,  Deepwater  may,  for  any  reason,  replace  the
Investment Trust Beneficiary.  If the Investment Trust Beneficiary resigns or is
removed herewith, the Majority Funding Participants shall appoint from among the
Funding  Participants  a  successor investment trust beneficiary which successor
investment  trust  beneficiary  shall  be  approved by Deepwater (which approval
shall  not  be  unreasonably  withheld  or delayed).  If no successor investment
trust beneficiary is appointed prior to the effective date of the resignation of
the  corresponding  Investment  Trust  Beneficiary,  such  Investment  Trust
Beneficiary  may  appoint,  after  consulting  with the Funding Participants and
Deepwater,  a  successor  collateral  agent from among the Funding Participants.
Upon  the successor investment trust beneficiary's acceptance of its appointment
as  successor  investment  trust  beneficiary  hereunder  (i)  such  successor
investment  trust beneficiary shall succeed to all the rights, powers and duties
of  the  retiring  Investment  Trust  Beneficiary and the term "Investment Trust
                                                                ----------------
Beneficiary"  shall  mean  such  successor investment trust beneficiary and such
-----------
successor  Investment  Trust Beneficiary Acknowledges that it takes its interest
in  the  Investment Trust subject to the pledge set forth in Section 8.12 of the
Investment Trust Agreement and (ii) such retiring Investment Trust Beneficiary's
appointment,  powers  and  duties  as  a  investment  trust beneficiary shall be
terminated.  After  the  retiring  Investment  Trust  Beneficiary's  resignation

<PAGE>
herewith, the provisions of this Section 11 shall inure to its benefit as to any
                                 ----------
actions  taken  or  omitted  to  be  taken by it while it was a Investment Trust
Beneficiary  hereunder  and  under  the  other  Transaction  Documents.  If  no
successor  investment  trust  beneficiary  has  accepted appointment by the date
which  is  forty-five  (45)  days  following  the  notice  of  resignation,  the
resignation  shall thereupon become effective and the Funding Participants shall
perform  all  of  the  duties of such Investment Trust Beneficiary hereunder and
under  the  other Transaction Documents until such time, if any, as the Majority
Funding  Participants  appoint  a  successor  investment  trust  beneficiary  as
provided  for  above.

                                   SECTION 12

                                  MISCELLANEOUS

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

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

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

<PAGE>
business  hours on a Business Day (or, if confirmed after business hours or on a
non-Business Day, on the next Business Day) and shall be directed to the address
of  such  Person  as  indicated:

     If  to  Deepwater,  to  it  at:

          Attn:  Treasury  Dept.
          c/o  Transocean  Offshore  Deepwater  Drilling  Inc.
          4  Greenway  Plaza
          Houston,  Texas  77046
          Telephone:  (713)  232-7500
          Telecopier:  (713)  232-7766

     with  copies  to:

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

          Attn:  General  Counsel
          c/o  Transocean  Offshore  Deepwater  Drilling  Inc.
          4  Greenway  Plaza
          Houston,  Texas  77046
          Telephone:  (713)  232-7500
          Telecopier:  (713)  232-7600

     If  to  the  Investment  Trust,  to  it  at:

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

     If  to  the  Charter  Trustee,  to  it  at:

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

<PAGE>
     If  to  the  Investment  Trustee,  to  it  at:

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

     If  to  any  Member,  to  it  at:

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

     or

          RBF  Deepwater  Exploration  II  Inc.
          c/o  Transocean  Offshore  Deepwater  Drilling  Inc.
          4  Greenway  Plaza
          Houston,  Texas  77046
          Attention:  Treasury  Department
          Telephone:  (713)  232-7500
          Telecopier:  (713)  232-7766

     If  to  the  Investment  Trust  Beneficiary  at:

          850  Library  Avenue,  Suite  204
          P.O.  Box  885
          Newark,  Delaware  19715
          Telephone:  (302)  738-6680
          Telecopier:  (302)  738-7210

     If  to a Funding Participant, to it at the address set forth in Schedule 2.
                                                                     ----------

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

     SECTION  12.5  Amendments,  Waivers  and  Consents.  Except  as  otherwise
                    -----------------------------------
expressly  provided  herein  or in any other Transaction Document, no amendment,
waiver  or  termination  of  any  provision  of  this  Agreement  or  any  other
Transaction  Document  (other  than  a LAPA), and no consent with respect to any
departure  by  any Person therefrom, shall be effective unless the same shall be
in  writing  and signed by the Majority Funding Participants, and the applicable
Person  and  acknowledged  by  the Trustees, and then any such waiver or consent
shall  be  effective

<PAGE>
only  in  the  specific  instance  and for the specific purpose for which given;
provided,  however, that if any amendment, waiver, consent, termination or other
--------   -------
modification  of  any  Transaction Document materially affects any Conduit, such
Conduit  must  consent  thereto  and  each applicable Rating Agency must provide
prior written confirmation that the rating of the Commercial Paper Notes of such
Conduit  will not be downgraded, suspended or withdrawn as a result thereof, and
no  such waiver, amendment or consent shall, unless in writing and signed by all
Funding  Participants and acknowledged by the Trustees, do any of the following:

     (a)     change  the  Commitment of any Funding Participant (except with the
written  consent of such Funding Participant) except as provided in Section 7.9;
                                                                    -----------

     (b)     postpone  or  delay  any date fixed by any Transaction Document for
any  payment  of Charter Return, or any fees or other amounts due to any Funding
Participant under any Transaction Document (except, with respect to amounts owed
only  to  a  particular  Funding  Participant,  with the written consent of such
Funding  Participant);

     (c)     reduce  (i) the amount of any outstanding Contributions or Advances
or  the rate of the Charter Return, or (ii) any fees or other amounts payable to
any  Funding Participant under any Transaction Document (except, with respect to
amounts  owed only to a particular Funding Participant, with the written consent
of  such  Funding  Participant);

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

     (e)     change  the  aggregate percentage which is required for the Funding
Participants  (or  any  of  them)  to  take  any  action  hereunder or under the
Transaction  Documents;

     (f)     amend  this  Section  or  any provision in this Agreement or in any
                          -------
other  Transaction Document providing for consent or other action by all Funding
Participants;

     (g)     discharge  the  Conoco  Guaranty  (other  than  pursuant to Section
                                                                         -------
9.4(iv)),  the  Transocean  Guaranty (other than pursuant to Section 9.4(iv)) or
-------                                                      ---------------
either  Drilling  Contract  Guaranty (other than pursuant to Section 9.4(i)), or
                                                             --------------
release  the  Lien  of  the  Ship  Mortgage or any material portion of any other
Collateral  or  subordinate  or  take  any  action,  including  the  issuance of
additional  instruments  or documents, which results in the subordination of the
interest  of  any  Funding  Participant  in any Collateral (including taking any
action  which has the effect of altering the subordination of payments under the
Transaction  Documents  made  to  a  Purchasing  Party  in  any  way that may be
detrimental  to  the  interests  of  any  Funding  Participant);

     (h)     amend  the  definition  of  "Certificate Return Rate", "Loan Return
                                          -----------------------    -----------
Rate",  "Drawn  Rate",  "Return  Rate",  "CP  Rate", "Certificate Margin", "Base
-----    -----------     ------------     --------    ------------------    ----
Rate",  "Alternate  Rate", "Federal Funds Rate", "Charter Residual Risk Amount",
----     ---------------    ------------------    ----------------------------
"Coverage  Ratio",  "Residual Guaranty Amount", "Majority Funding Participants",
 ---------------     ------------------------    -----------------------------
"Charter  Return", "Series A Return", "Series B Return", "Charter Margin", "Loan
 ---------------    ---------------    ---------------    --------------    ----
Margin"  or  "Return  Period";  or
------        --------------

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

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

     SECTION  12.6  Confidentiality.  Each  party  hereto  agrees  to  exercise
                    ---------------
commercially  reasonable efforts to keep any non-public information delivered or
made  available by Deepwater to it which is indicated or stated in writing to be
confidential  information,  confidential from anyone other than persons employed
or  retained  by  such  Participant who are or are expected to become engaged in
evaluating,  approving,  structuring  or  administering  any  of the Transaction
Documents  (such  Persons  to  likewise  be  under  similar  obligations  of
confidentiality  with  respect  to  such  information);  provided, however, that
                                                         --------  -------
nothing  herein  shall prevent any party hereto from disclosing such information
(i)  to  any  other  party  hereto,  (ii)  upon  the  order  of  any  court  or
administrative agency, (iii) upon the request or demand of any regulatory agency
or  authority  having  jurisdiction  over  such Participant, (iv) which has been
publicly disclosed, (v) to the extent reasonably required in connection with any
litigation  to  which  any  party  or its Affiliates may be a party, (vi) to the
extent  reasonably  required  in  connection  with  the  exercise  of any remedy
hereunder  or  under any other Transaction Document, (vii) to such party's legal
counsel,  independent  auditors  and  to  such party's Affiliates, (viii) to any
actual  or  proposed  assignee  or other transferee of all or part of its rights
hereunder  which  has  agreed  in  writing to be bound by the provisions of this
Section  12.6 and (ix) except as otherwise required by Applicable Law; provided,
-------------                                                          --------
however,  that,  should  disclosure  of  any  such  confidential  information be
-------
required  by  virtue of clause (ii) or (v) of the immediately preceding proviso,
such  party  shall  notify  Deepwater (if such notification is not prohibited by
Applicable  Law) of the same so as to allow Deepwater to seek a protective order
or  to  take any other appropriate action; provided, further, that no such party
                                           --------  -------
shall  be required to delay compliance with any directive to disclose beyond the
last  date such delay is legally permissible any such information so as to allow
Deepwater  to  effect  any  such action and provided, further, that if Deepwater
                                            --------  -------
exercises  the  Return  Option,  no Participant thereafter shall be bound by the
terms  of  this  Section  12.6  with  respect  to  any information regarding the
                 -------------
Drillship  (excluding,  however,  any  information  regarding  the  Drilling
Contracts).  Notwithstanding  the  foregoing  any  Conduit  or Administrator may
disclose:

     (A)     to  such Conduit's commercial paper dealers or placement agents and
to  investors  and  prospective  investors  in  such  Commercial  Paper  Notes,
information  concerning the transaction, as required by such Conduits agreements
with  such  dealers  or  placement  agents;

     (B)     to  Moody's  and  S&P (or any successor or other rating agency that
maintains  a  rating of such Conduit's Commercial Paper Notes), any information,
in  connection with such rating agency's review and maintenance of its rating of
such  Commercial  Paper  Notes;  and

     (C)     to  any  Program  Support  Provider  or  other entity that issues a
financial guaranty insurance policy or other credit enhancement facility for the
account of such Conduit or any provider of corporate management services to such
Conduit,  and  such  Conduit's certified public accountants, any information, in
connection  with  the  provision  and  administration  of  credit  facilities or
corporate  management  services  or accounting services, as applicable, to or on

<PAGE>
behalf of such Conduit; provided, that each such Person described in clauses (A)
                        --------                                     -----------
-  (C)  agrees  to  be  bound  by  the  provisions  of  this  Section  12.6.
   ---                                                        -------------

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

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

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

     SECTION  12.10  Severability.  Any  provision  of  this  Agreement  that is
                     ------------
prohibited  or unenforceable in any jurisdiction shall, as to such jurisdiction,
be  ineffective  to  the  extent of such prohibition or unenforceability without
invalidating  the  remaining  provisions  hereof,  and  any  such prohibition or
unenforceability  in  any  jurisdiction  shall  not  invalidate  or  render
unenforceable  such  provision  in  any  other  jurisdiction.

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

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

     SECTION  12.13  Limitations  on  Recourse.    The Funding Participants, the
                     -------------------------
Trustees  and  the  Investment  Trust  agree that their rights in respect of the
obligations  of  Deepwater to pay

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

     (b)     Deepwater,  Conoco and Transocean hereby acknowledge and agree that
none  of  the  Agents,  the  Trustees and the Funding Participant shall have any
personal  liability  whatsoever  to  Deepwater,  Conoco,  Transocean  or  their
respective  successors  or  assigns for any claim based on or in respect of this
Agreement  or  arising  from  the  transactions contemplated hereby.  Subject to
Section  6.1  of  the  Master Charter, the sole recourse of Deepwater, Conoco or
Transocean  or  any  Person  claiming  through or on behalf thereof for any such
claims arising hereunder will be to the Trust Estate.  Each of Deepwater, Conoco
and  Transocean  further  acknowledges  and  agrees  that  it  has no rights (as
third-party  beneficiary  or  otherwise) or standing under any agreement between
the  Trustees and any or all of the Investment Trust, the Agents, or the Funding
Participants,  which  agreements are not by their terms intended for the benefit
of  other parties other than Sections 5.2, 5.3, 5.4 and 5.5 of the Charter Trust
Agreement  and Sections 5.2, 5.3, 5.4 and 5.5 of the Investment Trust Agreement.

     (c)     It  is  expressly  understood and agreed by the parties hereto that
(a)  this  Agreement  and  the  other  Transactions Documents executed by either
Trustee,  are  not  being  executed  in  such  Trustee's  respective  personal
capacities,  except as expressly stated herein or therein, but solely (i) in the
case of Wilmington Trust Company, (x) as charter trustee under the Charter Trust
Agreement  and,  (y)  solely  with  respect  to  the  Depository  Agreement,  as
Depository  and  Securities  Intermediary  thereunder,  and  (ii) in the case of
Wilmington Trust FSB, as investment trustee under the Investment Trust Agreement
and (b) under no circumstances shall either Trustee be personally liable for the

<PAGE>
payment  of  any indebtedness or expenses of the Charter Trust or the Investment
Trust,  as applicable, or be liable for the breach or failure of any obligation,
representation,  warranty  or covenant made or undertaken by the Charter Trustee
or  Investment Trust, as applicable, under this Agreement, any other Transaction
Document  or  any  related  agreement, except to the extent of the Charter Trust
Estate  and  the  Investment  Trust  Estate,  respectively.

     (d)     Notwithstanding  any  provision  of  this  Agreement  or  any other
Transaction Document to the contrary, each party hereto agrees that each Conduit
shall  only  be  required  to  pay (a) any fees or liabilities that it may incur
hereunder only to the extent such Conduit has Excess Funds and (b) any expenses,
indemnities  or  other  liabilities under any other Transaction Document only to
the  extent  such  Conduit  has  Excess  Funds;  provided, however, that if such
                                                 --------  -------
Conduit  has  insufficient funds to make any payments required by this Agreement
or  any  Transaction  Document  to  any  party hereto, such Persons shall not be
excused  from  the  performance  of  their respective obligations hereunder.  In
addition,  no amount owing by any Conduit hereunder in excess of the liabilities
that  such  Conduit is required to pay in accordance with the preceding sentence
shall  constitute  a  claim (as defined in Section 101 to Title 11 of the United
States  Code) against such Conduit.  No recourse shall be had for the payment of
any  amount owing hereunder or for the payment of any fee hereunder or any other
obligation  of  or claim against, any Conduit  arising out of or based upon this
Agreement  or  any  Transaction  Document,  against  any  stockholder, employee,
officer, director, manager or incorporator of any Conduit  or Affiliate thereof;
provided,  however,  that  the  foregoing  shall  not relieve any such person or
--------   -------
entity  of  any  liability  they  might otherwise have as a result of fraudulent
actions  or  omissions taken by them.  Any and all claims against any Conduit by
any  other  Person  shall  be  subordinate  to  the claims of the holders of the
Commercial  Paper  Notes  of  such  Conduit.  The obligations under this Section
                                                                         -------
12.13(d)  shall  survive  the  termination  of  this  Agreement.
-------

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

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

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

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

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

     SECTION 12.19  Third-Party Beneficiaries.  Each of the Funding Participants
                    -------------------------
agrees  that  the  Drilling  Parties  shall  be third-party beneficiaries of the
covenant  contained  in Section 6.3(b) and each shall be entitled to rely on and
                        --------------
enforce  such  covenant  as  though  such  Drilling  Party  were a party to this
Agreement.  Each  of  the  parties  hereto  agrees  that  the  Hedging Agreement
Counterparties  shall  be third-party beneficiaries of the covenant contained in
Sections 10 and 12.5 and shall be entitled to rely on and enforce such covenants
 ----------     ----
as  though  the Hedging Agreement Counterparties were parties to this Agreement.

     SECTION  12.20  Consent  to  Jurisdiction.  Each  of the parties hereto (i)
                     -------------------------
hereby irrevocably submits to the nonexclusive jurisdiction of the Supreme Court
of the State of New York, New York County (without prejudice to the right of any
party to remove to the United States District Court for the Southern District of
New  York)  and  to the jurisdiction of the United States District Court for the
Southern  District  of  New  York, for the purposes of any suit, action or other
proceeding  arising  out  of this Agreement, the other Transaction Documents, or
the  subject  matter  hereof  or thereof or any of the transactions contemplated
hereby  or  thereby  brought by any of the parties hereto or their successors or
assigns, (ii) hereby irrevocably agrees that all claims in respect of such suit,
action  or  proceeding  may be heard and determined in such New York State court
or, to the fullest extent permitted by Applicable Law, in such Federal court and
(iii)  to the extent permitted by Applicable Law, hereby irrevocably waives, and
agrees  not to assert, by way of motion, as a defense, or otherwise, in any such
suit,  action  or  proceeding any claim that it is not personally subject to the
jurisdiction  of  the above-named courts, that the suit, action or proceeding is
brought  in  an  inconvenient  forum,  that  the  venue  of  the suit, action or
proceeding  is improper or that this Agreement, the other Transaction Documents,
or the subject

<PAGE>
matter  hereof  or  thereof  may  not  be  enforced in or by such court. A final
judgment  obtained  in  respect of any action, suit or proceeding referred to in
this  Section  12.20  shall  be  conclusive  and  may  be  enforced  in  other
      --------------
jurisdictions  by  suit  on  the  judgment  or  in any manner as provided by and
subject  to  Applicable  Law.  Each  of  the  parties  hereto hereby consents to
service  of process in connection with the subject matter specified in the first
sentence  of this Section 12.20 in connection with the above mentioned courts in
                  -------------
New  York  by  registered  mail,  Federal Express, DHL or similar courier at the
address  to which notices to it are to be given, it being agreed that service in
such  manner  shall  constitute  valid service upon such party or its respective
successors  or  assigns  in  connection with any such suit, action or proceeding
only;  provided, however, that nothing in this Section 12.20(i) shall affect the
       --------  -------                       ----------------
right  of  any  of  such  party or its respective successors or assigns to serve
legal process in any other manner permitted by law or affect the right of any of
such  parties  or its respective successors or assigns to bring any suit, action
or  proceeding  against any other one of such parties or its respective property
in  the  courts  of  other  jurisdictions.

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

     SECTION  12.22  Appointment  of Wilmington Trust FSB as Attorney-in-Fact on
                     -----------------------------------------------------------
behalf  of  the  Beneficial  Owners; Powers of Attorney.  Each of the Beneficial
-------------------------------------------------------
Owners  identified  in  the Charter Trust Agreement, by its respective signature
below,  hereby  appoints Wilmington Trust FSB as attorney-in-fact solely for the
purpose  of,  in its name, place and stead, executing and delivering the Charter
Trust  Agreement.  Wilmington  Trust  FSB  is further authorized and directed by
each  such  Beneficial  Owner  to  execute  and  deliver  the  power of attorney
substantially  in  the  form  attached  hereto  as  Exhibit N-1, in favor of the
                                                    -----------
Persons  listed  therein,  for the purpose of having the Charter Trust Agreement
duly  executed  and  delivered  by each such Beneficial Owner.  Such appointment
shall  not  be  construed  to  be  a "statutory short form power of attorney" as
defined  in  Section  5-1501  of the New York General Obligations Law.  Further,
Wilmington  Trust  Company  shall  execute  and  deliver  the  Power of Attorney
attached  hereto  as  Exhibit N-2, both in its individual capacity, as expressly
                      -----------
provided  in  such  Exhibit  N-2,  and  as  Charter  Trustee.
                    ------------

     SECTION  12.23  Non-Defaulting  Drilling  Party's Right to Pursue Contests.
                     ----------------------------------------------------------
Where  a  Non-Defaulting Drilling Party has exercised its Assumption Cure Right,
if the Charter Trustee, Investment Trust and the Funding Participants have opted
not  to  pursue  remedies  against  (i)  where  Frontier Deepwater Drilling is a
Defaulting Drilling Party, Conoco for any failure to make payments due under the
Conoco  Guaranty or the Conoco Drilling Contract Guaranty following a demand for
payment  thereunder,  or  (ii)  where  R&B  Falcon  Drilling  (International  &
Deepwater)  Inc.  is  a Defaulting Drilling Party, Transocean for any failure to
make  payments  due  under  the  Transocean  Guaranty or the Transocean Drilling
Contract Guaranty following a demand for payment thereunder, such Non-Defaulting
Drilling  Party shall have the right to pursue any and all claims of the Charter
Trustee,  Investment Trust and the Funding Participants under any such Guaranty;
provided,  however  that  such  Non-Defaulting Drilling Party shall not have the
--------   -------
right  in  any  way  to  settle  or compromise any such claim pursued under this
Section  for  less than the full amount owed under any such Guaranty unless each
-------
of  the  Funding  Participants  has  consented to

<PAGE>
such settlement or compromise.  Notwithstanding anything to the contrary in this
Section,  all  amounts received by the Non-Defaulting Drilling Party as a result
-------
of  the  pursuit of any claims hereunder shall be deposited into the appropriate
Account under the Depository Agreement, as though such amounts had been paid by,
where  clause  (i)  above  applies, Conoco and, where clause (ii) above applies,
Transocean.

     SECTION 12.24  Non-Petition.  Each party hereto hereby agrees that it shall
                    ------------
not  institute  against,  or  join  or  assist  any  other person in instituting
against,  any Conduit any bankruptcy, reorganization, arrangement, insolvency or
liquidation  proceeding  or  other  proceedings  under  any  federal  or  state
bankruptcy  or  similar  law,  for  one year and a day after the latest maturing
commercial paper note issued by such Conduit  is paid.  This Section 12.24 shall
                                                             -------------
survive  the  termination  of  this  Agreement.

     SECTION  12.25  Payments  to  Conduits.  Notwithstanding  anything  in  the
                     ----------------------
Transaction  Documents  to  the  contrary,  all  payments to each of the Conduit
(Paradigm)  and  the  Conduit (Liberty) under the Transaction Documents shall be
paid  to  the  applicable Administrator pursuant to the Depository Agreement for
the  benefit  of  such  Conduits.

     SECTION  12.26  UCC-1  Authorization.  Each  of  Deepwater  and the Charter
                     --------------------
Trustee  authorize  the  filing  of  UCC-1 Statements as required to perfect and
continue  the  security  interests  created  in  the  Transaction  Documents.

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

<PAGE>
                                     DEEPWATER DRILLING II L.L.C.

                                     By:  /s/ TIM JURAN
                                         ---------------------------------------
                                         Name:  Tim Juran
                                         Title: Manager

<PAGE>
                                     DEEPWATER INVESTMENT TRUST 1999-A

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

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

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

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

<PAGE>
                                     INVESTMENT  TRUST  BENEFICIARY

                                     By:  /s/ DONALD J. PUGLISI
                                         ---------------------------------------
                                         Name:  Donald J. Puglisi
                                         Title: Investment Trust Beneficiary

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

                                     By:  /s/ JAMES A. HANLEY
                                         ---------------------------------------
                                         Name:  James A. Hanley
                                         Title: Financial Services Officer

<PAGE>
                                   TRANSOCEAN SEDCO FOREX, INC., with respect to
                                      Sections  2.15,  9.4,  12.13(b)  and
                                      --------------   ---   --------
                                      12.13(d)  only
                                      --------

                                   By:  /s/ Eric B. Brown
                                       ----------------------------------------
                                       Name:  ERIC B. BROWN
                                       Title: Senior Vice President, General
                                              Counsel and Corporate Secretary

<PAGE>
                                   CONOCO  INC.,  with respect to Sections 2.15,
                                                                  -------------
                                        9.4,  12.13(b)  and  12.13(d)  only
                                        ---   --------       --------

                                   By:  /s/ R.W. GOLDMAN
                                       ----------------------------------------
                                       Name:  R.W. Goldman
                                       Title:

<PAGE>
                                   RBF  DEEPWATER  EXPLORATION  II  INC.,  with
                                        respect  to  Sections  5.2  and 6.4 only
                                                     -------------      ---

                                   By:  /s/ W. DENNIS HEAGNEY
                                       ----------------------------------------
                                       Name:  W. Dennis Heagney
                                       Title: Vice President

<PAGE>
                                   CONOCO  DEVELOPMENT  II INC., with respect to
                                   Sections  5.2  and  6.4  only
                                   -------------       ---

                                   By:  /s/ Robert
                                       ----------------------------------------
                                       Name:
                                       Title:

<PAGE>
                                   BANK OF  AMERICA,  N.A.,
                                     as Administrative Agent

                                   By: /s/ ALBERT Z. NORONA
                                       ----------------------------------------
                                       Name:  Albert Z. Norona
                                       Title: Vice President

<PAGE>
                                   HATTERAS  FUNDING  CORPORATION,  as  the
                                   Conduit  (Hatteras)

                                   By: /s/ CHRIS T. BURT
                                      ----------------------------------------
                                      Name:  Chris T. Burt
                                      Title: Vice President

<PAGE>
                                   BANK OF AMERICA, N.A., as Administrator
                                   (Hatteras)

                                   By: /s/ M. RANDALL ROSS
                                      ----------------------------------------
                                      Name:  M. Randall Ross
                                      Title: Principal

                                   BANK OF AMERICA, N.A., as Liquidity Agent
                                   (Hatteras)

                                   By: /s/ M. RANDALL ROSS
                                      ----------------------------------------
                                      Name:  M. Randall Ross
                                      Title: Principal

<PAGE>
                                   LIBERTY STREET FUNDING CORP., as the
                                   Conduit  (Liberty)

                                   By: /s/ ANDREW L. STIDD
                                      ----------------------------------------
                                      Name:  Andrew L. Stidd
                                      Title: President

<PAGE>
                                   THE BANK OF NOVA SCOTIA, as Administrator
                                   (Liberty)

                                   By: /s/ N. BELL
                                      ----------------------------------------
                                      Name:  N. Bell
                                      Title: Assistant Agent

                                   THE BANK OF NOVA SCOTIA, as Liquidity Agent
                                   (Liberty)

                                   By: /s/ N. BELL
                                      ----------------------------------------
                                      Name:  N. Bell
                                      Title: Assistant Agent

<PAGE>
                                   PARADIGM FUNDING LLC, as the Conduit
                                   (Paradigm)

                                   By: /s/ EVELYN ECHEVARRIA
                                      ----------------------------------------
                                      Name:  Evelyn Echevarria
                                      Title: Vice President

<PAGE>
                                   WESTDEUTSCHE LANDESBANK GIROZENTRALE
                                   NEW YORK BRANCH, as Administrator (Paradigm)

                                   By: /s/ CHRISTIAN BRUNE
                                      ----------------------------------------
                                      Name:  Christian Brune
                                      Title: Associate Director Securitization

                                   By: /s/ VIOLET DIAMANT
                                      ----------------------------------------
                                      Name:  Violet Diamant
                                      Title: Associate Director Securitization

                                   WESTDEUTSCHE  LANDESBANK  GIROZENTRALE
                                   NEW YORK BRANCH, as Liquidity Agent
                                   (Paradigm)

                                   By: /s/ CHRISTIAN BRUNE
                                      ----------------------------------------
                                      Name:  Christian Brune
                                      Title: Associate Director Securitization

                                   By: /s/ VIOLET DIAMANT
                                      ----------------------------------------
                                      Name:  Violet Diamant
                                      Title: Associate Director Securitization

<PAGE>
                                   BANK OF AMERICA, N.A., as a Liquidity
                                   Purchaser

                                   By: /s/ CLAIRE M. LIU
                                      ----------------------------------------
                                      Name:  Claire M. Liu
                                      Title: Managing Director

<PAGE>
                                   THE BANK OF NOVA SCOTIA, as a Liquidity
                                   Purchaser

                                   By: /s/ N. BELL
                                      ----------------------------------------
                                      Name: N. Bell
                                      Title: Assistant Agent

<PAGE>
                                   DEN NORSKE BANK ASA, as a Liquidity Purchaser

                                   By: /s/ BARBARA GRONQUIST
                                      ----------------------------------------
                                      Name:  Barbara Gronquist
                                      Title: Senior Vice President

                                   By: /s/ HANS JORGEN ORMAR
                                      ----------------------------------------
                                      Name:  Hans Jorgen Ormar
                                      Title: Vice President

<PAGE>
                                  FORTIS CAPITAL CORP., as a Liquidity Purchaser

                                   By: /s/ JOHN C. PRENATA
                                      ----------------------------------------
                                      Name:  John C. Prenata
                                      Title: Executive Vice President

                                   FORTIS CAPITAL CORP., as a Certificate
                                   Purchaser

                                   By: /s/ JOHN C. PRENATA
                                      ----------------------------------------
                                      Name:  John C. Prenata
                                      Title: Executive Vice President

                                   By: /s/ C. TURTON
                                      ----------------------------------------
                                      Name: C. Turton
                                      Title: Managing Director

<PAGE>
                                   NATEXIS BANQUES POPULAIRES, as a Liquidity
                                   Purchaser

                                   By: /s/ TIMOTHY L. POLVADO
                                      ----------------------------------------
                                      Name:  Timothy L. Polvado
                                      Title: Vice President and Group Manager

                                   By: /s/ LOUIS P. LAVILLE, III
                                      ----------------------------------------
                                      Name:  Louis P. Laville, III
                                      Title: Vice President and Group Manager

<PAGE>
                                    THE ROYAL BANK OF SCOTLAND PLC, as a
                                    Liquidity Purchaser

                                   By: /s/ SCOTT BARTON
                                      ----------------------------------------
                                      Name:  Scott Barton
                                      Title: Sr. Vice President

                                   THE ROYAL BANK OF SCOTLAND PLC, as a
                                   Liquidity Purchaser

                                   By: /s/ SCOTT BARTON
                                      ----------------------------------------
                                      Name:  Scott Barton
                                      Title: Sr. Vice President

<PAGE>
                                   SUNTRUST BANK, as a Liquidity Purchaser

                                   By: /s/ JOSEPH M. MCGREEVY
                                      ----------------------------------------
                                      Name:  Joseph M. McGreevy
                                      Title: Assistant Vice President

<PAGE>
                                   WESTDEUTSCHE LANDESBANK GIROZENTRALE
                                   NEW YORK BRANCH, as a Liquidity Purchaser

                                   By: /s/ CHRISTIAN BRUNE
                                      ----------------------------------------
                                      Name: Christian Brune
                                      Title: Associate Director Securitization

<PAGE>
                                   SCHEDULE 1

                  List of UCC and Other Necessary Security Filings

UCC-1 financing statements covering the assignment of Account Collateral under
the Depository Agreement, naming Deepwater as the debtor and the Depository, for
the benefit of the Charter Trustee, as the secured party filed with the Delaware
Secretary of State.

UCC-1 financing statements covering the assignment of the Assigned Contracts
referenced in the Deepwater Assignment, naming Deepwater as the debtor and the
Charter Trustee as the secured party filed with the Delaware Secretary of State.

A UCC-1 financing statement, covering the Drillship and naming Deepwater as the
debtor and the Charter Trustee as the secured party, filed with the Delaware
Secretary of State.

UCC-1 financing statements covering the assignment of Account Collateral under
the Depository Agreement, naming Charter Trustee as the debtor and the
Depository, for the benefit of the Investment Trust and Hedging Agreement
Counterparties, if any, as the secured party filed with the Delaware Secretary
of State.

UCC-1 financing statements covering the assignment of the Assigned Contracts and
Contract Payments referenced in the Charter Trustee Assignment, naming Charter
Trustee as the debtor and the Investment Trust, for itself and on behalf of the
Hedging Agreement Counterparties, if any, as the secured party filed with the
Delaware Secretary of State.

A UCC-1 financing statement, covering the Drillship and naming Charter Trustee
as the debtor and the Investment Trust and Hedging Agreement Counterparties, if
any, as the secured parties, filed with the Delaware Secretary of State.

Master Charter. Filing in Panama.

Charter Supplement No. 1. Filing in Panama.

Charter Supplement No. 2. Filing in Panama.

First Addendum to Ship Mortgage. Filing in Panama.

<PAGE>
                                   SCHEDULE 2
                      FUNDING PARTICIPANT NOTICE ADDRESSES,
                  PAYMENT INSTRUCTIONS AND RESPONSIBLE OFFICERS
BANK OF AMERICA, N.A.
GENERAL INFORMATION:
--------------------

DOMESTIC  LENDING  OFFICE:                 EURODOLLAR  LENDING  OFFICE:
-------------------------                  ---------------------------
Name:        Bank  of  America,  N.A.      Name:

             333 Clay Street, Suite 4550   Address:

Address:     Houston,  TX  77002

ADDRESS  FOR  NOTICES:

NAME:        Ramon Garcia
-----
ADDRESS:     Bank of America Plaza
--------     901 Main Street
             Dallas, TX 75202-3714

TEL #:       214-209-2119
------
FAX #:       214-290-9462
------

ADMINISTRATIVE  CONTACT  PERSON:

NAME:        Ramon Garcia
-----
ADDRESS:     Bank of America Plaza
--------     901 Main Street
             Dallas, TX 75202-3714

TEL #:       214-209-2119
------
FAX #:       214-290-9462
------

TAXPAYER ID #:
---------------------------------
PAYMENT INSTRUCTIONS (FOR US DOLLARS):
--------------------------------------

          Bank of America
          ABA #:  111000012
          Account #:  1292000883
          Account Name:  Transocean
          Attention:  Corporate Loan Funds

<PAGE>

          Bank  of  America,  National Association as Liquidity Agent (Hatteras)
          Independence  Center,  NC1-001-15-04
          101  N.  Tryon  Street
          Charlotte,  NC  28255
          Attention:  Angela  Berry/Kelly  Weaver
          Tel:  704-388-6483
          Fax:  704-409-0014
          Re:  Deepwater  Drilling

          Bank  of  America,  National  Association  as Administrator (Hatteras)
          Interstate  Tower,  NC1-005-15-01
          121  West  Trade  Street
          Charlotte,  NC  28255
          Attention:  M.  Randall  Ross
          Telephone:  704-386-8234
          Facsimile:  704-386-0892
          Re:  Deepwater  Drilling

          Hatteras  Funding  Corporation
          c/o  Global  Securitization  Services,  LLC
          114  West  47th  Street,  Suite  1715
          New  York,  NY  10036
          Attention:  Christopher  T.  Burt
          Tel:  212-302-5151
          Fax:  212-302-8767
          Address  for  Wires:
          U.S.  Bank  N.A.
          Corporate  Trust  Services
          100  Wall  Street
          New  York,  NY  10005
          Attention:    Rosalyn  Calendar
          ABA  No.:     091-000-022
          Account No.:  1731  0185  1827
          Account Name: Hatteras  Funding  Corporation
          Account No.:  770  864  72
          Account Name: Hatteras  Funding  AccuTrust
          Reference:    Deepwater  Drilling

<PAGE>
DEN NORSKE BANK, A.S.A.
-----------------------
GENERAL INFORMATION:
--------------------

DOMESTIC LENDING OFFICE:                 EURODOLLAR  LENDING  OFFICE:
-----------------------                  ---------------------------
Name:    Den Norske Bank, A.S.A.         Name:

Address: 200 Park  Ave., 31st Floor      Address:
         New York, NY 10666

ADDRESS  FOR  NOTICES:

NAME:      Anny Peralta
----
ADDRESS:   200 Park Ave., 31st Floor
-------    New York, NY 10666

TEL #:     212-681-3842
-----
FAX #:     212-681-4123
-----

ADMINISTRATIVE CONTACT PERSON:

NAME:     Anny Peralta
----
ADDRESS:  200 Park Ave., 31st Floor
-------   New York, NY 10666

TEL #:    212-681-3842
-----
FAX #:    212-681-4123
-----

TAXPAYER ID #:
-----------------------------

PAYMENT INSTRUCTIONS (FOR US DOLLARS):
-------------------------------------

          Bank  of  New  York
          ABA  #:  021  000018
          Account  #:  dnbaus  33
          Account  Name:  den  norske  bank
          Further  Credit  To:  Deepwater  Drilling  A/C #  13216999
          Attn:  Anny  Peralta

<PAGE>
FORTIS CAPITAL CORP.

GENERAL INFORMATION:
-------------------

DOMESTIC  LENDING  OFFICE:                    EURODOLLAR  LENDING  OFFICE:
-------------------------                     ---------------------------
Name:       Fortis Capital Corp.              Name:

Address:    3 Stamford Plaza                  Address:

            301 Tresser Blvd., 9th Floor

            Stanford, CT 06901

ADDRESS  FOR  NOTICES:

NAME:
-----

ADDRESS:
-------

TEL #:
-----
FAX #:
-----

ADMINISTRATIVE CONTACT PERSON:

NAME:       Frank Campanelli
----
ADDRESS:    3 Stamford Plaza
-------     301 Tresser Boulevard, 9th Floor
            Stamford, CT 06901-3239

TEL #:      203-705-5936
-----
FAX #:      203-705-5888
-----

TAXPAYER ID #:
-------------------------------

PAYMENT INSTRUCTIONS (FOR US DOLLARS):
-------------------------------------

          Chase Manhattan Bank
          ABA #: 021 000 021
          For Credit To: Fortis Capital Corp.
          Acct #: 001 1 624 418
          Ref: Deepwater Drilling II

<PAGE>
NATEXIS BANQUES POPULAIRES

GENERAL INFORMATION:
-------------------

DOMESTIC LENDING OFFICE:                       EURODOLLAR  LENDING  OFFICE:
-----------------------                        ---------------------------
Name:     Natexis Banques Populaires           Name:

Address:  Southwest Representative Office      Address:

          333 Clay Street, Suite 4340

          Houston, TX 77002

ADDRESS FOR NOTICES:

NAME:     Tanya  Mcallister
----

ADDRESS:  Southwest Representative Office
-------   333 Clay Street, Suite 4340
          Houston, TX 77002

TEL #:          713-759-9447
-----
FAX #:          713-759-9908
-----

ADMINISTRATIVE CONTACT PERSON:
-----------------------------

NAME:     Tanya McAllister
-----

ADDRESS:  Southwest Representative Office
-------   901 Main Street
          Houston, TX 77002

TEL #:     713-759-9447
-----
FAX #:     713-759-9908
-----

TAXPAYER ID #: 52-2257782
---------------------------

PAYMENT INSTRUCTIONS (FOR US DOLLARS):
-------------------------------------

               JP Morgan/Chase New York
               ABA Routing # 021-000021

To Further Credit:

               Natexis Banques Populaires
               Account # 544-775-330
               Ref: Deepwater Investment Trust 1999-A, Houston Office

<PAGE>
THE BANK OF NOVA SCOTIA

GENERAL INFORMATION:
-------------------

DOMESTIC LENDING OFFICE:                      EURODOLLAR LENDING OFFICE:
-----------------------                       ---------------------------
Name:    The Bank of Nova Scotia              Name:    Same as Domestic Lending
         Atlanta  Agency                               Office

Address: 600 Peachtree St. N.E., Suite 2700   Address: Same as Domestic Lending
         Atlanta, GA 30308                             Office

ADDRESS FOR NOTICES:

NAME:     Phyllis  Walker
-----

ADDRESS:  600 Peachtree ST. N.E., Suite 2700
-------   Atlanta,  Ga  30308

TEL #:    404-877-1552
------
FAX #:    404-888-8998
------

ADMINISTRATIVE CONTACT PERSON:

NAME:     Phyllis Walker
-----

ADDRESS:  600 Peachtree ST. N.E., Suite 2700
--------  Atlanta, GA 30308

TEL #:    404-877-1552
-----
FAX #:    404-888-8998
-----

TAXPAYER ID #:  13-4941099
-------------

PAYMENT INSTRUCTIONS (FOR US DOLLARS):
-------------------------------------

                    The Bank of Nova Scotia, New York Agency
                    ABA #: 026 002 532
                    For Credit to BNS Atlanta Agency, Acct # 0606634
                    Re: Deepwater Drilling II L.L.C.

<PAGE>
SUNTRUST BANK

GENERAL INFORMATION:
-------------------

DOMESTIC LENDING OFFICE:                         EURODOLLAR  LENDING  OFFICE:
-----------------------                          ---------------------------
Name:     Suntrust Bank                          Name:

Address:  303 Peachtree St. N.E., 10th Floor     Address:
          Atlanta, GA 30308

ADDRESS  FOR  NOTICES:

NAME:
     ---------------------------

ADDRESS:
--------

TEL #:
-----
FAX #:
-----

ADMINISTRATIVE CONTACT PERSON:

NAME:    Roshawn Orise

ADDRESS: 303 Peachtree Street N.E., 10th Floor
         Atlanta,  GA  30308

TEL #:   404-230-1939
-----
FAX #:   404-575-2730
-----

TAXPAYER ID #:   58-0466330
-------------

PAYMENT INSTRUCTIONS (FOR US DOLLARS):
-------------------------------------

                 Suntrust Bank
                 Bank Address: Same As Domestic Lending Office
                 ABA #: 061-000-104
                 Account # 9088-000-112
                 Account Name: Wire Clearing
                 Attn: Corporate Banking
                 Ref: Deepwater Drilling

<PAGE>
THE ROYAL BANK OF SCOTLAND PLC

GENERAL INFORMATION:
-------------------

DOMESTIC  LENDING  OFFICE:                  EURODOLLAR  LENDING  OFFICE:
-------------------------                   ---------------------------

Name:     The Royal Bank of Scotland        Name:     Same as Domestic Lending
          New York Branch                             Office

Address:  65 East 55th Street, 21st Floor   Address:  Same as Domestic Lending
          New York, NY 10022                          Office

ADDRESS  FOR  NOTICES:

NAME:
--------------------------------------

ADDRESS:
--------

TEL #:
-----
FAX #:
-----

ADMINISTRATIVE CONTACT PERSON:

NAME:    Sheila Shaw and Juanita Baird
-----

ADDRESS: Same As Domestic Lending Office
-------

TEL #: 212-401-1406
-----
FAX #: 212-401-1494
-----

TAXPAYER ID #:  135 63 4601
-------------

PAYMENT INSTRUCTIONS (FOR US DOLLARS):
-------------------------------------

                    Chase  Manhattan Bank,  New York
                    ABA  021000021
                    Account  Name:  NWB  PLC-NY  Commercial Lending
                    Account  #:  400931052
                    Ref:  Deepwater  Drilling  II  L.L.C.

<PAGE>
WESTDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH

GENERAL INFORMATION:
-------------------

DOMESTIC  LENDING  OFFICE:                EURODOLLAR  LENDING  OFFICE:
-------------------------                 ---------------------------
Name:    West LB, New York Branch         Name:
Address: 1211 Avenue of the America       Address:
         New York, NY 10036

ADDRESS FOR NOTICES:

NAME: Violet Diamant
-----

ADDRESS: 1211 Avenue of the Americas
-------  New York, NY 10036

TEL #: 212-852-6394
-----
FAX #: 212-852-5971
-----

ADMINISTRATIVE CONTACT PERSON:

NAME: Rahel Avigdor
-----

ADDRESS: 1211 Avenue of the Americas
-------  New  York,  NY  10036

TEL #: 212-597-8347
-----
FAX #: 212-852-5971
-----

TAXPAYER ID #:  52-2283708
-------------

PAYMENT INSTRUCTIONS (FOR US DOLLARS):

          Chase  Manhattan
          Bank  Address: 4 Chase Metro Tech Centre
          ABA#:    021000021
          Acct #:  9201060663
          Account Name:  WestLB New York
          Ref:           Name of Deal/Paradigm Funding

<PAGE>
                                   SCHEDULE 3
                                   ----------

                            [Intentionally Omitted]
                            -----------------------

<PAGE>
                                   SCHEDULE 4
                                   ----------

                            SUBORDINATION PROVISIONS

     The payment of the principal of and interest on and all other amounts
payable under any Subordinated Debt shall be expressly subordinated in right of
payment to the payment in full of all Senior Liabilities, as hereinafter
defined, to the extent and in the manner set forth in the following Sections 1
                                                                    ----------
through 9 (collectively, the "Subordination Provisions").
---------

1.   Subordination. Except as hereinafter expressly otherwise provided, or as
     -------------
     the Majority Funding Participants may expressly consent to in writing, the
     payment of all Junior Liabilities (as hereinafter defined) shall be
     postponed and subordinated to the payment in full of all Senior Liabilities
     and no payments or other distributions whatsoever in respect of any Junior
     Liabilities shall be made, nor shall any property or assets of Deepwater be
     applied to the purchase or other acquisition or retirement of any Junior
     Liabilities; except, that so long as no Event of Loss, Material Default, or
                  ------
     Charter Event of Default (each as defined in the Participation Agreement
     referenced in Section 9 below) exists, any and all payments or other
                   ---------
     distributions in respect of the Junior Liabilities are permitted to be made
     to the extent that any such payment would be permitted by the terms of the
     Depository Agreement.

2.   Bankruptcy, Insolvency, Etc. If an Event of Default listed in Section
     ---------------------------
     4.1(e) or (f) of either Charter Supplement No. 1 or Charter Supplement No.
     2 (each, an "Insolvency Event") occurs in respect of Deepwater, the Senior
     Liabilities shall first be paid in full in accordance with their terms or
     to the extent recoverable against assets of Deepwater before the holder of
     any Junior Liability (each, a "Junior Creditor") shall be entitled to
     receive and to retain any payment or distribution in respect of such Junior
     Liability. If an Insolvency Event occurs in respect of Deepwater, each
     Junior Creditor shall promptly file a claim or claims in the proceedings
     related to such Insolvency Event, for the full outstanding amount of the
     Junior Liability attributable to such Junior Creditor, and shall use
     commercially reasonable efforts to cause said claim or claims to be
     approved and shall cause all payments and other distributions in respect
     thereof to be made directly to Depository. If an Insolvency Event occurs in
     respect of Deepwater, Deepwater shall agree that Depository (if the
     Depository Agreement is in full force and effect, otherwise Administrative
     Agent) may, at its sole discretion, in the name of Deepwater, any Junior
     Creditor or otherwise, demand, sue for, collect, receive and receipt for
     any and all such payments or distributions, and file, prove and vote or
     consent in any such proceedings with respect to any and all claims of any
     Junior Creditor relating to the Junior Liabilities.

3.   Payments Held in Trust. If any Junior Creditor receives any payment or
     ----------------------
     other distribution of any kind or character from Deepwater, or from any
     other source whatsoever, in respect of any of the Junior Liabilities, other
     than as expressly permitted by the terms hereof, such payment or other
     distribution shall be received in trust for the Funding Participants and
     promptly turned over by the Junior Creditor to Depository (if the
     Depository Agreement is in full force and effect, otherwise to
     Administrative Agent).

<PAGE>
     All Junior Creditors will mark their books and records so as clearly to
     indicate that the Junior Liabilities are subordinated in accordance with
     these Subordination Provisions and will execute such further documents or
     instruments and take such further action as Depository (if the Depository
     Agreement is in full force and effect, otherwise Administrative Agent) may
     reasonably from time to time request to carry out the intent of these
     Subordination Provisions.

4.   Application of Payments; No Subrogation. All payments and distributions
     ---------------------------------------
     received by any Beneficiary (as hereinafter defined) in respect to the
     Junior Liabilities, to the extent received in or converted into cash, may
     be applied by such Beneficiary first to the payment of any and all expenses
     (including reasonable attorneys' fees and out-of-pocket expenses) paid or
     incurred by such Beneficiary in enforcing these Subordination Provisions or
     in endeavoring to collect or realize upon any of the Junior Liabilities or
     any security therefor, and any balance thereof shall, solely as between the
     Junior Creditors and the Beneficiaries, if held by either Trustee or a
     Funding Participant while the Depository Agreement is in full force and
     effect, be paid to Depository and shall be applied in accordance with the
     Depository Agreement and, if paid to Administrative Agent, shall be applied
     toward the payment of, or retained as security for, the discharge of Senior
     Liabilities remaining unpaid to the extent recoverable against assets of
     Deepwater; provided, that notwithstanding any such payments or
     distributions received by any Beneficiary in respect of the Junior
     Liabilities and so applied by any such Beneficiary toward the payment of
     Senior Liabilities, the Junior Creditors shall be subrogated to the then
     existing rights of such Beneficiary, if any, in respect of the Senior
     Liabilities only at such time as these Subordination Provisions shall have
     been discontinued and Beneficiaries shall have received payment of the full
     amount of the Senior Liabilities and all obligations of the Funding
     Participants to fund Advances shall have terminated.

5.   Waivers by the Junior Creditors. The Junior Creditors hereby waive: (a)
     -------------------------------
     notice of acceptance by any Beneficiary of these Subordination Provisions;
     (b) notice of the existence, creation, non-payment, amendment, supplement,
     increase or waiver of all or any of the Senior Liabilities; and (c) all
     diligence in collection or protection of, or realization upon, the Senior
     Liabilities (or any portion thereof) or any security therefore.

6.   Obligations of the Junior Creditors. The Junior Creditors will not, without
     -----------------------------------
     prior written consent of the Majority Funding Participant: (a) except as
     permitted by the Participation Agreement, transfer or assign, or
     subordinate to any Liabilities other than the Senior Liabilities, any
     Junior Liabilities or any rights in respect thereof; (b) take any
     collateral security for any Junior Liabilities; (c) commence, or join with
     any other creditor in commencing, any bankruptcy, reorganization or
     insolvency proceedings with respect to Deepwater; (d) amend, supplement or
     modify any of the terms or provisions of any instrument or document
     evidencing any of the Junior Liabilities in a manner inconsistent herewith
     or prohibited by the Participation Agreement; or (e) upon the occurrence
     and continuation of any Event of Default in respect of any of the Senior
     Liabilities, attempt to enforce or collect any of the Junior Liabilities or
     any rights in respect thereof prior to the payment in full of all Senior
     Liabilities.

<PAGE>
7.   Rights of Beneficiaries. Beneficiary in accordance with the terms of the
     -----------------------
     Transaction Documents may, from time to time, whether before or after any
     discontinuance of these Subordination Provisions, at their sole discretion
     and without notice to the Junior Creditors, take any or all of the
     following actions: (a) retain or obtain a security interest in any property
     to secure any of the Senior Liabilities (provided that this clause (a) does
     not and shall not be deemed to constitute a grant of, or consent to, a lien
     or security interest on any property of the Junior Creditors); (b) retain
     or obtain the primary or secondary obligations of any other obligor or
     obligors with respect to any of the Senior Liabilities; (c) extend or renew
     for one or more periods (whether or not longer than the original period),
     alter or exchange any of the Senior Liabilities, or release or compromise
     any obligation of any nature of any obligor with respect to any of the
     Senior Liabilities; (d) release its security interest in, or surrender,
     release or permit any substitution or exchange for all or any part of any
     property (provided, that this clause (d) does not and shall not be deemed
     to constitute a grant of, or consent to, a lien or security interest on any
     property of Deepwater) securing any of the Senior Liabilities, or extend or
     renew for one or more periods (whether or not longer than the original
     period), or release, compromise, alter or exchange any obligations of any
     nature of any obligor with respect to any such property (provided that this
     clause (d) does not and shall not be deemed to constitute an agreement to
     release, compromise, alter or exchange any obligations of any nature of the
     Junior Creditors with respect to any such property of the Junior
     Creditors); and (e) release, compromise, alter or exchange any guarantee
     obligations or other obligations of any nature of any obligor under the
     Transaction Documents or any documents to which Deepwater is a party.

8.   Transfer of Senior Liabilities. Subject to the provisions of the
     ------------------------------
     Participation Agreement and the other Transaction Documents, any
     Beneficiary may from time to time, whether before or after any
     discontinuance of these Subordination Provisions, without notice to
     Deepwater (subject to the express provisions of the Participation
     Agreement) or the Junior Creditors, assign or transfer any or all of the
     Senior Liabilities, or any interest therein, and, notwithstanding any such
     assignment or transfer or any subsequent assignment or transfer thereof,
     such Senior Liabilities shall be and remain Senior Liabilities for the
     purposes of these Subordination Provisions, and every immediate and
     successive assignee or transferee of any of the Senior Liabilities or of
     any interest therein shall, to the extent of the interest of such assignee
     or transferee in the Senior Liabilities, be entitled to the benefits of
     these Subordination Provisions, to the same extent as if such assignee or
     transferee were the transferring Beneficiary to the extent of the interest
     transferred.

9.   Definitions. Unless otherwise defined herein, terms used herein have the
     -----------
     meanings assigned to such terms in Appendix 1 of that certain Amended and
     Restated Participation Agreement, dated the date hereof (the "Participation
                                                                   -------------
     Agreement"), among Deepwater Drilling II L.L.C., a Delaware limited
     ---------
     liability company, Wilmington Trust FSB, a Federal savings bank, not in its
     individual capacity except as expressly provided, but solely as trustee
     under the Investment Trust Agreement, Deepwater Investment Trust 1999-A, a
     Delaware business trust, Wilmington Trust Company, a Delaware banking
     corporation, not in its individual capacity except as expressly provided,
     but solely as Charter Trustee, various financial institutions, as
     Certificate Purchasers, Hatteras Funding

<PAGE>
     Corporation, as the Conduit (Hatteras), Liberty Street Funding Corp., as
     the Conduit (Liberty), Paradigm Fundings LLC, as the Conduit (Paradigm),
     various financial institutions, as Liquidity Purchasers, Bank of America
     N.A., as Administrative Agent, the Investment Trust Beneficiary, various
     Administrators and Liquidity Agents, solely with respect to Sections 2.15,
     9.4, 12.13(b) and 12.13(d) thereof, Transocean Sedco Forex Inc. and Conoco
     Inc., and solely with respect to Sections 5.2 and 6.4, RBF Deepwater
     Exploration II Inc. and Conoco Development II Inc.

               a)             "Junior  Liabilities" means all Liabilities of
                               -------------------
                              Deepwater  under  or  in  connection  with  any
                              Subordinated  Debt.

               b)             "Liabilities"  means  collectively  all
                               -----------
                              obligations  of  Deepwater,  howsoever  created,
                              arising  or evidenced, whether direct or indirect,
                              absolute  or  contingent,  or  now  or  hereafter
                              existing,  or  due  or  to  become  due.

               c)             "Senior  Liabilities"  means  collectively  all
                               -------------------
                              Liabilities owed to any of the Beneficiaries under
                              the  Transaction  Documents;  it  being  expressly
                              understood  and  agreed  that  the  term  "Senior
                                                                         ------
                              Liabilities",  as  used  herein, shall include any
                              -----------
                              and all Charter Return or interest accruing on any
                              of  the  Senior Liabilities after the commencement
                              of  any  proceedings  referred  to  in  Section 2,
                                                                      ---------
                              notwithstanding any provision or rule of law which
                              might  restrict  the rights of any Beneficiary, as
                              against  Deepwater  or  anyone  else,  to  collect
                              Charter  Return  or  interest.

               d)             "Beneficiary"  means  any  or  all  of the Charter
                               -----------
                              Trustee,  the  Investment  Trustee, the Investment
                              Trust  Beneficiary,  the  Investment  Trust,  any
                              Agent,  the  Depository or any Funding Participant
                              or  any other Indemnified Party (as defined in the
                              Participation  Agreement).

<PAGE>
                              Transaction Documents
                             ----------------------

(i)     the  Participation  Agreement;
(ii)    the  Charter  Trust  Agreement;
(iii)   the  Investment  Trust  Agreement;
(iv)    the  Deepwater  Hedging  Agreements,  if  any;
(v)     the  Hedging  Agreements,  if  any;
(vi)    the  Drilling  Consent;
(vii)   the  Master  Charter;
(viii)  Charter  Supplement  No.  1;
(ix)    Charter  Supplement  No.  2;
(x)     the  Security  Documents;
(xi)    the  Series  A  Charter  Trust  Certificates;
(xii)   the  Series  B  Charter  Trust  Certificate;
(xiii)  Loan  Agreement;
(xiv)   [Intentionally  Omitted];
(xv)    Fee  Letters;
(xvi)   Notes
(xvii)  the  Conoco  Guaranty;  and
(xviii) the  Transocean  Guaranty.

<PAGE>EXECUTION COPY

                                   APPENDIX 1
                                       to
                             Participation Agreement

                         DEFINITIONS AND INTERPRETATION

I.   RULES  OF  INTERPRETATION

     A.     General  Rules  of  Interpretation.  In  each  Transaction Document,
            ----------------------------------
unless  a  clear  contrary  intention  appears:

          (i)  the  singular  number  includes the plural number and vice versa;
                                                                     ---- -----

          (ii)  reference  to  any  Person  (individually  or  in any particular
     capacity)  includes  such  Person's  legal  representatives, successors and
     assigns  but, if applicable, only if such legal representatives, successors
     and  assigns are permitted by the Transaction Documents, and reference to a
     Person  in a particular capacity excludes such Person in any other capacity
     or  individually;

          (iii)  reference  to  any  gender  includes  the  other  gender;

          (iv)  reference to any agreement (including any Transaction Document),
     document  or  instrument  means  such  agreement, document or instrument as
     amended  or modified and in effect from time to time in accordance with the
     terms  thereof  and,  if  applicable,  the  terms  of the other Transaction
     Documents  and  reference  to  any  promissory  note,  certificate or other
     instrument  includes  any  promissory note, certificate or other instrument
     which  is  an  extension  or renewal thereof or a substitute or replacement
     therefor;

          (v)  reference  to  any  Applicable  Law  means such Applicable Law as
     amended,  modified,  codified,  replaced or reenacted, in whole or in part,
     and  in  effect  from  time  to  time,  including  rules  and  regulations
     promulgated  thereunder  and reference to any section or other provision of
     any Applicable Law means that provision of such Applicable Law from time to
     time  in  effect  and constituting the substantive amendment, modification,
     codification,  replacement  or  reenactment  of  such  section  or  other
     provision;

          (vi)  reference  in  any Transaction Document to any Article, Section,
                                                               -------  -------
     Appendix,  Schedule  or  Exhibit  means  such Article or Section thereof or
     --------   --------      -------              -------    -------
     Appendix,  Schedule  or  Exhibit  thereto;
     --------   --------      -------

          (vii)  "hereunder",  "hereof",  "hereto"  and  words of similar import
     shall  be deemed references to a Transaction Document as a whole and not to
     any  particular  Article,  Section  or  other  provision  thereof;
                      -------   -------

<PAGE>
          (viii)  "including"  (and  with  correlative  meaning "include") means
     including without limiting the generality of any description preceding such
     term;  and

          (ix) relative to the determination of any period of time, "from" means
     "from  and  including"  and  "to"  means  "to  and  excluding".

     B.     Accounting  Terms.  In  each  Transaction Document, unless expressly
            -----------------
otherwise  provided,  accounting  terms  shall be construed and interpreted, and
accounting  determinations  and  computations  shall be made, in accordance with
GAAP.

     C.     Legal  Representation  of  the  Parties.  The  Transaction Documents
            ---------------------------------------
were  negotiated by the parties with the benefit of legal representation and any
rule  of  construction  or  interpretation  otherwise  requiring the Transaction
Document to be construed or interpreted against any party shall not apply to any
construction  or  interpretation  hereof  or  thereof.

     D.     Defined  Terms.  Unless  a  clear  contrary intention appears, terms
            --------------
defined  herein  have  the  respective  indicated  meanings  when  used  in each
Transaction  Document.

II.  DEFINITIONS

     "Account"  means  each  of  the  Event  of  Loss  Proceeds  Account,  the
      -------
Reimbursement and Proceeds Account, the Operating Account, the Permitted Contest
Reserve  Account,  the  Drillship  Sales  Proceeds  Account  and the Termination
Proceeds  Account.

     "Account  Collateral"  has  the  meaning  specified  in  Section 2.2 of the
      -------------------
Depository  Agreement.

     "Accredited  Investor"  has  the  meaning  specified  in Rule 501(a) of the
      --------------------
Securities  Act.

     "Acquiring  Member"  has  the  meaning  specified  in  Section  9.5  of the
      -----------------
Participation  Agreement.

     "Acquiror"  means an entity (i) into which another entity is merged or (ii)
      --------
that acquires all or substantially all of the assets or outstanding Voting Stock
of  a  Person.

     "Actual  Knowledge"  means  the  actual awareness of a Responsible Officer.
      -----------------

     "Adjustment Date"  means  the  Initial  Charter  Margin Adjustment Date and
      ---------------
every sixth Charter Hire Payment Date thereafter.

     "Administrative  Agent" has the meaning specified in Section 11.1(a) of the
      ---------------------
Participation  Agreement.

     "Administrator (Hatteras)" has the meaning specified in the preamble to the
      ------------------------
Loan  Agreement.

     "Administrator  (Liberty)" has the meaning specified in the preamble to the
      ------------------------
Loan  Agreement.

                                        2
<PAGE>
     "Administrator (Paradigm)" has the meaning specified in the preamble to the
      ------------------------
Loan  Agreement.

     "Administrators"  means  each  of  the  Administrator  (Hatteras),  the
      --------------
Administrator  (Liberty)  and  the  Administrator  (Paradigm).

     "Advance"  has the meaning specified in Section 2.3(b) of the Participation
      -------
Agreement.

     "Affected  Funding  Participant"  is  defined  in  Section  7.7  of  the
      ------------------------------
Participation  Agreement.

     "Affiliate"  means,  when used with respect to any Person, any other Person
      ---------
directly  or indirectly controlling or controlled by or under direct or indirect
common control with such Person.  As used in this definition, the term "control"
shall  mean  (including  the  correlative  meanings  of the terms "controlling,"
"controlled  by"  and  "under common control with"), as used with respect to any
Person,  the  possession directly or indirectly, of the power to direct or cause
the  direction  of  the  management policies of such Person, whether through the
ownership  of  voting  securities  or  by  contract  or  otherwise.

     "After  Tax  Basis"  means, with respect to any payment to be received, the
      -----------------
amount  of  such payment increased so that, after deduction of the amount of all
Taxes  required  to  be  paid  by the recipient calculated at the maximum United
States federal rates then generally applicable to large widely held corporations
and  at  the  marginal  state and local rates certified by the recipient as then
applicable  to  such  recipient  (less  any tax savings realized and the present
value  of  any tax savings projected to be realized by the recipient as a result
of  the  payment  of the indemnified amount), with respect to the receipt by the
recipient of such amount, such increased payment (as so reduced) is equal to the
payment  otherwise  required  to  be  made.

     "Agents"  means  the  Administrative  Agent,  the  Liquidity Agents and the
      ------
Administrators.

     "Affected  Party"  means  each Funding Participant, each permitted assignee
      ---------------
thereof,  each  Program  Support Provider of each Conduit, and each Affiliate of
the  foregoing  Persons.

     "Alternate  Rate  Funding"  means  any  Contribution,  Advance or Liquidity
      ------------------------
Purchase  for which the Series A Return, the Series B Return or any Return Rate,
as applicable, is calculated with reference to an Alternate Rate, as applicable.

     "Alternate  Rate"  means  the Alternate Rate (Hatteras), the Alternate Rate
      ---------------
(Liberty)  or  the  Alternate  Rate  (Paradigm).

     "Alternate  Rate  (Hatteras)" means, for any day, the higher of:  (a) 0.50%
      ---------------------------
per  annum  above  the latest Federal Funds Rate and (b) the rate of interest in
effect  for  such day as publicly announced from time to time by Bank of America
("BofA"),  as  its  "reference rate."  (The reference rate is a rate set by BofA
  ----
based  upon  various  factors including BofA's costs and desired return, general
economic  conditions  and  other  factors,  and is used as a reference point for
pricing some loans, which may be priced at, above or below such announced rate.)
Any  change  in  the  reference  rate announced by BofA shall take effect at the
opening  of  business  on  the  day specified in the public announcement of such
change.

                                        3
<PAGE>
     "Alternate Rate (Liberty)" means, for any day, the higher of: (a) 0.50% per
      ------------------------
annum above the latest Federal Funds Rate and (b) the rate of interest in effect
for  such  day  as  publicly  announced from time to time by Bank of Nova Scotia
("BNS"), as its "reference rate." (The reference rate is a rate set by BNS based
upon  various factors including BNS's costs and desired return, general economic
conditions  and other factors, and is used as a reference point for pricing some
loans,  which  may be priced at, above or below such announced rate.) Any change
in  the  reference  rate  announced  by  BNS shall take effect at the opening of
business  on  the  day  specified  in  the  public  announcement of such change.

     "Alternate  Rate  (Paradigm)" means, for any day, the higher of:  (a) 0.50%
      ---------------------------
per  annum  above  the latest Federal Funds Rate and (b) the rate of interest in
effect  for  such  day  as  publicly announced from time to time by Westdeutsche
Landesbank  Girozentrale,  New  York ("West LB"), as its "reference rate."  (The
                                       -------
reference  rate  is  a  rate set by West LB based upon various factors including
West  LB's  costs  and  desired  return,  general  economic conditions and other
factors,  and  is used as a reference point for pricing some loans, which may be
priced  at,  above  or  below such announced rate.)  Any change in the reference
rate  announced  by  West LB shall take effect at the opening of business on the
day  specified  in  the  public  announcement  of  such  change.

     "Applicable  Law"  means all applicable laws, rules, regulations (including
      ---------------
Environmental  Laws), statutes, treaties, conventions (including, if applicable,
the  Safety of Life at Sea Convention) codes, ordinances, permits, certificates,
orders  and licenses of, and interpretations by, all Government Authorities, and
applicable  judgments, decrees, injunctions, writs, orders or like action of any
court,  arbitrator  or other administrative, judicial or quasi-judicial tribunal
agency  of  competent  jurisdiction  (including  those  pertaining to health and
safety and those pertaining to the construction, use or operation of the Vessel,
the  OFE  and  any  Modifications).

     "Applicable  Liquidity  Purchasers"  means, (i) with respect to the Conduit
      ---------------------------------
(Hatteras),  the  Liquidity  Purchasers  (Hatteras),  (ii)  with  respect to the
Conduit  (Liberty),  the  Liquidity  Purchasers  (Liberty),  with respect to the
Conduit  (Paradigm),  the  Liquidity  Purchasers  (Paradigm).

      Applicable  Office"  means,  with respect to each Funding Participant, the
      ------------------
office,  branch  or  Affiliate  of  such  Funding  Participant  specified as its
"Applicable  Office" to Deepwater, the Charter Trustee and the Investment Trust.

     "Applicable  Percentage"  means:
      ----------------------

          (i)  with  respect  to  payments made or obligations guaranteed by (A)
     Transocean  or  its  Affiliates  (other  than  Deepwater)  or (B) Deepwater
     pursuant  to  the  terms  of  Charter  Supplement  No.  1,  60%;  or

          (ii)  with  respect  to payments made or obligations guaranteed by (A)
     Conoco  or  its Affiliates (other than Deepwater) or (B) Deepwater pursuant
     to  the  terms  of  Charter  Supplement  No.  2,  40%.

     "Appraisal" means, with respect to the Drillship, an appraisal delivered on
      ---------
the  Closing  Date,  prepared  by  the  Appraiser.

                                        4
<PAGE>
     "Appraiser"  means  American  Appraisal  Incorporated.
      ---------

     "Assigned Contract" has the meaning specified in the seventh recital to the
      -----------------
Deepwater  Assignment.

     "Assumption  Cure  Right"  has the meaning set forth in Section 9(a) of the
      -----------------------
Drilling  Consent.

     "Bank  of  America"  means  Bank  of  America,  N.A.  and  its  Affiliates.
      -----------------

     "Bankruptcy Default" means a Charter Default described in Section 4.1(e) or
      ------------------
(f) of either Charter Supplement No. 1 or Charter Supplement No. 2.

     "Base  Charter  Term"  means  the period commencing on the Closing Date and
      -------------------
ending on the fifth anniversary of the Day Rate Commencement Date.

     "Base  Rate"  means  a  rate  per  annum  equal  to  LIBOR.
      ----------

     "Base  Rate  Funding" means any Contribution, Advance or Liquidity Purchase
      -------------------
for  which  the  Series  A  Return,  Series  B  Return  or  any  Return Rate, as
applicable,  is  calculated  with  reference  to  the  Base  Rate.

     "Basic  Hire"  means  the sum of (x) the principal amortization payment due
      -----------
and payable on the applicable Charter Hire Payment Date as set forth on Schedule
I  to  the Master Charter and (y) all accrued and unpaid Charter Return then due
and  payable.

     "Beneficial  Owner  Amount" has the meaning specified in Section 3.2 of the
      -------------------------
Charter  Trust  Agreement.

     "Beneficial  Owners"  means those financial institutions who are parties to
      ------------------
the  Charter  Trust  Agreement  and  identified  therein as "Beneficial Owners".

     "Beneficial Participant" has the meaning specified in Section 3.8(h) of the
      ----------------------
Charter  Trust  Agreement.

     "Board  of  Governors"  means the Board of Governors of the Federal Reserve
      --------------------
System  of  the  United  States  of  America.

     "Borrower" has the meaning specified in the preamble to the Loan Agreement.
      --------

     "Borrower  Events"  has  the  meaning  specified in Section 6.2 of the Loan
      ----------------
Agreement.

     "Builder" means, collectively, Samsung Heavy Industries Co., Ltd., a Korean
      -------
corporation,  and  Samsung  Corporation, a Korean corporation, as builder of the
Vessel.

     "Business  Day" means (i) except as set forth in clause (ii) below, any day
      -------------
excluding  (x) Saturday, (y) Sunday, and (z) any day on which banks in New York,
New York, Wilmington, Delaware, Charlotte, North Carolina or Houston, Texas, are
authorized  by  law  to  close,  and  (ii)  with  respect  to  all  notices  and
determinations  in  connection  with  and payments of Charter

                                        5
<PAGE>
Return  any day which is a Business Day described in (i) above and which is also
a  day  for  trading  by and between banks in U.S. dollar deposits in the London
interbank  Eurodollar  market.

     "Casualty"  means  any  damage  or destruction of all or any portion of the
      --------
Drillship  as  a  result  of  a  fire  or  other  casualty aggregating more than
$2,000,000  to  repair  or  replace, which does not constitute an Event of Loss.

     "CERCLA"  means the Comprehensive Environmental Response, Compensation, and
      ------
Liability  Act  of  1980,  42  U.S.C.  Sec.  9601  et seq., and its implementing
regulations  and  amendments.

     "Certificate"  means each Series A Charter Trust Certificate and the Series
      -----------
B  Charter  Trust  Certificate.

     "Certificate  Margin"  means  175.0  basis  points per annum so long as the
      -------------------
ratings  of  both  Transocean  and  Conoco  are  at or above Investment Grade or
otherwise  225.0  basis  points  per  annum.

     "Certificate  Purchaser"  means  those  financial  institutions  who  are
      ----------------------
identified  in  the  Charter  Trust  Agreement  as  "Beneficial  Owners".

     "Certificate  Purchaser  Amount"  means,  with  respect to each Certificate
      ------------------------------
Purchaser,  at any given time, the aggregate amount of all Contributions made by
such  Certificate  Purchaser  plus  accrued but unpaid Postponement Yield due to
such  Certificate  Purchaser, if any, minus the amount of any distributions paid
to  such  Certificate  Purchaser  in  reduction  of  the  Charter  Balance.

     "Certificate  Purchaser Balance" means, at any given time, the aggregate of
      ------------------------------
all  Certificate  Purchaser  Amounts.

     "Certificate  Purchaser Commitment" means, with respect to each Certificate
      ---------------------------------
Purchaser,  the  amount  set  forth on Schedule I to the Charter Trust Agreement
opposite  the  name  of each Certificate Purchaser, which amount may be adjusted
pursuant  to  Section  7.7,  7.9  or  9.1  of  the  Participation  Agreement.

     "Certificate  Purchaser  Commitment Percentage" means, with respect to each
      ---------------------------------------------
Certificate  Purchaser,  the  percentage  beneficial  interest  held  by  such
Certificate  Purchaser  under  the  Charter  Trust  Agreement  from time to time
determined  in  accordance  with  the  Charter  Trust  Agreement.

     "Certificate  Return  Rate" means the Base Rate plus the Certificate Margin
      -------------------------
or,  to  the  extent that the Base Rate is unavailable or illegal, the Alternate
Rate  plus  the  Certificate  Margin.

     "Change  of  Control"  means  (i)  as  to  any Person (including Conoco and
      -------------------
Transocean),  a  sale,  assignment  or  transfer  by  its  Affiliates  of all or
substantially  all  of the assets of such Person and its Subsidiaries taken as a
whole  (whether  in a single transaction or a series of related transactions) to
any  "person"  or  "group"  (as  the ultimate purchaser, assignee or transferee)
within  the  meaning  of Section 13(d)(3) and Section 14(d)(2) of the Securities
Exchange  Act  of  1934  other  than  to  its  Affiliates; (ii) as to any Person
(including  Conoco  and Transocean), its

                                        6
<PAGE>
Affiliates directly or indirectly cease to beneficially own more than 50% of the
outstanding voting stock of such Person; (iii) after the occurrence of the event
described  in  clause  (ii),  the  first  date  on which the individuals who are
directors  of  the relevant entity and whose election or nomination for election
by  the  stockholders of the relevant entity is approved, or who were elected by
the  affirmative  vote of, at least two-thirds of the directors who were members
of  the board of directors of the relevant entity at the time of such nomination
or  election,  will  cease to constitute a majority of the board of directors of
the relevant entity or its successor by merger, consolidation or sale of assets;
or  (iv)  with  respect  to  any  Person, the liquidation or dissolution of such
Person.  For purposes of this definition, relevant entity means either Conoco or
Transocean,  or,  if  there  is  a Parent of such respective Person, the Parent;
provided  that none of the merger of Conoco with Phillips Petroleum Company, any
--------
acquisition  of  assets  or  securities  related  thereto, any related change of
directors  of  any entity or related dissolution of any Person shall be a Change
of  Control.

     "Change  of Control Prepayment Amount" has the meaning specified in Section
      ------------------------------------
9.4  of  the  Participation  Agreement.

     "Charter"  means  both  charters  created  by  the  Master  Charter,  as
      -------
supplemented  by  Charter  Supplement  No.  1  and  Charter  Supplement  No.  2.

     "Charter  Balance"  means,  at  any  given  time, the Certificate Purchaser
      ----------------
Balance  plus  the  Lender  Balance.

     "Charter  Commencement  Date"  means  the  Closing  Date.
      ---------------------------

     "Charter  Default"  means  any  event or condition which, with the lapse of
      ----------------
time  or  the  giving  of  notice,  or both, would constitute a Charter Event of
Default.

     "Charter Event of Default" has the meaning specified in Section 16.1 of the
      ------------------------
Master  Charter.

     "Charter Extension Option" has the meaning specified in Section 20.2 of the
      ------------------------
Master  Charter.

     "Charter  Hire"  means  Basic  Hire  plus  Supplemental  Hire.
      -------------

     "Charter  Hire  Payment  Date" means the last Business Day of each calendar
      ----------------------------
month  commencing  on the Initial Charter Hire Payment Date, and the last day of
the  Charter  Term.

     "Charter  Hire  Payment  Date  Certificate"  has  the  meaning specified in
      -----------------------------------------
Section  3.4(b)  of  the  Depository  Agreement.

     "Charter  Margin"  means  either  or both of the Certificate Margin and the
      ---------------
Loan  Margin.

     "Charter  Residual  Risk  Amount"  means  18% of the Charter Balance at the
      -------------------------------
commencement  of  the  Base  Charter  Term.

     "Charter  Return" means the aggregate of the Series A Return and the Series
      ---------------
B  Return.

                                        7
<PAGE>
     "Charter  Supplement"  means Charter Supplement No. 1 or Charter Supplement
      -------------------
No.  2.

     "Charter  Supplement  No.  1"  means  that  Amended  and  Restated  Charter
      ---------------------------
Supplement No. 1 dated as of the Documentation Date, between the Charter Trustee
and  Deepwater.

     "Charter  Supplement  No.  1 Event of Default" has the meaning specified in
      --------------------------------------------
Section  4.1  of  Charter  Supplement  No.  1.

     "Charter  Supplement  No.  1  Payment  Date"  has  the meaning specified in
      ------------------------------------------
Section  3.1  of  Charter  Supplement  No.  1.

     "Charter  Supplement  No.  2"  means  that  Amended  and  Restated  Charter
      ---------------------------
Supplement No. 2 dated as of the Documentation Date, between the Charter Trustee
and  Deepwater.

     "Charter  Supplement  No.  2 Event of Default" has the meaning specified in
      --------------------------------------------
Section  4.1  of  Charter  Supplement  No.  2.

     "Charter  Supplement  No.  2  Payment  Date"  has  the meaning specified in
      ------------------------------------------
Section  3.1  of  Charter  Supplement  No.  2.

     "Charter Supplement Prepayment Amount" has the meaning specified in Section
      ------------------------------------
4.2(c)  of  the  Depository  Agreement.

     "Charter  Term"  has  the  meaning  specified  in Section 2.3 of the Master
      -------------
Charter.

     "Charter  Trust"  means  the  trust  created  pursuant to the Charter Trust
      --------------
Agreement.

     "Charter  Trust  Agreement"  means  that Amended and Restated Charter Trust
      -------------------------
Agreement  (Deepwater Charter Trust 1999-A), dated as of the Documentation Date,
between  the  Charter  Trustee,  the  Certificate  Purchasers and the Investment
Trust.

     "Charter  Trust Certificates" means the Series A Charter Trust Certificates
      ---------------------------
and  the  Series  B  Charter  Trust  Certificate.

     "Charter  Trust  Company"  has the meaning specified in the preamble to the
      -----------------------
Charter  Trust  Agreement.

     "Charter  Trust  Estate"  has  the  meaning specified in Section 2.2 of the
      ----------------------
Charter  Trust  Agreement.

     "Charter  Trustee"  has  the  meaning  specified  in  the  preamble  to the
      ----------------
Participation  Agreement.

     "Charter Trustee Assignment" means the Amended and Restated Charter Trustee
      --------------------------
Assignment, dated as of the Documentation Date, between the Charter Trustee, the
Investment  Trustee  and  the  Hedging  Agreement  Counterparties  (if  any).

     "Claims"  has  the  meaning  specified in Section 10.1 of the Participation
      ------
Agreement.

                                        8
<PAGE>
     "Classification  Society"  has the meaning specified in Section 10.1 of the
      -----------------------
Master  Charter.

     "Closing  Date"  means  August  31,  1999.
      -------------

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

     "Collateral"  means  the  Charter  Trustee's  rights  in the Drillship, the
      ----------
Account  Collateral,  the  Collateral Documents and all other assets or property
over  which a Lien or security interest has purported to have been granted under
the  Security  Documents.

     "Collateral  Documents"  has  the  meaning  specified in Section 2.1 of the
      ---------------------
Depository  Agreement.

     "Commercial  Paper Account" has the meaning specified in Section 2.2 of the
      -------------------------
LAPA  (Hatteras).

     "Commercial  Paper  Notes" means the Commercial Paper Notes (Hatteras), the
      ------------------------
Commercial  Paper  Notes  (Paradigm)  and  the Commercial Paper Notes (Liberty).

     "Commercial  Paper  Notes  (Hatteras)" shall mean commercial paper notes of
      ------------------------------------
the  Conduit  (Hatteras)  issued  pursuant to and in accordance with its program
documents.

     "Commercial Paper Notes (Liberty)" shall mean commercial paper notes of the
      --------------------------------
Conduit  (Liberty)  issued  pursuant  to  and  in  accordance  with  its program
documents.

     "Commercial  Paper  Notes  (Paradigm)" shall mean commercial paper notes of
      ------------------------------------
the  Conduit  (Paradigm)  issued  pursuant to and in accordance with its program
documents.

     "Commitment" means each or all of the Certificate Purchaser Commitment, the
      ----------
Liquidity  Purchaser  Commitment Amount and the Facility Loan Commitment Amount.

     "Competitor"  means  a Person who either (i) is engaged in the exploration,
      ----------
development,  production,  refinement,  marketing  or  retailing  of  crude oil,
petroleum  products,  natural gas or gas liquids or in providing marine contract
drilling  services  for  oil,  gas  or other hydrocarbons or (ii) has a material
interest  (whether held directly or indirectly) in, or is otherwise an Affiliate
of,  a  Person  that  is  engaged  in  the exploration, development, production,
refinement, marketing or retailing of crude oil, petroleum products, natural gas
or gas liquids or in providing marine contract drilling services for oil, gas or
other  hydrocarbons;  provided,  however,  that a Person who is an institutional
                      --------   -------
investor  or  lender  which  is a passive investor or lender in the financing of
equipment  or  facilities  used  in  the  exploration,  development, production,
refinement, marketing or retailing of crude oil, petroleum products, natural gas
or gas liquids or in providing marine contract drilling services for oil, gas or
other  hydrocarbons or a passive investor in any Person described in clauses (i)
or  (ii)  above  shall  not,  solely  by  the  reason of such investment or loan
(including  by  reason of foreclosing on any facilities used by such Person), be
deemed  to  be  a  "Competitor".
                    ----------

     "Condemnation"  means  (x)  the  permanent  and  complete  condemnation,
      ------------
requisition, confiscation, arrest, seizure or other taking of title or leasehold
interest  to  the  Drillship  or any

                                        9
<PAGE>
transfer  made  in lieu of any such actual or threatened action or proceeding or
(y) any condemnation other than a requisition of temporary use or requisition of
use  for  a period scheduled to last beyond the end of the Charter Term or which
in  fact is continuing on the last day of the Charter Term even if not scheduled
to  last beyond the Charter Term, in either case resulting in the loss of use or
possession  of  substantially  all  of  the Drillship. A "Condemnation" shall be
                                                          ------------
deemed  to  have  occurred  on  the  earliest  of the dates that use, title or a
leasehold  interest  is  taken.

     "Conduit  Advance"  has  the  meaning  specified  in  Section 2.3(b) of the
      ----------------
Participation  Agreement.

     "Conduit  Fee  Letter"  means  that  certain  fee  letter  dated  as of the
      --------------------
Documentation  Date made by Deepwater for the benefit of the Conduit (Hatteras),
the  Conduit  (Paradigm)  and  the  Conduit  (Liberty).

     "Conduit  (Hatteras)"  means  Hatteras  Funding  Corporation.
      -------------------

     "Conduit  (Liberty)"  means  Liberty  Street  Funding  Corp.
      ------------------

     "Conduit  Loan"  has  the  meaning  specified  in  Section  2.1 of the Loan
      -------------
Agreement.

     "Conduit  Loan  Amount"  means  each of the Conduit Loan Amount (Hatteras),
      ---------------------
Conduit  Loan  Amount  (Liberty)  and  Conduit  Loan  Amount  (Paradigm).

     "Conduit  Loan  Amount  (Hatteras)"  means  $126,470,589.
      ---------------------------------

     "Conduit  Loan  Amount  (Liberty)"  means  $50,000,000.
      --------------------------------

     "Conduit  Loan  Amount  (Paradigm)"  means  $52,076,267.
      ---------------------------------

     "Conduit  Loan  Events of Default" has the meaning specified in Section 6.1
      --------------------------------
of  the  Loan  Agreement.

     "Conduit  Notes"  has  the  meaning specified in Section 2.3(a) of the Loan
      --------------
Agreement.

     "Conduit  (Paradigm)"  means  Paradigm  Funding  LLC.
      -------------------

     "Conduit Portion" means a fraction, the numerator of which is the aggregate
      ---------------
face  amount  of  Notes  held  by  a Conduit and the denominator of which is the
aggregate  amount  of  all  Notes  then  outstanding.

     "Conduits" means each of the Conduit (Hatteras), the Conduit (Paradigm) and
      --------
the  Conduit  (Liberty).

     "Conoco"  means  Conoco  Inc.  (formerly Conoco Energy Company), a Delaware
      ------
corporation.

     "Conoco  Charter"  means  the  charter  created  by  the Master Charter, as
      ---------------
supplemented  by  Charter  Supplement  No.  2.

                                       10
<PAGE>
     "Conoco  Drilling  Contract" means that Deepwater Drillship Contract, dated
      --------------------------
as  of  April  30,  1997,  as  assigned,  amended and restated, between Frontier
Deepwater  Drilling  Inc.  and  Deepwater.

     "Conoco  Drilling  Contract  Guaranty"  means  the  Amended  and  Restated
      ------------------------------------
Deepwater  Drillship Project, Conoco Inc. Guaranty, dated as of August 31, 1999,
given  by  Conoco  Inc.  in  favor  of  Deepwater.

     "Conoco  Drilling  Party"  means  Frontier  Deepwater  Drilling  Inc.
      -----------------------

     "Conoco  Guaranty" means the Amended and Restated Conoco Guaranty, dated as
      ----------------
of  the  Documentation  Date,  given  by  Conoco  in  favor of the Trustees, the
Investment  Trust,  the  Administrative  Agent,  the  Funding  Participants, the
Hedging  Agreement  Counterparties,  if  any,  and the other beneficiaries named
therein.

     "Conoco  Series  A Charter Trust Certificate" means each certificate issued
      -------------------------------------------
to a Beneficial Owner from the Charter Trustee pursuant to Section 2.4(a) of the
Participation  Agreement  and  in accordance with the Charter Trust Agreement to
evidence  40% of the Certificate Purchaser Amount of each such Beneficial Owner.

     "Conoco  Usage"  means  the number of days, rounded to the nearest day, the
      -------------
Drillship  has  been  utilized  under  the  Conoco  Drilling  Contract.

     "Construction  Contract"  means the Contract for Construction and Sale of a
      ----------------------
103,000  Metric  Tons  Displacement Drillship (Hull No. 1231), dated February 7,
1997,  between  the  Buyer  and  the  Builder.

     "Consumer  Price Index" means the Consumer Price Index of all Items for all
      ---------------------
Urban Consumers (1981-1983 = 100) published by the Bureau of Labor Statistics of
the  United  States Department of Labor, as reported by the Wall Street Journal.
If  for  any reason the Bureau of Labor Statistics does not furnish the Consumer
Price  Index,  the  parties  instead  shall mutually select, accept and use such
other  index  or comparable statistics on the cost of living in Washington, D.C.
that  is  computed  and  published  by  an  agency  of  the  United  States or a
responsible  financial  periodical  of  recognized  authority.

     "Contract Payments" has the meaning specified in Section 6 of the Deepwater
      -----------------
Assignment.

     "Contribution"  has  the  meaning  specified  in  Section  2.3(a)  of  the
      ------------
Participation  Agreement.

     "Counterpart  Series A Charter Trust Certificate" has the meaning specified
      -----------------------------------------------
in  Section  2.4(c)  of  the  Participation  Agreement.

     "Coverage  Ratio"  means, (i) as of any Charter Hire Payment Date occurring
      ---------------
on  or  prior  to  the  third  Charter  Hire  Payment Date, the ratio of (x) the
projected  Revenues for the next three calendar months (beginning with the month
following  the  month in which such Charter Hire Payment Date occurs) to (y) the
aggregate  amount of all payments (including projected

                                       11
<PAGE>
Operation  and  Maintenance  Expenses)  that  will  be required to be made under
clauses  "first"  through  "ninth" of Section 3.4(b) of the Depository Agreement
during  such  three-month  period,  and  (ii) thereafter, as of any Charter Hire
Payment Date, the ratio of (A) the actual Revenues for the immediately preceding
three  calendar  months  (including the month in which such Charter Hire Payment
Date  occurs)  to (B) the aggregate amount of all payments under clauses "first"
through  "eighth"  of  Section  3.4(b)  of  the  Depository  Agreement that were
actually made during such three-month period or that would have been made during
such  period  if there had been sufficient funds in the Operating Account at the
time  such  payments  were  required  to  be  made.

     "Covered  Assets"  shall mean, with respect to each Conduit, the loans made
      ---------------
by  such  Conduit  to  the  Investment  Trust  and  notes  related  thereto.

     "CP  Rate"  for any Return Period for any Conduit Loan means, the per annum
      --------
rate equivalent to the "weighted average cost" (as defined below) related to the
issuance  of  the  Commercial  Paper  Notes  by  the applicable Conduit that are
allocated, in whole, or in part, by such Conduit or its Administrator to fund or
maintain  such  Conduit  Loan  (and  which  may also be allocated in part to the
funding  of  other  assets  of  such  Conduit);  provided,  however, that if any
                                                 --------   -------
component of such rate is a discount rate, in calculating the "CP Rate" for such
                                                               -------
Conduit Loans for such Return Period, a Conduit shall for such component use the
rate  resulting  from  converting  such  discount  rate  to  an interest bearing
equivalent  rate  per  annum.  As used in this definition, a Conduit's "weighted
                                                                        --------
average  cost" shall consist of (w) the daily weighted average interest rate (or
-------------
discount)  paid  to  purchasers of the Commercial Paper Notes, together with the
Dealer  Fee,  to  the  extent allocated, in whole or in part, to such Commercial
Paper  Notes by such Conduit or its Administrator, (x) certain documentation and
transaction  costs  associated with the issuance of such Commercial Paper Notes,
(y)  any  incremental  out-of-pocket  carrying  costs  incurred  with respect to
Commercial  Paper  Notes  allocated  to such Conduit Loans and maturing on dates
other  than  those  on which corresponding funds are received by the Conduit and
(z)  the actual interest rate paid on other borrowings by the Conduit, including
borrowings  to  fund  small or odd dollar amounts are not easily accommodated in
the  commercial  paper  market.

     "Credit  Support"  means (i) any direct or indirect payment by one Drilling
      ---------------
Party  or its Affiliates to the other Drilling Party for the purpose of allowing
such  payee Drilling Party to meet its obligations under its respective Drilling
Contract  or  (ii) any guaranty or other credit support by one Drilling Party or
its  Affiliates of the obligations of the other Drilling Party or its Affiliates
for  the  purpose  of  allowing  such  benefited  Drilling  Party  to  meet  its
obligations  under  its  respective  Drilling  Contract.

     "Cross  Charter  Default"  means, with respect to a Charter Supplement, the
      -----------------------
Charter  Event  of  Default  listed  in  Section  4.1(k)  thereof.

     "Day  Rate"  means  the  daily rate payable to Deepwater under the Drilling
      ---------
Contracts  for  the  use  of  the  Drillship.

     "Day  Rate  Commencement  Date"  means  March  31,  1999.
      -----------------------------

     "Dealer  Fee" has the meaning specified in each related Conduit Fee Letter.
      -----------

     "Deepwater"  has the meaning specified in the preamble to the Participation
      ---------
Agreement.

                                       12
<PAGE>
     "Deepwater  Assignment"  means  the  Assignment  Agreement, dated as of the
      ---------------------
Closing  Date,  between  Deepwater  and  the  Charter  Trustee.

     "Deepwater  Hedging Agreements" has the meaning specified in Section 6.5 of
      -----------------------------
the  Participation  Agreement.

     "Deepwater  Obligations"  means all of Deepwater's obligations (monetary or
      ----------------------
otherwise)  arising  under,  or  in  connection with, the Transaction Documents.

     "Deepwater Person" means Deepwater, any permitted subcharterer or any other
      ----------------
Person  (other  than the Charter Trustee, the Investment Trustee, the Investment
Trust or any Funding Participant) using or in possession of the Drillship or any
officer,  director,  employee  or  agent  of  any  of  the  foregoing.

     "Default"  means  a  Charter  Default.
      -------

     "Defaulted  Amount"  has  the  meaning  specified  in  Section  7.9  of the
      -----------------
Participation  Agreement.

     "Defaulting Certificate Purchaser" has the meaning specified in Section 7.9
      --------------------------------
of  the  Participation  Agreement.

     "Defaulting  Drilling  Party"  means  (i) Frontier Deepwater Drilling Inc.,
      ---------------------------
where  a  Charter  Supplement  No.  2 Event of Default exists (but not a Charter
Supplement No.1 Event of Default, other than a Cross Charter Default thereunder)
or  would  exist  but  for  the  exercise  of  the  Assumption  Cure  Right, the
Non-Assumption  Cure  Right  or  the  provision  of  Credit Support (except such
Charter  Event  of  Default  arising  solely  from  the  Cross  Charter  Default
thereunder)  or (ii) R&B Falcon Drilling (International & Deepwater) Inc., where
a  Charter  Supplement  No.  1  Event  of  Default  exists  (but  not  a Charter
Supplement  No.  2  Event  of  Default,  other  than  a  Cross  Charter  Default
thereunder)  or  would  exist but for the exercise of the Assumption Cure Right,
the  Non-Assumption  Cure  Right or the provision of Credit Support (except such
Charter  Event  of  Default  arising  solely  from  a  Cross  Charter  Default
thereunder).

     "Deposited  Amounts"  has  the  meaning  specified  in  Section  2.1 of the
      ------------------
Depository  Agreement.

     "Depository"  has  the  meaning specified in the preamble to the Depository
      ----------
Agreement.

     "Depository Agreement" means the Amended and Restated Depository Agreement,
      --------------------
dated  as  of  the Documentation Date, among Deepwater, the Charter Trustee, the
Investment  Trust  and  the  Depository.

     "Disbursement  Certificate"  means  an  Event  of  Loss  Certificate,  a
      -------------------------
Reimbursement  and Proceeds Certificate, a Payment Date Certificate, a Permitted
Contest  Reserve  Certificate,  a  Trustee  Default  Notice, a Hedging Agreement
Default  Notice,  a Drillship Sales Proceeds Certificate, a Termination Proceeds
Certificate  or  a  Permitted  Contest  Reserve  Certificate.

                                       13
<PAGE>
     "Disbursement  Information" has the meaning specified in Section 4.3 of the
      -------------------------
Depository  Agreement.

     "Documentation  Date"  has  the  meaning specified in Section 3.1(a) of the
      -------------------
Participation  Agreement.

     "Dollars",  "US$"  and  "$"  means dollars in lawful currency of the United
      -------     ---         -
States.

     "Drawn  Rate"  means  the  Base Rate plus the Loan Margin or, to the extent
      -----------
that  the  Base  Rate  is  unavailable  or  illegal,  the  Alternate  Rate.

     "Drilling  Consent"  means  the  Amended  and  Restated  Acknowledgment and
      -----------------
Consent  Agreement,  dated as of the Documentation Date, by and among R&B Falcon
Drilling  (International  &  Deepwater)  Inc., Frontier Deepwater Drilling Inc.,
Deepwater,  the  Charter  Trustee  and  the  Investment  Trust.

     "Drilling  Contract"  means  the Conoco Drilling Contract or the R&B Falcon
      ------------------
Drilling  Contract.

     "Drilling Contract Guaranty" means the Conoco Drilling Contract Guaranty or
      --------------------------
the  Transocean  Drilling  Contract  Guaranty.

     "Drilling  Party"  means  Frontier  Deepwater  Drilling  Inc. or R&B Falcon
      ---------------
Drilling  (International  &  Deepwater)  Inc.  or, when used in the plural, both
Frontier  Deepwater  Drilling  Inc.  and  R&B  Falcon  Drilling (International &
Deepwater)  Inc.

     "Drilling  Services  Agreement  Contractor"  means  R&B Falcon Drilling Co.
      -----------------------------------------

     "Drillship"  means  the  Vessel  together  with  the  OFE.
      ---------

     "Drillship  Sales  Proceeds" has the meaning specified in Section 3.6(a) of
      --------------------------
the  Depository  Agreement.

     "Drillship  Sales  Proceeds  Account"  has the meaning specified in Section
      -----------------------------------
3.6(a)  of  the  Depository  Agreement.

     "Drillship Sales Proceeds Certificate" has the meaning specified in Section
      ------------------------------------
3.6(b)  of  the  Depository  Agreement.

     "Effective  Date"  has  the  meaning  specified  in  Section  4.1  of  the
      ---------------
Participation  Agreement.

     "Eligible  Asset"  shall mean loans secured by interests in the Collateral,
      ---------------
including,  but  not limited to, any Covered Assets, which meet the criteria set
forth  in  each  Conduit's credit and investment policy, as amended from time to
time,  as  of  the  date a loan is made in relation to such Eligible Asset or is
purchased  by  any  Conduit.

     "Environmental Claim" means any Claim arising out of or attributable to any
      -------------------
Environmental  Event  or  Hazardous  Activity.

                                       14
<PAGE>
     "Environmental  Event" means (i) any activity, occurrence or condition that
      --------------------
violates  or  results  in  noncompliance  with  any  Environmental Law; (ii) any
release  of  or  potential  release  of  any Hazardous Substance or Oil from the
Drillship;  (iii)  any  incident  in  which  any  Hazardous  Substance or Oil is
released or threatened to be released from a vessel other than the Drillship and
which  involves  a collision between the Drillship and such other vessel or some
incident  of  navigation  or operation, in either case, in connection with which
the  Drillship  is  actually  or  potentially  liable  to be arrested and/or the
Drillship  or  Deepwater and/or any operator or manager is at fault or allegedly
at  fault or otherwise liable to any legal or administrative action; or (iv) any
other incident in which any Hazardous Substance or Oil is released or threatened
to  be  released  otherwise than from the Drillship in connection with which the
Drillship  is  actually  or  potentially  liable  to  be  arrested  and/or where
Deepwater  and/or  any  operator  or  manager  of  the  Drillship is at fault or
allegedly  at  fault  or otherwise liable to any legal or administrative action.

     "Environmental  Law"  means all applicable international, foreign, federal,
      ------------------
state  and  local laws, regulations, conventions, treaties, written governmental
agreements and written governmental policies that are legally binding, statutes,
ordinances,  codes,  rules,  directives,  orders,  decrees,  judicial  and
administrative  judgments  and  rules of common law, whether now or hereafter in
effect,  that  relate in any way to Oil or any Hazardous Substance in connection
with  the  regulation  or  protection  of human health, natural resources or the
environment.

     "ERISA"  means  the  Employee  Retirement  Income  Security  Act  of  1974.
      -----

     "Estimated  Interest  Period"  has the meaning specified in Section 2.16 of
      ---------------------------
the  Participation  Agreement.

     "Eurocurrency  Liabilities" has the meaning specified in Section 7.5 of the
      -------------------------
Participation  Agreement.

     "Event  of  Default"  means  a  Charter  Event  of  Default.
      ------------------

     "Event  of  Loss"  means  a Condemnation or the occurrence of an event that
      ---------------
results  or would result in the termination of either Drilling Contract pursuant
to  Section  2.2.2  thereof.

     "Event  of Loss Certificate" has the meaning specified in Section 3.2(b) of
      --------------------------
the  Depository  Agreement.

     "Event  of  Loss  Proceeds  Account"  has  the meaning specified in Section
      ----------------------------------
3.2(a)  of  the  Depository  Agreement.

     "Excepted Rights" means, as to any Participant, the exclusive right of such
      ---------------
Participant  to  (i) retain all Excluded Amounts owing to it and (ii) to demand,
collect  or  commence any action in equity or at law to obtain such payments and
to  enforce  any  judgment  with  respect  thereto.

     "Excess  Charter  Return"  means, for any Return Period, an amount equal to
      -----------------------
the  excess  of (i) an amount equal to the product of the applicable Return Rate
times the Charter Balance set forth on Schedule I to the Master Charter opposite
the  Charter  Hire Payment Date under the heading "Charter Balance" over (ii) an
amount  equal  to  the  product  of  the applicable Return Rate

                                       15
<PAGE>
times  the  actual Charter Balance (or portion thereof) allocable to such Return
Period  as  of  the  first  day  of  such  Return  Period.

     "Excess  Funds" means (i) with respect to the Conduit (Hatteras), (a) prior
      -------------
to  a  Foreclosure  Event  (as  defined  in  the LAPA (Hatteras)), all funds not
required  after  giving effect to all amounts on deposit in the Commercial Paper
Account  (Hatteras)  to  pay  or provide for the payment of all Commercial Paper
Notes  (Hatteras)  of  the  Conduit  (Hatteras)  maturing  on  the  date of such
determination  or  that  have previously matured but remain unpaid and (b) after
the occurrence of a Foreclosure Event (as defined in the LAPA (Hatteras)), means
all  funds  not  required  to  pay or provide for the payment of all Outstanding
Commercial  Paper  Notes  of the Conduit (Hatteras) or Commercial Paper Notes of
the Conduit (Hatteras) that have previously matured but remain unpaid, (ii) with
respect  to  the Conduit (Liberty) and the Conduit (Paradigm), all funds of such
Conduit  which  may  be  used  to  make the applicable payment and which are not
required  to  repay  the  Face  Amount  of  the Commercial Paper Notes and other
obligations of each Conduit under its program documents when due; provided, that
                                                                  --------  ----
after  giving  effect  to  such  payment  either  (x)  such  Conduit could issue
Commercial  Paper  Notes  or  obtain loans under its program documents (assuming
such  outstanding  Commercial  Paper Notes and other obligations matured at such
time) in accordance with the program documents or (y) all Commercial Paper Notes
and  other  obligations  are  paid  in  full.

     "Excluded  Accounts"  means (i) the Permitted Contest Reserve Account; (ii)
      ------------------
the  Event  of  Loss  Proceeds  Account and (iii) the Reimbursement and Proceeds
Account.

     "Excluded  Amounts"  means
      -----------------

     (i)  all  indemnity  payments  and  expenses  to  which  any  Indemnitee is
          entitled  pursuant  to  the  Transaction  Documents;

     (ii) any  amounts  payable  under any Transaction Document to reimburse the
          Charter  Trustee,  any  Agent  or any other Participant (including the
          reasonable expenses of any such Person incurred in connection with any
          such payment) for performing any of the obligations of Deepwater under
          and  as  permitted  by  any  Transaction  Document;

    (iii) any  insurance  proceeds  (or  payments  with  respect  to  risks
          self-insured  or  policy deductibles) under liability policies payable
          to  the  Charter  Trustee,  any Agent or any other Participant (or any
          such  Person's  successors,  assigns,  agents,  trustees,  officers,
          directors  or  employees);

     (iv) any  insurance  proceeds  under  policies  maintained  by  the Charter
          Trustee,  any  Agent  or  any other Participant and not required to be
          maintained  by  Deepwater  under  the  Charter;

     (v)  any amount payable by Deepwater pursuant to Sections 3.2(i) and 4.2(j)
          of the Participation Agreement, whether or not such amounts are or can
          be  characterized  as  a  Supplemental  Hire;  and

                                       16
<PAGE>
     (vi) any payments of interest, yield or Charter Return on payments referred
          to  in  clauses  (a)  through  (e)  above.
                  ------------           ---

     "Extension  Notice" has the meaning specified in Section 20.2 of the Master
      -----------------
Charter.

     "Extension  Term" means any period which immediately follows the end of the
      ---------------
Base  Charter Term with respect to which Deepwater has requested an extension of
the  Charter  Term  pursuant  to  Section  20.2  of the Master Charter, and such
request  has  been  granted  pursuant  to  such  Section  20.2.

     "Face Amount" shall mean with respect to Commercial Paper Notes issued on a
      -----------
discount  basis,  the  face  amount thereof and with respect to Commercial Paper
Notes issued on an interest-bearing basis, the amount of principal plus interest
payable  at  maturity  in  respect  of  such  Commercial  Paper  Notes.

     "Facility  Fee"  has  the  meaning  specified  in  Section  2.14  of  the
      -------------
Participation  Agreement.

     "Facility  Loan"  has  the  meaning specified in Section 2.1(b) of the Loan
      --------------
Agreement.

     "Facility  Loan Commitment" means the percentage set forth on the Schedules
      -------------------------
to  the Loan Agreement under the heading "Facility Loan Commitment" opposite the
names  of  each  Liquidity  Purchaser.

     "Facility  Loan  Commitment  Amount"  means  the  amounts  set forth on the
      ----------------------------------
Schedules  to  the  Loan  Agreement  under the heading "Facility Loan Commitment
Amount"  opposite  the  names  of  each  Liquidity  Purchaser.

     "Facility  Note"  has  the  meaning specified in Section 2.3(b) of the Loan
      --------------
Agreement.

     "Federal  Funds  Rate" means, for any day, the rate set forth in the weekly
      --------------------
statistical  release  designated  as  H.15(519),  or  any successor publication,
published  by the Federal Reserve Bank of New York (including any such successor
"H.15(519)")  on  the preceding Business Day opposite the caption "Federal Funds
(Effective)";  or,  if for any relevant day such rate is not so published on any
such  preceding Business Day, the rate for such day shall be the arithmetic mean
as  determined  by  the Charter Trustee of the rates for the last transaction in
overnight  Federal  Funds  arranged prior to 9 a.m. (New York City time) on that
day  by  each  of the three leading brokers of Federal Funds transactions in New
York  City  selected  by  the  Charter  Trustee.

     "Fees"  means  each  fee  set forth in Section 2.14(b) of the Participation
      ----
Agreement  or  in  each  Fee  Letter.

     "Fee  Letters"  means  the  Upfront Fee Letters and the Conduit Fee Letter.
      ------------

     "Force  Majeure  Event"  means  any  excused or permissible delay under the
      ---------------------
Drilling  Contracts,  if  fulfillment has been delayed, hindered or prevented by
any  circumstance  of  whatsoever  nature,  including  financial  or  economic
conditions  in general, hostilities, restraints of rulers or people, revolution,
civil  commotion,  strike,  labor  disturbances,  epidemic,  accident,  fire,
lightning,  flood,  wind,  storm,  earthquake,  explosion,  blow-out,  crater,
blockade,  embargo,  lack

                                       17
<PAGE>
of  or failure of transportation facilities, inability, despite Deepwater's best
efforts,  to  arrange or secure importation, exportation or permits, or any law,
proclamation,  regulation, ordinance, demand or requirement of any government or
any  government  agency  having  or  claiming  to  have  jurisdiction  over  the
operations  of  or  with  respect  to the Drillship or any part thereof, or over
Deepwater  or  any act of God, or any other act of government or act or omission
of  a  supplier.

     "Frontier  Deepwater Drilling Inc." means Frontier Deepwater Drilling Inc.,
      --------------------------------
a  Delaware  corporation.

     "Frontier Portion" means with respect to any Return Period, a fraction, the
      ----------------
numerator of which is the number of hours, rounded to the nearest half hour, the
Drillship  has  been  utilized  under  the  Conoco  Drilling Contract during the
relevant Return Period and the denominator of which is the product of the actual
number  of  days  in  such  Return  Period  and  24  hours.

     "Funding"  means  Contributions,  Advances  and/or  Liquidity  Purchases.
      -------

     "Funding  Participant"  means any or all Liquidity Purchasers, Conduits and
      --------------------
Certificate  Purchasers.

     "Funding  Participant  Liens"  means  Liens on or against any or all of the
      ---------------------------
Drillship, the Trust Estate, the Investment Trust, the Charter or any payment of
Charter Hire which results from (a) any act or omission of, or any Claim against
any  Funding  Participant in any case unrelated to the transactions contemplated
by  the  Transaction  Documents  (including  any  Liens arising as a result of a
voluntary  transfer of all or any portion of either Trust Estate, other than any
voluntary  transfer  after a Charter Event of Default or a transfer to Deepwater
pursuant  to  the  Charter), (b) any Tax owed by any such Person, except for any
Tax  required to be paid by Deepwater under the Transaction Documents, including
any  Tax  for  which  Deepwater  is obligated to indemnify such Person under the
General  Tax  Indemnity,  or  (c)  any act or omission of such Person that is in
breach  of  any  of  the  covenants  or agreements of the Transaction Documents.

     "Funding  Participant  Replacement Conditions" has the meaning specified in
      --------------------------------------------
Section  4.4  of  the  Participation  Agreement.

     "GAAP"  means  United  States  generally  accepted  accounting  principles
      ----
(including  principles  of  consolidation  and characterization), in effect from
time  to  time,  consistently  applied.

     "General  Indemnity"  means  the indemnity provided by Deepwater to various
      ------------------
parties  pursuant to Section 10.1 (subject to Section 10.2) of the Participation
Agreement.

     "General  Tax  Indemnity"  means  the  indemnity  provided  by Deepwater to
      -----------------------
various  parties  pursuant  to  Section  10.4  of  the  Participation Agreement.

     "Government  Action"  means  all  permits,  authorizations,  registrations,
      ------------------
consents, approvals, waivers, exceptions, variances, orders, judgments, decrees,
licenses,  exemptions,  publications, filings, notices to and declarations of or
with,  or  required  by, any Government Authority, or required by any Applicable
Law,  and  shall  include,  without  limitation, all

                                       18
<PAGE>
environmental  and operating permits and licenses that are required for the full
use  and  operation  of  the  Drillship  (or  any  part  thereof).

     "Government  Authority"  means any nation or government, any state, county,
      ---------------------
province,  municipality  or  other  political subdivision thereof and any entity
exercising  executive,  legislative,  judicial,  regulatory  or  administrative
functions  of  or  pertaining  to  government.

     "Guarantor's  Percentage"  means
      -----------------------

     (i)  with  respect  to Conoco, (a) its Applicable Percentage of the Charter
     Balance  minus  the  Certificate  Purchaser  Amounts  and  Lender  Amounts
              -----
     purchased  by Conoco pursuant to Section 9.4 of the Participation Agreement
     divided  by  (b) 100% of the Charter Balance; provided, however, that in no
     -----------                                   --------  -------
     event  shall  the percentage calculated by this clause (i) be less than 0%;
                                                     ----------
     and

     (ii)  with  respect  to  Transocean,  (a)  its Applicable Percentage of the
     Charter  Balance minus the Certificate Purchaser Amounts and Lender Amounts
                      -----
     purchased  by  Transocean  pursuant  to  Section  9.4  of the Participation
     Agreement  divided  by  (b) 100% of the Charter Balance; provided, however,
                -----------                                   --------  -------
     that  in  no  event  shall the percentage calculated by this clause (ii) be
                                                                  -----------
     less  than  0%.

     "Guaranty"  by  any Person, means any obligation or arrangement, contingent
      --------
or  otherwise,  of  such Person directly or indirectly guaranteeing or otherwise
becoming  contingently  liable  upon any Indebtedness or other obligation of any
other  Person  and,  without  limiting  the  generality  of  the  foregoing, any
obligation,  direct  or indirect, contingent or otherwise, of such Person (i) to
secure,  purchase or pay (or advance or supply funds for the purchase or payment
of)  such Indebtedness or other obligation of such other Person (whether arising
by  virtue  of  partnership arrangements, by agreement to keep-well, to purchase
assets,  goods,  securities  or  services,  to  provide  collateral security, to
take-or-pay, or to maintain financial statement conditions or otherwise) or (ii)
to  the  extent  that  such  an arrangement would be considered to be a guaranty
under  GAAP,  entered  into  for the purpose of assuring in any other manner the
obligee  of  such  Indebtedness or other obligation of the payment thereof or to
protect  such  obligee  against  loss  in respect thereof (in whole or in part);
provided,  that  the term Guaranty shall not include endorsements for collection
--------
or  deposit  in  the ordinary course of business.  The term "Guaranty" used as a
verb  has  a  corresponding  meaning.

     "Hazardous  Activity" means any activity, process, procedure or undertaking
      -------------------
that  directly  or  indirectly  (i) produces, generates or creates any Hazardous
Substance;  (ii)  causes  or results in (or threatens to cause or result in) the
Release  of any Hazardous Substance into the environment (including air, surface
water,  groundwater,  drinking water, land (including surface or subsurface) and
plant,  aquatic  and  animal life); (iii) involves the containment or storage of
any  Hazardous  Substance;  or  (iv)  would  be  regulated  as  hazardous  waste
treatment,  storage  or  disposal  within  the meaning of any Environmental Law.

     "Hazardous  Substance"  means  any  of  the  following:  (i)  explosives,
      --------------------
radioactive  materials, asbestos, polychlorinated biphenyls, lead and radon gas;
or  (ii)  any  substance,  material,  product,  derivative,  compound,  mixture,
mineral, chemical, waste, gas, medical waste, or pollutant, in

                                       19
<PAGE>
each  case  whether  naturally  occurring,  human-made  or the by-product of any
process,  that is considered under any applicable Environmental Law to be toxic,
corrosive, flammable, carcinogenic, mutagenic or hazardous to the environment or
human  health;  provided,  however,  that  the  term  "Hazardous  Substance"
                --------   -------
specifically  does  not  include  Oil.

     "Head  Lease"  means  the  lease agreement (if any) under which the Charter
      -----------
Trustee leases the Drillship from the Head Lessor in accordance with Section 4.3
of  the  Participation  Agreement.

     "Head  Lease  Defeasance Arrangements" has the meaning specified in Section
      ------------------------------------
4.3  of  the  Participation  Agreement.

     "Head  Lease Documents" means the Head Lease, the Head Lease Loan, the Head
      ---------------------
Lease  Defeasance  Agreement  and any other documents entered into in connection
with  the  Head  Lease  Transaction.

     "Head  Lease  Loan"  has  the  meaning  specified  in  Section  4.3  of the
      -----------------
Participation  Agreement.

     "Head  Lease  Transaction"  has the meaning specified in Section 4.3 of the
      ------------------------
Participation  Agreement.

     "Head  Lessor"  means  the  lessor  under  the  Head  Lease.
      ------------

     "Hedging  Agreement  Counterparty" means the counterparty under any Hedging
      --------------------------------
Agreement.

     "Hedging  Agreement  Default  Notice"  means a notice given by each Hedging
      -----------------------------------
Agreement  Counterparty,  if any, setting forth disbursements to be made to such
Hedging  Agreement  Counterparty  as indicated in either Section 4.2(b), Section
4.2(c)  or  Section  4.2(d)  of  the  Depository  Agreement.

     "Hedging  Agreement  Obligations" means all of the obligations (monetary or
      -------------------------------
otherwise)  of  the  Charter  Trustee  arising  under  or in connection with the
Hedging  Agreements.

     "Hedging  Agreements"  has  the  meaning  specified  in  Section 6.5 of the
      -------------------
Participation  Agreement.

     "Illegality  Event"  has  the  meaning  specified  in  Section  7.1  of the
      -----------------
Participation  Agreement.

     "Indebtedness"  of  any  Person means at any date, without duplication, (i)
      ------------
all  obligations of such Person for borrowed money; (ii) all obligations of such
Person  evidenced  by  bonds,  debentures,  notes  or similar instruments; (iii)
whether  or  not  so  included  as  liabilities  in  accordance  with  GAAP, all
obligations  of  such  Person  to pay the deferred purchase price of property or
services,  except  trade  accounts  payable  arising  in  the ordinary course of
business;  (iv)  all  obligations  of such Person to reimburse any bank or other
Person  in  respect  of  amounts  payable  under  a banker's acceptance; (v) all
obligations of such Person, contingent or otherwise,

                                       20
<PAGE>
relative to the face amount of all letters of credit, whether or not drawn; (vi)
all  indebtedness  (including  indebtedness  arising  under  title  retention or
conditional  sales  agreements)  secured  by  a Lien on any asset of any Person,
whether  or  not  such  indebtedness  is assumed by such Person or is of limited
recourse  (provided,  that,  for  purposes  of  this  clause  (vi), non-recourse
           --------                                   ------------
indebtedness  in  excess  of  the  value of the asset securing such indebtedness
shall  not  be  counted);  (vii)  all obligations of such Person as lessee under
leases  which  have  been  or  should  be,  in accordance with GAAP, recorded as
capital or operating leases; and (viii) all indebtedness of others Guaranteed by
such  Person.

     "Indemnified  Party"  has  the  meaning  specified  in  Section 10.1 of the
      ------------------
Participation  Agreement.

     "Initial  Charter  Hire  Payment  Date"  means the last Business Day of the
      -------------------------------------
first  full  calendar  month  following  the  Closing  Date.

     "Initial  Charter  Margin  Adjustment  Date"  means  October  1,  2001.
      ------------------------------------------

     "Institutional  Investor"  means  any  Accredited  Investor,  excluding any
      -----------------------
individual  or  natural  person.

     "Insurance Beneficiary" has the meaning specified in Section 14.2(d) of the
      ---------------------
Master  Charter.

     "Insurance  Requirements"  means  all terms and conditions of any insurance
      -----------------------
policy  either  required by the Master Charter to be maintained by Deepwater and
all  requirements  of  the issuer of any such policy; provided, however, that if
                                                      --------  -------
Deepwater  is  entitled  to self-insure certain risks in lieu of maintaining the
insurance coverages required under Article XIV of the Master Charter, "Insurance
Requirements"  means  the  standard  terms  of any insurance policies (including
casualty  and general liability) and all requirements commonly prescribed by the
issuers  of  such policies which otherwise would be required to be maintained by
Deepwater  absent  the  permitted  self-insurance.

     "Interim  Class  Certificate"  means  a  certificate  issued  by  the
      ---------------------------
Classification  Society evidencing the class of the Drillship to be delivered by
the  Builder  to  Deepwater.

     "Inverse  R&B  Usage  Ratio"  means  the  R&B  Usage  Ratio  minus  one.
      --------------------------                                  -----

     "Investment  Companies  Act" means the Investment Companies Act of 1940, as
      --------------------------
amended,  together  with  the  rules  and  regulations  promulgated  thereunder.

     "Investment  Grade" means BBB- and Baa3 by S&P and Moody's, respectively or
      -----------------
any  equivalent  rating  by  any  other  nationally  recognized  rating  agency.

     "Investment  Trust"  means  Deepwater  Investment  Trust 1999-A, a Delaware
      -----------------
business  trust.

                                       21
<PAGE>
     "Investment  Trust  Agreement"  means  the  Amended and Restated Investment
      ----------------------------
Trust  Agreement  (Deepwater  Investment  Trust  1999-A)  dated  as  of  the
Documentation Date, between Wilmington Trust FSB, as trustee, and the Investment
Trust  Beneficiary.

     "Investment  Trust  Amount" means, with respect to the Investment Trust, at
      -------------------------
any  given  time,  the  aggregate  amount  advanced  by  the  Lenders  minus any
                                                                       -----
distributions  made  which  have the effect of reducing the Lender Balance, plus
                                                                            ----
any  Postponement  Interest  capitalized  pursuant  to  Section  2.8  of  the
Participation  Agreement.

     "Investment Trust Beneficiary" has the meaning specified in Section 11.1(b)
      ----------------------------
of  the  Participation  Agreement.

      Investment  Trustee"  has  the  meaning  specified  in the preamble to the
      -------------------
Participation  Agreement.

     "LAPA (Hatteras)" means the Liquidity Asset Purchase Agreement, dated as of
      ---------------
the  Documentation  Date  among the Conduit (Hatteras), the Liquidity Purchasers
(Hatteras),  the  Liquidity  Agent  (Hatteras) and the Administrator (Hatteras).

     "LAPA  (Liberty)" means the Liquidity Asset Purchase Agreement, dated as of
      ---------------
the  Documentation  Date  among  the Conduit (Liberty), the Liquidity Purchasers
(Liberty)  and  the  Liquidity  Agent (Liberty) and the Administrator (Liberty).

     "LAPA (Paradigm)" means the Liquidity Asset Purchase Agreement, dated as of
      ---------------
the  Documentation  Date  among the Conduit (Paradigm), the Liquidity Purchasers
(Paradigm)  and the Liquidity Agent (Paradigm) and the Administrator (Paradigm).

     "LAPAs"  means each of LAPA (Hatteras), LAPA (Liberty) and LAPA (Paradigm).
      -----

      "Lender  Amount"  means,  with  respect  to  each  Lender,  the  aggregate
       --------------
outstanding  amount  of  its  Notes.

     "Lender  Balance"  means,  at  any  given time, the aggregate amount of all
      ---------------
Lender  Amounts  plus  any Postponement Interest capitalized pursuant to Section
2.8  of  the  Participation  Agreement.

     "Lenders  (Hatteras)" has the meaning specified in the preamble to the Loan
      -------------------
Agreement.

     "Lenders  (Liberty)"  has the meaning specified in the preamble to the Loan
      ------------------
Agreement.

     "Lenders  (Paradigm)" has the meaning specified in the preamble to the Loan
      -------------------
Agreement.

     "Lender  Portion"  means,  with respect to any amount, ninety seven percent
      ---------------
(97%)  of  such  amount.

     "Lenders"  means each of Lenders (Hatteras), Lenders (Paradigm) and Lenders
      -------
(Liberty).

                                       22
<PAGE>
     "LIBOR"  means,  for  any  Return  Period,  the rate per annum equal to the
      -----
offered  rate  (rounded upwards, if necessary, to the next higher 1/100th of 1%)
which  appears  on  the Telerate Page 3750, British Bankers Association Interest
Settlement  Rates  (or  such other system for the purpose of displaying rates of
leading  reference  banks  in  the  London  interbank  market that replaces such
system)  as  of  11:00 a.m. (London time) for deposits in Dollars on the day two
(2)  Business  Days  prior  to  the first day of such Return Period in an amount
approximately equal to the principal amount of the Certificate Purchaser Amounts
and  Lender  Amounts  to  which  such Return Period is to apply and for a period
corresponding as nearly as possible to such Return Period; provided, that, if no
                                                           --------
such  rate appears on Telerate Page 3750 it shall be (i), so long as any Hedging
Agreements  are  in  effect,  the  "Floating  Rate"  as  defined  in the Hedging
Agreements  or (ii) if no Hedging Agreements are in effect, the rate of interest
then offered to prime banks in the London interbank Eurodollar market by Bank of
America  for  deposits  in  U.S.  Dollars.

     "Lien"  means  any  mortgage,  pledge,  lien,  charge,  encumbrance, lease,
      ----
sublease,  charter,  subcharter,  right, security interest, rights in rem of any
kind  or  claim of whatever nature or description against any property or asset.

     "Liquidity  Agent  (Hatteras)" has the meaning specified in the Preamble to
      ----------------------------
the  Loan  Agreement.

     "Liquidity  Agent  (Liberty)"  has the meaning specified in the Preamble to
      ---------------------------
the  Loan  Agreement.

     "Liquidity  Agent  (Paradigm)" has the meaning specified in the Preamble to
      ----------------------------
the  Loan  Agreement.

     "Liquidity  Agents"  means  each  of  the  Liquidity  Agent (Hatteras), the
      -----------------
Liquidity  Agent  (Paradigm)  and  the  Liquidity  Agent  (Liberty).

     "Liquidity  Purchase" means the purchase of a Percentage Interest under any
      -------------------
LAPA  (and  as  described  in  the  Loan  Agreement) by the Applicable Liquidity
Purchaser.

     "Liquidity  Purchaser  Advance" has the meaning specified in Section 2.3(b)
      -----------------------------
of  the  Participation  Agreement.

     "Liquidity Purchaser (Hatteras)" means each financial institution listed on
      ------------------------------
the  signature  page  of  the  LAPA  (Hatteras)  under  the  caption  "Liquidity
Purchasers,"  and  each other financial institution that has become a "Liquidity
Purchaser,"  under  the  LAPA  (Hatteras).

     "Liquidity  Purchaser  (Liberty)" has the meaning specified in the preamble
      -------------------------------
to  the  Loan  Agreement.

     "Liquidity  Purchaser (Paradigm)" has the meaning specified in the preamble
      -------------------------------
to  the  Loan  Agreement.

     "Liquidity  Purchaser  Commitment"  means  each  Liquidity  Purchaser's
      --------------------------------
obligation  (i)  to  purchase  Percentage  Interests  under  each  LAPA from the
respective  Conduit  and  (ii)  to make Facility Loans under the Loan Agreement.

                                       23
<PAGE>
     "Liquidity  Purchaser  Commitment  Amount"  means,  with  respect  to  each
      ----------------------------------------
Liquidity  Purchaser,  the  amount set forth on the signature pages to each LAPA
opposite  the  name  of  such  Liquidity Purchaser, which amount may be adjusted
pursuant  to  each  LAPA.

     Liquidity  Purchaser  Commitment  Percentage"  means,  with respect to each
     --------------------------------------------
Liquidity  Purchaser,  the  percentage  set forth on the signature pages to each
LAPA opposite the name of such Liquidity Purchaser, which amount may be adjusted
pursuant  to  each  LAPA.

     "Liquidity  Purchaser  Portion" means a fraction, the numerator of which is
      -----------------------------
the  aggregate  face  amount  of  Notes held by all Liquidity Purchasers and the
denominator  of which is the aggregate face amount of all Notes then outstanding

     "Liquidity  Purchasers"  means each of the Liquidity Purchasers (Hatteras),
      ---------------------
the  Liquidity  Purchasers  (Paradigm)  and  the Liquidity Purchasers (Liberty).

     "LLC  Agreement"  means  the  LLC  Agreement,  dated  as of April 30, 1997,
      --------------
between  the  Members.

     "Loan Agreement" means the Loan Agreement, dated the date hereof, among the
      --------------
Borrower,  each  Conduit,  each  Administrator,  each  Liquidity  Agent and each
Liquidity  Purchaser.

     "Loan  Margin" means 100.0 basis points per annum so long as the ratings of
      ------------
both  Transocean  and Conoco are at or above Investment Grade or otherwise 150.0
basis  points  per  annum.

     "Loan  Return  Rate"  means  (i)  with  respect  to  Lender  Amounts of the
      ------------------
Liquidity  Purchasers, the Drawn Rate and (ii) with respect to Lender Amounts of
each Conduit, the CP Rate to the extent such Lender Amount is funded through the
issuance of Commercial Paper Notes and the Drawn Rate (subject to Section 2.5 of
the  Loan  Agreement)  to  the  extent  such  Lender Amount is otherwise funded.

     "Loans"  means  the  Conduit  Loans  and  the  Facility  Loans.
      -----

     "Majority Funding Participants" means, as of the date of determination, the
      -----------------------------
Funding  Participants  that  have an aggregate of Certificate Purchaser Amounts,
Lender  Amounts  and  unfunded  Commitments that in the aggregate represent more
than  50%  of  the  sum  of  Charter  Balance and all unfunded Commitments.  For
purposes  of this definition, no Purchasing Party shall be considered a "Funding
Participant"  and  any interest of any Purchasing Party shall be subtracted from
the  outstanding  Charter Balance solely for the calculation of Majority Funding
Participants.

     "Mandatory  Funding  Event"  has the meaning specified in Schedule 2 to the
      -------------------------
LAPA  (Hatteras).

     "Marketing  Period"  means  the  period commencing on the date which is 180
      -----------------
days  prior to the Scheduled Charter Expiration Date and ending on the Scheduled
Charter  Expiration  Date.

                                       24
<PAGE>
     "Master Charter" means the bareboat Amended and Restated Master Charter and
      --------------
Sale  and  Purchase  Agreement for a Vessel, dated as of the Documentation Date,
among Deepwater and the Charter Trustee, excluding both Charter Supplement No. 1
and  Charter  Supplement  No.  2.

     "Material  Adverse  Effect"  means,  with  respect to Conoco, Transocean or
      -------------------------
Deepwater,  an  event  or  events,  condition  or  conditions,  circumstance  or
circumstances  which  individually  or  in  the  aggregate  could  be reasonably
expected  to:

          (iii)  have  a  material  adverse  effect  on the financial condition,
     business,  assets  or  operations  of  Conoco,  Transocean  or  Deepwater;

          (iv)  have  a  material  adverse  effect  on  Deepwater's, Conoco's or
     Transocean's  ability  to  perform  its  respective  obligations  under the
     Transaction  Documents  to  which  it  is  a  party;

          (v)  have  a  material  adverse  effect  on  the  title,  priority  or
     perfection  of  the  Participants'  interest  in  the  Drillship;

          (vi)  have  a  material  adverse  effect  on the validity, legality or
     enforceability  of any material provision of any Transaction Document or on
     the  rights  or  remedies  of any of the Participants under the Transaction
     Documents;

          (vii)  have  a  material  adverse  effect  on  the  value,  utility or
     remaining  useful  life  of  the  Drillship;  or

          (viii) result in criminal liability or material civil liability to any
     Indemnitee  or  forfeiture  or  loss  of  the  Drillship.

     "Material Default" means a Charter Default described in Section 4.1(a), (e)
      ----------------
or  (f)  of  either  Charter  Supplement  No.  1  or  Charter  Supplement No. 2.

     "Maturity  Date"  means  the  last  day  of  the  Charter  Term.
      --------------

     "Maximum  Residual  Guaranty  Amount"  means  as  of  any  date the sum of:
      -----------------------------------

     (i)  the  Charter  Balance  on such date (reduced by any payment of Charter
     Supplement  Prepayment  Amount of Termination Value under Section 4.2(c) of
     the  Depository  Agreement),  plus  any  accrued and unpaid Charter Return,
     minus  the  Charter  Residual  Risk  Amount  as  of  such  date;  and
     -----

     (ii)  all  accrued  and  unpaid  Supplemental  Hire (not included in clause
     (i)).

     "Member"  means  each  of  RBF  Deepwater  Exploration  II  Inc. and Conoco
      ------
Development  II  Inc.

     "Minimum  Specifications" means each of the following criteria with respect
      -----------------------
to  the  Drillship:  (i)  upon final sea trial, speed shall not be more than two
(2)  knots lower than the

                                       25
<PAGE>
guaranteed  speed  specified  in  Paragraph  2  of Article I of the Construction
Contract;  (ii) actual fuel consumption shall not be more than ten percent (10%)
in excess of the guaranteed fuel consumption specified in Paragraph 2 of Article
I  of  the Construction Contract; (iii) the capacity of the "Extended Well Test"
tanks,  including  slop  tanks,  shall not be less than 14,310 cubic meters; and
(iv)  the actual displacement of the Drillship shall not vary by more than 3,500
metric  tons  (whether  higher or lower) from the guaranteed displacement of the
Drillship  specified  in  Paragraph 2 of Article I of the Construction Contract.

     "Modifications"  has  the  meaning  specified in Section 11.1 of the Master
      -------------
Charter.

     "Moody's"  means  Moody's  Investors  Service,  Inc.
      -------

     "NAIC  Annual Statement" has the meaning specified in Section 5.4(d) of the
      ----------------------
Participation  Agreement.

     "Net  Sales Proceeds" has the meaning specified in Section 20.3(iii) of the
      -------------------
Master  Charter.

     "Non-Assumption Cure Right" has the meaning specified in Section 16.5(a) of
      -------------------------
the  Master  Charter.

     "Non-Defaulting Certificate Purchaser" has the meaning specified in Section
      ------------------------------------
7.9  of  the  Participation  Agreement.

     "Non-Defaulting Drilling Party" means (i) Frontier Deepwater Drilling Inc.,
      -----------------------------
provided  that  no Charter Supplement No. 2 Event of Default exists (except such
Charter  Event  of  Default  arising  solely  from  the  Cross  Charter  Default
thereunder)  or  (ii)  R&B  Falcon  Drilling  (International  & Deepwater) Inc.,
provided  that  no Charter Supplement No. 1 Event of Default exists (except such
Charter  Event  of  Default  arising  solely  from  the  Cross  Charter  Default
thereunder).

     "Non-Recourse  Party"  means  any Member, its respective Affiliates and its
      -------------------
past,  present or future officers, directors, employees, shareholders, agents or
representatives.

     "Note  Payment"  means  Basic  Hire  due  and  payable  under  the Charter,
      -------------
excluding  any  accrued  and  unpaid  Series  A  Return  then  due  and payable.

     "Notes"  has the meaning specified in Section 2.3(b) of the Loan Agreement.
      -----

     "Obligation"  has  the  meaning  specified  in  Section  22.1 of the Master
      ----------
Charter.

     "OFE"  means  owner-furnished  equipment,  more  specifically  described in
      ---
Schedule  3  to  the  Participation  Agreement.

     "Officer's  Certificate"  means  a  certificate  signed  by  any individual
      ----------------------
holding  the office of vice president, treasurer, assistant treasurer or higher,
which  certificate  shall  certify  as true and correct the subject matter being
certified  to  in  such  certificate.

                                       26
<PAGE>
     "Oil"  means  oil  of any kind or in any form, including but not limited to
      ---
petroleum,  fuel  oil,  sludge, oil refuse, and oil mixed with wastes other than
dredged  spoil, but not including petroleum (including crude oil or any fraction
thereof)  which  is  specifically  listed or designated as a hazardous substance
under  subparagraphs  (A)  through  (F)  of  Section  101(14)  of  CERCLA.

     "Operating  Account"  has  the  meaning  specified in Section 3.4(a) of the
      ------------------
Depository  Agreement.

     "Operation  and  Maintenance  Expenses"  means  all  amounts  necessary for
      -------------------------------------
Deepwater to man, victual, navigate, operate, supply, fuel, repair, maintain the
Drillship  in accordance with the requirements of the Drilling Contracts and the
Charter  and  shall  include,  without  limitation,  payments  under Deepwater's
contracts  for  marine  and drilling services, payments to any Permitted Service
Provider, premiums on insurance policies, fees, costs and expenses in connection
with  any  Deepwater Hedging Agreements or Hedging Agreements (excluding amounts
payable  in  connection  with  an  early  termination), property and other taxes
(other  than  income  taxes),  costs  of  fuel  and fuel supply, waste disposal,
expenses for repairs and maintenance required in order to maintain the Drillship
in  accordance  with  the  Drilling Contracts and in accordance with the Charter
(including  expenses  for  inspections and drydocking maintenance), the costs of
all  Modifications  required  or permitted under the Charter and all shore-based
support  expenses  and  warehouse  costs  attributable  to any of the foregoing;
provided, however, that Operation and Maintenance Expenses shall not include any
--------  -------
amounts  for  which  Deepwater  is  entitled  to  a  Reimbursement.

     "Optional  Modifications"  has the meaning specified in Section 11.1 of the
      -----------------------
Master  Charter.

     "Original  Certificate  Purchasers"  mean  the  Persons  specified  in  the
      ---------------------------------
Original  Participation  Agreement  as  certificate  purchasers  therein.

     "Original  Certificates"  means the Original Series A Trust Certificate and
      ----------------------
the  Original  Investment  Trust  Certificate.

     "Original  Charter  Supplement"  shall mean the Original Charter Supplement
      -----------------------------
No.  1  or  the  Original  Charter  Supplement  No.  2.

     "Original  Charter  Supplement  No.  1"  shall  mean  the  Original Charter
      -------------------------------------
Supplement  No.  1,  dated  the  Closing  Date,  between the Charter Trustee and
Deepwater.

     "Original  Charter  Supplement  No.  2"  shall  mean  the  Original Charter
      -------------------------------------
Supplement  No.  2,  dated  the  Closing  Date,  between the Charter Trustee and
Deepwater.

     "Original Charter Trust Agreement" means the Charter Trust Agreement, dated
      --------------------------------
the Closing Date, among the beneficial owners named therein, Charter Trustee and
Investment  Trust.

     "Original  Conoco  Guaranty"  means  the  Conoco Guaranty as defined in the
      --------------------------
Original  Participation  Agreement.

                                       27
<PAGE>
     "Original  Depository  Agreement" means the Depository Agreement, dated the
      -------------------------------
Closing Date, among Deepwater, the Charter Trustee, the Investment Trust and the
Depository.

     "Original Drilling Consent" means the Acknowledgment and Consent Agreement,
      -------------------------
dated  as of the Closing Date, by and among R&B Falcon Drilling (International &
Deepwater)  Inc.,  Frontier  Deepwater  Drilling  Inc.,  Deepwater,  the Charter
Trustee  and  the  Investment  Trust.

     "Original Investment Trust Agreement" means the Investment Trust Agreement,
      -----------------------------------
dated  the  Closing  Date,  among  the  Original  Certificate  Purchasers,  the
Investment  Trustee  and  a  co-investment  trustee.

     "Original  Investment  Trust Certificates" means each certificate issued to
      ----------------------------------------
the  Original Certificate Purchasers by the Investment Trust pursuant to Section
2.1(d)  of  the  Original  Participation  Agreement  and  in accordance with the
Original  Trust  Agreements.

     "Original Master Charter" has the meaning specified in the first recital to
      -----------------------
the  Master  Charter.

     "Original  Participation Agreement" has the meaning specified in the second
      ---------------------------------
recital  to  the  Participation  Agreement.

     "Original  Series A Trust Certificate" means each certificate issued to the
      ------------------------------------
Original  Certificate  Purchasers  by  the  Charter  Trustee pursuant to Section
2.1(b)  of  the  Original  Participation  Agreement  and  in accordance with the
Original  Charter  Trust  Agreement.

     "Original  Series  B Trust Certificate" means the certificate issued to the
      -------------------------------------
Investment  Trust  pursuant  to  Section  2.1(f)  of  the Original Participation
Agreement  and  in  accordance  with  the  Original  Charter  Trust  Agreement.

     "Original  Transaction  Documents"  means:
      --------------------------------

          (i)    the Original Participation Agreement;
          (ii)   the Original Charter Trust Agreement;
          (iii)  the Original Investment Trust Agreement;
          (iv)   the Deepwater Hedging Agreements, if any;
          (v)    the Hedging Agreements, if any;
          (vi)   the Original Drilling Consent;
          (vii)  the Original Master Charter;
          (viii) the Original Charter Supplement No. 1;
          (ix)   the Original Charter Supplement No. 2;
          (x)    the Protocol of Delivery and Acceptance;
          (xi)   the Security Documents as defined in the Original Participation
                 Agreement;
          (xii)  the Original Certificates;
          (xiii) the Original Conoco Guaranty; and
          (xiv)  the  R&B  Falcon  Guaranty  as  defined  in  the  Original
                 Participation  Agreement.

                                       28
<PAGE>
     "Other Supplement" (i) when used in Charter Supplement No. 1, means Charter
      ----------------
Supplement  No.  2  or (ii) when used in Charter Supplement No. 2, means Charter
Supplement  No.  1.

     "Outstanding"  has  the  meaning  specified  in  Schedule  2  to  the  LAPA
      -----------
(Hatteras).

     "Overdue  Rate"  means  either Return Rate, as applicable, plus two percent
      -------------
(2%)  per  annum.

     "Parent"  means,  with  respect  to  any Person,  a corporation that is the
      ------
direct  or  indirect beneficial owner of more than 50% of the outstanding Voting
Stock  of such Person and that has reporting obligations under Section 13 of the
Securities  Exchange  Act  of  1934,  as  amended.

     "Partial  Condemnation"  means  the  condemnation,  requisition  for  use,
      ---------------------
confiscation,  arrest, seizure or other taking of title or leasehold interest in
the  Drillship  or  any  transfer  made in lieu of any such actual or threatened
action  or  proceeding  which  does  not  constitute  a  Condemnation.

     "Participants"  means  the  Certificate  Purchasers,  the  Conduits,  the
      ------------
Liquidity  Purchasers,  the  Trustees  and  the  Investment Trust, collectively.

     "Participation  Agreement"  means  the  Amended  and Restated Participation
      ------------------------
Agreement,  dated  as  of the Documentation Date, among Deepwater, the Trustees,
the  Investment  Trust,  the  Administrative  Agent, the Conduits, the Liquidity
Purchasers,  the  Certificate  Purchasers,  the  Administrators,  the  Liquidity
Agents,  Investment  Trust  Beneficiary,  Transocean,  Conoco,  RBF  Deepwater
Exploration  II  Inc.  and  Conoco  Development  II  Inc.

     "Payment  Date  Certificate" has the meaning specified in Section 3.4(b) of
      --------------------------
the  Depository  Agreement.

     "PBGC"  means  the  Pension  Benefit  Guaranty  Corporation  or  any entity
      ----
succeeding  to  any  or  all  of  its  functions  under  ERISA.

     "Percentage  Interests"  has  the meaning set forth in the applicable LAPA.
      ---------------------

     "Permitted  Charterer"  means  any Person that is or should be consolidated
      --------------------
with  Conoco  or  Transocean for financial reporting purposes in accordance with
GAAP.

     "Permitted  Contest"  means  a  test,  challenge,  appeal or proceeding for
      ------------------
review  of  any  Applicable  Law, so long as (x) such test, challenge, appeal or
proceeding  shall  be  prosecuted  diligently  and  in good faith in appropriate
proceedings  and  (y)  such  test,  challenge,  appeal  or  proceeding  and  any
non-compliance with Applicable Law during the pendency thereof does not (i) pose
any  significant risk of foreclosure, forfeiture or loss of the Drillship or any
material  part thereof, (ii) pose any material risk of a loss of priority of the
Lien  of  the  Ship  Mortgage  (or any other Lien on the Drillship) or any other
Collateral,  (iii)  pose  any  material  risk  of  any criminal liability or any
material  civil liability being imposed on either Trustee, the Investment Trust,
the  Administrative Agent, the Collateral Agent or any Funding Participant, (iv)
interfere  in  any material manner with the use or operation of the Drillship or
(v)  pose  any  material  risk of interference with the payment of Charter Hire.

                                       29
<PAGE>
     "Permitted  Contest  Reserve  Account" has the meaning specified in Section
      ------------------------------------
3.5(a)  of  the  Depository  Agreement.

     "Permitted Contest Reserve Amount" means, as of the date of calculation, an
      --------------------------------
amount  equal  to  Deepwater's  reasonable  estimate  of its potential or actual
liability or additional costs and expenses that it will be required to incur but
only to the extent that (a) such liability or costs and expenses exceed $500,000
with  respect  to  a  single Permitted Contest or $2,000,000 with respect to all
pending  Permitted  Contests  and  (b)  such Claims are not covered by insurance
policies  required  to be maintained by Deepwater under the Master Charter which
are  then in effect (except that all Claims as to which the insurer has issued a
denial  of  coverage  or as to which it has reserved its rights, shall be deemed
not  to  be  covered  by  insurance  for  the  purposes  of  this  clause  (b)).

     "Permitted  Contest  Reserve  Certificate"  has  the  meaning  specified in
      ----------------------------------------
Section  3.5(b)  of  the  Depository  Agreement.

     "Permitted  Indebtedness"  means  (i)  Subordinated Debt, (ii) Indebtedness
      -----------------------
arising under the Transaction Documents and (iii) any other Indebtedness owed to
any  Person  other than a Member or Affiliate of a Member in an aggregate amount
not  to  exceed $500,000 (provided that, (x) if such Indebtedness is in the form
                          --------
of  a loan, such limit shall be calculated by reference to the principal of such
loan and (y) if such Indebtedness is in the form of a lease, such limit shall be
calculated  by reference to the present value as of the date of determination of
all  lease  payments  discounted  at the then applicable Federal Funds Rate plus
sixty  (60)  basis  points).

     "Permitted  Investments"  has  the  meaning specified in Section 6.1 of the
      ----------------------
Depository  Agreement.

     "Permitted  Liens"  means  (i)  the  respective rights and interests of the
      ----------------
Participants,  as provided in any of the Transaction Documents; (ii) any Lien as
permitted  and  contemplated by the Transaction Documents; (iii) Liens for Taxes
either  not  yet  due  or  being contested pursuant to a Permitted Contest; (iv)
Liens  of suppliers, mechanics, crew, repairers, employees, or operators of port
authorities,  Liens for salvage, general or particular average, or other similar
Liens securing the payment of the price of goods or services rendered arising in
the  ordinary  course of business and for amounts the payment of which is either
not  yet  delinquent  or  is  being diligently contested pursuant to a Permitted
Contest;  (v)  Liens arising out of judgments or awards which are being appealed
in good faith or with respect to which at the time there shall have been secured
a  stay of execution; (vi) salvage and similar rights of insurers under policies
of  insurance  maintained  with  respect  to the Drillship; (vii) Liens securing
Permitted  Indebtedness;  (viii)  any other Lien with respect to which a bond or
other  security  shall  have  been  provided  either  (x)  through  a normal and
customary  letter  of  undertaking  issued  by the protection and indemnity club
providing the coverage maintained under Section 14.1(f) of the Master Charter or
(y)  by  a  surety  and  in a form, both of which are acceptable to the Majority
Funding Participants in their sole discretion; (ix) Trust Liens; and (x) Funding
Participant  Liens.

     "Permitted  Service  Provider" has the meaning specified in Section 7(b) of
      ----------------------------
the  Drilling  Consent.

                                       30
<PAGE>
     "Person"  means  any  individual,  corporation, partnership, joint venture,
      ------
limited  liability  company,  association,  joint-stock  company,  trust,
unincorporated  organization,  Government  Authority  or  any  other  entity.

     "Placement  Agent"  means  Bank  of  America.
      ----------------

     "Plan"  means at any time an employee pension benefit plan which is covered
      ----
by  Title  IV of ERISA or subject to the minimum funding standards under Section
412  of  the  Code.

     "Post  Cure  Payment Notice" has the meaning specified in Section 4.2(d) of
      --------------------------
the  Depository  Agreement.

     "Postponed  Advance"  has  the  meaning  specified  in  Section  2.8 of the
      ------------------
Participation  Agreement.

     "Postponed Advance Account" has the meaning specified in Section 2.8 of the
      -------------------------
Participation  Agreement.

     "Postponed  Advance  Date"  has the meaning specified in Section 2.8 of the
      ------------------------
Participation  Agreement.

     "Postponed  Contribution"  has  the meaning specified in Section 2.8 of the
      -----------------------
Participation  Agreement.

     "Postponed  Contribution  Account" has the meaning specified in Section 2.8
      --------------------------------
of  the  Participation  Agreement.

     "Postponement  Interest"  has  the  meaning specified in Section 2.8 of the
      ----------------------
Participation  Agreement.

     "Postponement  Payment"  has  the  meaning  specified in Section 2.8 of the
      ---------------------
Participation  Agreement.

     "Postponement  Yield"  has  the  meaning  specified  in  Section 2.8 of the
      -------------------
Participation  Agreement.

     "Prepayment  Change  of  Control  Trigger Event"  means the occurrence of a
      ----------------------------------------------
Change  of  Control of either Conoco or Transocean unless (a) the rating of such
person  is  not  less  than (i) in the case of Conoco, Baa2 from Moody's and BBB
from  S&P  or (ii) in the case of Transocean, is not less than Baa2 from Moody's
and BBB from S&P or (b) in the event that such person is merged into or acquired
by  an  Acquiror  (i)  in the case of an Acquiror of Conoco, such Acquiror has a
rating of not less than Baa2 from Moody's and not less than BBB from S&P (ii) in
the  case  of  an Acquiror of Transocean, such Acquiror has a rating of not less
than  Baa2 from Moody's and BBB from S&P, provided that the Acquiror assumes the
                                          --------
obligations  of the acquired company under the Transaction Documents pursuant to
an  assumption  agreement  and  delivers  an  opinion  of  counsel in connection
therewith,  each  in substantially the form satisfactory to the Majority Funding
Participants,  or  (c)  Conoco or Transocean, as applicable, will provide to the
Majority  Funding  Participants  simultaneously  with a Change of Control credit
support

                                       31
<PAGE>
acceptable  to  the  Majority  Funding  Participants for any obligations of such
person  under  the Transaction Documents reasonably equivalent to that in effect
immediately  prior  to  the  Change  of  Control.

     "Prepayment  Change  of  Control  Trigger  Event  Notice"  has  the meaning
      -------------------------------------------------------
specified  in  Section  9.4(a)  of  the  Participation  Agreement.

     "Prepayment  Notice"  has  the  meaning  specified in Section 9.4(a) of the
      ------------------
Participation  Agreement.

     "Program  Fee"  means the Program Fee (Hatteras), the Program Fee (Liberty)
      ------------
and  the  Program  Fee  (Paradigm).

     "Program Fee (Hatteras)" means the fee payable to the Conduit (Hatteras) in
      ----------------------
accordance  with  the  Conduit  Fee  Letter  (Hatteras).

     "Program  Fee  (Liberty)" means the fee payable to the Conduit (Liberty) in
      -----------------------
accordance  with  the  Conduit  Fee  Letter  (Liberty).

     "Program Fee (Paradigm)" means the fee payable to the Conduit (Paradigm) in
      ----------------------
accordance  with  the  Conduit  Fee  Letter  (Paradigm).

     "Program Support Provider" shall mean any Person now or hereafter, directly
      ------------------------
in  support  of  the  transactions  contemplated by the Transaction Documents or
generally  in  support  of  a Conduit extending credit or having a commitment to
extend  credit  to or for the account of, or to make purchases from such Conduit
or  issuing  a  letter of credit, surety bond or other instrument to support any
obligations  arising under or in connection with such Conduit's commercial paper
program  (except  to  the  extent  such  general  support  does  not  cover this
transaction),  as  well  as any such Person now or hereafter acting as agent for
such Conduit or for any of the foregoing Persons, including, without limitation,
the  Liquidity  Purchasers  and  Agents  of  such  Conduit.

     "Protocol  of  Delivery  and Acceptance" means the Protocol of Delivery and
      --------------------------------------
Acceptance,  entered  into  by  the Charter Trustee and Deepwater on the Closing
Date.

     "Purchase  Notice"  has the meaning specified in Section 20.1 of the Master
      ----------------
Charter.

     "Purchase  Option"  has the meaning specified in Section 20.1 of the Master
      ----------------
Charter.

     "Purchase  Option  Date"  has  the meaning specified in Section 20.1 of the
      ----------------------
Master  Charter.

     "Purchase  Option  Price"  has the meaning specified in Section 20.1 of the
      -----------------------
Master  Charter.

     "Purchased  Interest" means (i) where Transocean is a Purchasing Party, the
      -------------------
Certificate  Purchaser Amounts relating to the Transocean Series A Charter Trust
Certificates and the Lender Amounts related to the Notes purchased by Transocean
pursuant to Section 9.4 of the Participation Agreement or (ii) where Conoco is a
Purchasing  Party,  the  Certificate  Purchaser  Amounts  relating to the Conoco
Series  A  Charter  Trust  Certificates  and  the  Lender  Amounts

                                       32
<PAGE>
related  to  the  Notes  purchased  by  Conoco  pursuant  to  Section 9.4 of the
Participation  Agreement.

     "Purchasing  Party"  means  (i)  Conoco  or Transocean, if and only if such
      -----------------
Person  has  suffered a Prepayment Change of Control Trigger Event and has or is
required  to  purchase  any  Purchased  Interest  under  Section  9.4  of  the
Participation  Agreement  or  (ii)  Deepwater  or  any  Affiliate  of any of the
foregoing to the extent such Person obtains an interest, directly or indirectly,
in  a  Purchased  Interest.

     "Purchasing  Party  Amount"  means,  at  any given time with respect to any
      -------------------------
Purchasing  Party,  its Purchased Interest minus the amount of any distributions
paid  to  such  Purchasing  Party  in  reduction of its allocated portion of the
Certificate  Purchaser  Amounts  or  the  Lender  Amounts,  as  the case may be.

     "Qualified  Transfer"  has  the  meaning  specified  in  Section 9.5 of the
      -------------------
Participation  Agreement.

     "R&B  Falcon  Drilling  Contract"  means that Deepwater Drillship Contract,
      -------------------------------
dated as of April 30, 1997, as amended and restated, between R&B Falcon Drilling
(International  &  Deepwater)  Inc.  and  Deepwater.

     "R&B  Falcon  Drilling  Contract Guaranty" has the meaning specified in the
      ----------------------------------------
Original  Participation  Agreement.

     "R&B  Falcon  Drilling  (International  & Deepwater) Inc." means R&B Falcon
      --------------------------------------------------------
Drilling  (International  &  Deepwater)  Inc.,  a  Delaware  corporation.

     "R&B  Falcon  Drilling  Party"  means  R&B Falcon Drilling (International &
      ----------------------------
Deepwater)  Inc.

     "R&B  Falcon  Guaranty"  means  the  R&B  Falcon Guaranty as defined in the
      ---------------------
Original  Participation  Agreement.

     "R&B  Portion"  means,  with  respect to any Return Period, a fraction, the
      ------------
numerator of which is the number of hours, rounded to the nearest half hour, the
Drillship  has  been  utilized under the R&B Falcon Drilling Contract during the
relevant Return Period and the denominator of which is the product of the actual
number  of  days  in  such  Return  Period  and  24  hours.

     "R&B  Usage" means the number of days, rounded to the nearest full day, the
      ----------
Drillship  has  been  utilized  under  the  R&B  Falcon  Drilling  Contract.

     "R&B  Usage  Ratio"  means,  from  time to time, a fraction (expressed as a
      -----------------
percentage)  the  numerator  of which is the maximum number of days during which
R&B  Falcon  Drilling (International & Deepwater) Inc. is obligated, pursuant to
the  terms  of the Rig Sharing Agreement, to use the Drillship commencing on the
most recent Adjustment Date preceding the date the rate of the Charter Margin is
to  be  determined  and  ending  on  the  scheduled  termination of the Drilling
Contracts divided by the total number of days remaining during such period under
          ----------
the  Drilling  Contracts.

                                       33
<PAGE>
     "Rating Agency" and "Rating Agencies" means S&P and/or Moody's and/or, with
      -------------       ---------------
respect  to  any  Conduit,  any  other rating agency rating the Commercial Paper
Notes  of  any  applicable  Conduit,  as  applicable.

     "Reasonable  Basis"  means a reasonable basis within the meaning of Section
      -----------------
6662(d)(2)(B)(ii)(II)  of  the  Code  or  any  regulations  thereunder.

     "Refinancing  Amount"  means  $237,215,675.
      -------------------

     "Refinancing  Date"  means  December  __,  2001.
      -----------------

     "Refinancing  Request"  means  each  written  request  by Deepwater setting
      --------------------
forth,  among  other  things,  the Refinancing Date or, if the Contributions and
Advances  are  postponed  under  Section 2.8 of the Participation Agreement, the
Refinancing Request issued under such Section, in each case in substantially the
form of Exhibit J to the Participation Agreement with appropriate provisions and
insertions.

     "Reimbursement  and  Proceeds Account" has the meaning specified in Section
      ------------------------------------
3.3(a)  of  the  Depository  Agreement.

     "Reimbursement  and  Proceeds  Certificate"  has  the  meaning specified in
      -----------------------------------------
Section  3.3(b)  of  the  Depository  Agreement.

     "Reimbursements"  has  the  meaning  specified  in  Section  3.3(a)  of the
      --------------
Depository  Agreement.

     "Related  Indemnified  Party" means the Affiliates of an Indemnified Party,
      ---------------------------
the  officers,  directors, employees and agents of the Indemnified Party and its
Affiliates  and,  in  the  case  of  the  Funding Participants and their Related
Indemnified Parties, the Charter Trustee and, in the case of the Charter Trustee
and the Investment Trust, the Funding Participants and their Related Indemnified
Parties.

     "Related  Party" means (i) with respect to Charter Supplement No. 1 and the
      --------------
charter created thereby, Transocean and its Affiliates (other than Deepwater) or
(ii)  with  respect to Charter Supplement No. 2 and the charter created thereby,
Conoco  and  its  Affiliates  (other  than  Deepwater).

     "Release"  means  any  release,  pumping,  pouring,  emptying,  injecting,
      -------
escaping,  leaching, dumping, seepage, spill, leak, flow, discharge, disposal or
emission  of  Oil  or  a  Hazardous  Substance.

     "Replacement  Funding Participant" has the meaning specified in Section 4.4
      --------------------------------
of  the  Participation  Agreement.

     "Required  Modifications"  has the meaning specified in Section 11.1 of the
      -----------------------
Master  Charter.

                                       34
<PAGE>
     "Residual  Guaranty  Amount"  means, (i) upon sale of the Charter Trustee's
      --------------------------
interest in the Drillship pursuant to Deepwater's exercise of its Return Option,
the  sum  of:

     (A)   the Charter  Balance  on such date (reduced by any payment of Charter
     Supplement  Prepayment  Amount of Termination Value under Section 4.2(c) of
     the  Depository  Agreement),  plus  any  accrued and unpaid Charter Return,
     minus  the  Net  Sales  Proceeds;  and
     -----

     (B)   all accrued and unpaid Supplemental Hire;

provided,  however,  that in no event shall the amount calculated in this clause
--------   -------
(i)  exceed  the  Maximum  Residual  Guaranty  Amount;  or  (ii)  if the Charter
Trustee's  interest  in  the  Drillship is not sold on or prior to the Scheduled
Charter  Expiration  Date in accordance with Section 20.3 of the Master Charter,
the  Maximum  Residual  Guaranty  Amount.

     "Responsible  Officer"  means,  with respect to any matter (i) if a natural
      --------------------
Person,  such  Person;  or  (ii)  if not a natural Person, a senior financial or
legal  officer or such other officer of such Person, who in the normal course of
his  operational  duties  would  have  knowledge  of  such  matter.

     "Return  Notice"  has  the  meaning specified in Section 20.3 of the Master
      --------------
Charter.

     "Return  Option"  has  the  meaning specified in Section 20.3 of the Master
      --------------
Charter.

     "Return  Period"  means with respect to any determination of Charter Return
      --------------
(i)  the  period  commencing on and including the Refinancing Date and ending on
but  excluding  the  last day of the month in which the Refinancing Date occurs,
and  (ii)  thereafter  with  respect  to the Charter Balance, the calendar month
preceding  the  month  in  which the Charter Hire Payment Date occurs; provided,
                                                                       --------
that  the  last  Return  Period  shall  end on the last day of the Charter Term.

     "Return  Rates" means the Certificate Return Rate and the Loan Return Rate.
      -------------

     "Revenues"  means  all  amounts received by Deepwater from whatever source,
      --------
including  all  revenues  from  the  Drilling  Contracts but excluding (i) those
amounts to be deposited, pursuant to the Depository Agreement, into the Event of
Loss  Proceeds  Account,  Reimbursement  and Proceeds Account, Permitted Contest
Reserve  Account,  Drillship  Sales Proceeds Account or the Termination Proceeds
Account,  (ii)  those  amounts  which, on the date of payment or receipt, may be
properly  distributed  to  Deepwater  (or  as  directed  by Deepwater) under the
Depository Agreement, (iii) those amounts received by Deepwater from the Members
as  capital  contributions  and  (iv)  those  amounts received by Deepwater that
constitute  proceeds  of  Subordinated  Debt  and (v) proceeds of Casualties and
Condemnations  up  to  $2,000,000  an  occurrence.

     "Rig Sharing Agreement" means that Rig Sharing Agreement, dated as of April
      ---------------------
30,  1997,  among  the  Conoco Drilling Party, the R&B Falcon Drilling Party and
Deepwater.

     "S&P"  means  Standard  &  Poor's  Ratings  Services,  a  division  of  The
      ---
McGraw-Hill  Companies,  Inc.

                                       35
<PAGE>
     "Scheduled Charter Expiration Date" means, with respect to the Base Charter
      ---------------------------------
Term,  the scheduled expiration of the Base Charter Term and with respect to any
Extension  Term,  the  scheduled  expiration  of  any  Extension  Term.

     "Securities  Act"  means  the  Securities Act of 1933, as amended, together
      ---------------
with  the  rules  and  regulations  promulgated  thereunder.

     "Securities  Intermediary"  means  Wilmington  Trust  Company,  a  Delaware
      ------------------------
banking  corporation,  as  securities  intermediary  and  depository  under  the
Depository  Agreement.

     "Security  Documents"  means the collective reference to the Ship Mortgage,
      -------------------
the  Deepwater  Assignment,  the  Depository  Agreement,  the  Drilling Contract
Guaranties,  the  Charter Trustee Assignment, the Charter and all other security
documents  granting or perfecting a Lien on any asset or assets of any Person to
secure  the  Deepwater  Obligations,  the  Series  A Obligations or the Series B
Obligations.

     "Selling  Member"  has  the  meaning  specified  in  Section  9.5  of  the
      ---------------
Participation  Agreement.

     "Series  A  Charter  Trust  Certificates"  means  the Conoco Series A Trust
      ---------------------------------------
Certificates  and  the  Transocean  Series  A  Trust  Certificates.

     "Series  A  Obligations" means the obligations (monetary or otherwise) owed
      ----------------------
by  the  Charter  Trustee  to the Beneficial Owners as evidenced by the Series A
Charter  Trust  Certificates.

     "Series A Portion" means, with respect to any amount, three percent (3%) of
      ----------------
such  amount.

     "Series  A  Return"  means:
      -----------------

     (i)  except  where  clause  (ii)  of this definition is applicable, for any
     Return Period, an amount equal to the product of the applicable Certificate
     Return  Rate  times  the Certificate Purchaser Balance (or portion thereof)
     allocable  to  such  Return  Period  or

     (ii)  where  one,  but  not  both,  of  the  Charter  Supplements  has been
     accelerated  pursuant  to  Section 4.2(a) thereof, Series A Return accruing
     after  the  termination  of  the  accelerated  Charter  Supplement shall be
     calculated as, for any Return Period, an amount equal to the product of the
     applicable  Certificate Return Rate times the Certificate Purchaser Balance
     that  would  have  been  in  effect on such date, but for the acceleration.

     "Series  B  Charter  Trust Certificate" means the certificate issued to the
      -------------------------------------
Investment  Trust  from  the  Charter  Trustee pursuant to Section 2.1(f) of the
Original  Participation  Agreement  and  in  accordance  with the Original Trust
Agreements  to  evidence  the  Investment  Trust  Amount.

     "Series  B Obligations" means those obligations owed by the Charter Trustee
      ---------------------
to  the Investment Trust as evidenced by the Series B Charter Trust Certificate.
Any  event which reduces the obligations owed by Deepwater to the holders of the
Notes  shall  reduce  the  Series  B  Obligations  to  the  same  extent.

                                       36
<PAGE>
     "Series  B  Return"  means
      -----------------

     (i)  except  where  clause  (ii)  of this definition is applicable, for any
     Return Period, an amount equal to the product of the applicable Loan Return
     Rate times the Lender Balance (or portion thereof) allocable to such Return
     Period  or

     (ii)  where  one,  but  not  both,  of  the  Charter  Supplements  has been
     accelerated  pursuant  to  Section 4.2(a) thereof, Series B Return accruing
     after  the  termination  of  the  accelerated  Charter  Supplement shall be
     calculated as, for any Return Period, an amount equal to the product of the
     applicable  Loan  Return Rate times the Lender Balance that would have been
     in  effect  on  such  date,  but  for  the  acceleration.

     "Services  Agreements"  means  the  Marine  Services Agreement, dated as of
      --------------------
April  30, 1997, between Deepwater and Conoco Shipping Company, and the Drilling
Services Agreement, dated as of April 30, 1997, between Deepwater and R&B Falcon
Drilling  Co.

     "Settlement  Date"  has the meaning specified in Section 15.2 of the Master
      ----------------
Charter.

     "Ship Mortgage" means a first priority Panamanian mortgage over the Vessel,
      -------------
given  by  the  Charter Trustee in favor of the Investment Trust and the Hedging
Agreement  Counterparties,  if  any  as  amended  by the First Addendum to Naval
Mortgage.

     "Slot"  has  the  meaning  specified  in  Section  4(a)  of the Rig Sharing
      ----
Agreement.

     "Special  Purchase  Right" has the meaning specified in Section 16.4 of the
      ------------------------
Master  Charter.

     "Special  Purchase  Right Notice" has the meaning specified in Section 16.4
      -------------------------------
of  the  Master  Charter.

     "Special  Purchase  Right  Payment  Amount"  has  the  meaning specified in
      -----------------------------------------
Section  16.4  of  the  Master  Charter.

     "Special  Purchase Right Payment Date" has the meaning specified in Section
      ------------------------------------
16.4  of  the  Master  Charter.

     "Subordinated  Debt"  means  Indebtedness  of  Deepwater  to its Members or
      ------------------
Affiliates  of  its  Members  which is by its terms expressly subordinate to all
payments  of Charter Hire (including Basic Hire and all amounts due and owing by
Deepwater  to  the other parties under the Transaction Documents) (as more fully
set  forth on Schedule 4 to the Participation Agreement) and is payable only out
of  funds  available  for  distribution  under  clauses  "eighth" and "ninth" of
Section  3.4(b)  of  the  Depository  Agreement.

     "Subordinated Notes" means promissory notes or other instruments evidencing
      ------------------
Subordinated  Debt.

     "Subordinated  Operating  Expenses"  means  those  fees, costs and expenses
      ---------------------------------
payable  to  Affiliates  of Transocean and Conoco under the Services Agreements.

                                       37
<PAGE>
     "Subsidiary"  means,  with  respect  to  a Person, any corporation or other
      ----------
entity  of  which securities or other ownership interests having ordinary voting
power  to elect a majority of the board of directors or other persons performing
similar  functions  are at the time directly or indirectly owned by such Person.

     "Substitute  Funding  Participant"  is  defined  in  Section  7.7  of  the
      --------------------------------
Participation  Agreement.

     "Supplement  Date"  has the meaning specified in Section 15.2 of the Master
      ----------------
Charter.

     "Supplemental  Hire"  means all amounts, liabilities and obligations (other
      ------------------
than  Basic  Hire)  which Deepwater assumes, agrees or is otherwise obligated to
pay to the Charter Trustee, the Investment Trust, any Funding Participant or any
other  Person under, and subject to, the Charter or any of the other Transaction
Documents,  including  breakage  costs,  indemnities,  damages  and  expenses.
"Supplemental Hire" shall include all fees, costs and expenses and other amounts
payable  by  Deepwater during the Base Charter Term to the Charter Trustee under
the  Deepwater  Hedging  Agreements.

     "Swap  Termination  Amount"  means an amount due and payable by the Charter
      -------------------------
Trustee  under  Section  6(d)  or  (e)  of  the  Hedging  Agreements.

     "Tax"  or  "Taxes"  means  any  and  all license, registration, mortgage or
      ---        -----
security  filing  fees,  stamp  duties  and  documentation  fees  and all taxes,
assessments,  levies, sales, use or transfer tax, imposts, duties, charges, fees
or  withholdings of any nature whatsoever, together with all penalties, fines or
interest  thereon  or  other additions thereto, imposed by any federal, state or
local  government,  political  subdivision,  or  taxing  authority in the United
States, or by any governmental or taxing authority of or in a foreign country or
possession  or  territory  or  any  international  authority.

     "Tax  Claim"  means  a  claim  for  Taxes  under the General Tax Indemnity.
      ----------

     "Termination  of  Refinancing"  has the meaning specified in Section 4.1 of
      ----------------------------
the  Participation  Agreement.

     "Termination  Proceeds"  has the meaning specified in Section 3.7(a) of the
      ---------------------
Depository  Agreement.

     "Termination  Proceeds Account" has the meaning specified in Section 3.7(a)
      -----------------------------
of  the  Depository  Agreement.

     "Termination  Proceeds  Certificate"  has  the meaning specified in Section
      ----------------------------------
3.7(b)  of  the  Depository  Agreement.

     "Termination  Value"  means  on  any  date,  an amount equal to the Charter
      ------------------
Balance  on  such  date.

     "Transaction  Documents"  means:
      ----------------------

          (i)     the Participation Agreement;

                                       38
<PAGE>
          (ii)      the Charter Trust Agreement;
          (iii)     the Investment Trust Agreement;
          (iv)      the Deepwater Hedging Agreements, if any;
          (v)       the Hedging Agreements, if any;
          (vi)      the Drilling Consent;
          (vii)     the Master Charter;
          (viii)    Charter Supplement No. 1;
          (ix)      Charter Supplement No. 2;
          (x)       the Security Documents;
          (xi)      the Series A Charter Trust Certificates;
          (xii)     the Series B Charter Trust Certificate;
          (xiii)    Loan Agreement;
          (xiv)     LAPAs;
          (xv)      Fee Letters;
          (xvi)     Notes
          (xvii)    the Conoco Guaranty; and
          (xviii)   the Transocean Guaranty.

     "Transaction  Expenses"  means:
      ---------------------

          (i)       the  fees  and  expenses  of  Mayer,  Brown & Platt, special
                    counsel  to Certificate Purchasers, Liquidity Purchasers and
                    Administrative  Agent,  Baker Botts, L.L.P., special counsel
                    to  Deepwater,  Watson,  Farley & Williams, special maritime
                    counsel  to  the  Certificate  Purchasers,  the  Conduit,
                    Liquidity Purchasers, and Administrative Agent, Mayer, Brown
                    &  Platt,  special  counsel to each of the Conduit (Liberty)
                    and  the  Conduit (Paradigm) (including any fees incurred in
                    connection  with  extension  of  each  applicable  LAPA),
                    Cadwalader,  Wickersham  and  Taft,  special  counsel to the
                    Conduit  (Hatteras),  (including  any  fees  incurred  in
                    connection  with  extension  of the LAPA (Hatteras)), Arias,
                    Fabrega  &  Fabrega,  Panamanian  counsel  to  the Liquidity
                    Purchasers,  the  Conduit  and  the  Certificate Purchasers,
                    Benedetti  &  Benedetti,  special  Panamanian  counsel  to
                    Deepwater,  and  Walkers,  Cayman  Islands  counsel  to
                    Transocean;
          (ii)      the  fees  and  expenses  of  the Placement Agent other than
                    legal  fees  and  expenses;
         (iii)      the fees and expenses of the Administrative Agent other than
                    legal  fees  and  expenses;
          (iv)      the  fees  and  expenses of the Investment Trust Beneficiary
                    other  than  legal  fees  and  expenses;
          (v)       the  fees  and  expenses  of  the  Trustees;
          (vi)      the  fees and expenses of Delaware counsel to the Investment
                    Trustee,  the  Charter  Trustee  and  the  Depository;
         (vii)      certain  other  expenses  incurred  in  connection  with the
                    negotiation  and  execution of the Transaction Documents and
                    the  transactions  contemplated  thereby  (including fees or
                    expenses  incurred  in  connection

                                       39
<PAGE>
                    with  the  translation,  documentation or recordation of the
                    Ship  Mortgage);  and
        (viii)      the  fees  and expenses of one local counsel, if any, to the
                    Funding Participants, the Trustees, the Investment Trust and
                    the  Administrative  Agent  in connection with the review of
                    the  Head  Lease  Documents,  if  any.

     "Transfer  Restrictions"  means  the  restrictions  on transfer of interest
      ----------------------
imposed  on  the  Trustees and Funding Participants pursuant to Section 9 of the
Participation  Agreement.

     "Transocean"  means  Transocean  Sedco Forex Inc., an exempt company formed
      ----------
under  the  laws  of  the  Cayman  Islands.

     "Transocean  Charter"  means  the charter created by the Master Charter, as
      -------------------
supplemented  by  Charter  Supplement  No.  1.

     "Transocean  Drilling  Contract  Guaranty"  means  that Deepwater Drillship
      ----------------------------------------
Project,  Transocean  Guaranty,  dated  as  of  the  Documentation Date given by
Transocean  in  favor  of  Deepwater.

     "Transocean  Guaranty"  means  the  Transocean  Guaranty,  dated  as of the
      --------------------
Documentation Date, given by Transocean in favor of the Trustees, the Investment
Trust,  the  Administrative  Agent,  the  Liquidity Purchasers, the Conduit, the
Certificate  Purchasers  and  the  other  beneficiaries  named  therein.

     "Transocean  Series  A  Charter  Trust  Certificate" means each certificate
      --------------------------------------------------
issued to a Beneficial Owner from the Charter Trustee pursuant to Section 2.4(a)
of  the  Participation  Agreement  and  in  accordance  with  the  Charter Trust
Agreement  to  evidence the 60% of the Certificate Purchaser Amount of each such
Beneficial  Owner.

     "Trust  Agreements"  means  the  Charter Trust Agreement and the Investment
      -----------------
Trust  Agreement.

     "Trust  Estate"  means the sum of $1.00 (receipt of which from the Original
      -------------
Certificate  Purchasers  is  hereby acknowledged by the Charter Trustee) and all
estate,  right,  title and interest of the Charter Trustee and/or the Investment
Trust  in,  to  and under (1) the Charter, (2) the Depository Agreement, (3) the
Drillship  and  (4) each other Transaction Document to which the Charter Trustee
and/or  the  Investment  Trust  is  a  party.

     "Trust  Indenture  Act"  means the Trust Indenture Act of 1939, as amended,
      ---------------------
together  with  the  rules  and  regulations  promulgated  thereunder.

     "Trust  Liens"  means  Liens on or against any or all of the Drillship, the
      ------------
Trust  Estate,  the  Charter  Trust,  the  Investment  Trust, the Charter or any
payment  of  Charter  Hire  which result from (a) any act or omission of, or any
Claim  against,  the  Investment  Trust, the Investment Trust Beneficiary or the
Trustees  in  any  case  unrelated  to  the  transactions  contemplated  by  the
Transaction  Documents  (including  any Liens arising as a result of a voluntary
transfer  of  the Drillship or all or any portion of the Trust Estate other than
any  voluntary  transfer  after a Charter

                                       40
<PAGE>
Event  of  Default),  (b)  any  Tax  owed by any such Person, except for any Tax
required  to be paid by Deepwater under the Transaction Documents, including any
Tax  for which Deepwater is obligated to indemnify such Person under the General
Tax  Indemnity,  or  (c) any act or omission of such Person that is in breach of
any  of  the  covenants  or  agreements  of  the  Transaction  Documents.

     "Trustee Default Notice" has the meaning specified in Section 4.2(a) of the
      ----------------------
Depository  Agreement.

     "Trustee  Disbursement Notice (Both Supplements)" has the meaning specified
      -----------------------------------------------
in  Section  4.2(b)  of  the  Depository  Agreement.

     "Trustee Disbursement Notice (Either Supplement)" has the meaning specified
      -----------------------------------------------
in  Section  4.2(c)  of  the  Depository  Agreement.

     "Trustees"  means  the  Charter  Trustee  and  the  Investment  Trustee.
      --------

     "Uniform Commercial Code" and "UCC" means the Uniform Commercial Code as in
      -----------------------       ---
effect  in  any  applicable  jurisdiction.

     "United  States"  and  "U.S."  shall  mean  the  United  States of America.
      --------------         ----

     "Unsubordinated  Operating  Expense  Amount" means, for each day during any
      ------------------------------------------
Return Period (or portion thereof) during the Charter Term, $12,000 of Operation
and  Maintenance  Expenses  to  be  adjusted  from time to time as follows:  (i)
commencing  in  the  year  2000  on  every January 1 during the Charter Term the
"Unsubordinated Operating Expense Amount" shall be adjusted upwards or downwards
by  an  amount  determined  in  accordance with the following equation:  (a) the
Consumer  Price  Index  for December 31 of the most recently ended calendar year
shall  be  divided  by  the Consumer Price Index for December 31 of the calendar
year  immediately  preceding  the  most recently ended calendar year and (b) the
quotient  obtained through the calculation set forth in clause (a) (expressed as
a  percentage)  shall  be  multiplied  by  the "Unsubordinated Operating Expense
Amount"  (taking  into  account  all  prior  adjustments)  for  the  immediately
preceding  calendar  year;  and (ii) for any period during which the Day Rate is
reduced  pursuant  to  the  Drilling  Contract  during  the  Charter  Term,  the
Unsubordinated Operating Expense Amount shall be adjusted downwards by an amount
determined  in  accordance  with the following equation:  (x) the Day Rate after
such  reduction  divided  by  the  Day  Rate  before  such reduction and (y) the
quotient  (expressed  as  a  percentage)  determined  in  clause  (x)  shall  be
multiplied  by  the Unsubordinated Operating Expense Amount (taking into account
all prior adjustments) in effect immediately prior to the reduction of Day Rate.

     "Upfront  Fee  Letters"  means  certain fee letters dated the Documentation
      ---------------------
Date,  each  made  by  Deepwater  in  favor  of  each  Lender,  respectively.

     "Vessel"  means  the  727-foot double-hulled vessel, bearing Hull No. 1231,
      ------
without  the  OFE,  constructed  pursuant  to  the  Construction  Contract.

     "Voting  Stock"  means  the shares of capital stock of a corporation having
      -------------
ordinary  voting  power  to  elect  a majority of the board of directors of such
corporation,  but  excluding  any  other

                                       41
<PAGE>
class  or  classes  of  stock  that  have  or  might  have voting power upon the
occurrence  of  a  contingency.

     "War  Risk  Policy"  means a marine "all risk" insurance policy that covers
      -----------------
war  risks,  confiscation,  expropriation, nationalization and deprivation risks
for  operations  of  the  Drillship outside the United States that complies with
Section  14.1(e)  of  the  Charter  and  contains the terms of such policy as in
effect  on  the  Documentation  Date.

     "Warranties"  means  all  of the right, title and interest in, to and under
      ----------
any  warranty,  covenant,  representation,  service  life  policy,  performance
guaranty,  indemnity  or  product  support  agreement  of  any  contractor,
subcontractor,  manufacturer,  materialman, supplier, vendor or any other Person
(excluding  Conoco,  Frontier  Deepwater  Drilling  Inc.,  R&B  Falcon  Drilling
(International  &  Deepwater)  Inc.,  Transocean,  Deepwater,  the  Members, the
Investment  Trust,  the  Trustees and the Certificate Purchasers) (collectively,
the  "Warrantors")  contained  in  any  contract  or  agreement,  including  the
      ----------
Construction  Contract,  to the extent that such contracts and agreements relate
to  the  Vessel,  the  OFE  or  any  part  thereof;  provided, however, that the
                                                     --------  -------
definition  of  "Warranties" shall not include adjustments to the contract price
pursuant  to  Article  III  of  the  Construction  Contract.

     "Warrantors"  has  the  meaning  specified  in the definition "Warranties".
      ----------                                                    ----------

     "Wilmington  Trust  Company"  means  Wilmington  Trust  Company, a Delaware
      --------------------------
banking  company.

                                       42
<PAGE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00035-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00035-of-00352.parquet"}]]