TRANSOCEAN SEDCO FOREX INC
<DOCUMENT>
<TYPE>EX-10.44
<SEQUENCE>14
<FILENAME>doc13.txt
<TEXT>
                                                                  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>

</TEXT>
</DOCUMENT>
