Exhibit 10.1

SECTION 1 - GENERAL

1.1 PURPOSE. The Global Marine 1998 Stock Option and Incentive Plan (the "Plan") has been established by Global Marine Inc. (the "Company") to (i) attract and retain persons eligible to participate in the Plan, (ii) motivate Participants by means of appropriate incentives to achieve long-range goals,
(iii) provide incentive compensation opportunities using the Company's common stock or cash that are competitive with those of other similar companies, and (iv) further identify Participants' interests with those of the Company's other stockholders through compensation that is based on the Company's common stock, thereby promoting the long-term financial interest of the Company and the Related Companies, including growth in value of the Company's equity and enhancement of long-term stockholder return.

1.2 PARTICIPATION. Subject to the terms and conditions of the Plan, the Committee shall determine and designate from time to time, from among the Eligible Individuals, those persons who will be granted one or more Awards under the Plan and thereby become "Participants" in the Plan. At the discretion of the Committee, a Participant may be granted any Award permitted under the provisions of the Plan, and more than one Award may be granted to a Participant. Awards may be granted as alternatives to or in replacement of (a) awards outstanding under the Plan or any other plan or arrangement of the Company or a Related Company, or (b) awards outstanding under a plan or arrangement of a business or entity all or part of which is acquired by the Company or a Related Company.

1.3 OPERATION AND ADMINISTRATION. The operation and administration of the Plan, including the Awards made under the Plan, shall be subject to the provisions of Section 6 (relating to operation and administration).

1.4 CONSTRUCTION AND DEFINITIONS. Where the context admits, words in any gender shall include any other gender, words in the singular shall include the plural and the plural shall include the singular. Capitalized terms in the Plan shall be defined as set forth in the Plan, including the definition provisions of Section 2.

SECTION 2 - DEFINED TERMS

For purposes of the Plan, the terms listed below shall be defined as follows:

(a) 1989 PLAN. The term "1989 Plan" has the meaning ascribed to it in paragraph (a) of subsection 6.2.

(b) AGREEMENT. The term "Agreement" has the meaning ascribed to it in subsection 6.10.

(c) AWARD. The term "Award" means any award or benefit granted to any Participant under the Plan, including without limitation the grant of Options, SARs, Stock Awards, and Cash Awards.

(d) BOARD. The term "Board" means the Board of Directors of the Company.

(e) CASH AWARD. The term "Cash Award" has the meaning ascribed to it in subsection 5.1.

(f) CODE. The term "Code" means the Internal Revenue Code of 1986, as amended. A reference to any provision of the Code shall include reference to any successor provision of the Code.

(g) COMMITTEE. The term "Committee" has the meaning ascribed to it in subsection 7.1.

(h) COMPANY. The term "Company" has the meaning ascribed to it in subsection 1.1.

(i) EFFECTIVE DATE. The term "Effective Date" has the meaning ascribed to it in subsection 6.1.

(j) ELIGIBLE INDIVIDUAL. The term "Eligible Individual" shall mean any employee of the Company or a Related Company, any consultant or other person providing key services to the Company or a Related Company, and any person to whom an offer of employment has been made by the Company or a Related Company; provided, however, that any member of the Board shall not be an Eligible Individual unless he is also an employee of the Company or a Related Company.

(k) EXERCISE PRICE. The term "Exercise Price" has the meaning ascribed to it in subsection 3.2.

(l) FAIR MARKET VALUE. For purposes of determining the "Fair Market Value" of a share of Stock, the following rules shall apply:

(i) If the Stock is at the time listed or admitted to trading on any stock exchange, then the "Fair Market Value" shall be the mean between the lowest and highest reported sale prices of the Stock on the date in question on the principal exchange on which the Stock is then listed or admitted to trading. If no reported sale of Stock takes place on the date in question on the principal exchange, then the reported closing asked price of the Stock on such date on the principal exchange shall be determinative of "Fair Market Value."

(ii) If the Stock is not at the time listed or admitted to trading on a stock exchange, the "Fair Market Value" shall be the mean between the lowest reported bid price and highest reported asked price of the Stock on the date in question in the over-the-counter market, as such prices are reported in a publication of general circulation selected by the Committee and regularly reporting the market price of the Stock in such market.

(iii) If the Stock is not listed or admitted to trading on any stock exchange or traded in the over-the-counter market, the "Fair Market Value" shall be as determined in good faith by the Committee.

(m) INCENTIVE STOCK OPTION. The term "Incentive Stock Option" has the meaning ascribed to it in paragraph (a) of subsection 3.1.

(n) NON-QUALIFIED STOCK OPTION. The term "Non-Qualified Stock Option" has the meaning ascribed to it in paragraph (a) of subsection 3.1.

(o) OPTION. The term "Option" has the meaning ascribed to it in paragraph (a) of subsection 3.1.

(p) PARTICIPANT. The term "Participant" has the meaning ascribed to it in subsection 1.2.

(q) PLAN. The term "Plan" has the meaning ascribed to it in subsection 1.1.

(r) PRICING DATE. The term "Pricing Date" has the meaning ascribed to it in subsection 3.2.

(s) RELATED COMPANY. The term "Related Company" means any subsidiary of the Company and any other business venture in which the Company has a significant interest as determined in the discretion of the Committee.

(t) SAR. The term "SAR" has the meaning ascribed to it in paragraph (b) of subsection 3.1.

(u) STOCK. The term "Stock" means shares of common stock of the Company.

(v) STOCK AWARD. The term "Stock Award" has the meaning ascribed to it in subsection 4.1.

SECTION 3 - OPTIONS AND SARS

3.1 DEFINITIONS.

(a) The grant of an "Option" entitles the Participant to purchase shares of Stock at an Exercise Price established by the Committee. Options granted under this Section 3 may be either Incentive Stock Options or Non-Qualified Stock Options, as determined in the discretion of the Committee. An "Incentive Stock Option" is an Option that is intended to satisfy the requirements applicable to an "incentive stock option" as described in section 422(b) of the Code and shall comply with, among other things, the requirements of subsections 3.2, 3.3 and 6.1 of the Plan. A "Non-Qualified Stock Option" is an Option that is not intended to be an "incentive stock option" as that term is described in section 422(b) of the Code.

(b) A stock appreciation right (an "SAR") entitles the Participant to receive, in cash or Stock (as determined in accordance with subsection 3.5), value equal to all or a portion of the excess of: (i) the Fair Market Value of a specified number of shares of Stock at the time of exercise; over (ii) an Exercise Price established by the Committee.

3.2 EXERCISE PRICE. The "Exercise Price" of each Option and SAR granted under this Section 3 shall be established by the Committee or shall be determined by a method established by the Committee; provided, however, that the Exercise Price shall not be less than the Fair Market Value of a share of Stock as of the Pricing Date. For purposes of the preceding sentence, the "Pricing Date" shall be the date on which the Option or SAR is granted, except that the Committee may provide that: (a) the Pricing Date is the date on which the recipient is hired or promoted (or similar event), if the grant of the Option or SAR occurs not more than 90 days after the date of such hiring, promotion or other event; and (b) if an Option or SAR is granted in tandem with or in substitution for an outstanding Award, the Pricing Date is the date of grant of such outstanding Award.

3.3 EXERCISE. Each Option and each SAR shall be exercisable in accordance with such terms and conditions and during such periods as may be established by the Committee; provided, however, that (a) each Option and each SAR shall be exercisable only during a fixed period of time ending no later than ten years from the date such Option or SAR is granted, and
(b) to the extent required by the Code, the aggregate Fair Market Value of the shares of Stock with respect to which Incentive Stock Options granted to any individual Participant are exercisable for the first time during any calendar year shall not exceed $100,000, valued at the date or dates the Options are granted, and any grant of an Option designated as an Incentive Stock Option that is in excess of such limit required by the Code shall be treated as a Non-Qualified Stock Option.

3.4 PAYMENT OF OPTION EXERCISE PRICE. The payment of the Exercise Price of an Option granted under this Section 3 shall be subject to the following:

(a) Subject to the following provisions of this subsection 3.4, the full Exercise Price for shares of Stock purchased upon the exercise of any Option shall be paid at the time of such exercise except that, in the case of an exercise arrangement approved by the Committee and described in paragraph (c) of this subsection 3.4, payment may be made as soon as practicable after the exercise.

(b) The Exercise Price shall be payable in cash or by tendering shares of Stock (by either actual delivery of shares or by attestation, with such shares being valued at Fair Market Value as of the day of exercise), excluding any shares deemed unacceptable for any reason by the Committee, or in any combination thereof, as determined by the Committee.

(c) The Committee may permit a Participant to elect to pay the Exercise Price upon the exercise of an Option by authorizing a third party to sell some or all of the shares of Stock acquired upon exercise of an Option and remit to the Company a sufficient portion of the sale proceeds to pay the entire Exercise Price and any tax withholding resulting from such exercise.

3.5 SETTLEMENT OF AWARD. Distribution following exercise of an Option or SAR, and shares of Stock distributed pursuant to such exercise, shall be subject to such conditions, restrictions and contingencies as the Committee may establish. Settlement of SARs may be made in shares of Stock valued at their Fair Market Value at the time of exercise, in cash, or in any combination thereof, as determined in the discretion of the Committee. The Committee may in its discretion impose such conditions, restrictions and contingencies with respect to shares of Stock acquired pursuant to the exercise of an Option or an SAR as the Committee determines to be desirable.

SECTION 4 - OTHER STOCK AWARDS

4.1 DEFINITION. A "Stock Award" is a grant of shares of Stock or of a right to receive shares of Stock, or their cash equivalent or a combination of both, in the future.

4.2 RESTRICTIONS ON STOCK AWARDS. Each Stock Award shall be subject to such terms and conditions, restrictions and contingencies, if any, as the Committee shall determine. Restrictions and contingencies limiting the right to receive shares of Stock, or their cash equivalent or a combination of both, in the future pursuant to a Stock Award shall limit such right for a minimum of three years from the date such Stock Award is granted or be based on the achievement of single or multiple performance goals over a period ending at least one year from the date such Stock Award is granted. Such restrictions and/or contingencies may terminate or be subject to termination before the passage of the period of time designated and/or the achievement of such performance goals only in the event of the death, disability, or retirement from or other non-cause termination of employment with the Company or a Related Company of the holder of such Stock Award, or in the event of a change of control, as defined in the terms of such Stock Award, of the Company or a Related Company. The performance goals may be cumulative, annual or end-of-performance period goals, may be relative to a peer group or based on increases or changes relative to stated values, and may be based on any one or more of the following measures: (a) earnings before interest, taxes, depreciation and amortization; (b) earnings per share; (c) stock price growth; (d) net income (before or after taxes); (e) cash flow; and (f) total shareholder return. Any unrestricted grant of shares of Stock pursuant to a Stock Award shall be made only in lieu of salary or bonus that otherwise would be payable by the Company or a Related Company.

SECTION 5 - CASH AWARDS

5.1 DEFINITION. A "Cash Award" is a cash bonus paid solely on account of the attainment of one or more objective performance goals that have been preestablished by the Committee.

5.2 RESTRICTIONS ON CASH AWARDS. Each Cash Award shall be subject to such terms and conditions, restrictions and contingencies, if any, as the Committee shall determine. Restrictions and contingencies limiting the right to receive a cash payment pursuant to a Cash Award shall be based on the achievement of single or multiple performance goals over a period of time determined by the Committee. The performance goals may be cumulative, annual or end-of-period performance goals, may be relative to a peer group or based on increases or changes relative to stated values, and may be based on any one or more of the following measures: (a) earnings before interest, taxes, depreciation and amortization; (b) earnings per share; (c) stock price growth; (d) net income (before or after taxes); (e) cash flow; and (f) total shareholder return. The maximum cash payment to be made to any one individual pursuant to any Cash Award during any calendar year shall not exceed $2,000,000.

SECTION 6 - OPERATION AND ADMINISTRATION

6.1 EFFECTIVE DATE AND DURATION. Subject to its approval by the stockholders of the Company at the Company's 1998 annual meeting of stockholders, the Plan shall be effective as of February 10, 1998 (the "Effective Date"); provided, however, that, to the extent Awards are made under the Plan prior to its approval by stockholders, they shall be contingent on approval of the Plan by the stockholders of the Company. The Plan shall be unlimited in duration and, in the event of Plan termination, shall remain in effect as long as any Awards under it are outstanding; provided, however, that, to the extent required by the Code, no Incentive Stock Options may be granted under the plan on a date that is more than ten years from the date the Plan is approved by stockholders.

6.2 SHARES SUBJECT TO PLAN.

(a) (i) Subject to the following provisions of this subsection 6.2, the maximum number of shares of Stock that may be delivered to Participants and their beneficiaries under the Plan shall be equal to the sum of: (I) 7,500,000 shares of Stock; (II) any shares of Stock available for future awards under the Global Marine Inc. 1989 Stock Option and Incentive Plan (the "1989 Plan") as of the Effective Date; and (III) any shares of Stock represented by awards granted under the 1989 Plan that are forfeited, expire or are canceled without delivery of shares of Stock or which result in the forfeiture of shares of Stock back to the Company.

(ii) Any shares of Stock granted under the Plan that are forfeited because of the failure to meet an Award contingency or condition shall again be available for delivery pursuant to new Awards granted under the Plan. To the extent any shares of Stock covered by an Award are not delivered to a Participant or beneficiary because the Award is forfeited or canceled, or the shares of Stock are not delivered because the Award is settled in cash, such shares shall not be deemed to have been delivered for purposes of determining the maximum number of shares of Stock available for delivery under the Plan.

(iii) If the Exercise Price or other purchase price of any stock option or other award granted under the Plan or the 1989 Plan is satisfied by tendering shares of Stock to the Company by either actual delivery or by attestation, or if the tax withholding obligation resulting from the settlement of any such option or other award is satisfied by tendering or withholding shares of Stock, only the number of shares of Stock issued net of the shares of Stock tendered or withheld shall be deemed delivered for purposes of determining the maximum number of shares of Stock available for delivery under the Plan.

(iv) Shares of Stock delivered under the Plan in settlement, assumption or substitution of outstanding awards or obligations to grant future awards under the plans or arrangements of another entity shall not reduce the maximum number of shares of Stock available for delivery under the Plan, to the extent that such settlement, assumption or substitution is a result of the Company or a Related Company acquiring another entity or an interest in another entity.

(b) Subject to paragraph (c) of this subsection 6.2, the following additional maximums are imposed under the Plan.

(i) The maximum number of shares of Stock that may be issued pursuant to Options intended to be Incentive Stock Options shall be 6,000,000 shares. In the event of an increase in the number of shares authorized in clause I in the first sentence of paragraph 6.2(a)(i), said maximum number of shares will be increased pro rata.

(ii) The maximum number of shares of Stock that may be issued in conjunction with Awards granted pursuant to
Section 4 (relating to Stock Awards) shall be 2,000,000 shares.

(iii) The maximum number of shares that may be covered by Awards granted to any one individual during any ten consecutive calendar years pursuant to this Plan shall be 20% of the shares of Stock authorized in clause I in the first sentence of paragraph 6.2(a)(i) to be delivered under the Plan. In the event of an increase in the number of shares authorized in said clause I, the 20% limitation will apply to the increased number of shares authorized.

(c) In the event of a corporate transaction involving the Company (including without limitation any stock divided, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination or exchange of shares), the Committee may adjust Awards to preserve the benefits or potential benefits of the Awards. Action by the Committee may include adjustment of:
(i) the number and kind of shares which may be issued or delivered under the Plan; (ii) the number and kind of shares subject to outstanding Awards; and (iii) the Exercise Price of outstanding Options and SARs; as well as any other adjustments that the Committee determines to be equitable.

6.3 LIMIT ON DISTRIBUTION. Distribution of shares of Stock or other amounts under the Plan shall be subject to the following:

(a) Notwithstanding any other provision of the Plan, the Company shall have no liability to deliver any shares of Stock under the Plan or make any other distribution of benefits under the Plan unless such delivery or distribution would comply with all applicable laws (including without limitation the requirements of the Securities Act of 1933) and the applicable requirements of any securities exchange or similar entity.

(b) To the extent that the Plan provides for the issuance of stock certificates to reflect the issuance of shares of Stock, the issuance may be effected on a non-certificated basis to the extent not prohibited by applicable law or the applicable rules of any stock exchange.

6.4 TAX WITHHOLDING. Whenever the Company proposes or is required to distribute Stock under the Plan, the Company may require the recipient to remit to the Company or the Company or any Related Company may withhold from any payments due or becoming due to the recipient an amount sufficient to satisfy any Federal, state and local tax withholding requirements prior to the delivery of any certificate for such shares; provided, however, that, in the discretion of the Committee, the Company may withhold from the shares to be delivered shares with a Fair Market Value sufficient to satisfy all or a portion of such tax withholding requirements, or the Company may accept delivery of shares of Stock with a Fair Market Value sufficient to satisfy all or a portion of such tax withholding requirement, excluding any shares deemed unacceptable for any reason by the Committee. Whenever under the Plan payments are to be made to a Participant or beneficiary in cash, such payments may be net of an amount sufficient to satisfy any Federal, state and local tax withholding requirements. At the discretion of the Committee, the terms and conditions of any Award may provide for a cash payment to a Participant equal to any tax the Participant must pay in connection with the settlement of the Award and/or the disposition of Stock received upon settlement of the Award.

6.5 SHARES AS PAYMENT. Subject to the overall limitation on the number of shares of Stock that may be delivered under the Plan, the Committee may use available shares of Stock, valued at their Fair Market Value, as the form of payment for any compensation, grants or rights earned or due under any other compensation plans or arrangements of the Company or a Related Company.

6.6 DIVIDENDS AND DIVIDEND EQUIVALENTS. An Award may provide the Participant with the right to receive dividends or dividend equivalent payments with respect to Stock which may be either paid currently or credited to an account for the Participant, and may be settled in cash or Stock as determined by the Committee. Any such settlements, and any such crediting of dividends or dividend equivalents or reinvestment in shares of Stock, may be subject to such conditions, restrictions and contingencies as the Committee shall establish, including the reinvestment of such credited amounts in Stock equivalents.

6.7 PAYMENTS. Awards may be settled through cash payments, the delivery of shares of Stock, the granting of replacement Awards, or a combination thereof as the Committee shall determine. Any Award settlement, including payment deferrals, may be subject to such conditions, restrictions and contingencies as the Committee shall determine. The Committee may permit or require the deferral of any Award payment, subject to such rules and procedures as it may establish, which may include provisions for the payment or crediting of interest or dividend equivalents, including converting such credits into deferred Stock equivalents.

6.8 TRANSFERABILITY. Except as otherwise provided by the Committee, Awards under the Plan are not transferable except as designated by the Participant by will or by applicable laws of descent and distribution.

6.9 FORM AND TIME OF ELECTIONS. Unless otherwise specified herein, each election required or permitted to be made by any Participant or other person entitled to benefits under the Plan, and any permitted modification or revocation thereof, shall be in writing and filed with the Committee at such times, in such form, and subject to such restrictions and limitations, not inconsistent with the terms of the Plan, as the Committee shall require.

6.10 AGREEMENT WITH COMPANY. At the time of an Award to a Participant under the Plan, the Committee may require a Participant to enter into an agreement with the Company (the "Agreement") in a form specified by the Committee, agreeing to the terms and conditions of the Plan and to such additional terms and conditions not inconsistent with the Plan as the Committee may prescribe in its sole discretion.

6.11 LIMITATION OF IMPLIED RIGHTS.

(a) Neither a Participant nor any other person shall by reason of the Plan acquire any right in or title to any assets, funds or property of the Company or any Related Company whatsoever, including without limitation any specific funds, assets, or other property which the Company or any Related Company, in their sole discretion, may set aside in anticipation of a liability under the Plan. A Participant shall have only a contractual right to the stock or amounts, if any, payable under the Plan, unsecured by any assets of the Company or any Related Company. Nothing contained in the Plan shall constitute a guarantee that the assets of such companies shall be sufficient to pay any benefits to any person.

(b) The Plan does not constitute a contract of employment, and selection as a Participant and/or the grant or an Award will not give any employee the right to be retained in the employ of the Company or any Related Company, the right to receive any future Award under the Plan, or any right or claim to any benefit under the Plan, unless such right or claim has specifically accrued under the terms of the Plan. Except as otherwise provided in the Plan, no Award under the Plan shall confer upon the holder thereof any right as a stockholder of the Company prior to the date on which the individual fulfills all conditions for receipt of such right.

6.12 EVIDENCE. Evidence required of anyone under the Plan may be by certificate, affidavit, document or other information which the person acting on it considers pertinent, reliable, and signed, made or presented by the proper party or parties.

6.13 ACTION BY COMPANY OR RELATED COMPANY. Any action required or permitted to be taken by the Company or any Related Company shall be by resolution of its board of directors, or by action of one or more members of the board (including a committee of the board) who are duly authorized to act for the board, or, except to the extent prohibited by applicable law or applicable rules of any stock exchange, by a duly authorized officer of the company.

6.14 SEPARATE FUND. Neither the Company, the Board or the Committee has any obligation to create a separate fund for the performance of any cash payment obligation under the Plan, but any or all of them may, at their own discretion, create trust funds or similar arrangements for such purpose.

6.15 LIABILITY FOR CASH PAYMENTS. Each Related Company shall be liable for payment of cash due under the Plan with respect to any Participant to the extent that such benefits are attributable to the services rendered for that Related Company by the Participant. Any disputes relating to liability of a Related Company for cash payments shall be resolved by the Committee.

6.16 POOLING OF INTERESTS ACCOUNTING. The Committee may, in its sole and absolute discretion, declare inoperative anything in this Plan or in the terms, conditions, restrictions or contingencies pertaining to any Award, including any outstanding Award, that adversely affects pooling of interests accounting.

SECTION 7 - COMMITTEE

7.1 ADMINISTRATION. The authority to control and manage the operation and administration of the Plan shall be vested in a committee (the "Committee") in accordance with this Section 7.

7.2 SELECTION AND COMPOSITION OF COMMITTEE. The Committee shall be selected by the Board and shall consist of two or more members of the Board who are not employees of the Company or a Related Company.

7.3 POWERS OF COMMITTEE. The authority to manage and control the operation and administration of the Plan shall be vested in the Committee, subject to the following:

(a) Subject to the Provisions of the Plan, the Committee will have the authority and discretion to select from among the Eligible Individuals those persons who shall receive Awards, to determine the time or times of receipt, to determine the types of Awards and the number of shares covered by the Awards, to establish the terms, conditions, performance criteria, restrictions, and other provisions of such Awards, and, subject to the same restrictions imposed upon the Board by Section 8, to amend, cancel or suspend Awards. In making such Award determinations, the Committee may take into account the nature of services rendered by the individual, the individual's present and potential contribution to the Company's success, and such other factors as the Committee deems relevant.

(b) Subject to the provisions of the Plan, the Committee will have the authority and discretion to determine the extent to which Awards under the Plan will be structured to conform to the requirements applicable to performance-based compensation as described in Code section 162(m) and to take such action, establish such procedures, and impose such restrictions at the time such Awards are granted as the Committee determines to be necessary or appropriate to conform to such requirements.

(c) The Committee will have the authority and discretion to establish terms and conditions of Awards as the Committee determines to be necessary or appropriate to conform to applicable requirements or practices of jurisdictions outside of the United States.

(d) The Committee will have the authority and discretion to interpret the Plan, to establish, amend and rescind any rules and regulations relating to the Plan, to determine the terms and provisions of any agreements made pursuant to the Plan, and to make all other determinations that may be necessary or advisable for the administration of the Plan.

(e) Any interpretation of the Plan by the Committee and any decision made by it under the Plan is conclusive, final and binding.

(f) At its discretion, the Committee may terminate or suspend the granting of Awards under the Plan at any time or from time to time.

(g) In controlling and managing the operation and administration of the Plan, the Committee shall act by a majority of its then members, by meeting or by writing filed without a meeting. The Committee shall maintain and keep adequate records concerning the Plan and concerning its proceedings and acts in such form and detail as the Committee may decide.

7.4 DELEGATION BY COMMITTEE. Except to the extent prohibited by applicable law or the applicable rules of a stock exchange, the Committee may allocate all or any part of its responsibilities and powers to any one or more of its members and may delegate all or any part of its responsibilities and powers to any person or persons selected by it. Any such allocation or delegation may be revoked by the Committee at any time.

7.5 INFORMATION TO BE FURNISHED TO COMMITTEE. The Company and Related Companies shall furnish the Committee with such data and information as may be required for it to discharge its duties. The records of the Company and Related Companies as to an employee's or Participant's employment or other provision of services, termination of employment or cessation of the provision of services, leave of absence, re-employment and compensation shall be conclusive on all persons unless determined to be incorrect. Participants and other persons entitled to benefits under the Plan must furnish the Committee such evidence, data or information as the Committee considers desirable to carry out the terms of the Plan.

7.6 DUPLICATED SIGNATURES. At its discretion, the Committee may accept a duplicated signature on any document, whether faxed, photocopied or otherwise duplicated, which will be effective to the same extent as an original signature unless there is a showing of fraud or other wrongdoing, the burden of making such showing being on the person asserting such fraud or wrongdoing.

SECTION 8 - AMENDMENT AND TERMINATION

The Board may at any time amend, suspend or terminate the Plan, provided that, subject to subsection 6.2 (relating to certain adjustments to shares), no amendment or termination may
(a) in the absence of written consent to the change by the affected Participant (or, if the Participant is not then living, the affected beneficiary), adversely affect the rights of any Participant or beneficiary under any Award granted under the Plan prior to the date such amendment is adopted by the Board, or (b) in the absence of proper approval by the Company's stockholders, increase the share limitations set forth in subsection 6.2 or the cash limitations set forth in subsection 5.2 or change the minimum Option and SAR Exercise Prices set forth in subsection 3.2.

EXHIBIT 10.2

[10 February 1998
or 05 May 1998]

TO: ____________

PERFORMANCE STOCK

In order to provide incentive compensation specifically directed toward achievement of long term performance goals, you have been granted a conditional right to receive as many as ______ shares of Global Marine common stock. The company will issue and deliver to you none, some or all of these shares at the time of the first regular meeting of the company's board of directors in 2001, depending on the extent to which the performance objectives set forth in the attached terms and conditions have been achieved.

This grant amounts to an incremental opportunity to earn significant compensation, provided that we are able to achieve the ambitious targets established for cumulative EBITDA, 2000 EPS, and stock price. This incentive arrangement is designed so that the management team wins if the company's stockholders win.

The attachment contains the terms and conditions of your grant under this incentive arrangement. The conditions are based on the company's performance during the period 1998-2000, as measured against long term performance goals established by the Compensation Committee of the Board of Directors.

It is important to note that, in addition to the other conditions pertaining to your performance stock grant, the grant is contingent upon approval of the Global Marine 1998 Stock Option and Incentive Plan by the company's stockholders at the 1998 annual meeting. If the plan is not approved at the 1998 annual meeting, your grant will be void and without effect.

I look forward to working with you in an effective mutual effort to assure that the target goals are more than accomplished.

[Signature]

Attachment

Form 1C(1)
(2-98)

GLOBAL MARINE INC.

TERMS AND CONDITIONS
OF
PERFORMANCE STOCK GRANT
(Performance Period 1998-2000)

1. CONDITIONAL RIGHT TO RECEIVE SHARES. At the time of the first regular meeting of the Company's board of directors held in 2001, the Company will issue and deliver shares of the Common Stock to you, up to the full number of shares stated in the first paragraph of the cover page of this memorandum (the "Shares"), subject to the terms and conditions outlined in this memorandum and the terms and conditions of the Plan as amended from time to time in accordance with its terms.

2. NUMBER OF SHARES TO BE ISSUED AND DELIVERED. The Company will issue and deliver to you none, some or all of the Shares. The exact number of Shares to be issued and delivered will depend on the performance of the Company and its subsidiaries during the period 1998-2000 as measured against the following long- term performance goals (the "Performance Goals") established by the Compensation Committee of the Company's board of directors (the "Compensation Committee"):

Cumulative EBITDA: Cumulative earnings of the

                    Company and its subsidiaries on
                    a consolidated basis before
                    interest, taxes, depreciation
                    and amortization for fiscal
                    years 1998, 1999 and 2000.
                    Threshold = $1.80 billion;
                    Target = $2.25 billion.

2000 E.P.S.:        Earnings per share of the Company's Common
                    Stock for fiscal year 2000.
                    Threshold = $2.20/share; Target = $3.30/share.

Stock Price:        Average of the daily closing prices for one
                    share of the Company's Common Stock during
                    the fourth quarter of 2000 compared to the
                    average of the daily closing prices for one
                    share of the Company's Common Stock during
                    the fourth quarter of 1997.
                    Threshold = +30%; Target = +50%.

The total number of Shares stated in the first paragraph of the cover page of this memorandum has been allocated among the three Performance Goals as follows: 40% are Cumulative EBITDA Shares; 40% are 2000 E.P.S. Shares; and 20% are Stock Price Shares. A percentage of the Shares allocated to each Performance Goal will be issued and delivered to you, depending on actual performance as measured against that respective Performance Goal, as follows:

PERFORMANCE:                  PERCENTAGE

Below Threshold               0%

At Threshold                  25%

Between Threshold             A proportionate percentage between
 and Target                   25% and 100%, based on straight-line
                              interpolation between the threshold
                              and target objectives.

At or Above Target            100%

3. NON-TRANSFERABLE. You may not transfer your right to receive Shares under this memorandum other than by will or by the laws of descent and distribution.

4. TERMINATION OF EMPLOYMENT. You will not be entitled to receive any of the Shares after termination of your employment with the Company and its subsidiaries unless such termination is by reason of early retirement not objected to by the Compensation Committee, normal retirement, disability or death, or unless your employment with the Company and its subsidiaries is terminated by the Company or any such subsidiary other than for cause (to mean acts of misconduct harmful to the Company, inadequate performance or incompetence). If your employment is terminated by reason of early retirement not objected to by the Compensation Committee, normal retirement or disability, or by the Company or any of its subsidiaries other than for cause, the number of Shares that the Company would otherwise issue and deliver to you at the time of the Company's first regular board meeting held in 2001 will be prorated based on your months of employment completed during the period 1998-2000 compared to 36 months, and the Company will issue and deliver to you or your legal representative or representatives, at the time of said board meeting, a reduced number of Shares based on such proration. If your employment is terminated by reason of your death, the total number of Shares stated in the first paragraph of the cover page of this memorandum will be multiplied by 50% and the resulting number will be prorated based on your months of employment completed during the period 1998-2000 compared to 36 months, and the Company will issue and deliver to the appropriate person or persons named under your last will and testament or determined under applicable intestate laws, as soon as practicable following your death, a reduced number of Shares based on such multiplication and proration. Termination of your "employment" with the Company and its subsidiaries will be deemed to occur at the close of business on the earliest of (i) the last day on which you are assigned to a position with the Company or any of its subsidiaries for the purpose of performing your occupation, in the case of termination by reason of your early or normal retirement, disability or death, (ii) the last day of the period during which you are entitled to receive salary continuation under any agreement, policy, plan or other arrangement with the Company or any of its affiliates, in the case of any termination entitling you to such salary continuation, (iii) the last day of an approved leave of absence if you do not resume the performance of your occupation for the Company or any of its subsidiaries on or before the next business day, and (iv) the last day on which you are assigned to a position with the Company or any of its subsidiaries for the purpose of performing your occupation in any other case. For purposes of this paragraph, the term "disability" shall mean any physical or mental condition which totally and permanently prevents you from engaging in any substantial gainful activity, as reasonably determined in good faith by the Compensation Committee.

5. ADJUSTMENTS. Except as provided in the following paragraph, if outstanding shares of the class then subject to the conditional right to receive Shares outlined herein are increased, decreased, changed into or exchanged for a different number or kind of shares or securities of the Company through reorganization, recapitalization, reclassification, stock dividend, stock split or reverse stock split, then there will be substituted for each Share then subject to such right and for each share upon which any of the Performance Goals are then based the number and class of shares or securities into or for which each share of the class subject to such right shall be so changed or exchanged. Such adjustments will become effective on the effective date of any such transaction; except that in the event of a stock dividend or of a stock split effected by means of a stock dividend or distribution, such adjustments will become effective immediately after the record date therefor.

Upon a dissolution or liquidation of the Company, or upon a reorganization, merger or consolidation of the Company with one or more corporations as a result of which the Company is not the surviving company, your right to acquire Shares and the obligations of the Company hereunder will terminate, unless provision is made in writing in connection with such transaction for the assumption of such obligations, or the substitution for such obligations of similar obligations involving the stock of a successor employer corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the conditions thereof and the number and kind of Shares and prices, in which event your right to acquire Shares and the obligations of the Company hereunder will continue in the manner and under the terms so provided.

Adjustments under this Section 5 will be made by the Compensation Committee, whose determination as to what adjustments will be made, and the extent thereof, will be final, binding and conclusive. No fractional shares of stock will be issued pursuant to any right to receive of Shares hereunder or in connection with any adjustment contemplated herein.

6. LIMITATION. You will not be entitled to the privileges of stock ownership in respect of any of the Shares until they have been issued and delivered pursuant to the terms and conditions of this memorandum and the Plan.

7. REQUIREMENTS OF LAW AND STOCK EXCHANGES. Your right to acquire the Shares and the issuance and delivery of the Shares will be subject to compliance with all applicable requirements of law. In addition, the Company will not be required to issue or deliver any certificate or certificates for any of the Shares prior to the admission of such Shares to listing on notice of issuance on any stock exchange on which shares of the same class are then listed.

By accepting receipt of any of the Shares as contemplated herein, you will be representing and agreeing for yourself and your transferees by will or by the laws of descent and distribution that, unless a registration statement under the Securities Act of 1933, as amended (the "Securities Act"), is in effect as to the Shares received, any and all Shares so acquired will be acquired for investment and not for sale or distribution, and each such acquisition will be accompanied by a representation and warranty in writing, signed by the person entitled to make such acquisition, that the Shares are being so acquired in good faith for investment and not for sale or distribution. In the event the Company's legal counsel, at the Company's request, advises it that registration under the Securities Act of the acquired Shares is required prior to issuance thereof, the Company will not be required to issue or deliver the Shares unless and until such legal counsel advises it that such registration has been completed or is not required.

By accepting receipt of any of the Shares, you also will be representing and agreeing for yourself and your transferees by will or the laws of descent and distribution that if you are an officer of the Company or any other person who might be deemed an "affiliate" of the Company under the Securities Act at the time any Shares that have been acquired are proposed to be sold, you or they will not sell such Shares (a) without giving thirty days advance notice in writing to the Company, and (b) until the Company has advised you or them that such sale may be made without registration under the Securities Act or, if such registration is required, that such registration has been effected.

8. RESTRICTIONS ON SHARE TRANSFER BY CERTAIN PERSONS. In the case of Cumulative EBITDA Shares and 2000 E.P.S. Shares, until six months have elapsed after the date of the Company's unconditional issuance of such Shares to you, or, in the case of Stock Price Shares, until six months have elapsed after the date the Compensation Committee approved the recommendation that you be granted a conditional right to receive such Shares, you may not transfer such Shares in a transaction that would constitute a "sale" under Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), if you are at the time of the sale a person subject to the provisions of Section 16 of the Exchange Act.

9. WAGE WITHHOLDING AND EMPLOYMENT TAXES. Your acquisition of any of the Shares as outlined herein may result in ordinary income at the time of acquisition. Such ordinary income will be subject to both wage withholding and employment taxes, and the Company or your employer may be required to effect such withholding and/or deduct such taxes. Except as set forth below, you may make an irrevocable election to satisfy, in whole or in part, your obligation to reimburse the Company or your employer for such taxes (an "Election") by (i) making a cash payment to the Company, (ii) having the Company deduct the required amount from any cash compensation that the Company or any of its subsidiaries may owe you, (iii) surrendering your right to acquire either a specified number of the Shares or Shares having a specified value, in each case with a value not in excess of your related tax liability, (iv) tendering shares previously issued pursuant to the Plan or other shares of the Company's common stock owned by you, or
(v) combining any or all of the foregoing in any fashion; provided, however, that, if you are at the time the withholding obligation arises a person subject to the provisions of Section 16 of the Exchange Act, you must satisfy such obligation by surrendering your right to acquire such number of Shares as will have a value sufficient to satisfy such obligation, but not in excess of such liability. The Compensation Committee may disapprove of any Election or suspend or terminate the right to make Elections at any time or from time to time. All withheld or surrendered Shares and other shares tendered in payment will be valued at their Fair Market Value on the date the withholding obligation arises. "Fair Market Value" with regard to stock of the Company on a particular date shall mean the average of the high and low quotations at which the stock is traded on that particular date as reported in the "NYSE-Composite Transactions" section of the Southwest Edition of THE WALL STREET JOURNAL for that date (corrected for obvious typographical errors), or, if no prices are quoted for that date, on the last preceding date for which such prices of shares of stock are so quoted. In the event "NYSE-Composite Transactions" cease to be reported as such, or in the event that the Company's stock is no longer quoted on the New York Stock Exchange, an appropriate substitute published stock quotation system will be selected by the Compensation Committee, consistent with appropriate regulatory provisions.

10. CONTINUED EMPLOYMENT AND FUTURE GRANTS. Neither the granting to you of a right to receive stock nor the other arrangements outlined herein give you the right to remain in the employ of the Company or any of its subsidiaries or to be selected to receive similar or identical grants in the future.

11. GLOBAL MARINE 1998 STOCK OPTION AND INCENTIVE PLAN, THE BOARD AND THE COMMITTEE. The conditional right to receive Shares outlined in this memorandum has been granted to you, and any issuance and delivery of Shares will be made, under and pursuant to the Plan as the same shall have been amended from time to time in accordance with its terms. The decision of the Company's board of directors or the Committee on any questions concerning the interpretation or administration of the Plan or any matters covered in this memorandum will be final and conclusive. No amendment to the Plan or decision of the board or the Committee will deprive you, without your consent, of any rights hereunder.

A copy of the Plan in its present form is available at the Company's principal office for inspection during business hours by you or other persons who may be entitled to acquire any of the Shares as contemplated herein.

References in this Exhibit A to "this memorandum" (and indirect references such as "hereof," "hereunder" and "herein") refer to the attached cover page of this memorandum and this Exhibit A, each of which constitutes an integral part of this memorandum.

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this "AGREEMENT"), dated as of May 5, 1998, is by and between GLOBAL MARINE INC., a Delaware corporation ("GMI"), GLOBAL MARINE CORPORATE SERVICES INC., a California corporation (the "COMPANY"), and ROBERT E. ROSE (the "EXECUTIVE").

The Company desires to employ the Executive and the Executive desires to accept employment with the Company, on the terms and conditions of this Agreement.

Accordingly, the parties agree as follows:

1. EMPLOYMENT DUTIES AND ACCEPTANCE.

1.1 EMPLOYMENT BY THE COMPANY: DUTIES. GMI and the Company hereby agree to employ the Executive for a term commencing on May 5, 1998, and expiring at the end of the day on October 23, 2003 (such date, or later date to which this Agreement is extended in accordance with the terms hereof, the "TERMINATION DATE"), unless earlier terminated as provided in Article 4 or unless extended as provided herein (the "TERM"). During the Term, the Executive shall initially serve in the capacity of President and Chief Executive Officer of GMI and shall also serve in those offices and directorships of the Company, and subsidiary corporations or entities of GMI, to which he may from time to time be appointed or elected. During the Term, the Executive shall devote all reasonable efforts and all of his business time and services to GMI and the Company, subject to the direction of the Board of Directors of GMI (the "GMI BOARD") and the Board of Directors of the Company (the "COMPANY BOARD" and together with the GMI Board, the "BOARDS). The Executive shall not engage in any other business activities except for passive investments and his farm and ranching interests and service on the Boards of Directors of Cardinal Holding Corp. and Cardinal Services, Inc., which activities shall not materially interfere with the Executive's obligations hereunder.

1.2 ACCEPTANCE OF EMPLOYMENT BY THE EXECUTIVE. The Executive hereby accepts such employment and shall render the services and perform the duties described above.

2. COMPENSATION AND OTHER BENEFITS.

2.1 ANNUAL SALARY. The Company shall pay to the Executive an annual salary at a rate of five hundred twenty-five thousand dollars ($525,000) per year (the "ANNUAL SALARY"), subject to increase at the sole discretion of the Board. The Annual Salary shall be payable in accordance with the payroll policies of the Company as from time to time in effect, but in no event less frequently than once each month, less such deductions as shall be required to be withheld by applicable law and regulations.

2.2 BONUS. If determined by the GMI Board, the Company may declare and pay an incentive bonus to the Executive with respect to the fiscal years ending during the Term (the "INCENTIVE BONUS"). The amount of the Incentive Bonus payable during the Term shall be determined by the GMI Board, in its sole discretion.

2.3 EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN. Effective as of the Effective Date, the Executive shall be designated a participant in the Global Marine Executive Supplemental Retirement Plan (the "SERP"). For purposes of determining the amount of the Normal Retirement Benefit and the Executive's eligibility for an Early Retirement Benefit under the SERP (as such terms are defined therein), the Executive shall be credited with three years of employment with the Company for each actual year of employment from and after the Effective Date. In addition, in the event the Executive's employment with the Company terminates due to death, due to disability pursuant to Section 4.5, due to involuntary termination without cause under Section 4.3, or due to constructive termination under Section 4.6, he shall be deemed eligible to receive an Early Retirement Benefit under the SERP calculated as though the Executive had attained 15 years of employment with the Company, and in such event his benefits shall be determined on the basis of the Annual Salary and Incentive Bonus paid during the twelve-month period preceding his termination of employment.

2.4 PARTICIPATION IN EMPLOYEE BENEFIT PLANS. The Company and GMI agree to permit the Executive during the Term, if and to the extent eligible, to participate in any 401k plan, retirement plan, group life, hospitalization or disability insurance plan, health program, pension plan, similar benefit plan or other so-called "fringe benefits" of the Company or GMI (collectively, "BENEFITS") which may be available to other senior executives of the Company or GMI on terms no less favorable to the Executive than the terms offered to such other executives.

2.5 OTHER PERQUISITES. The Executive shall be entitled to expense reimbursement, office appointments, secretarial support and other perquisites as are provided in accordance with Company policy or practice for senior executives of the Company. In addition, the Company shall provide the Executive with the use of the automobile which was made available to the Executive by Cardinal Services, Inc., provided that Cardinal Services, Inc. agrees to an assumption of the lease agreement for such automobile, or if an assumption of such lease cannot be mutually agreed, the Company will provide the Executive with the use of a similar automobile.

3. NON-COMPETITION; NON-SOLICITATION.

3.1 COVENANTS AGAINST COMPETITION. The Executive acknowledges that (i) his work for GMI and the Company will give him access to trade secrets of and confidential information concerning the business of GMI, the Company and their affiliates (the "Company Business"); and (ii) the agreements and covenants contained in this Agreement are essential to protect the business and goodwill of GMI and the Company. Accordingly, the Executive covenants and agrees as follows:

3.1.1 NON-COMPETE. The Executive shall not during the Restricted Period (as defined below) in the United States or any other place where GMI, the Company and their affiliates conduct operations related to the Company Business, directly or indirectly (except in the Executive's capacity as an officer of GMI or the Company): (i) engage or participate in the Company Business; (ii) enter the employ of, or render any other services to, any person engaged in the Company Business except as permitted hereunder; or (iii) become interested in any such person in any capacity, including, without limitation, as an individual, partner, shareholder, lender, officer, director, principal, agent, consultant or trustee except as permitted hereunder, provided however, that the Executive may own, directly or indirectly, solely as an investment, securities of any person traded on any national securities exchange or listed on the National Association of Securities Dealers Automated Quotation System if the Executive is not a controlling person of, or a member of a group which controls, such person and the Executive does not, directly or indirectly, own 1% or more of any class of equity securities, or securities convertible into or exercisable or exchangeable for 1% or more of any class of equity securities, of such person. As used herein, the "Restricted Period" shall mean a period commencing on the date hereof and terminating upon the first to occur of (a) the date which is one year after the date on which the Company terminates or is deemed to terminate the Executive's employment without Cause as defined hereinafter, (b) the date which is one year after the date on which the Executive terminates or is deemed to terminate his employment pursuant to Section 4.6 hereof or (c) the Termination Date; provided, however, that if the Company shall have terminated the Executive's employment for Cause and such Cause in fact exists or if the Executive shall have terminated his employment with the Company in breach of the terms of this Agreement, the Restricted Period shall end twelve months following the termination of the Executive's employment hereunder.

3.1.2 DISCLOSURE OF INFORMATION. The Executive recognizes and acknowledges that he will have access to certain confidential proprietary information of GMI and the Company which is a valuable, special and unique asset of the business of GMI, the Company and their affiliates. He therefore covenants and agrees, which covenant and agreement is of the essence of this Agreement, that during or after the term of his employment, he will not reveal to anyone not an employee, officer, agent or consultant of GMI, the Company and their affiliates at any time the business methods or secrets of GMI, the Company and their affiliates, and that upon termination of his employment, he will return to GMI and the Company all records and documents (and all copies thereof) and all other property belonging to GMI and the Company or relating to GMI and their business.

3.1.3. SOLICITATION AND ENTICEMENT OF EMPLOYEES. The Executive agrees that during the term of his employment by GMI and the Company and for a period of one (1) year after termination of his employment with GMI and the Company, he will not solicit or entice any other employee of GMI or the Company to leave GMI or the Company to go to work for any other business or organization which is in direct or indirect competition with GMI or the Company.

3.1.4 CUSTOMERS OF THE COMPANY. During the Restricted Period, the Executive shall not, except by reason of and in his capacity as an officer of the Company, directly or indirectly, request or advise a customer of the Company or its subsidiaries to curtail or cancel such customer's business relationship with the Company.

3.2 RIGHTS AND REMEDIES UPON BREACH. If the Executive breaches, or threatens to commit a breach of, any of the provisions contained in Section 3.1 of this Agreement (the "RESTRICTIVE COVENANTS"), the Company shall have the following rights and remedies, each of which rights and remedies shall be independent of the others and severally enforceable, and each of which is in addition to, and not in lieu of, any other rights and remedies available to the Company under law or in equity:

3.2.1 SPECIFIC PERFORMANCE. The right and remedy to have the Restrictive Covenants specifically enforced by any court of competent jurisdiction, it being agreed that any breach or threatened breach of the Restrictive Covenants would cause irreparable injury to GMI and the Company and that money damages would not provide an adequate remedy to GMI and the Company.

3.2.2 ACCOUNTING. The right and remedy to require the Executive to account for and pay over to the Company all compensation, profits, monies, accruals, increments or other benefits derived or received by the Executive as the result of any action constituting a breach of the Restrictive Covenants.

3.3 SEVERABILITY OF COVENANTS. The Executive acknowledges and agrees that the Restrictive Covenants are reasonable and valid in duration and geographical scope and in all other respects. If any court determines that any of the Restrictive Covenants, or any part thereof, is invalid or unenforceable, the remainder of the Restrictive Covenants shall not thereby be affected and shall be given full effect without regard to the invalid portions.

3.4 BLUE-PENCILLING. If any court determines that any of the Restrictive Covenants, or any part thereof, is unenforceable because of the duration or geographical scope of such provision, such court shall have the power to reduce the duration or scope of such provision, as the case may be, and, in its reduced form, such provision shall then be enforceable.

3.5 ENFORCEABILITY IN JURISDICTIONS. GMI, the Company and the Executive intend to, and hereby do, confer jurisdiction to enforce the Restrictive Covenants upon the courts of any jurisdiction within the geographical scope of such Restrictive Covenants. If the courts of any one or more of such jurisdictions hold the Restrictive Covenants unenforceable by reason of the breadth of such scope or otherwise, it is the intention of GMI and the Company that such determination not bar or in any way affect the right of GMI and the Company to the relief provided above in the courts of any other jurisdiction within the geographical scope of such Restrictive Covenants, as to breaches of such Restrictive Covenants in such other respective jurisdictions, such Restrictive Covenants as they relate to each jurisdiction being, for this purpose, severable into diverse and independent covenants.

4. TERMINATION.

4.1 TERMINATION UPON DEATH. If the Executive dies during the Term, this Employment Agreement shall terminate, provided, however, that in any such event, (a) the Company shall pay to the Executive, or to his estate, an amount in cash equal to three times Executive's Annual Salary then in effect (or, if the Company has reduced the Executive's Annual Salary in breach of this Agreement, the Executive's Annual Salary before such reduction), and any Benefits that have vested in the Executive at the time of such termination as a result of his participation in any of the Company's benefit plans shall be paid to the Executive, or to his estate or designated beneficiary, in accordance with the provision of such plan.

4.2 TERMINATION WITH CAUSE. The Company has the right, at any time during the Term, subject to all of the provisions hereof, exercisable by serving notice, effective on or after the date of service of such notice as specified therein, to terminate the Executive's employment under this Agreement and discharge the Executive with Cause. If such right is exercised, the Term shall terminate on the date of such termination and the Company's obligation to the Executive shall be limited solely to the payment of unpaid Annual Salary accrued, and subject to the provisions of the applicable benefit plans, any benefits vested up to the effective date specified in the Company's notice of termination. As used in this Agreement, the term "Cause" shall mean and include
(i) chronic alcoholism or controlled substance abuse as determined by a doctor selected by the Company and reasonably acceptable to the Executive (subject to the requirements of the Americans with Disabilities Act), (ii) an act of fraud or dishonesty on the part of the Executive with respect to the Company or its subsidiaries;
(iii) the Executive's material and continuing failure to perform (as opposed to unsatisfactory performance of) his duties hereunder after written notice thereof or a material breach by the Executive of this Agreement except, in each case, where such failure or breach is caused by the illness or other similar incapacity or disability of the Executive; or (iv) conviction of or entry of a plea of nolo contendere to a misdemeanor involving moral turpitude or a felony. Prior to the effectiveness of termination for Cause under subclause (i), (ii), or (iii) above, the Executive shall be given 30 days' prior notice from the Board specifically identifying the reasons which are alleged to constitute Cause for any termination hereunder and an opportunity to be heard by the Board in the event Executive disputes such allegations.

4.3 TERMINATION WITHOUT CAUSE. The Company has the right, at any time during the Term, subject to all of the provisions hereof, exercisable by serving notice, effective on or after the date of service of such notice as specified therein, to terminate the Executive's employment under this Agreement and discharge the Executive without Cause. If the Executive is terminated during the Term without Cause (including any termination which is deemed to be a constructive termination without Cause under Section 4.6 hereto), the Term shall terminate on the date of such termination and the Company's obligation to the Executive shall be limited solely to the payment, at the times and upon the terms provided for herein, of the greater of (i) the Executive's Annual Salary for the number of full months remaining in the Term of this Agreement had the Executive not been so terminated and (ii) the Executive's Annual Salary for a period of 24 months, in each case based on the Annual Salary of the Executive in effect on the date of termination (or, if the Company has reduced the Executive's Annual Salary in breach of this Agreement, the Executive's Annual Salary before such reduction). In the event of a termination by the Company without Cause within 180 days after a Change of Control (as hereinafter defined), including a constructive termination without Cause pursuant to Section 4.6, the amounts due to the Executive pursuant to this Section 4.3 shall be due and payable in one lump-sum payment within 60 days after such termination. In all other cases, any amounts due to the Executive pursuant to this Section 4.3 shall be due and payable as and when they would have become due and payable absent such termination. In addition, any Benefits that have vested in the Executive at the time of such termination as a result of his participation in any of the Company's benefit plans shall be paid to the Executive, or to his estate or designated beneficiary, subject to the provisions of such plans.

4.4 TERMINATION BY THE EXECUTIVE. Any termination of this Agreement by the Executive during the Term, except such termination as is deemed to be a constructive termination without Cause by the Company under Section 4.6 of this Agreement, shall be deemed to be a breach of the terms of this Agreement for the purposes of Section 3.1.1 hereof and shall entitle the Company to discontinue payment of all Annual Salary, Incentive Bonuses and benefits accruing from and after the date of such termination. Any Benefits that have vested in the Executive at the time of such termination as a result of his participation in any of the Company's benefit plans shall be paid to the Executive, or to his estate or designated beneficiary, subject to the provisions of such plans.

4.5 TERMINATION UPON DISABILITY. If during the Term the Executive becomes physically or mentally disabled, whether totally or partially, as evidenced by the written statement of a competent physician licensed to practice medicine in the United States who is mutually acceptable to the Company and the Executive or his closest relative if he is not then able to make such a choice, so that the Executive is unable, with reasonable accommodation, substantially to perform his services hereunder (i) for a period of four consecutive months, or (ii) for shorter periods aggregating six months during any twelve-month period, the Company may at any time after the last day of the four consecutive months of disability or the day on which the shorter periods of disability equal an aggregate of six months, by written notice to the Executive, terminate the Executive's employment hereunder. In the event of such termination, the Term shall terminate on the date of such termination and the Company shall (a) pay to the Executive, or to his estate, an amount in cash equal to three times Executive's Annual Salary then in effect (or, if the Company has reduced the Executive's Annual Salary in breach of this Agreement, the Executive's Annual Salary before such reduction), and (b) any Benefits that have vested in the Executive at the time of such termination as a result of his participation in any of the Company's benefit plans shall be paid to the Executive, or to his estate or designated beneficiary, subject to the provisions of such plans.

4.6 CONSTRUCTIVE TERMINATION WITHOUT CAUSE. Notwithstanding any other provision of this Agreement, the Executive's employment under this Agreement may be terminated during the Term by the Executive, which termination shall be deemed to be constructive termination by the Company without Cause if one of the following events shall occur without the consent of the Executive: (i) a failure to elect or reelect or to appoint or reappoint the Executive to the office of Chief Executive Officer of GMI or other material change by the Company or GMI which would reduce the Executive's title or position or assign him responsibilities not in keeping with the position of Chief Executive Officer and President described in Section 1 above; (ii) the assignment or reassignment by the Company or GMI of the Executive to a location outside an area of metropolitan Houston, Texas; (iii) the liquidation, dissolution, consolidation or merger of the Company or GMI, or transfer of all or substantially all of its assets, other than a transaction in which a successor corporation assumes this Agreement and all obligations and undertakings of the Company and GMI hereunder; (iv) a reduction in the Executive's fixed salary; (v) a Change of Control as hereinafter defined; (vi) the failure by GMI or the Company to indemnify the Executive in accordance with the provisions of Attachment A hereto; (vii) the Executive is not re-elected to the Board immediately after his term on the Board expires; or (viii) the occurrence of any other material breach of this Agreement by GMI, the Company or any of their subsidiaries. Any such termination shall be made by written notice to each member of the Board, specifying the event relied upon for such termination and given within 60 days after such event. Any such constructive termination shall be effective 60 days after the date each member of the Board has been given such written notice setting forth the grounds for such termination with specificity; provided, however, that Executive shall not be entitled to terminate this Agreement in respect of any of the grounds set forth above if within 60 days after such notice the action constituting such ground for termination is no longer continuing. A constructive termination by the Company without Cause shall terminate the Restrictive Period hereunder.

4.7 CHANGE OF CONTROL. For the purposes hereof, a "Change of Control of the Company" shall be deemed to have occurred if after the effective date (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Act) is or becomes the "beneficial owner" (as defined in Rule d-3 under the Securities Exchange Act of 1934 (the "Act")), directly or indirectly, of securities of GMI representing 35% or more of the combined voting power of GMI's then outstanding securities without the prior approval of at least a majority of the members of the Board in office immediately prior to such person attaining such percentage interest; (ii) there occurs a proxy contest or a consent solicitation, or GMI is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at least a majority of the members of the GMI Board in office, as a consequence of which members of the GMI Board in office immediately prior to such transaction or event constitute less than a majority of the GMI Board thereafter; or (iii) during any period of two consecutive years, other than as a result of an event described in clause (ii) of this Section 4.7, individuals who at the beginning of such period constituted the GMI Board (including for this purpose any new director whose election or nomination for election by the GMI stockholders was approved by a vote of at least a majority of the directors then still in office who were directors at the beginning of such period) cease for any reason to constitute at least a majority of the Board.

5. LEGAL FEES. In the event of a dispute or disagreement regarding the right of the Executive to receive any compensation or other benefit under this Agreement or the amount of such compensation or other benefit, the Executive shall be reimbursed by GMI for any and all attorney's fees and other costs and expenses as and when expended by the Executive in connection with such dispute or disagreement, regardless of the outcome thereof. Further, in the event the Executive becomes entitled to any monies or benefits hereunder, GMI agrees to pay such monies and provide such benefits without regard to any and all claims, offsets or causes of action which GMI may have against the Executive until such time, if ever, as GMI shall have obtained a final judgment in its favor in a court of competent jurisdiction regarding such claim, offset or cause of action.

6. INDEMNIFICATION. The Executive shall be entitled to indemnification of claims arising by reason of the fact that the Executive is or was a director or officer of GMI or the Company in accordance with the standard terms of indemnification for officers of GMI attached hereto as Attachment A.

7. OTHER PROVISIONS.

7.1 CERTAIN DEFINITIONS. As used in this Agreement, the following terms have the following meanings unless the context otherwise requires:

7.1.1 "Affiliate" with respect to a person means any other person controlled by or under common control with such person but shall not include any stockholder or director of an entity, as such.

7.1.2 "Person" means any individual, corporation, partnership, firm, joint Company, association, joint-stock company, trust, unincorporated organization, governmental or regulatory body or other entity.

7.1.3 "Subsidiary" means any corporation 50% or more of the voting securities of which are owned directly or indirectly by GMI or the Company.

7.2 NOTICES. Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, telegraphed, telexed, sent by facsimile transmission or sent by certified, registered or express mail, postage prepaid. Any such notice shall be deemed given when so delivered personally, telegraphed, telexed or sent by facsimile transmission or, if mailed, on the date of actual receipt thereof, as follows:

7.2.1 if to the Company and GMI, to:

Global Marine Inc.
777 North Eldridge
Houston, Texas 77079
Attn: Corporate Secretary

7.2.2 if to the Executive, to:

Robert E. Rose
703 St. Ives
Houston, Texas 77079

Any party may change its address for notice hereunder by notice to the other party hereto.

7.3 ENTIRE AGREEMENT. This Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements, written or oral, with respect thereto.

7.4 WAIVERS AND AMENDMENTS. This Agreement may be amended, superseded, canceled, renewed or extended, and the terms and conditions hereof may be waived, only by a written instrument signed by the parties hereto or, in the case of a waiver, by the party waiving compliance. No delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof. Nor shall any waiver on the part of any party of any such right, power or privilege hereunder, nor any single or partial exercise of any right, power or privilege hereunder, preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

7.5 GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas
(without giving effect to the choice of law provisions thereof) where the employment of the Executive shall be deemed, in part, to be performed and enforcement of this Agreement or any action taken or held with respect to this Agreement shall be taken in the courts of appropriate jurisdiction in Houston, Texas.

7.6 ASSIGNMENT. This Agreement, and any rights and obligations hereunder, may not be assigned by the Executive and may be assigned by GMI and the Company (subject to Section 4.6 (iii) hereof) only to any successor in interest, whether by merger, consolidation, acquisition or the like, or to purchasers of substantially all of the assets of GMI.

7.7 COUNTERPARTS. This Agreement may be executed in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all of which together shall constitute one and the same instrument.

7.8 HEADINGS. The headings in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

7.9 NO PRESUMPTION AGAINST INTEREST. This Agreement has been negotiated, drafted, edited and reviewed by the respective parties, and therefore, no provision arising directly or indirectly here from shall be construed against any party as being drafted by said party.

7.10 VALIDITY CONTEST. The Company shall promptly pay any and all legal fees and expenses incurred by the Executive from time to time as a direct result of the Company's contesting the due execution, authorization, validity or enforceability of this Agreement.

7.11 BINDING AGREEMENT. This Agreement shall inure to the benefit of and be binding upon the Company and its respective successors and assigns and the Executive and his legal representatives.

7.12 AUTHORIZATION. The Company represents and warrants that the Board of Directors of the Company has authorized the execution of this Agreement.

7.13 EXECUTIVE'S REPRESENTATIONS, WARRANTIES AND AGREEMENTS.

7.13.1 The Executive warrants and represents that he was not terminated from employment with Diamond Offshore Drilling Inc. for any reason that would be deemed to constitute "cause" within the meaning of his employment agreement with Diamond Offshore Drilling Inc.

7.13.2 The Executive warrants that he will not, during the course of his employment with GMI and the Company, disclose any confidential or proprietary information obtained during his prior employment relationships, and will not use such confidential information in a manner that would violate his contractual obligations to prior employers. In addition, the Executive warrants that he will comply with the nonsolicitation of employees requirement of his prior employment agreement with Diamond Offshore Drilling Inc.

7.13.3 The Executive warrants that the execution and performance of this Agreement is not in violation of any existing agreement to which he is a party.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

GMI

GLOBAL MARINE INC.

By:   /s/James L. McCulloch
Name: James L. McCulloch
Title:Vice President - General Counsel

COMPANY

GLOBAL MARINE CORPORATE
SERVICES INC.

By:   /s/ James L. McCulloch
Name: James L. McCulloch
Title:Vice President - General Counsel

EXECUTIVE

/s/ Robert E. Rose
Robert E. Rose

HARLAND AND WOLFF SHIPBUILDING
AND HEAVY INDUSTRIES LIMITED

and

GLOBAL MARINE INTERNATIONAL SERVICES CORPORATION

SHIPBUILDING CONTRACT

relating to

Hull No: 1739

PARTIES
CLAUSE 1           INTERPRETATION
                   Definitions
                   General Interpretation

CLAUSE 2           DESCRIPTION
                   Principal Particulars
                   Yard Number

CLAUSE 3           DESIGN RESPONSIBILITY
                   Owner's Responsibilities
                   Builder's Responsibilities
                   Continuing Liability of Builder
                   Owner's Proprietary Rights

                   Builder's Proprietary Rights

CLAUSE 4           CLASS AND REGULATIONS
                   Classification Society and Class
                   Changes to Classification Requirements

CLAUSE 5           CONSTRUCTION, MATERIALS AND INSPECTION
                   Construction
                   Subcontracting
                   Standard of Construction
                   Use of Substitute Materials
                   Lightship Weight and Center of Gravity
                   Departures from Contemplated Construction
                   Provision of Lightship Weight Updates
                   Preparation of Critical Path Project Schedule and
                   Construction
                   Critical Path Analysis
                   Variation of Contractual Price
                   Right to attend tests and trials
                   Supervision and Inspection by Owner's
                   Authorized Representative
                   Defective Workmanship
                   Resolution of Disputes by Classification Society
                   Provision of Offices and Office Equipment
                   Payment for office facilities
                   Access to Vessel and Builder's Yard
                   Standards applicable to Project Managers
                   Replacement of Authorized Representatives

CLAUSE 6           MODIFICATIONS
                   Change Request by Owner
                   Builder's Acceptance and Confirmation
                   Builder's Proposal
                   Timing of Owner's Response
                   Request for Further Information
                   Change Request by Builder
                   Changes to Regulatory Requirements
                   Authority of Project Managers
                   Owner's Directive
                   Referral to Appeals Board
                   Dispute resolution
                   Classification Society
                   Appeals Board
                   Effect of Disputes
                   Denomination of Project Change Orders and
                   Directives


CLAUSE 7           OWNER FURNISHED EQUIPMENT
                   Delivery
                   Risk
                   Notice of Arrival and Expenses of Delivery
                   Storage
                   Inspection by Builder
                   Owner's Right to Interest

CLAUSE 8           PRICE AND TERMS OF PAYMENT
                   Price
                   Guarantees
                   Installment Schedule
                   Notice of Installments Falling Due
                   Submission of Stage Certificates and Invoices
                   Payment of increases in the Contract Price
                   Terms of Payment
                   Set off of Liquidated Damages
                   Failure to Take Delivery

CLAUSE 9           PROPERTY AND JURISDICTION
                   Vesting of Property, Allocation of Risk and
                   Builder's Lien
                   Labeling of the Vessel
                   OFE
                   Appropriation of Vessel parts
                   Assembly other than at Builder's Yard

CLAUSE 10          INSURANCE
                   Owner to Insure
                   Builder to Insure
                   Payment of deductible
                   Insurance Recoveries
                   Total Loss of Vessel
                   Partial Loss of Vessel
                   Other insurances to be effected
                   Provision of copies of insurances effected
                   Risk of Vessel

CLAUSE 11          TRIALS AND PERFORMANCE
                   Arrangements for Trials
                   Notice of Sea Trials
                   Failure of Owner's Representative to attend
                   Unfavourable Weather Conditions
                   Fuel Consumption
                   Vessel not Complying with Specifications
                   Punch List of Defects

CLAUSE 12          DELIVERY
                   Time and Place
                   Valid Tender of Delivery
                   Removal of Vessel
                   Builder's Bonus and Liquidated Damages
                   Incomplete Work

CLAUSE 13          FORCE MAJEURE
                   Force Majeure Delays
                   Notice of Delays
                   Revised Contract Delivery Date
                   Owner's Rights

CLAUSE 14          DEFAULT OF THE OWNER
                   Events of Default
                   Builder's right to Cancel
                   Remedies following cancellation
                   Claims against Owner
                   Exercise of such rights

CLAUSE 15          DEFAULT OF THE BUILDER
                   Events of Default
                   Owner's Right to Cancel or take possession
                   Parent Company Guarantee and Letter of Credit
                   Vesting of Title
                   Sub-Contract Right
                   OFE
                   Set Off
                   Termination Without Cause

CLAUSE 16          GUARANTEE
                   Builder's Guarantee
                   Notice of Guarantee Claims
                   Inspection by Builder
                   Transportation of Builder
                   Remedies
                   Guarantees from Subcontractors
                   Holding of Sub-Contract Rights
                   Exclusion of Implied Guarantees
                   Builder's Warranty that Works Free from
                   Encumbrances
                   Exceptions and Limitations
                   Guarantee Engineer
                   Limitation of Guarantees

CLAUSE 17          INDEMNITIES FOR INFORMATION SUPPLIED
                   Builder's Indemnity
                   Owner's Indemnity

CLAUSE 18          TAXES AND DUTIES
                   For account of Builder
                   For account of Owners
                   Other Taxes

CLAUSE 19          HEALTH AND SAFETY ENVIRONMENT AND EMPLOYMENT
                   Precedence of Local Legislation
                   Compliance with Applicable Government Regulations
                   Sub-Contractors

CLAUSE 20          LAW AND ARBITRATION

CLAUSE 21          ASSIGNMENT

CLAUSE 22          NOTICES AND COMMUNICATIONS

CLAUSE 23          WAIVER

CLAUSE 24          ENTIRE CONTRACT AND AMENDMENTS

CLAUSE 25          LIABILITY AND INDEMNIFICATION
                   Definitions
                   Builder's Responsibilities
                   Owner's Responsibilities
                   Consequential Damages
                   Limit of Indemnities
                   Allocation of risk
                   Extension of Indemnities
                   Range of liabilities

CLAUSE 26          BENEFIT OF INDEMNITIES
                   Extended to Owner Group
                   Extended to Builder Group
                   Agencies for Giving and Receiving Indemnities

EXECUTION
                   FIRST SCHEDULE - STAGE CERTIFICATE

                   SECOND SCHEDULE - FINAL STAGE CERTIFICATE

                   THIRD SCHEDULE - LETTER OF CREDIT

                   FOURTH SCHEDULE - PARENT COMPANY GUARANTEE

                   FIFTH SCHEDULE - BUILDER'S PROPOSAL

                   SIXTH SCHEDULE - CHANGE ORDER REQUEST

                   SEVENTH SCHEDULE - PROJECT CHANGE ORDER

                   EIGHTH SCHEDULE - OWNER FURNISHED EQUIPMENT

                   NINTH SCHEDULE - SPECIFICATIONS

                   TENTH SCHEDULE - SUBCONTRACTORS LIST

                   ELEVENTH SCHEDULE - MAKER'S LIST

                   TWELFTH SCHEDULE - ADJUSTMENTS OF CONTRACT PRICE
                   BETWEEN ACTUAL AND ESTIMATED STEEL WEIGHTS

                   THIRTEENTH SCHEDULE -BUILDER'S RATES FOR
                   PROVISION OF OFFICE FACILITIES

                   FOURTEENTH SCHEDULE - HEALTH AND SAFETY PROVISIONS

                   FIFTEENTH SCHEDULE - "PHASE 2 BASIC DESIGN
                   PACKAGE"

SIXTEENTH SCHEDULE - INSURANCE

THIS CONTRACT is made the 27th day of February, One Thousand, Nine Hundred and Ninety Eight between:

(1) HARLAND AND WOLFF SHIPBUILDING AND HEAVY INDUSTRIES LIMITED, a company organized and existing under the laws of Northern Ireland and having its principal office at Queen's Island, Belfast, Northern Ireland BT3 9DU (hereinafter called the "Builder"); and

(2) GLOBAL MARINE INTERNATIONAL SERVICES CORPORATION, a Bahamian company and having its principal office at c/o McKinney, Bancroft & Hughes, Mareva House, 4 George Street, P.O. Box N. 3937, Nassau, Bahamas, (hereinafter called the "Owner").

WHEREBY IT IS AGREED that the Builder will construct, complete and deliver to the Owner the Vessel described herein and the Owner shall duly pay the Builder therefor all in accordance with the following Clauses of this Contract:

1.1.1     "Authorized Representative(s)" shall mean any
          person who has been advised in writing by the
          Owner Project Manager to the Builder or (as the
          case may be) by the Builder Project Manager to the
          Owner as having authority to act for the Owner or
          (as the case may be) the Builder, and the extent
          of such authority shall be defined in such advice;

1.1.2     "Appeals Board" shall mean a board comprised in
          accordance with Clause 6.10;

1.1.4     "Builder Project Manager" shall mean the person
          appointed by Builder, and Notified in writing to
          the Owner as having authority to act on behalf of
          Builder, in the discharge of Builder's obligations
          hereunder. The authority of Builder Project
          Manager includes, but is not limited to, the
          authority to sign Project Change Orders pursuant
          to Clause 6.  Builder Project Manager may appoint
          Authorized Representatives to act on behalf of
          Builder, and shall Notify Owner in writing of such
          appointment, defining in such Notice the extent of
          the authority of each Authorized Representative;

1.1.5     "Builder's Proposal" shall mean a document in the
          form set out at Schedule Five hereto;

1.1.6     Builder's Quarterly Invoices" shall mean invoices,
          other than invoices for installment payments of
          the Contract Price referred to in Clause 8,
          submitted by the Builder to the Owner on a
          quarterly basis and in accordance with the
          provisions of Clause 8 which shall include, but
          not be limited to, facilities charges for
          telephone and other services and charges as more
          specifically described in Clauses 5.15, 5.16 and
          8.10.

1.1.7     "Builders Yard" shall mean the premises of the
          Builder at Queen's Island, Belfast, Northern
          Ireland;

1.1.8     "Change Order Request" shall mean a request in the
          form set out at Schedule Six hereto;

1.1.9     "Classification Society" shall mean  the American
          Bureau of Shipping (also referred to as "ABS");

1.1.10    "Constructability" shall mean, in the context of
          the Builder's obligations under Clause 3.2(a),
          that the Vessel is physically capable of being
          built on the basis of the Phase 2 Basic Design
          Package.  However, confirmation by the Builder of
          such constructability shall not of itself give
          rise to any different obligation of the Builder
          under this Contract in relation to the performance
          characteristics of the Vessel than that which
          would otherwise have applied as part of the Works;

1.1.11    "Contract Delivery Date" shall mean 10th October
          One Thousand Nine Hundred and Ninety-Nine as from
          time to time extended pursuant to this Contract by
          Permissible Delay;

1.1.12    "Contract Price" shall mean the price stipulated
          in Clause 8.1 as amended by the provisions of this
          Contract or any Amendment thereof;

1.1.13    "Delivery" and "Delivery Date" shall mean the date
          upon which the Vessel is delivered to and accepted
          by the Owner in accordance with the provisions of
          Clause 12.2;

1.1.14    "Force Majeure" shall mean any of the
          circumstances specified in Clause 13.1;

1.1.15    "Guarantee Period" shall mean the period referred
          to in Clause 16.1;

1.1.16    "Letter of Credit" shall mean a letter of credit
          in the maximum amount of United States Dollars
          Thirty Million (US$30,000,000) substantially in
          the form set out at Schedule Three executed by a
          first class Bank acceptable in all respects to the
          Owner;

1.1.17    "Makers List" shall mean the list attached at
          Schedule Eleven hereto;

1.1.18    "Notice" shall mean formal notice as further
          provided in Clause 22;

1.1.19    "Owner Furnished Equipment" or "OFE" shall mean
          any item of equipment outfit and/or stores for the
          Vessel on the list attached at Schedule Eight
          hereto and as may otherwise be provided for in the
          Specifications;

1.1.20    "Owner Subcontractor" or "Owner Supplier" shall
          mean any person under contract to the Owner in
          connection with the performance of any of the
          obligations of Owner hereunder;

1.1.21    "Owner Project Manager" shall mean the person
          appointed by Owner, and Notified in writing to the
          Builder as having authority to act on behalf of
          Owner, in the discharge of Owner's obligations
          hereunder. The authority of Owner Project Manager
          includes, but is not limited to, the authority to
          sign Project Change Orders pursuant to Clause 6.
          Owner Project Manager may appoint Authorized
          Representatives to act on behalf of Owner, and
          shall notify Builder in writing of such
          appointment, defining in such Notice the extent of
          the authority of each Authorized Representative;

1.1.22    "Parent Company Guarantee" shall be a guarantee in
          the form set out at Schedule Four hereto and
          executed by the Parent Company Guarantor;

1.1.23    "Parent Company Guarantor" shall mean Harland and
          Wolff Holdings plc, a company having its
          registered office at Queen's Island, Belfast, BT3
          9DU;

1.1.24    "Permissible Delay" shall mean a delay in the
          Delivery of the Vessel on account of causes which
          under the terms of this Contract permit
          postponement of the Contract Delivery Date which
          delay shall be documented by a Project Change
          Order countersigned by Owner;

1.1.25    "Port of entry Northern Ireland" shall mean the
          point at which the OFE arrives on the territory of
          Northern Ireland whether by air or freight;

1.1.26    "Project Change Order" shall mean a document in
          the form set out at the Seventh Schedule hereto;

1.1.27    "Regulatory Bodies" shall mean the authorities,
          imposing rules and regulations with which the
          construction and outfit of the  Vessel must comply
          in accordance with the Specifications;

1.1.28    "Specifications" shall mean the specifications,
          plans and drawings signed by the Builder and the
          Owner and attached at the Ninth Schedule hereto
          and identified as forming an integral part of this
          Contract or such revised or supplemental
          specifications, plans or drawings as may
          subsequently be agreed between the Owner and the
          Builder and signed by the  Builder Project Manager
          and the Owner Project Manager, in accordance with
          Clause 6 and "Specified" shall mean stipulated in
          the Specifications;

1.1.29    "Subcontract(s)" shall mean any contract entered
          into by Builder for the construction or
          manufacture of any materials, machinery, services
          or equipment for the Works;

1.1.30    "Subcontractor(s)" shall mean any person under
          contract to the Builder for the construction, or
          manufacture of any materials, machinery, services
          or equipment for the  Works;

1.1.31    "Subcontractor's List" shall mean the List
          attached at the Tenth Schedule hereto;

1.1.32    "Supplier" shall mean any person under contract to
          the Builder for the supply of any materials,
          machinery, services or equipment for the Works;

1.1.33    "Valid Tender of Delivery" shall mean a tender of
          the Vessel for Delivery in accordance with Clause
          12.2;

1.1.34    "Vessel" means the vessel bearing Hull No.1739
          which is the subject of this Contract and
          generally as described in Clause 2 with all the
          machinery, outfit, materials and equipment
          appurtenant thereto.

1.1.35    "Work" or "Works" means the works and services
          (which expressions shall include the supply of
          materials and equipment) to be performed by the
          Builder or, to the extent permitted by Clause 5.2,
          by its Subcontractors or Suppliers under this
          Contract.

1.2 The order of precedence for the documents forming this Contract shall be:

1.2.1     in case of any inconsistency between any provision
          of this Contract and the Specifications, this
          Contract shall prevail; and

1.2.2     in case of any inconsistency between the
          Specifications and a plan or drawing, the
          Specifications shall prevail; and

1.2.3     in case of any inconsistency between one plan or
          drawing and another plan or drawing, the later in
          date shall prevail;

1.3 Any reference to a Clause is to a Clause of this Contract.

1.4 The Index and Clause headings appearing in this Contract are inserted for convenience of reference only and shall not affect the construction of this Contract.

CLAUSE 2 - DESCRIPTION

2.1 The Builder shall construct and deliver to the Owner a completely outfitted and equipped Drill-ship (being, subject to Clause 3, of the Owner's design) which is capable of operating as a dynamically positioned drilling unit in water depths up to 12,000 feet and as otherwise provided for herein and in the Specifications, including supplying and installing all materials, labor, machinery, equipment, furnishings, fittings, as specified in the Specifications save and except to the extent of Owner Furnished Equipment. In the case of Owner Furnished Equipment, the Builder shall install same and provide the necessary foundations, wiring, piping and successfully- tested and commissioned interface connections to ensure the Owner Furnished Equipment functions as complete operational systems. Upon Delivery, the Vessel and all its parts and appurtenances shall be complete as specified hereinafter.

2.2 The Vessel shall have the Hull No.1739 and this number shall be placed on the Vessel, her materials and outfit during construction.

CLAUSE 3 - DESIGN

3.1 The Owner shall be responsible, at no cost to the Builder, for:

(a) the preparation of the drawings and plans for the Vessel which drawings and plans are called the "Phase 2 Basic Design Package", a list of which is at Schedule Fifteen hereto;

(b) obtaining the approval of the Classification Society and the Regulatory Bodies to the Phase 2 Basic Design Package; and

(c) furnishing the Builder, in a timely manner, with the Phase 2 Basic Design Package, and any modifications thereto as a result of obtaining the approvals described in (b) above.

The Builder acknowledges that, at the date of this Contract, it is in receipt of the Phase 2 Basic Design Package together with evidence of the status of approvals of the Classification Society.

3.2 The Builder, as part of the Works and at no additional cost to the Owner, shall be responsible for:

(a) confirming the Constructability of the Phase 2 Basic Design Package, as provided to it by the Owner, to ensure that it provides an appropriate basis to perform the Works hereunder, and, in particular, that the construction and completion of the Vessel is in accordance with this Contract and the Specifications. Builder shall, immediately on discovery of any such inconsistencies, advise the Owner Project Manager in writing of any inconsistencies in the Phase 2 Basic Design Package relative to the Constructability of the Vessel; and

(b) the preparation of Builder's construction plans and drawings (the "Builder's Working Drawings") based upon the Phase 2 Basic Design Package. Such plans and drawings shall, if required, be submitted to the Owner and the Classification Society for approval in accordance with the provisions of this Contract and the Specifications; and

(c) the performance of the Works on the basis of such plans and drawings as from time to time are approved by the Classification Society and the Owner under paragraph
(b) above; and

(d) using all reasonable endeavors to discover any inaccuracies in plans, drawings, and data provided by the Owner, or provided by a third party acting on behalf of the Owner, for the purposes of the Works.

3.3 Builder shall be and remain liable hereunder for:

(a) any defect or deficiency in the preparation of the Builder's Working Drawings, whether or not the same have been approved by the Owner or the Classification Society, save to the extent that such defect or deficiency is caused by inaccuracies in plans, drawings and/or data supplied by Owner, unless the Builder shall have failed to use all reasonable endeavours to discover detectable inaccuracies in such plans, drawings or data; and

(b) any design work undertaken by Builder in connection with a Project Change Order.

3.4 The design of the Vessel and all plans and drawings relating to the Vessel and all intellectual property rights in the same (such design, plans and drawings and all intellectual property rights in the same being herein called the "Owner I.P.R.") shall at all times be and remain the sole and exclusive property of the Owner who reserves all proprietary rights in and to the same. The Builder will not obtain any rights of ownership or other proprietary rights in connection therewith or any part thereof and will not act in any way to indicate to any third party that he has any right in or to.

The Builder shall only be entitled to use the Owner I.P.R. for the sole purpose of (and for no other purpose than) performing the Works.

3.5 Notwithstanding anything to the contrary in Clause 3.4 above, the Builder shall retain ownership of all Builder's Working Drawings and all ownership and intellectual property rights thereto, except for those which have been developed directly from drawings, plans or other information supplied by Owner, Owner Subcontractor, Owner Supplier, or the Phase 2 Basic Design Package. For the avoidance of doubt, Owner shall own all Builder's Working Drawings and all ownership and intellectual property rights thereto, inclusive of those approved by the Classification Society, which have been developed directly from drawings, plans or other information supplied by the Owner, Owner Subcontractor, Owner Supplier or the Phase 2 Basic Design Package. With respect to all Builder's Working Drawings, regardless of ownership, the Builder shall:

(a) make copies thereof available to the Owner or Classification Society (and Owner shall be entitled to make the same available to Owner Subcontractor or Owner Supplier or any third party for the purposes described in this Clause) in the course of performance of the Works or, at the request of the Owner, to assist the Owner, or any third party, in the operation, repair or maintenance of the Vessel after delivery; and

(b) not design or build any drillship or similar vessel to the Vessel on the basis of "Owner IPR"; and

(c) not disclose Owner IPR nor Builder's Working Drawings to third parties whether to enable them to effect such design of any drillship or vessel similar to the Vessel or otherwise.

CLAUSE 4 - CLASS AND REGULATIONS

4.1 The Vessel shall be built to ABS rules and under their survey to Class A1-E Mobile Offshore Drilling Unit - DPS-3 AMS, ACCU, R2S and to the specified rules and regulations of the Regulatory Bodies, including any alterations and modifications thereto published as at the date of signature of this Contract and including rules or regulations announced but not in effect on the date of signature of this Contract provided that they are scheduled to come into effect prior to the Contract Delivery Date, so as to enable the Vessel to be registered under the Panamanian Flag. All fees and charges incidental to classification and to compliance with the specified rules and regulations of Regulatory Bodies and the requirements of this Contract payable in connection with the construction of the Vessel shall be for the account of the Builder, except for fees, charges and expenses of the Classification Society incidental to the approval of the Phase 2 Basic Design Package and registration of the Vessel which shall be for account of the Owner.

4.2 If, after the date of signature of this Contract, any requirements of the Classification Society or of the Regulatory Bodies, with which the construction of the Vessel is required to conform including requirements announced prior to the date of signature of this Contract and scheduled to come into effect prior to the Contract Delivery Date, are altered or changed by the Classification Society or Regulatory Bodies and the parties are unable to obtain a dispensation therefrom or waiver of compliance therewith, the Builder shall comply with any such alterations or changes (if any) in the construction of the Vessel occasioned thereby, and any modifications or alterations to the Contract Price and/or Contract Delivery Date, arising out of the changes in the rules or regulations shall be determined in accordance with Clause 6.

CLAUSE 5 - CONSTRUCTION, MATERIALS AND INSPECTION

5.1 The Builder shall commence performance of the Works and shall proceed with the same with all due diligence, so as to achieve the completion of the Works and Delivery of the Vessel in accordance with this Contract and the Specifications and the Contract Delivery Date.

5.2 The Builder may sub-contract any portion of the Work of the Vessel to any of the Subcontractors or Suppliers respectively specified and/or listed in the Subcontractor's List or Maker's List attached at schedules Ten and Eleven respectively, but shall not otherwise be entitled to sub-contract such Work without the Owner's consent which shall not be unreasonably withheld.

5.3 Subject to all the terms of this Contract, the Vessel, her machinery, outfit, equipment, materials and workmanship shall be in accordance with this Contract and the Specifications and shall otherwise be in conformity with first class commercial shipbuilding practice, as applicable in Western Europe.

5.4 If any specified materials are not available when required for incorporation in the Vessel, the Builder shall be at liberty to use other suitable materials in substitution therefor subject to the approval of the Owner which approval shall not be unreasonably withheld and (where applicable) to the approval of the Classification Society and other Regulatory Bodies. If such approvals are forthcoming, any consequent modification or change shall be dealt with in accordance with the provisions of Clause 6.

5.5 Within thirty (30) days of the signature of this Contract, Owner shall supply to Builder all available estimates of weight and center of gravity of OFE items. Further, Owner shall, upon its receipt, supply Builder with certified vendor drawings for OFE as soon as is practically possible. Within sixty (60) days of the signature of this Contract, Builder shall derive an estimate of steel weight and the center of gravity of the Vessel from the Phase 2 Basic Design Package. Within one hundred and twenty (120) days of the signature of this Contract, Builder shall submit to the Owner for approval a complete estimate of the estimated weight and center of gravity of the Vessel. Agreement shall be reached as quickly as possible between Builder and Owner as to the baseline lightship weight and center of gravity (herein referred to as "Baseline Lightship Weight" and "Center of Gravity"). Any changes in the weight and/or center of gravity as a result of changes in OFE, shall be dealt with under the change order procedure in accordance with Clause 6.

5.6 Departures from the construction contemplated in the above agreement which affect the Baseline Lightship Weight and Center of Gravity shall not be undertaken until Builder has submitted to the Owner his estimate of the effect on the lightship weight and center of gravity of the Vessel and obtained written approval of Owner to proceed with the departure. Individual departures from any agreed weight group of 227KG (500lb) or less shall not require written approval.

5.7 The Builder shall continuously update the lightship weight as working drawings are produced and approved and the weight of the equipment becomes available. After the date of the agreement of the Baseline Lightship Weight and Center of Gravity of the Vessel, as provided for in Clause 5.5 above, Builder shall submit to Owner a monthly report which details:

(i) an update of the comprehensive lightship weight and center of gravity of the Vessel; and

(ii) a tabulation of all departures from the Baseline Lightship Weight and Center of Gravity of the Vessel which details their respective cumulative effects thereto.

5.8 The Builder shall prepare a Primavera level 3 critical path project schedule within thirty (30) days of signature of this Contract for submission to Owner, and shall give information to and cooperate with the Owner Project Manager and the Owner in this respect in order that all parties are thoroughly familiar with the progress made and to be made in order that the Vessel may be completed by the Contract Delivery Date. The scheduled delivery dates and all delivery requirements of items of equipment which can affect the critical path project schedule shall be clearly identified in such critical path project schedule. The project schedule shall include a critical path analysis and be updated monthly and submitted to Owner in conjunction with the monthly report referred to in Clause 5.7 above.

5.9 To the extent that the actual steel weight of the completed Vessel, as defined in Schedule Twelve hereto, differs from the estimated steel weights set out at Schedule Twelve hereto the Contract Price shall be adjusted in accordance with the rates set out in that Schedule.

5.10 During construction of the Vessel the Builder will permit Owner's Authorized Representatives to attend tests and trials which shall be advised in writing to Owner Project Manager as follows:

(i) in the case of a test or trial where a representative of Owner Supplier must be present, Builder shall give thirty (30) days provisional advisement, and seven (7) days definite advisement of such trial; and

(ii) in the case of a test or trial for which a formal procedure with acceptance/rejection criteria is applicable, Builder shall give seventy-two (72) hours advisement of such trial;

(iii)in the case of a day to day inspection, Builder shall give reasonable notice and shall use its best endeavours to give such advisement at least the day before such test or trial.

Such examination and inspection shall in no way diminish, affect or impair the obligations, guarantees or undertakings of the Builder in relation to the due and proper execution of the Work or the materials employed or guarantees hereinafter mentioned. The failure of an Owner's Authorized Representative to attend any test or trial, after receipt of reasonable notice as above, shall be deemed a waiver of Owner's right to attend same, however Builder shall furnish to Owner the results of such tests and trials as soon as practicable thereafter.

5.11 The Builder will also permit Owner's Authorized Representatives to have access during all working hours to the facilities of the Builder and its Subcontractors where the Works are being carried out.

5.12 If during construction and prior to dock and sea trials the Owner, its Project Manager or Authorized Representatives becomes aware of any defect or omission in the Vessel or its machinery arising out of the Works they shall as soon as practicable specify the same in writing to the Builder Project Manager and

(i) if the Builder agrees the alleged defect or omission or if under Clause 6.9 the Classification Society so decides, the Builder shall at its own cost rectify any such defect or omission; and

(ii) in any event Owner shall have the right to issue a directive instructing Builder to rectify the defect or omission. Builder shall comply with such directive but such compliance shall not prejudice either Party's rights under Clause 5.13.

5.13 Any dispute which may arise between Owner and Builder during the construction of the Vessel in relation to the workmanship, materials or conformity with the Specifications shall be resolved in accordance with Clauses 6.9 and 6.10 or if not so resolved, may be referred to arbitration in accordance with Clause 20.

5.14 The Builder shall provide, without cost to Owner, the following:

(i) a single office facility at the Builder's Yard, for fifteen (15) people to enable the Owner Project Manager and Owner's Authorized Representatives to carry out their duties. Such facility will comprise suitable office fittings including drawing tables, stools, desks, chairs, filing cabinets, toilets, lighting, heating, hot and cold running water, cleaning, the installation of telephone (comprising four (4) outside lines and three (3) internal lines) and fax services all free of charge to the Owner; and

(ii) Builder shall also supply a heated portable office on or near the Vessel, with one (1) shipyard phone, one
(1) desk and four (4) chairs; and

(iii)all facilities for a further fifteen (15) people including offices, heating and light, telephones, drawing tables, stools, desks, chairs, filing cabinets, toilets, hot and cold running water facilities, as may be required for the Owner's operations personnel. Such facilities for Owner's operations personnel shall be provided six (6) months prior to the Contract Delivery Date.

5.15 Telephone rental and unit charges and the installation and use of any additional communication services or any other additional accommodation or services or equipment as may be provided by the Builder at the Owner's request shall be paid for by the Owner against the Builder's Quarterly Invoices. Builder shall invoice Owner at its cost without uplift or premium for the charges mentioned above.

5.16 The Builder shall permit Owner's operations personnel, Owner Subcontractors and Owner Suppliers, all necessary and appropriate access to the Vessel for outfitting and rig up purposes. Owner Project Manager and Builder Project Manager shall liaise and shall co-operate with each other to minimize any disruption. Owner's operations personnel, Owner Subcontractors and Owner Suppliers shall be permitted ready access to the Builder's Yard to enable them to carry out and complete their work to ensure that the Vessel is fully operational at Delivery. The Builder shall provide the necessary facilities and support, which shall be paid by Owner against Builder's Quarterly Invoices in accordance with the schedule of rates, attached at Schedule Thirteen hereto.

5.17 The Owner undertakes that its Project Manager and Authorized Representatives shall carry out their duties hereunder in accordance with first class commercial shipbuilding practice as applicable in Western Europe and in such a way as to avoid any unnecessary increase in building cost or delay in the Builder's construction programme.

5.18 Either party shall have the right by written Notice to request the other to replace its Project Manager or any of its Authorized Representatives if they are reasonably deemed by the objecting party to be unsuitable or unsatisfactory for the proper progress of the Vessel's construction. If the party in receipt of such Notice shall agree, the replacement of such Project Manager or Authorized Representative shall take place as soon as reasonably practicable.

CLAUSE 6 - MODIFICATIONS AND CHANGE ORDERS

6.1 Owner may, at any time prior to Delivery of the Vessel, issue a Change Order Request in writing to the Builder, instructing the Builder to modify or change the Specifications.

6.2 If the Builder considers such modification or change can be carried out without alteration to the Contract Price or Contract Delivery Date, the Builder shall, within five (5) days confirm this in writing to the Owner and proceed with such modification or change.

6.3 If the Builder considers such modification or change cannot be carried out without alteration to the Contract Price or Contract Delivery Date, the Builder shall within five (5) days or where the extent of the modification or change requires a longer period, such longer period as the parties shall agree, submit to the Owner in writing a Builder's Proposal which shall detail:

(i) the amount of any increase or decrease to the Contract Price, representing the reasonable cost or saving for the relevant modification or change; and

(ii) the extent of any reasonable extension or advancement in the Contract Delivery Date of the Vessel occasioned by such change or modification;

(iii)any other impact on the Specifications (including without limitation, the Baseline Light ShipWeight or Center of Gravity of the Vessel).

6.4 Within five (5) days, or where the extent of the modification or change justifies a different period, and in particular where the Builder deems the item or component to be modified or changed to be critical to the timely construction of the Vessel, such other period as the parties shall agree, of receipt of a Builder Proposal, Owner shall advise Builder in writing of its acceptance or rejection of the Builder's Proposal. If the Builder's Proposal is accepted, the Owner shall countersign a Project Change Order submitted by Builder.

6.5 Owner shall have, in the event that it does not accept the Builder's Proposal, the right to request such further information or documentation to substantiate the Builder's Proposal, which Builder shall promptly supply. Any dispute which may arise between Owner and Builder during the construction of the vessel in relation to any modification or change to the Specification, Contract Price or Contract Delivery Date shall be resolved in accordance with Clauses 6.9 and 6.10, or if not so resolved may be referred to arbitration in accordance with Clause 20.

6.6 In the event that the Builder wishes to propose a modification or change to the Specifications, the Builder shall advise Owner Project Manager in writing of the suggested modification or change, and shall submit a Builder's Proposal complying in all respects with Clause 6.3 above. The Owner shall have the right to reject or accept the suggested modification or change in its discretion. In the event of an acceptance, the Owner shall countersign the Project Change Order submitted by the Builder.

6.7 Paragraphs 6.2, 6.3 and 6.4 shall apply mutatis mutandis, in the event that, following the signature of this Contract, any alterations or modifications are made to the laws, rules, regulations and enactments (including any rules or regulation or alterations or modifications thereto announced but not in effect on the date of signature of this Contract and provided they are scheduled to come into effect prior to the Contract Delivery Date), to which the construction of the Vessel is required to conform, save that each party on becoming aware of such modification, deletion or addition shall forthwith advise the other in writing.

6.8 The Builder Project Manager and the Owner Project Manager, respectively, shall have authority to bind the Builder and Owner, respectively, in relation to this Clause.

6.9 During the performance of the Works, and prior to the Delivery of the Vessel, if the value of any dispute in respect of any matter referred to in Clause 5.12, 5.13, 6.5 or 13.3 is not more than United States Dollars fifty thousand (US$50,000) (or equivalent), it shall be referred to the Senior Representative of the Classification Society on site, acting as an expert and not as an arbitrator, whose decision shall be final and binding on the parties. If the value of the dispute exceeds United States Dollars fifty thousand (US$50,000) (or equivalent), the parties may by mutual agreement refer the dispute to the Senior Representative of the Classification Society on site acting as an expert and not as an arbitrator whose decision, in the event of such referral, shall be final and binding on the parties.

With respect to any dispute of any matter referred to in Clause 6.5 only which is not more than United States Dollars fifty thousand (US$50,000) (or equivalent) if the dispute mechanism outlined hereinabove should be deemed unsatisfactory by either Party, the Parties will endeavour to establish a mutually-agreed dispute resolution mechanism for such disputes. Failing the establishment of the Parties of a mutually-agreed dispute resolution mechanism for such Clause 6.5 disputes, any and all such disputes may be referred by either Party to arbitration in accordance with the terms and conditions of Clause 20 hereof.

6.10 Owner and Builder shall use all reasonable efforts to agree the necessary alteration to the Contract Delivery Date, Contract Price or Specifications arising as a consequence of the proposed modification or change but, if no agreement can be reached, either party may refer the dispute to an Appeals Board. Such Appeals Board shall consist of one representative of each party who is not part of the day to day activities involved in the performance of the Works. If the Appeal's Board is unable to reach an agreed decision either party shall be entitled to initiate arbitration procedures under Clause 20.

6.11 Notwithstanding that Builder Proposal has not been issued or that a Project Change Order has not been countersigned by Owner in relation thereto, Owner shall at any time have the right to issue a directive instructing Builder to proceed with the change to the Specifications in question. Builder shall comply with such directive, but such compliance shall not prejudice either party's rights to refer the dispute to the Senior Representative of the Classification Society on site in accordance with Clause 6.9, or to the Appeals Board as set forth in Clause 6.10 or to initiate arbitration proceedings as set forth in Clause 20 hereunder.

6.12 All Project Change Orders and/or the value for any directive issued by Owner hereunder this Clause 6 shall be denominated in US Dollars. The US Dollar figure shall be based on the official exchange rate for British Pounds Sterling in effect at the time the Project Change Order is signed by both Parties or the Owner directive is issued.

CLAUSE 7 - OWNER FURNISHED EQUIPMENT

7.1 Owner shall deliver to Builder's Yard all items of Owner Furnished Equipment in accordance with the delivery date for such item specified in the initial Primavera critical path project schedule (as amended from time to time by Permissible Delay), (the "OFE Scheduled Delivery Date").

7.2 All items of Owner Furnished Equipment shall be at Builder's risk from arrival at the dock or gates of the Builder's Yard.

7.3 NOT USED

7.4 From time of arrival at Builder's Yard, the Builder shall, at its own cost, transport and store all items of Owner Furnished Equipment in secure and appropriate storage in accordance with Owner Supplier's manual and instructions (and/or Owner's instructions) in the minimum number of separate warehouse(s) or area(s) practicable, taking care that the same shall not be damaged, and shall clearly mark all items of Owner Furnished Equipment as such and as the property of the Owner.

7.5 On arrival of each item of Owner Furnished Equipment at the Builder's Yard, the Builder shall inspect the same to ensure that the items contain no obvious defects or signs of damage, and shall measure and review the same to ensure that they are in accordance with the relevant Owner Supplier's specified dimensions and interfaces. Builder shall promptly advise Owner Project Manager in writing of any items which are damaged or do not appear to be in accordance with such specified dimensions or interfaces.

7.6 Provided that Owner has delivered the item of Owner Furnished Equipment on or before the OFE Scheduled Delivery Date, where the value of such an item exceeds United States Dollars five hundred thousand (US$ 500,000) and unless so instructed by Owner, where such item is not installed within sixty (60) days following the Scheduled Delivery Date, Builder shall pay to Owner interest at the rate of one half per cent (0.5%) of the price of such item pro rata per month calculated daily from and including the sixty-first (61st) day and paid monthly. Owner shall be entitled to set off all sums due to it pursuant to this Clause against the installment of the Contract Price payable pursuant to Clause 8.3.5.

CLAUSE 8 - PRICE AND TERMS OF PAYMENT

8.1 The total cost for Drillship No 1739 shall be United States Dollars Two Hundred and Sixty Seven Million, Seven Hundred and Ninety Four Thousand, Two Hundred Thirty Four (US$267,794,234) comprised as follows:

A United States Dollars One Hundred and Sixty One Million, Five Hundred Eighty Five Thousand, Two Hundred Thirty Four (US$161,585,234) (the "Contract Price") for detail design, procurement (exclusive of OFE, see below), construction, installation of all equipment, commissioning and setting to work of the total drillship, all according to this Contract.

B United States Dollars One Hundred Six Million, Two Hundred Nine Thousand (US$106,209,000) for OFE. Unless otherwise mutually agreed the Owner shall be responsible for all payments due in respect of OFE to Owner Suppliers and Owner Subcontractors.

8.2 Builder shall provide the Parent Company Guarantee and the Letter of Credit (attached in the forms of the Third and Fourth Schedules, respectively) to Owner at the date of signature of this Contract.

8.3 Provided that Owner has received the Parent Company Guarantee and Letter of Credit, payment of the Contract Price shall be made by installments from or on behalf of the Owner to the Builder as follows:-

8.3.1     Twenty percent (20%) of the Contract Price on
          signature of this Contract within seven (7) days
          of Owner's receipt of Builder's invoice;

8.3.2     Twenty percent (20%) of the Contract Price at the
          start of preparation, intended to be the
          continuous cutting of steel but not before March
          2, 1998;

8.3.3     Twenty percent (20%) of the Contract Price on keel
          laying of a minimum of five hundred (500) tons of
          steel, but not before September 1, 1998;

8.3.4     Twenty percent (20%) of the Contract Price at
          floatation of the Vessel in a condition where it
          can be floated without requiring new docking, but
          not before April 15, 1999; and

8.3.5     Twenty percent (20%) of the Contract Price, plus
          or minus any increases or decreases occasioned in
          accordance with the provisions of this Contract or
          any Amendment thereof which have not previously
          been accounted for by adjustment of this or any
          earlier installments, at Delivery of the Vessel,
          estimated to be October 10, 1999.

8.4 The Builder shall by not less than seven (7) days advance Notice in writing advise the Owner of the date upon which any of the installments referred to in Clauses 8.3.2 to 8.3.5 hereof shall become payable.

8.5 Payment of each of the installments at 8.3.2 to 8.3.4 above shall be subject to the receipt by the Owner of

(i) a Stage Certificate (in the form set out in the First Schedule hereto) signed by the Builder and countersigned by the Owner and

(ii) following such counter-signature, the Builder's invoice in the amount of the relevant installment.

8.6 Notwithstanding Clause 8.1, if the aggregate of any increases in the Contract Price for the Vessel resulting from the operation of Clause 6 or any Amendment to this Contract amounts to an increase of more than two percent (2%) in the Contract Price at any time during the construction of the Vessel (such increase over and above two (2%) percent being called the "Excess"), the following shall apply:

(i) if there shall be an Excess on or before payment of the installment referred to in Clause 8.3.2, forty (40%) per cent of the Excess shall be paid together with such installment and sixty (60%) per cent shall be paid in equal proportions with the installments referred to in Clauses 8.3.3. to 8.3.5;

(ii) if there shall be an Excess after payment of the installment referred to in Clause 8.3.2, but on or before payment of the installment referred to in Clause 8.3.3, sixty (60%) per cent of the Excess shall be paid together with such installment and forty (40%) per cent shall be paid in equal proportions with the installments referred to in Clauses 8.3.4. to 8.3.5;

(iii)if there shall be an Excess after payment of the installment referred to in Clause 8.3.3, but on or before payment of the installment referred to in Clause 8.3.4, eighty (80%) per cent of the Excess shall be paid together with such installment and twenty (20%) per cent shall be paid with the installment referred to in Clause 8.3.5;

For the avoidance of doubt, any Excess occurring following the payment of the installment referred to in Clause 8.3.4 and/or any increases that, in aggregate, do not exceed two per cent (2%) shall be paid together with the installment referred to in Clause 8.3.5.

8.7 The amount of each of the installments referred to in Clause 8.3 hereof shall be paid in US Dollars free of bank charges together with any VAT and other tax or duty then payable by the Owner direct to the Builder's Account No: by banker's draft or telegraphic transfer within seven (7) days following receipt by Owner of the Builder's invoice in accordance with Clause 8.5, and, if not so paid shall (without prejudice to any other rights of the Builder in respect of non payment) bear interest from the due date until payment at the rate of two percent (2%) over one month LIBOR from time to time for the particular currency.

8.8 Any amounts for bonuses or liquidated damages under Clause 12 shall be calculated and determined on or before Delivery of the Vessel and shall be payable on the Delivery Date, and Owner shall be entitled to net-off such amount(s) against the installment referred to in Clause 8.3.5 above.

8.9 If the Owner fails to take delivery upon a Valid Tender of Delivery by the Builder, the Owner shall nevertheless make full and final payment on the date of such valid tender of Delivery and shall thereafter reimburse the Builder for all costs and expenses which the Builder reasonably incurs by reason of the Owner's failure to take Delivery.

8.10 Other sums due to Builder by Owner hereunder this Contract, except those payable for bonus or by Amendment, shall be the subject of Builder's Quarterly Invoices. For each quarter ending after the date of the signing of this Contract Builder, shall prepare and submit to Owner an invoice covering sums for and including, but not limited to, additional services which are requested by Owner, but are not provided for in any Project Change Order, and facilities usage for Owner's Subcontractors and Owner's Suppliers provided for in Clause 5.16, above. Upon its receipt of Builder's Quarterly Invoices, Owner shall pay the undisputed portion within thirty (30) days. Undisputed amounts of Builder's Quarterly Invoices beyond the thirty (30) day period shall bear interest at the rate of two per cent (2%) over one-month LIBOR from time to time for the particular currency.

CLAUSE 9 - PROPERTY AND JURISDICTION

9.1 Upon payment of the sum due under Clause 8.3.1 the Vessel, as it is constructed, and all machinery, equipment and materials whether wholly or partially finished or unfinished from time to time appropriated or intended for it in the Builder's Yard or elsewhere shall become and remain the absolute property of the Owner (but at the risk of the Builder) notwithstanding that any such machinery, equipment and materials shall subsequently be worked upon by the Builder or its Subcontractors or otherwise processed or incorporated into the Vessel and shall not be within the ownership or disposition of the Builder, but the Builder shall at all times have a lien thereon for any part of the Contract Price which is unpaid and for any sums due from time to time in accordance with this Contract provided that such lien shall not continue or be enforceable by or on behalf of the Builder in any of the circumstances described in Clauses 15.1 or 15.2.

9.2 Immediately upon machinery, equipment or material becoming the property of the Owner under the provisions of Clause 9.1 the Builder shall place or cause to be placed thereon the yard number of the Vessel and shall place such number at the bow of the Vessel and shall take all reasonable steps to cause all machinery, equipment and materials for the Vessel to be numbered as aforesaid by itself or its Subcontractors.

9.3 Any items, other than Owner Furnished Equipment (which shall be and remain the property of the Owner), not used in the construction of the Vessel shall after Delivery revert to and become the property of the Builder.

9.4 Without prejudice to the rights of Owner as provided in Clause 15, any engines, boilers, machinery or materials which are part of the Vessel or which are appropriated thereto shall not after delivery to the premises of the Builder be removed outside the Builder's Yard except for the purposes of effecting repairs thereto or obtaining replacements therefor.

9.5 Without prejudice to the rights of Owner as provided in Clause 15, the Vessel shall not be assembled or floated other than at the Builder's Yard without the prior approval of the Owner.

CLAUSE 10 - INSURANCE

10.1 Owner and Builder respectively shall each effect the insurances listed at the Sixteenth Schedule hereto, on the terms and conditions therein set out and shall, within fourteen (14) days of signature of this Contract supply each other with copies of all such insurances effected.

10.2 Owner's Builder's risk insurance referred to in Schedule 16 contains a deductible of United States Dollars two hundred thousand (US$ 200,000). Builder shall therefore, in addition to the insurances listed at Schedule 16, procure insurance from the date of signature of this Contract in the joint names of Owner and Builder, in the amount of United States Dollars two hundred thousand (US$200,000) in respect of each and every claim, with a deductible of United States Dollars fifty thousand (US$50,000).

10.3 In the event that the Vessel should suffer partial damage between the date of signature of this Contract and the Delivery Date, Owner shall be liable to pay to Builder the first United States Dollars fifty thousand (US$50,000) payable under each and every claim if the event which has given rise to the claim occurs as a result of the sole fault of Owner.

10.4 In the event of an actual, constructive, compromised or arranged total loss of the Vessel prior to the Delivery of the Vessel, either the Owner or the Builder shall be entitled to terminate this Contract by serving upon the Builder or the Owner as the case may be, written Notice of termination, such Notice to be dispatched within thirty days of the date upon which the insurers accept that the Vessel has become an actual, constructive, compromised or arranged total loss.

10.5 In the event of any loss or damage being sustained by the Vessel prior to Delivery which does not constitute an actual, constructive, compromised or arranged total loss the Builder shall repair and make good that loss or damage (hereinafter referred to as a "partial loss") to the approval of the Classification Society and reasonable approval of the Owner so that the Vessel in all respects meets the requirements of this Contract at the Specifications.

10.6 The proceeds of any claim shall be dealt with as follows:-

10.6.1 in the case of a partial loss, when the insurers are satisfied that the Builder has made good the loss or damage the occurrence of which had given rise to the claim or when the insurers are satisfied that the Builder has made sufficient progress in repairing or making good the loss or damage the occurrence of which had given rise to the claim, then the insurers shall pay to the Builder the whole proceeds where the repairs are complete or such part of the proceeds as the insurers may decide as a payment on account of the partial repair.

10.6.2 in the event of an actual, constructive, compromised or arranged total loss, if refund has not been made pursuant to Clause 15, any amounts received and retained by the Owner out of the insurance proceeds shall be set off against any liability of Builder to Owner pursuant to Clause 15 hereof, and, to the extent such refund has been made, any proceeds shall be paid to Builder.

CLAUSE 11 - TRIALS AND PERFORMANCE

11.1 Prior to the Vessel's delivery to, and acceptance by the Owner, the Vessel shall undergo sea trials during a single trip, at a place appointed by the Builder and in accordance with the provisions of Specifications. The Vessel shall also undergo dock trials in accordance with the provisions of the Specifications.

11.2 The Owner shall receive from the Builder at least thirty
(30) days provisional Notice and seven (7) days definite Notice of the time and place of the sea trials of the Vessel.

11.3 The Authorized Representatives of the Owner who will attend and witness the performance of the Vessel during such sea trials shall be present on the date specified in such notice. Failure of the Owner or any of the Authorized Representatives to be present after due notice of not less than seven (7) days shall render the Owner liable for the costs of the abortive sea trial arrangements and shall constitute a Permissible Delay extending the Contract Delivery Date of the Vessel by the period of delay caused by such failure to be present which extension shall be effected by a Project Change Order in accordance with Clause 6.

11.4 In the event of the weather on the date specified for the sea trials being in the reasonable opinion of either party unfavorable, then the same shall take place on the first available day thereafter that weather conditions permit. If during the sea trials such changes in weather shall occur as would, in the opinion of either party , have precluded any commencement of the sea trials had the change in weather occurred before the sea trials had started then, in such event, either party shall have the option to discontinue the sea trials and require that the date for the sea trials be postponed until the first favorable day next following unless the Owner shall agree to accept the Vessel on the basis of the sea trials made prior to such sudden change in weather condition. Any delay in sea trials caused by adverse weather conditions shall be a Force Majeure delay within the terms of Clause 13.

11.5 Prior to dock and sea trials the Owner shall select the fuel oil and main engine lubricating oils in compliance with the Specifications and machinery manufacturer's recommendations, whereupon the Builder shall provide the Vessel with the required quantity of fuel oil, lubricating oils, grease and other stores necessary for the conduct of such dock and sea trials. Upon Delivery of the Vessel, the Owner shall pay to the Builder a sum equal to the cost of fuel oil and such lubricating oils, greases and other stores used during such trials and any such fuel oil, lubricating oils, greases and other stores on board the Vessel at Delivery.

11.6 If the Vessel fails any of the dock or sea trials for which the Builder is responsible, the Builder shall rectify any defects in respect of the Works which caused such failure and shall conduct additional trials until the Vessel meets or exceeds the applicable testing criteria.

11.7 No later than two (2) weeks prior to the anticipated Delivery Date the Owner and the Builder shall prepare a final punch list of defects. If such list cannot be agreed, any dispute shall be resolved in accordance with Clauses 6.9 and 6.10 or, if not so resolved, may be referred to arbitration in accordance with Clause 20.

This sub-clause is without prejudice to Builder's obligation to deliver the Vessel in accordance with the Contract and the Specifications.

CLAUSE 12 - DELIVERY

12.1 The Vessel shall be delivered to the Owner by the Builder at the Builder's Yard on or before the Contract Delivery Date.

12.2 Provided that:

(i) the Vessel is in compliance with the requirements of the Contract and the Specifications; and

(ii) all the Certificates referred to below are tendered

then Delivery of the Vessel shall be forthwith effected by the concurrent signature by the Owner and the Builder of a Certificate of Delivery acknowledging delivery of the Vessel by the Builder and acceptance thereof by the Owner.

Upon Delivery of the Vessel the Builder shall hand to the Owner, the Builder's Certificate, the Certificate of the Classification Society, all other Certificates required to enable the Owner to operate the Vessel and all other certificates, provisional certificates and protocols. If the Builder is unable to provide a final Classification Society Certificate at Delivery he shall be entitled to provide an interim certificate, provided that the Builder shall furnish Owner with the final certificate as promptly as possible thereafter.

If the relevant certificates, provisional certificates and/or protocols are not available due to delay in the provision by Owner, Owner Subcontractors or Owner Suppliers of the operations manuals including stability book, necessary to obtain the same, provided such delay was not occasioned by failure of Builder or its Subcontractors or Suppliers, to provide Owner, in a timely manner, with the necessary information and data to compile such operations manuals, Builder shall nevertheless be deemed, provided it has complied in all other respects with this Clause 12.2, to have achieved a Valid Tender of Delivery

12.3 The Owner shall take possession of the Vessel immediately upon Delivery and, except as otherwise mutually agreed in writing in advance, remove the Vessel within seven (7) days of Delivery from the Builder's Yard. If Owner fails to remove the Vessel within seven (7) days, Owner shall reimburse Builder for any actual and direct costs incurred by Builder as a result of such failure to remove after seven (7) days.

12.4 Upon Delivery of the Vessel, the following shall occur:

12.4. 1If Delivery occurs on or before fifteen (15) days prior to the Contract Delivery Date, Owner shall pay to Builder the sum of United States Dollars Three Million (USD $3,000,000) as a bonus for early delivery;

12.4.2 If Delivery occurs between the period of fourteen
(14) days prior to Contract Delivery Date and fifteen (15) days after Contract Delivery Date, the bonus referred to in
Section 12.5.1, above, shall be reduced by the sum of United States Dollars One Hundred Thousand (USD $100,000) per day such that no bonus may be earned by the Builder after the expiry of such thirty (30) days.

12.4.3 There shall be a grace period of fifteen (15) days from the sixteenth (16th) through the thirtieth (30th) day after the Contract Delivery Date where no bonus may be earned by the Builder and no liquidated damages shall become due and payable to the Owner.

12.4.4 If Delivery occurs on or after the thirty-first day after the Contract Delivery Date, Builder shall pay to the Owner as liquidated damages, but not as a penalty, the sum of United States Dollars Fifty Thousand (USD $50,000) per day for a period not to exceed thirty (30) days.

12.4.5 If Delivery occurs on or after the sixty-first
(61st) day after the Contract Delivery Date, Builder shall pay to Owner as liquidated damages, but not as a penalty, the sum of United States Dollars One Hundred Thousand (USD $100,000) per day for a period not to exceed thirty (30) days.

12.4.6 If Delivery has not occurred within the period of ninety (90) days after the Contract Delivery Date, no further or other liquidated damages shall be payable by Builder and Builder's liability to pay liquidated damages under this Clause 12.5 shall be limited to the aggregate amount of United States Dollars, Four Million Five Hundred Thousand (USD $4,500,000), payable under clauses 12.4.4 and 12.4.5 the liquidated damages payable thereunder being, for the avoidance of doubt, cumulative. In this event, Owner shall be entitled to exercise the rights and remedies available to it under Clause 15.

12.5 If any items on the Vessel are incomplete when the Vessel is otherwise ready for Delivery and the Owner and the Builder agree that such items:

(i) do not materially affect the operation of the Vessel; and

(ii) are not likely to cause damage or deterioration; and

(iii)do not constitute such a number that whilst not individually giving rise to such material effect, nor likely to cause damage or deterioration, are in aggregate material to the condition of the Vessel,

then the Owner will take Delivery of the Vessel. Owner shall in any event have such items completed in a manner to be mutually agreed upon between the Builder and the Owner. Dispatch to the Vessel by sea freight, or if practicable by air freight in the case of emergency, of items completed and/or received at the Builder's Yard subsequent to departure of the Vessel therefrom shall be at the expense of the Builder excepting items of Owner Furnished Equipment the cost of dispatch of which shall be at the expense of the Owner.

CLAUSE 13 - FORCE MAJEURE

13.1 A Force Majeure occurrence shall mean any of the following occurrences beyond the control and without the fault or negligence of the party affected and which by the exercise of reasonable diligence the said party is unable to prevent or provide against and which delays the construction of the Vessel:

13.1.1 Act of God, fire, inclement weather of abnormal severity and/or duration;

13.1.2 war (whether declared or not), riots, insurrections or malicious damage;

13.1.3 damage to Vessel which constitutes a partial loss and is repaired from the proceeds of insurance under the provisions of Clauses 10.5 and 10.6.1;

13.1.4 requisition order, control, direction, intervention or requirement by or of any Government or body acting under the authority of any Government;

13.1.5 cessation, curtailment or interruption of fuel, power, gas, water or any other essential services; and

13.1.6 except where due to the fault or negligence of the Builder or its Subcontractors or Suppliers, any delay in or short delivery of, or defects in materials machinery services or equipment for the Vessel (provided that the Builder demonstrates that they are critical to construction of the Vessel at the time of delay and that they were ordered in due time);

PROVIDED HOWEVER THAT the Builder shall not be entitled to rely upon any of the causes of delay listed in Clause 13.1 unless the Builder has taken all reasonable steps to mitigate their effect upon the construction of the Vessel.

13.2 The Builder shall, within two (2) days of becoming aware that the occurrence of any event of the nature specified above is likely to cause delay, Notify the Owner in writing thereof. The Builder shall also advise the Owner in writing after any such occurrence of which Notice was given in accordance with the provisions of this Clause ceases within two (2) days of such cessation and shall then provide the Owner with the Builder's best estimate of the likely period of delay resulting therefrom. Failure of the Builder to provide due Notice as provided for in this Contract shall be deemed a waiver of Builder's right to claim Force Majeure.

13.3 A delay to the Contract Delivery Date caused by Force Majeure shall constitute Permissible Delay and issues as to (i) whether an event constitutes Force Majeure and (ii) the extent of any delay due to Force Majeure, shall be documented, agreed and/or resolved in accordance with Clause 6. The revised Contract Delivery Date resulting from Permissible Delays due to Force Majeure causes shall be established by extending the Contract Delivery Date by one day for each day of Force Majeure calculated after making full provision for concurrent delays and mitigation by the Builder.

13.4 In the event of a period of Force Majeure lasting more than forty-five (45) consecutive days, or period or periods thereof of more than sixty (60) days in the aggregate, the Owner shall be entitled to exercise the rights afforded to it under Clause 15.2.

14.1.1    the Owner fails to pay any installment of the
          Contract Price within seven (7) days of its
          becoming due and payable in accordance with Clause
          8; or

14.1.2    the Owner without due cause fails to  pay all sums
          due on delivery within three days of a Valid
          Tender of Delivery.

Notice of cancellation by the Builder under this Clause shall be given by facsimile and confirmed in writing and shall (unless the Owner shall have then remedied the default) be effective fourteen (14) days after receipt thereof by the Owner whereupon the Builder shall be entitled to exercise the rights provided for in Clauses 14.2 and 14.3 and in which event title to the Vessel shall forthwith revest in the Builder, provided that the Builder shall not be entitled to exercise such rights in respect of any amount in dispute, where that dispute has been referred to the Senior Representative of the Classification Society, to the Appeals Board, or to arbitration or Court proceedings.

14.2 The Builder shall be entitled to cancel this Contract forthwith by notice given by facsimile and confirmed in writing upon an order being made or an effective resolution being passed for the winding up of the Owner (otherwise than a members voluntary winding up for the purpose of amalgamation or reconstruction) or a receiver or administrator being appointed of the whole or any part of the undertaking of the Owner.

14.3 If the Builder shall cancel this Contract under Clause 14.1 or 14.2 the Builder shall be entitled (in addition to interest as provided in Clause 8.7) to the proved loss resulting from the Owner's default. The Builder shall sell the Vessel by public auction or tender or private sale at its discretion and shall apply the proceeds of sale (after deducting the expenses of sale including the cost of completing the Vessel for sale) together with any installments of the Contract Price paid under Clause 8 as follows:

14.3.1 in satisfaction of the balance due to the Builder under this Contract.

14.3.2the balance, if any, shall belong to the Owner.

14.4 If the proceeds of the sale of the Vessel when added to the installments received prior to cancellation are less than the aggregate of the Contract Price and the expenses of resale, the deficiency shall be paid by Owner to Builder and if not so paid shall be recoverable by action against Owner.

14.5 However, notwithstanding any of the foregoing, the Builder shall not be entitled to exercise its rights under this Clause if the Owner has already commenced the exercise of its rights pursuant to Clause 15.

15.1.1    the Vessel becomes a total loss in accordance with
          Clause 10.4; or

15.1.2    the Vessel is requisitioned by the British
          Government; or

15.1.3    the Builder without just cause refuses to proceed
          with the construction of the Vessel; or

15.1.4    an order is made or an effective resolution is
          passed for the winding up of the Builder
          (otherwise than a members' voluntary winding up
          for the purpose of amalgamation or reconstruction)
          or a receiver or administrator is appointed of the
          whole or any part of the undertaking of the
          Builder; or

15.1.5    If at any time during this Contract, following
          receipt of request to do so from Owner, the
          Builder, utilising the Primavera level 3 critical
          path project schedule, is unable to demonstrate to
          the Owner's satisfaction that it has sufficient
          additional capacity, including sub-contracted
          labor, and/or materials, and/or has developed a
          recovery plan that would enable him to deliver the
          Vessel within ninety (90) days following the
          Contract Delivery Date and that the Builder is
          implementing such plan and/or utilizing such
          additional capacity and exercising all necessary
          due diligence to achieve Delivery within such
          period.

15.2 In circumstances of Builder's default as described in Clause 15.1 or in the circumstances set out in Clauses 12.4.6 or 13.4, the Owner, without prejudice to its rights under the Parent Company Guarantee, shall be entitled by Notice to the Builder EITHER:

(i) to cancel this Contract in which event Builder shall forthwith refund to the Owner (a) the aggregate amount of all sums paid pursuant to Clause 8, (b) any amount reasonably and properly paid by Owner to any Owner Subcontractors and (c) any and all amounts reasonably and properly paid by Owner for Owner Furnished Equipment which has been incorporated in the Vessel, all together with interest thereon at the rate of two (2%) percent over one-month LIBOR from time to time for the particular currency, calculated in each case from the date of payment by Owner to the date such refund is made.

However, the proceeds of any insurance claim previously received by Owner shall be deducted from the amount to be refunded under this sub-clause (i). Upon such refund as aforesaid being made in full, all the obligations, duties and liabilities of each of the parties hereto to the other under this Contract shall forthwith be completely discharged and title to the Vessel shall be vested in Builder; OR

(ii) to take possession of the Vessel in its unfinished state and complete the Vessel in accordance with this Contract and the Specifications either at the Builder's Yard or elsewhere, at Owner's sole option. In the event that Owner decides to complete the Vessel at Builder's Yard, Owner and its agents or Owner Subcontractors shall be entitled to use Builder's Yard, buildings, plant, machinery, tools and implements and all materials appropriated to or ordered for the Vessel and shall not be liable for breakage or damage thereto. In this case, in the event that the cost of completing the Vessel is more than the amount of the outstanding installments, Builder shall pay to Owner on demand an amount equal to the amount of such excess from the time of demand with interest thereon at two (2) % per cent over one month LIBOR from time to time for the particular currency calculated from the date of demand until the date of refund.

15.3 In the circumstances set out in Clause 15.2:

(i) Owner shall be entitled, in the event that it elects to cancel this Contract pursuant to Clause 15.2(i) above, and no refund is made in full by Builder within five
(5) days of receipt of Notice of such cancellation, to make demand under the Letter of Credit and/or the Parent Company Guarantee, in Owner's sole option; and

(ii) Owner shall be entitled, in the event that it elects to take possession pursuant to Clause 15.2(ii), then or at any time thereafter to make demand under the Letter of Credit for the full amount thereof and to utilise the same for the purposes of completing the Vessel (in accordance with the terms of this Contract and the Specifications) and shall account to Builder for any unutilised amounts following such completion, and/or to make demand under the Parent Company Guarantee and to utilise all sums from time to time received thereunder for the purposes of completing the Vessel (in accordance with the terms of this Contract and the Specifications).

15.4 Subject always to the provisions of Clause 15.2(ii), 15.3 and 15.5, in the event of the cancellation, rescission or termination of this Contract by the Owner, the property in the Vessel and all its materials, machinery and equipment shall, following receipt by the Owner of the full amount of all installments paid up to the date of such cancellation, rescission or termination of the Contract and all other amounts payable by the Builder to the Owner hereunder, be transferred to and vest in the Builder.

15.5 In the event that the Owner elects to take possession of the Vessel pursuant to Clause 15.2(ii), the Builder shall assign (or procure the assignment of) the Subcontracts, Supplier contracts and/or any rights arising thereunder to the Owner and shall do and execute such assurances, acts and documentation required or desirable for vesting the Subcontracts and/or any rights arising thereunder in the Owner.

15.6 All items of Owner's Furnished Equipment not incorporated in the Vessel shall be made available to Owner.

15.7 In the event that Owner elects to take possession of the Vessel pursuant to Clause 15.2(ii), any sums due from Builder to Owner by way of liquidated damages already incurred at the date of Notice shall be set off against any remaining installments due from Owner to Builder.

15.8 Notice of cancellation by the Owner under Clause 15.2 as a result of Builder's default with 15.1.2, 15.1.3, or 15.1.5 shall be given by facsimile confirmed in writing and shall be effective fourteen (14) days after receipt by the Builder unless the Builder shall have demonstrated that it can speedily remedy the default, and is exercising the necessary due diligence to do so. Any other Notice of cancellation under 15.2 shall be effective forthwith upon service.

15.9 TERMINATION BY OWNER WITHOUT CAUSE. Notwithstanding any other provision herein contained Owner may, at its sole discretion and without cause, terminate the Contract at any time by giving written notice to Builder.

15.9.1    If Owner should elect to terminate the Contract
          pursuant to Clause 15.9:

15.9.1.1  Builder, unless the notice directs otherwise,
          shall cease performance of the work and shall
          perform only such work as is necessary in order to
          preserve and protect the permanent works, and
          shall, if at Builder's Yard, store the same at
          Owner's risk and expense, until such time as it is
          removed from Builder's Yard.

15.9.1.2  The Builder shall deliver and transfer to the
          Owner in accordance with the Owner's instructions
          all materials, supplies and other items for which
          Builder is entitled to receive reimbursement
          according to the Contract, together with all
          plans, drawings, specifications and other
          documents which Owner is entitled to according to
          the Contract.

15.9.1.3  Builder, shall, if requested by Owner, undertake
          all reasonable endeavours to cancel any or all of
          its outstanding orders or Subcontracts upon such
          terms as may be approved by the Owner.  When such
          terms are not approved, or if Owner shall so
          request, Builder shall assign such orders or
          Subcontracts to Owner and take such actions as may
          be necessary in order to secure for Owner the
          rights of Builder therein.

15.9.2    In the event of termination by Owner in accordance
          with this Clause 15.9, Owner shall pay to Builder
          the following amounts in full and final settlement
          of all amounts due under or in any way arising
          from the amounts due under or in any way arising
          from the Contract, less all amounts previously
          paid:

15.9.2.1  an amount, by way of termination fee, which is six
          percent (6%) of the amounts in Clauses 15.9.2.2
          and 15.9.2.3, respectively and below, but is not
          less than United States Dollars Five Million (US
          $5,000,000);

15.9.2.2  an amount for the cost and expenses incurred by
          the Builder for materials and equipment being in
          conformity with the Contract and which are ordered
          for incorporation into the Work, together with all
          direct costs for work performed up to the date of
          the notice of termination hereunder, inclusive of
          overhead recovery;

15.9.2.3  an amount for all other documented costs which the
          Builder is legally obliged to pay Subcontractors
          or Suppliers, or in respect of liabilities or
          costs which Builder has undertaken in good faith
          in connection with the work; and

15.9.2.4  an amount for all costs, charges and expenses
          directly attributable to the orderly close out of
          the performance of the Work, such as the cost
          incurred for personnel in order to satisfy the
          requirements of law and labour agreements.

15.9.3    The Owner shall, within fourteen (14) days of
          notice of termination, at its cost and expense,
          remove the permanent works or any part thereof
          from the Builder's Yard, but in no case any longer
          than thirty (30) days.  If any of Owner's property
          remains in Builder's Yard longer than thirty (30)
          days from the notice of termination under this
          Clause 15.9, and Owner and Builder are unable to
          mutually agree on the disposition of Owner's
          property, then Builder may remove, at Owner's
          expense, all remaining Owner's property which
          obstructs Builder's activities within Builder's
          Yard.

CLAUSE 16 - GUARANTEE

16.1 The Builder, for the whole of the Guarantee Period, guarantees the Works against all defects which are due to defective design (to the extent that Builder has responsibility for such design pursuant to Clause 3), defective material, poor workmanship and/or the Works not having been performed in accordance with this Contract. The Guarantee Period shall be for a period of twelve (12) months from Delivery of the Vessel provided always that, in respect of any repairs or replacements or such additional works as are referred to in Clause 16.6, the Guarantee Period shall be twelve (12) months after completion of such repairs, replacements and additional works. The Guarantee Period shall not in any event exceed twenty four (24) months in total from Delivery.

16.2 The Owner shall give Notice to the Builder confirmed in writing within fourteen (14) days after discovery of any defect by any supervisory personnel on board the Vessel for which a claim is made under this Clause 16. The Owner's written Notice shall include full details as to the nature of the defect and the extent of the damage caused thereby. The Builder shall be freed from all liability under this Clause 16 for any defects discovered prior to the expiry of the Guarantee Period, unless Notice thereof is given by the Owner not later than fourteen (14) days after the expiry of the Guarantee Period. The Builder shall have no liability in respect of defects discovered after the expiry of the Guarantee Period.

16.3 Without prejudice to Clause 16.6, upon receipt of Notice under Clause 16.2 the Builder shall be entitled to arrange for inspection of the Vessel on its own behalf. The Owner shall make available to the representatives of the Builder at such inspection the Vessel's logbooks and any other relevant documents and information and shall supply such certified copies of such log books, documents and information as may reasonably be requested by the Builder.

16.4 If Builder needs to travel to the Vessel in connection with Clause 16, Owner shall provide transportation between shore base and Vessel for Builder's personnel and equipment, to the extent that Owner is able to obtain same without cost to Owner.

16.5 The Builder shall have no liability for errors, omissions or defects in the Works arising from inaccuracy of data provided by the Owner, or from a third party acting on behalf of the Owner for the purposes of the Works, unless the Builder shall have failed to use all reasonable endeavours to discover detectable inaccuracies of said data.

16.6 The Builder shall remedy at its own expense any defect arising during the Guarantee Period against which the Works are guaranteed under this Contract and which is Notified by Owner to Builder in accordance with Clause 16.2, by making all necessary repairs and replacements and by performing such additional works as may be required to remedy such defect (including without prejudice to the foregoing generality the provision of such personnel as the parties may agree). Further, if the Owner deems that it would be inconvenient to bring the Vessel back to the Builder's Yard, Owner shall have the right to complete repair work at other shipyards and Builder shall pay to Owner the actual cost to Owner of the repairs. Builder shall have the right to be consulted prior to the commencement of such repair work by another party, as to its extent and cost, provided that Owner shall be entitled following notification and consultation to effect such repairs by such other party whether or not the same are agreed by Builder. If the repairs are carried out by a third party, the Builder shall pay the cost of such repairs, but Builder shall not be liable for the efficacy of the same.

16.7 The Builder shall obtain guarantees of not less than twelve (12) months from Delivery or such longer period as Builder is able to obtain at no extra cost from its Subcontractors or Suppliers.

16.8 The Builder shall hold the benefit of all warranties, guarantees, liquidated damages clauses and other rights and remedies under contracts entered into with Subcontractors and Suppliers in trust for and in accordance with the Owner's instructions, and at the Owner's cost. At the end of the Guarantee Period the Builder shall assign to the Owner the benefit of any remaining Subcontractors' or Suppliers' guarantee(s), or warranties.

16.9 The guarantees and remedies contained in this Clause 16 concerning the defects which are covered by this Clause 16 are the sole and exclusive guarantees and remedies in favor of the Owner concerning such matters. All guarantees and remedies concerning such matters which would otherwise be implied by law (whether under the Sale of Goods Act or otherwise) and all remedies in tort, (including but not limited to negligence), are expressly excluded. For the avoidance of doubt, this Clause has no application to warranties concerning title or intellectual property rights.

16.10 The Builder warrants that the Works will be delivered to the Owner free and clear of any liens, charges, claims, mortgages, or other encumbrances of whatever nature upon the Owner's title thereto, and in particular, that the Works will be absolutely free of all burdens in the nature of imposts, taxes or charges and the Builder shall indemnify the Owner in respect of any liability arising as a consequence of the Builder's breach of this sub-clause.

16.11 The Builder's guarantee does not extend to loss or damage or expense to the extent arising from wear and tear, perils of the sea, accident, negligence or misuse on the part of the Owner or any third party.

16.12 The Builder has the right to appoint or nominate on Delivery of the Vessel upon terms and conditions to be agreed a competent guarantee engineer acceptable to the Owner to sail with the Vessel as guarantee engineer during the whole or any part of the Guarantee Period and, if the Owner has reason to be dissatisfied with the guarantee engineer so appointed, shall from time to time replace him by another competent guarantee engineer free of cost to the Owner. The wages and expenses and repatriation expenses of the guarantee engineer shall be paid by the Builder . The Owner and its employees shall give such guarantee engineer full co-operation in carrying out his duties as the Builder's representative on board the Vessel.

16.13 Notwithstanding the foregoing the Builder's Guarantee under this Clause 16 shall be limited to the terms of guarantees provided to the Builder by its Subcontractors or Suppliers in the case, where the Owner has specifically negotiated the sub-contract or purchase order in question or where the Owner has specifically requested a Subcontractor or Supplier not on the Subcontractor's List or the Maker's List.

CLAUSE 17 - INDEMNITIES FOR INFORMATION SUPPLIED

17.1 The Builder shall indemnify the Owner from and against all claims of third parties arising by reason of the use by Owner or Owner Subcontractor or Owner Supplier of any information supplied to Owner, Owner Subcontractors or Owner Suppliers by Builder in connection with the performance of the Works, and from all costs and expenses (including costs and expenses of litigation) incurred by Owner by reason of such claim, except for claims or liabilities arising in connection with any matter to which Clause 17.2 applies.

17.2 The Owner shall indemnify the Builder from and against all claims of third parties arising by reason of the use by the Builder of the Specifications and of any document or information supplied to the Builder or its Subcontractors by the Owner, Owner Subcontractors or Owner Suppliers in connection with the design, construction and the building of the Vessel or the construction or installation of the machinery or equipment thereof or the provision of Owners Furnished Equipment and from all costs and expense (including costs and expenses of litigation) incurred by the Builder by reason of any such claim.

CLAUSE 18 - TAXES AND DUTIES, ETC

18.1 The Builder shall bear any taxes and duties applicable to materials or equipment supplied by the Builder, its Subcontractors or Suppliers.

18.2 The Owner shall bear any taxes and duties applicable to materials or equipment supplied by the Owner, Owner Subcontractors and Suppliers.

18.3 The Owner shall bear all other taxes, duties, commissions, fees and expenses incurred in connection with this Contract, including those incurred in arranging finance, mortgage facilities and registration formalities.

CLAUSE 19 - HEALTH AND SAFETY ENVIRONMENT AND EMPLOYMENT

19.1 The Builder and Owner shall and shall cause their respective Subcontractors and Suppliers while at the Builders Yard to observe and comply with the Health and Safety provisions of Schedule Fourteen hereto.

19.2 In all circumstances compliance with local legislative requirements and/or obligations shall take precedence over the requirements of Schedule Fourteen hereto.

19.3 The Builder and Owner and their respective Subcontractors shall comply with all laws, rules and regulations of Government having jurisdiction over the area in which the Works are undertaken to the extent that they are now, or may become applicable to them during the performance of this Contract.

CLAUSE 20 - LAW AND ARBITRATION

20.1 This Contract shall be governed by and construed in accordance with the Law of England.

20.2 Any dispute or difference touching or concerning this Contract or arising thereof, other than disputes to be referred to an expert by the provisions of this Contract shall be referred to the arbitration in London (or such other place as may be agreed between the parties) of a single arbitrator to be appointed by agreement between the parties or, (failing agreement within 14 days after either party has given to the other a written request to concur in the appointment of a single arbitrator) of three arbitrators, one to be appointed by each party and an umpire chosen by the two arbitrators so appointed. Any such reference shall be a submission to arbitration in accordance with the Arbitration Act 1996 or any statutory variation, modification or re-enactment thereof for the time being in force.

CLAUSE 21 - ASSIGNMENT OF CONTRACT

Except by the Owner to the ultimate parent company of Owner or an associated company of the Owner, neither of the parties hereto shall be entitled to assign or transfer any of its rights or duties hereunder without prior Notice to, and the prior written consent of, the other who shall not unreasonably withhold such consent. PROVIDED THAT in the event of an assignment, except to the ultimate parent company of Owner, Owner shall remain responsible for and guarantee the performance and observance of the assigned obligations by any such associated company. For the purposes of this Clause associated "company" means and includes any holding company, whether direct or indirect, or any subsidiary, whether direct or indirect, of the Owner or of such holding company, "holding company" and "subsidiary" having the meanings assigned to these terms by Section 736 of the Companies Act 1985.Any assignment permitted under this Clause shall be at the cost of the Assignor.

CLAUSE 22 - NOTICES AND COMMUNICATIONS

22.1 Any Notice or Notification to be given hereunder to the Owner shall be delivered to the Owner's Project Manager on site at the Builder's Yard and :

Global Marine International Services Corporation c/o McKinney, Bancroft & Hughes
Mareva House, 4 George Street
P.O. Box N. 3937
Nassau, Bahamas

Attention:President

With copies to:

Global Marine International Services Corporation c/o Global Marine UK Limited
Standbrook House, 2/5 Old Bond Street London, England W1X 4QH

Attention:F. L. Matthews, Vice President

and

Global Marine Drilling Company
777 N. Eldridge Parkway
Houston, Texas 77079

Attention:John A. Thorson, Manager Construction and Marine Projects Facsimile Number:
281-596-5179

or such other person, address or facsimile number as the Owner may from time to time by notice in writing to the Builder designate for that purposes.

22.2 Any notice to be given hereunder to the Builder shall be addressed to,

The Project Manager
Ship No: 1739
Harland and Wolff Shipbuilding and Heavy Industries Limited Queen's Island
BELFAST
BT3 9DU
Northern Ireland

Facsimile:01232-458515

or such other person, address or facsimile number as the Builder may from time to time by notice in writing to the Owner designate for that purpose.

22.3 Any Notice or other document to be given or served hereunder may be delivered by hand or sent by facsimile or posted by first-class mail (for inland mail) or airmail (for overseas mail) prepaid post, addressed to the address or facsimile number of the respective party as given in Clause 22.1 and 22.2. Any such Notices or documents sent by post in the manner specified above shall be deemed served two (for inland mail) or seven (for overseas mail) business days after posting. Where a Notice or document is transmitted by facsimile the document shall be deemed served when transmitted by the sending party.

CLAUSE 23 - WAIVER

Any waiver by or neglect or forbearance by either party to require or enforce any of the provisions of this Contract at any time given by either party shall not prejudice or affect any right of that party afterwards, with regard to any other failure to comply with the provisions of this Contract whether or not of a similar nature, to act strictly in accordance with the provisions herein contained.

CLAUSE 24 - ENTIRE CONTRACT AND AMENDMENTS

This Contract constitutes the entire agreement of the Builder and the Owner in relation to the construction and purchase of the Vessel and neither any representation, warranty or statement made by or on behalf of the Builder or the Owner prior to the date hereof shall affect the terms of this Contract or the rights or duties of the Builder or the Owner hereunder nor shall any modification of the terms of this Contract be of any effect unless made in writing and signed by the Owner and the Builder or their respective Authorized Representatives or Project Managers (in case of Project Change Orders).

CLAUSE 25 - LIABILITY AND INDEMNIFICATION

25.1 As used in Clauses 25 and 26 of this Contract:

(a)"Owner Group" means the following persons and entities, individually and collectively:

(i) Owner, its Parent, subsidiary, affiliated, associated Companies;

(ii) Owner Subcontractors and Owner Suppliers and other parties contracting with Owner (excepting Builder and Builder's Subcontractors);

(iii)The respective Officers, Directors, Employees, Agents, Owners, Shareholders, Servants, Representatives and Insurers of each of the parties set forth in Clauses
25.1 (a) (i) and 25.1 (a) (ii).

(b) "Builder Group" means the following persons and entities, individually and collectively:

(i) Builder, its Parent, Subsidiary, Affiliated, Associated Companies;

(ii) Builder's Subcontractors, Suppliers and other parties contracting with Builder (excepting Owner); and

(iii)The respective Officers, Directors, Employees, Agents, Owners, Shareholders, Servants, Representatives and Insurers of each of the parties set forth in Clauses
25.1 (b) (i) and 25.1 (b) (ii).

25.2 Builder shall at all times be responsible for and shall release, protect, indemnify, defend (including payment of reasonable attorney's fees and costs of litigation) and hold Owner Group harmless from and against any and all costs, losses, liabilities, claims, demands, causes of action, damages, penalties, judgments and awards of every kind and character, without limit and without regard to the cause or causes thereof or the negligence or fault of any party or parties (including without limitation the active, passive, concurrent or solely negligent acts or omissions of any member of Owner Group) arising in connection herewith:

(a) In favour of the officers, directors, employees, agents, servants, representatives or invitees of Builder Group on account of sickness, bodily injury or death; and/or

(b) On account of damage to or loss of Builder Group equipment or property; and/or

(c) From pollution or contamination occurring prior to Delivery (including without limitation the control and/or removal thereof) which originates from Builder's Yard or equipment, the equipment of Builder's Subcontractors or materials under the control of Builder's Subcontractors, including but not limited to fuels, lubricants, motor oils, pipe dope, paints, solvents, garbage or debris.

(d) From the storage, transportation and/or disposal of any and all waste generated during the performance of the Work by Builder or Builder Group.

25.3 Owner shall at all times be responsible for and shall release, protect, indemnify, defend (including payment of reasonable attorney's fees and costs of litigation) and hold Builder Group harmless from and against any and all costs, losses, liabilities, claims, demands, causes of action, damages, judgments and of every kind and character, without limit and without regard to the cause or causes thereof or the negligence or fault of any party or parties (including without limitation the active, passive, concurrent or solely negligent acts or omissions of any member of Builder Group) arising in connection herewith:

(a) In favor of the officers, directors, employees, agents, servants, representatives or invitees of Owner Group on account of sickness, bodily injury or death; and/or

(b) On account of damage to or loss of the equipment and/or property of Owner Group, save for the Vessel and OFE in relation to which the other provisions of this Contract shall apply; and/or

(c) From pollution or contamination arising from the Vessel following Delivery.

25.4 Notwithstanding anything to the contrary, expressed or implied, in this Contract, inclusive of any amendments or Project Change Orders, in tort or otherwise at law, neither party shall be liable to the other for special, indirect, or consequential damages including, without limitation, loss of profits or business interruptions resulting from or arising out of this Contract or the performance of any work or services, however same may be caused including the negligence or fault of any party or parties and whether or not within the contemplation of the parties before, after or on the date of signature of this Contract.

25.5 Except as otherwise expressly limited in this Contract, it is the express intention of the parties hereto that all indemnity obligations and/or liabilities assumed by the parties under articles 25.2, 25.3 and 25.4 shall be without limit and without regard to the cause or causes thereof, including, but not limited to, preexisting conditions, whether such conditions be patent or latent; the unseaworthiness of any vessel or vessels, whether or not the preexisting breach of representation or warranty (express or implied); strict liability and/or ruin or defective premises, equipment, facilities, or appurtenances of any party under any code law or other type of strict liability, whether or not preexisting, and/or is latent, patent or otherwise; breach of contract; tort, breach of duty (statutory, contractual, common law or otherwise) or the negligence or fault of any party or parties, including, but not limited to, that of the indemnified parties, whether such be sole, joint or concurrent, active or passive; or any other theory of legal liability.

25.6 It is the express intention of the parties hereto that the provisions of this Contract shall exclusively govern the allocation of risks and liabilities of said parties, it being acknowledged that the agreement reflected herein has been based upon such express understanding.

25.7 All persons or entities who are or who may become a person or entity designated in Clause 25.1 (a) and (b), other than Owner and Builder, shall be deemed to be third party beneficiaries of this Contract for the purposes solely of enforcing an indemnity expressed to be for their benefit.

25.8 The indemnifications set forth in this Contract shall apply to all types of liabilities specifically covered by the indemnifications whether such liabilities are incurred directly by the indemnitees or indirectly through the operation of an indemnification agreement with another party provided that the liability for which such indemnification is sought, arose from or occurred as the result of or incidental to the performance of the parties' obligations hereunder.

CLAUSE 26 - BENEFIT OF INDEMNITIES

26.1 The indemnities given by Builder to Owner or Owner Group under Clause 25 are hereby agreed to be extended to and for the benefit of Owner Group as defined in Clause 25.1(a).

26.2 The indemnities given by Owner to Builder or Builder Group under Clause 25 are hereby agreed to be extended to and for the benefit of Builder Group as defined in Clause 25.1(b).

26.3 Owner hereby agrees to the appointment of Builder as its agent and trustee solely for the giving and receiving of the indemnities specified in Clause 25.3, which agency is solely for the purpose of permitting the indemnified party to make its claim against the indemnifying party and all duties, liabilities and obligations which would otherwise be imposed on or incurred by Owner by virtue of the agency are expressly excluded.

26.4 Builder hereby agrees to the appointment of Owner as its agent and trustee solely for the giving and receiving of the indemnities specified in Clause 25.2, which agency is solely for the purpose of permitting the indemnified party to make its claim against the indemnifying party and all duties, liabilities and obligations which would otherwise be imposed on or incurred by Builder by virtue of the agency are expressly excluded.

IN WITNESS WHEREOF, this Contract has been executed by duly authorized representatives of the Parties hereto in duplicate originals effective as of the date and year first above written.

GLOBAL MARINE INTERNATIONAL SERVICES       HARLAND AND WOLFF SHIPBUILDING D
CORPORATION                                AND HEAVY INDUSTRIES LIMITED

By:    /s/John A. Thorson                  By:  /s/ Per M. Nielsen
       John A. Thorson                          Per M. Nielsen
       Attorney-in-Fact                         Chief Executive Officer

HARLAND AND WOLFF SHIPBUILDING
AND HEAVY INDUSTRIES LIMITED

and

GLOBAL MARINE INTERNATIONAL SERVICES CORPORATION

SHIPBUILDING CONTRACT

relating to

Hull No: 1740

PARTIES

CLAUSE 1       INTERPRETATION
               Definitions
               General Interpretation

CLAUSE 2       DESCRIPTION
               Principal Particulars
               Yard Number

CLAUSE 3      DESIGN RESPONSIBILITY
              Owner's Responsibilities
              Builder's Responsibilities
              Continuing Liability of Builder
              Owner's Proprietary Rights
              Builder's Proprietary Rights

CLAUSE 4      CLASS AND REGULATIONS
              Classification Society and Class
              Changes to Classification Requirements

CLAUSE 5      CONSTRUCTION, MATERIALS AND INSPECTION
              Construction
              Subcontracting
              Standard of Construction
              Use of Substitute Materials
              Lightship Weight and Center of Gravity
              Departures from Contemplated Construction
              Provision of Lightship Weight Updates
              Preparation of Critical Path Project Schedule and Construction
              Critical Path Analysis
              Variation of Contractual Price
              Right to attend tests and trials
              Supervision and Inspection by Owner's
              Authorized Representative
              Defective Workmanship
              Resolution of Disputes by Classification Society
              Provision of Offices and Office Equipment
              Payment for office facilities
              Access to Vessel and Builder's Yard
              Standards applicable to Project Managers
              Replacement of Authorized Representatives

CLAUSE 6      MODIFICATIONS
              Change Request by Owner
              Builder's Acceptance and Confirmation
              Builder's Proposal
              Timing of Owner's Response
              Request for Further Information
              Change Request by Builder
              Changes to Regulatory Requirements
              Authority of Project Managers
              Owner's Directive
              Referral to Appeals Board
              Dispute resolution
              Classification Society
              Appeals Board
              Effect of Disputes
              Denomination of Project Change Orders and Directives


CLAUSE 7      OWNER FURNISHED EQUIPMENT
              Delivery
              Risk
              Notice of Arrival and Expenses of Delivery
              Storage
              Inspection by Builder
              Owner's Right to Interest

CLAUSE 8      PRICE AND TERMS OF PAYMENT
              Price
              Guarantees
              Installment Schedule
              Notice of Installments Falling Due
              Submission of Stage Certificates and Invoices
              Payment of increases in the Contract Price
              Terms of Payment
              Set off of Liquidated Damages
              Failure to Take Delivery

CLAUSE 9      PROPERTY AND JURISDICTION
              Vesting of Property, Allocation of Risk and Builder's Lien
              Labeling of the Vessel
              OFE
              Appropriation of Vessel parts
              Assembly other than at Builder's Yard

CLAUSE 10     INSURANCE
              Owner to Insure
              Builder to Insure
              Payment of deductible
              Insurance Recoveries
              Total Loss of Vessel
              Partial Loss of Vessel
              Other insurances to be effected
              Provision of copies of insurances effected
              Risk of Vessel

CLAUSE 11     TRIALS AND PERFORMANCE
              Arrangements for Trials
              Notice of Sea Trials
              Failure of Owner's Representative to attend
              Unfavourable Weather Conditions
              Fuel Consumption
              Vessel not Complying with Specifications
              Punch List of Defects

CLAUSE 12     DELIVERY
              Time and Place
              Valid Tender of Delivery
              Removal of Vessel
              Builder's Bonus and Liquidated Damages
              Incomplete Work

CLAUSE 13     FORCE MAJEURE
              Force Majeure Delays
              Notice of Delays
              Revised Contract Delivery Date
              Owner's Rights

CLAUSE 14     DEFAULT OF THE OWNER
              Events of Default
              Builder's right to Cancel
              Remedies following cancellation
              Claims against Owner
              Exercise of such rights

CLAUSE 15     DEFAULT OF THE BUILDER
              Events of Default
              Owner's Right to Cancel or take possession
              Parent Company Guarantee and Letter of Credit
              Vesting of Title
              Sub-Contract Right
              OFE
              Set Off
              Termination Without Cause

CLAUSE 16     GUARANTEE
              Builder's Guarantee
              Notice of Guarantee Claims
              Inspection by Builder
              Transportation of Builder
              Remedies
              Guarantees from Subcontractors
              Holding of Sub-Contract Rights
              Exclusion of Implied Guarantees
              Builder's Warranty that Works Free from Encumbrances
              Exceptions and Limitations
              Guarantee Engineer
              Limitation of Guarantees

CLAUSE 17     INDEMNITIES FOR INFORMATION SUPPLIED
              Builder's Indemnity
              Owner's Indemnity

CLAUSE 18     TAXES AND DUTIES
              For account of Builder
              For account of Owners
              Other Taxes

CLAUSE 19     HEALTH AND SAFETY ENVIRONMENT AND EMPLOYMENT
              Precedence of Local Legislation
              Compliance with Applicable Government Regulations
              Sub-Contractors

CLAUSE 20     LAW AND ARBITRATION

CLAUSE 21     ASSIGNMENT

LAUSE 22      NOTICES AND COMMUNICATIONS

CLAUSE 23     WAIVER

CLAUSE 24     ENTIRE CONTRACT AND AMENDMENTS

CLAUSE 25     LIABILITY AND INDEMNIFICATION
              Definitions
              Builder's Responsibilities
              Owner's Responsibilities
              Consequential Damages
              Limit of Indemnities
              Allocation of risk
              Extension of Indemnities
              Range of liabilities

CLAUSE 26     BENEFIT OF INDEMNITIES
              Extended to Owner Group
              Extended to Builder Group
              Agencies for Giving and Receiving Indemnities

EXECUTION

FIRST SCHEDULE - STAGE CERTIFICATE

SECOND SCHEDULE - FINAL STAGE CERTIFICATE

THIRD SCHEDULE - LETTER OF CREDIT

FOURTH SCHEDULE - PARENT COMPANY GUARANTEE

FIFTH SCHEDULE - BUILDER'S PROPOSAL

SIXTH SCHEDULE - CHANGE ORDER REQUEST

SEVENTH SCHEDULE - PROJECT CHANGE ORDER

EIGHTH SCHEDULE - OWNER FURNISHED EQUIPMENT

NINTH SCHEDULE - SPECIFICATIONS

TENTH SCHEDULE - SUBCONTRACTORS LIST

ELEVENTH SCHEDULE - MAKER'S LIST

TWELFTH SCHEDULE - ADJUSTMENTS OF CONTRACT PRICE BETWEEN ACTUAL
AND ESTIMATED STEEL WEIGHTS

THIRTEENTH SCHEDULE -BUILDER'S RATES FOR PROVISION OF OFFICE
FACILITIES

FOURTEENTH SCHEDULE - HEALTH AND SAFETY PROVISIONS

FIFTEENTH SCHEDULE - "PHASE 2 BASIC DESIGN PACKAGE"

SIXTEENTH SCHEDULE - INSURANCE

THIS CONTRACT is made the 28th day of March, One Thousand, Nine Hundred and Ninety Eight between:

(1) HARLAND AND WOLFF SHIPBUILDING AND HEAVY INDUSTRIES LIMITED, a company organized and existing under the laws of Northern Ireland and having its principal office at Queen's Island, Belfast, Northern Ireland BT3 9DU (hereinafter called the "Builder"); and

(2)GLOBAL MARINE INTERNATIONAL SERVICES CORPORATION, a Bahamian company and having its principal office at c/o McKinney, Bancroft & Hughes, Mareva House, 4 George Street, P.O. Box N. 3937, Nassau, Bahamas, (hereinafter called the "Owner").

WHEREBY IT IS AGREED that the Builder will construct, complete and deliver to the Owner the Vessel described herein and the Owner shall duly pay the Builder therefor all in accordance with the following Clauses of this Contract:

CLAUSE 1 - INTERPRETATION

1.1 In this Contract

1.1.1 "Authorized Representative(s)" shall mean any person who has been advised in writing by the Owner Project Manager to the Builder or (as the case may be) by the Builder Project Manager to the Owner as having authority to act for the Owner or (as the case may be) the Builder, and the extent of such authority shall be defined in such advice;

1.1.2 "Appeals Board" shall mean a board comprised in accordance with Clause 6.10;

1.1.3 NOT USED

1.1.4 "Builder Project Manager" shall mean the person appointed by Builder, and Notified in writing to the Owner as having authority to act on behalf of Builder, in the discharge of Builder's obligations hereunder. The authority of Builder Project Manager includes, but is not limited to, the authority to sign Project Change Orders pursuant to Clause 6. Builder Project Manager may appoint Authorized Representatives to act on behalf of Builder, and shall Notify Owner in writing of such appointment, defining in such Notice the extent of the authority of each Authorized Representative;

1.1.5 "Builder's Proposal" shall mean a document in the form set out at Schedule Five hereto;

1.1.6 Builder's Quarterly Invoices" shall mean invoices, other than invoices for installment payments of the Contract Price referred to in Clause 8, submitted by the Builder to the Owner on a quarterly basis and in accordance with the provisions of Clause 8 which shall include, but not be limited to, facilities charges for telephone and other services and charges as more specifically described in Clauses 5.15, 5.16 and 8.10.

1.1.7 "Builders Yard" shall mean the premises of the Builder at Queen's Island, Belfast, Northern Ireland;

1.1.8 "Change Order Request" shall mean a request in the form set out at Schedule Six hereto;

1.1.9"Classification Society" shall mean the American Bureau of Shipping (also referred to as "ABS");

1.1.10 "Constructability" shall mean, in the context of the Builder's obligations under Clause 3.2(a), that the Vessel is physically capable of being built on the basis of the Phase 2 Basic Design Package. However, confirmation by the Builder of such constructability shall not of itself give rise to any different obligation of the Builder under this Contract in relation to the performance characteristics of the Vessel than that which would otherwise have applied as part of the Works;

1.1.11 "Contract Delivery Date" shall mean 10th February Two Thousand as from time to time extended pursuant to this Contract by Permissible Delay;

1.1.12 "Contract Price" shall mean the price stipulated in Clause 8.1 as amended by the provisions of this Contract or any Amendment thereof;

1.1.13 "Delivery" and "Delivery Date" shall mean the date upon which the Vessel is delivered to and accepted by the Owner in accordance with the provisions of Clause 12.2;

1.1.14"Force Majeure" shall mean any of the circumstances specified in Clause 13.1;

1.1.15 "Guarantee Period" shall mean the period referred to in Clause 16.1;

1.1.16 "Letter of Credit" shall mean a letter of credit in the maximum amount of United States Dollars Forty Million (US$40,000,000) substantially in the form set out at Schedule Three executed by a first class Bank acceptable in all respects to the Owner;

1.1.17 "Makers List" shall mean the list attached at Schedule Eleven hereto;

1.1.18 "Notice" shall mean formal notice as further provided in Clause 22;

1.1.19 "Owner Furnished Equipment" or "OFE" shall mean any item of equipment outfit and/or stores for the Vessel on the list attached at Schedule Eight hereto and as may otherwise be provided for in the Specifications;

1.1.20 "Owner Subcontractor" or "Owner Supplier" shall mean any person under contract to the Owner in connection with the performance of any of the obligations of Owner hereunder;

1.1.21 "Owner Project Manager" shall mean the person appointed by Owner, and Notified in writing to the Builder as having authority to act on behalf of Owner, in the discharge of Owner's obligations hereunder. The authority of Owner Project Manager includes, but is not limited to, the authority to sign Project Change Orders pursuant to Clause 6. Owner Project Manager may appoint Authorized Representatives to act on behalf of Owner, and shall notify Builder in writing of such appointment, defining in such Notice the extent of the authority of each Authorized Representative;

1.1.22 "Parent Company Guarantee" shall be a guarantee in the form set out at the Fourth Schedule hereto and executed by the Parent Company Guarantor;

1.1.23 "Parent Company Guarantor" shall mean Harland and Wolff Holdings plc, a company having its registered office at Queen's Island, Belfast, BT3 9DU;

1.1.24 "Permissible Delay" shall mean a delay in the Delivery of the Vessel on account of causes which under the terms of this Contract permit postponement of the Contract Delivery Date which delay shall be documented by a Project Change Order countersigned by Owner;

1.1.25 NOT USED

1.1.26 "Project Change Order" shall mean a document in the form set out at the Seventh Schedule hereto;

1.1.27 "Regulatory Bodies" shall mean the authorities, imposing rules and regulations with which the construction and outfit of the Vessel must comply in accordance with the Specifications;

1.1.28 "Specifications" shall mean the specifications, plans and drawings signed by the Builder and the Owner and attached at the Ninth Schedule hereto and identified as forming an integral part of this Contract or such revised or supplemental specifications, plans or drawings as may subsequently be agreed between the Owner and the Builder and signed by the Builder Project Manager and the Owner Project Manager, in accordance with Clause 6 and "Specified" shall mean stipulated in the Specifications;

1.1.29 "Subcontract(s)" shall mean any contract entered into by Builder for the construction or manufacture of any materials, machinery, services or equipment for the Works;

1.1.30 "Subcontractor(s)" shall mean any person under contract to the Builder for the construction, or manufacture of any materials, machinery, services or equipment for the Works;

1.1.31 "Subcontractor's List" shall mean the List attached at the Tenth Schedule hereto;

1.1.32 "Supplier" shall mean any person under contract to the Builder for the supply of any materials, machinery, services or equipment for the Works;

1.1.33 "Valid Tender of Delivery" shall mean a tender of the Vessel for Delivery in accordance with Clause 12.2;

1.1.34 "Vessel" means the vessel bearing Hull No.1740 which is the subject of this Contract and generally as described in Clause 2 with all the machinery, outfit, materials and equipment appurtenant thereto.

1.1.35 "Work" or "Works" means the works and services (which expressions shall include the supply of materials and equipment) to be performed by the Builder or, to the extent permitted by Clause 5.2, by its Subcontractors or Suppliers under this Contract.

1.2 The order of precedence for the documents forming this Contract shall be:

1.2.1 in case of any inconsistency between any provision of this Contract and the Specifications, this Contract shall prevail; and

1.2.2 in case of any inconsistency between the Specifications and a plan or drawing, the Specifications shall prevail; and

1.2.3 in case of any inconsistency between one plan or drawing and another plan or drawing, the later in date shall prevail;

1.3 Any reference to a Clause is to a Clause of this Contract.

1.4 The Index and Clause headings appearing in this Contract are inserted for convenience of reference only and shall not affect the construction of this Contract.

CLAUSE 2 - DESCRIPTION

2.1 The Builder shall construct and deliver to the Owner a completely outfitted and equipped Drill-ship (being, subject to Clause 3, of the Owner's design) which is capable of operating as a dynamically positioned drilling unit in water depths up to 12,000 feet and as otherwise provided for herein and in the Specifications, including supplying and installing all materials, labor, machinery, equipment, furnishings, fittings, as specified in the Specifications save and except to the extent of Owner Furnished Equipment. In the case of Owner Furnished Equipment, the Builder shall install same and provide the necessary foundations, wiring, piping and successfully- tested and commissioned interface connections to ensure the Owner Furnished Equipment functions as complete operational systems. Upon Delivery, the Vessel and all its parts and appurtenances shall be complete as specified hereinafter.

2.2 The Vessel shall have the Hull No.1740 and this number shall be placed on the Vessel, her materials and outfit during construction.

CLAUSE 3 - DESIGN

3.1 The Owner shall be responsible, at no cost to the Builder, for:

(a) the preparation of the drawings and plans for the Vessel which drawings and plans are called the "Phase 2 Basic Design Package", a list of which is at the Fifteenth Schedule hereto;

(b) obtaining the approval of the Classification Society and the Regulatory Bodies to the Phase 2 Basic Design Package; and

(c) furnishing the Builder, in a timely manner, with the Phase 2 Basic Design Package, and any modifications thereto as a result of obtaining the approvals described in (b) above.

The Builder acknowledges that, at the date of this Contract, it is in receipt of the Phase 2 Basic Design Package together with evidence of the status of approvals of the Classification Society.

3.2 The Builder, as part of the Works and at no additional cost to the Owner, shall be responsible for:

(a) confirming the Constructability of the Phase 2 Basic Design Package, as provided to it by the Owner, to ensure that it provides an appropriate basis to perform the Works hereunder, and, in particular, that the construction and completion of the Vessel is in accordance with this Contract and the Specifications. Builder shall, immediately on discovery of any such inconsistencies, advise the Owner Project Manager in writing of any inconsistencies in the Phase 2 Basic Design Package relative to the Constructability of the Vessel; and

(b) the preparation of Builder's construction plans and drawings (the "Builder's Working Drawings") based upon the Phase 2 Basic Design Package. Such plans and drawings shall, if required, be submitted to the Owner and the Classification Society for approval in accordance with the provisions of this Contract and the Specifications; and

(c) the performance of the Works on the basis of such plans and drawings as from time to time are approved by the Classification Society and the Owner under paragraph (b) above; and

(d) using all reasonable endeavors to discover any inaccuracies in plans, drawings, and data provided by the Owner, or provided by a third party acting on behalf of the Owner, for the purposes of the Works.

3.3 Builder shall be and remain liable hereunder for:

(a) any defect or deficiency in the preparation of the Builder's Working Drawings, whether or not the same have been approved by the Owner or the Classification Society, save to the extent that such defect or deficiency is caused by inaccuracies in plans, drawings and/or data supplied by Owner, unless the Builder shall have failed to use all reasonable endeavours to discover detectable inaccuracies in such plans, drawings or data; and

(b) any design work undertaken by Builder in connection with a Project Change Order.

3.4 The design of the Vessel and all plans and drawings relating to the Vessel and all intellectual property rights in the same (such design, plans and drawings and all intellectual property rights in the same being herein called the "Owner I.P.R.") shall at all times be and remain the sole and exclusive property of the Owner who reserves all proprietary rights in and to the same. The Builder will not obtain any rights of ownership or other proprietary rights in connection therewith or any part thereof and will not act in any way to indicate to any third party that he has any right in or to.

The Builder shall only be entitled to use the Owner I.P.R. for the sole purpose of (and for no other purpose than) performing the Works.

3.5 Notwithstanding anything to the contrary in Clause 3.4 above, the Builder shall retain ownership of all Builder's Working Drawings and all ownership and intellectual property rights thereto, except for those which have been developed directly from drawings, plans or other information supplied by Owner, Owner Subcontractor, Owner Supplier, or the Phase 2 Basic Design Package. For the avoidance of doubt, Owner shall own all Builder's Working Drawings and all ownership and intellectual property rights thereto, inclusive of those approved by the Classification Society, which have been developed directly from drawings, plans or other information supplied by the Owner, Owner Subcontractor, Owner Supplier or the Phase 2 Basic Design Package. With respect to all Builder's Working Drawings, regardless of ownership, the Builder shall:

(a) make copies thereof available to the Owner or Classification Society (and Owner shall be entitled to make the same available to Owner Subcontractor or Owner Supplier or any third party for the purposes described in this Clause) in the course of performance of the Works or, at the request of the Owner, to assist the Owner, or any third party, in the operation, repair or maintenance of the Vessel after delivery; and

(b) not design or build any drillship or similar vessel to the Vessel on the basis of "Owner IPR"; and

(c) not disclose Owner IPR nor Builder's Working Drawings to third parties whether to enable them to effect such design of any drillship or vessel similar to the Vessel or otherwise.

CLAUSE 4 - CLASS AND REGULATIONS

4.1The Vessel shall be built to ABS rules and under their survey to Class ( A1-E Mobile Offshore Drilling Unit - DPS-3 AMS, ACCU, R2S and to the specified rules and regulations of the Regulatory Bodies, including any alterations and modifications thereto published as at the date of signature of this Contract and including rules or regulations announced but not in effect on the date of signature of this Contract provided that they are scheduled to come into effect prior to the Contract Delivery Date, so as to enable the Vessel to be registered under the Panamanian Flag. All fees and charges incidental to classification and to compliance with the specified rules and regulations of Regulatory Bodies and the requirements of this Contract payable in connection with the construction of the Vessel shall be for the account of the Builder, except for fees, charges and expenses of the Classification Society incidental to the approval of the Phase 2 Basic Design Package and registration of the Vessel which shall be for account of the Owner.

4.2 If, after the date of signature of this Contract, any requirements of the Classification Society or of the Regulatory Bodies, with which the construction of the Vessel is required to conform including requirements announced prior to the date of signature of this Contract and scheduled to come into effect prior to the Contract Delivery Date, are altered or changed by the Classification Society or Regulatory Bodies and the parties are unable to obtain a dispensation therefrom or waiver of compliance therewith, the Builder shall comply with any such alterations or changes (if any) in the construction of the Vessel occasioned thereby, and any modifications or alterations to the Contract Price and/or Contract Delivery Date, arising out of the changes in the rules or regulations shall be determined in accordance with Clause 6.

CLAUSE 5 - CONSTRUCTION, MATERIALS AND INSPECTION

5.1 The Builder shall commence performance of the Works and shall proceed with the same with all due diligence, so as to achieve the completion of the Works and Delivery of the Vessel in accordance with this Contract and the Specifications and the Contract Delivery Date.

5.2 The Builder may sub-contract any portion of the Work of the Vessel to any of the Subcontractors or Suppliers respectively specified and/or listed in the Subcontractor's List or Maker's List attached at schedules Ten and Eleven respectively, but shall not otherwise be entitled to sub-contract such Work without the Owner's consent which shall not be unreasonably withheld.

5.3 Subject to all the terms of this Contract, the Vessel, her machinery, outfit, equipment, materials and workmanship shall be in accordance with this Contract and the Specifications and shall otherwise be in conformity with first class commercial shipbuilding practice, as applicable in Western Europe.

5.4 If any specified materials are not available when required for incorporation in the Vessel, the Builder shall be at liberty to use other suitable materials in substitution therefor subject to the approval of the Owner which approval shall not be unreasonably withheld and (where applicable)to the approval of the Classification Society and other Regulatory Bodies. If such approvals are forthcoming, any consequent modification or change shall be dealt with in accordance with the provisions of Clause 6.

5.5 Within thirty (30) days of the signature of this Contract, Owner shall supply to Builder all available estimates of weight and center of gravity of OFE items. Further, Owner shall, upon its receipt, supply Builder with certified vendor drawings for OFE as soon as is practically possible. Within sixty (60) days of the signature of this Contract, Builder shall derive an estimate of steel weight and the center of gravity of the Vessel from the Phase 2 Basic Design Package. Within one hundred and twenty
(120) days of the signature of this Contract, Builder shall submit to the Owner for approval a complete estimate of the estimated weight and center of gravity of the Vessel. Agreement shall be reached as quickly as possible between Builder and Owner as to the baseline lightship weight and center of gravity (herein referred to as "Baseline Lightship Weight" and "Center of Gravity"). Any changes in the weight and/or center of gravity as a result of changes in OFE, shall be dealt with under the change order procedure in accordance with Clause 6.

5.6 Departures from the construction contemplated in the above agreement which affect the Baseline Lightship Weight and Center of Gravity shall not be undertaken until Builder has submitted to the Owner his estimate of the effect on the lightship weight and center of gravity of the Vessel and obtained written approval of Owner to proceed with the departure. Individual departures from any agreed weight group of 227KG
(500lb) or less shall not require written approval.

5.7 The Builder shall continuously update the lightship weight as working drawings are produced and approved and the weight of the equipment becomes available. After the date of the agreement of the Baseline Lightship Weight and Center of Gravity of the Vessel, as provided for in Clause 5.5 above, Builder shall submit to Owner a monthly report which details:

(i) an update of the comprehensive lightship weight and center of gravity of the Vessel; and

(ii) a tabulation of all departures from the Baseline Lightship Weight and Center of Gravity of the Vessel which details their respective cumulative effects thereto.

5.8 The Builder shall prepare a Primavera level 3 critical path project schedule within thirty (30) days of signature of this Contract for submission to Owner, and shall give information to and cooperate with the Owner Project Manager and the Owner in this respect in order that all parties are thoroughly familiar with the progress made and to be made in order that the Vessel may be completed by the Contract Delivery Date. The scheduled delivery dates and all delivery requirements of items of equipment which can affect the critical path project schedule shall be clearly identified in such critical path project schedule. The project schedule shall include a critical path analysis and be updated monthly and submitted to Owner in conjunction with the monthly report referred to in Clause 5.7 above.

5.9 To the extent that the actual steel weight of the completed Vessel, as defined in the Twelfth Schedule hereto, differs from the estimated steel weights set out at Twelfth Schedule hereto the Contract Price shall be adjusted in accordance with the rates set out in that Schedule.

5.10 During construction of the Vessel the Builder will permit Owner's Authorized Representatives to attend tests and trials which shall be advised in writing to Owner Project Manager as follows:

(i) in the case of a test or trial where a representative of Owner Supplier must be present, Builder shall give thirty
(30) days provisional advisement, and seven (7) days definite advisement of such trial; and

(ii)in the case of a test or trial for which a formal procedure with acceptance/rejection criteria is applicable, Builder shall give seventy-two (72) hours advisement of such trial;

(iii)in the case of a day to day inspection, Builder shall give reasonable notice and shall use its best endeavours to give such advisement at least the day before such test or trial.

Such examination and inspection shall in no way diminish, affect or impair the obligations, guarantees or undertakings of the Builder in relation to the due and proper execution of the Work or the materials employed or guarantees hereinafter mentioned. The failure of an Owner's Authorized Representative to attend any test or trial, after receipt of reasonable notice as above, shall be deemed a waiver of Owner's right to attend same, however Builder shall furnish to Owner the results of such tests and trials as soon as practicable thereafter.

5.11 The Builder will also permit Owner's Authorized Representatives to have access during all working hours to the facilities of the Builder and its Subcontractors where the Works are being carried out.

5.12 If during construction and prior to dock and sea trials the Owner, its Project Manager or Authorized Representatives becomes aware of any defect or omission in the Vessel or its machinery arising out of the Works they shall as soon as practicable specify the same in writing to the Builder Project Manager and

(i) if the Builder agrees the alleged defect or omission or if under Clause 6.9 the Classification Society so decides, the Builder shall at its own cost rectify any such defect or omission; and

(ii)in any event Owner shall have the right to issue a directive instructing Builder to rectify the defect or omission. Builder shall comply with such directive but such compliance shall not prejudice either Party's rights under Clause 5.13.

5.13 Any dispute which may arise between Owner and Builder during the construction of the Vessel in relation to the workmanship, materials or conformity with the Specifications shall be resolved in accordance with Clauses 6.9 and 6.10 or if not so resolved, may be referred to arbitration in accordance with Clause 20.

5.14 The Builder shall provide, without cost to Owner, the following:

(i) a single office facility at the Builder's Yard, for fifteen (15) people to enable the Owner Project Manager and Owner's Authorized Representatives to carry out their duties. Such facility will comprise suitable office fittings including drawing tables, stools, desks, chairs, filing cabinets, toilets, lighting, heating, hot and cold running water, cleaning, the installation of telephone (comprising four (4) outside lines and three (3) internal lines) and fax services all free of charge to the Owner; and

(ii)Builder shall also supply a heated portable office on or near the Vessel, with one (1) shipyard phone, one (1) desk and four (4) chairs; and

(iii)all facilities for a further fifteen(15) people including offices, heating and light, telephones, drawing tables, stools, desks, chairs, filing cabinets, toilets, hot and cold running water facilities, as may be required for the Owner's operations personnel. Such facilities for Owner's operations personnel shall be provided six (6) months prior to the Contract Delivery Date.

5.15 Telephone rental and unit charges and the installation and use of any additional communication services or any other additional accommodation or services or equipment as may be provided by the Builder at the Owner's request shall be paid for by the Owner against the Builder's Quarterly Invoices. Builder shall invoice Owner at its cost without uplift or premium for the charges mentioned above.

5.16 The Builder shall permit Owner's operations personnel, Owner Subcontractors and Owner Suppliers, all necessary and appropriate access to the Vessel for outfitting and rig up purposes. Owner Project Manager and Builder Project Manager shall liaise and shall co-operate with each other to minimize any disruption. Owner's operations personnel, Owner Subcontractors and Owner Suppliers shall be permitted ready access to the Builder's Yard to enable them to carry out and complete their work to ensure that the Vessel is fully operational at Delivery. The Builder shall provide the necessary facilities and support, which shall be paid by Owner against Builder's Quarterly Invoices in accordance with the schedule of rates, attached at the Thirteenth Schedule hereto.

5.17 The Owner undertakes that its Project Manager and Authorized Representatives shall carry out their duties hereunder in accordance with first class commercial shipbuilding practice as applicable in Western Europe and in such a way as to avoid any unnecessary increase in building cost or delay in the Builder's construction programme.

5.18 Either party shall have the right by written Notice to request the other to replace its Project Manager or any of its Authorized Representatives if they are reasonably deemed by the objecting party to be unsuitable or unsatisfactory for the proper progress of the Vessel's construction. If the party in receipt of such Notice shall agree, the replacement of such Project Manager or Authorized Representative shall take place as soon as reasonably practicable.

CLAUSE 6 - MODIFICATIONS AND CHANGE ORDERS

6.1 Owner may, at any time prior to Delivery of the Vessel, issue a Change Order Request in writing to the Builder, instructing the Builder to modify or change the Specifications.

6.2 If the Builder considers such modification or change can be carried out without alteration to the Contract Price or Contract Delivery Date, the Builder shall, within five (5) days confirm this in writing to the Owner and proceed with such modification or change.

6.3 If the Builder considers such modification or change cannot be carried out without alteration to the Contract Price or Contract Delivery Date, the Builder shall within five (5) days or where the extent of the modification or change requires a longer period, such longer period as the parties shall agree, submit to the Owner in writing a Builder's Proposal which shall detail:

(i) the amount of any increase or decrease to the Contract Price, representing the reasonable cost or saving for the relevant modification or change; and

(ii)the extent of any reasonable extension or advancement in the Contract Delivery Date of the Vessel occasioned by such change or modification;

(iii )any other impact on the Specifications (including without limitation, the Baseline Light ShipWeight or Center of Gravity of the Vessel).

6.4 Within five (5) days, or where the extent of the modification or change justifies a different period, and in particular where the Builder deems the item or component to be modified or changed to be critical to the timely construction of the Vessel, such other period as the parties shall agree, of receipt of a Builder Proposal, Owner shall advise Builder in writing of its acceptance or rejection of the Builder's Proposal. If the Builder's Proposal is accepted, the Owner shall countersign a Project Change Order submitted by Builder.

6.5 Owner shall have, in the event that it does not accept the Builder's Proposal, the right to request such further information or documentation to substantiate the Builder's Proposal, which Builder shall promptly supply. Any dispute which may arise between Owner and Builder during the construction of the vessel in relation to any modification or change to the Specification, Contract Price or Contract Delivery Date shall be resolved in accordance with Clauses 6.9 and 6.10, or if not so resolved may be referred to arbitration in accordance with Clause 20.

6.6 In the event that the Builder wishes to propose a modification or change to the Specifications, the Builder shall advise Owner Project Manager in writing of the suggested modification or change, and shall submit a Builder's Proposal complying in all respects with Clause 6.3 above. The Owner shall have the right to reject or accept the suggested modification or change in its discretion. In the event of an acceptance, the Owner shall countersign the Project Change Order submitted by the Builder.

6.7 Paragraphs 6.2, 6.3 and 6.4 shall apply mutatis mutandis, in the event that, following the signature of this Contract, any alterations or modifications are made to the laws, rules, regulations and enactments (including any rules or regulation or alterations or modifications thereto announced but not in effect on the date of signature of this Contract and provided they are scheduled to come into effect prior to the Contract Delivery Date), to which the construction of the Vessel is required to conform, save that each party on becoming aware of such modification, deletion or addition shall forthwith advise the other in writing.

6.8 The Builder Project Manager and the Owner Project Manager, respectively, shall have authority to bind the Builder and Owner, respectively, in relation to this Clause.

6.9 During the performance of the Works, and prior to the Delivery of the Vessel, if the value of any dispute in respect of any matter referred to in Clause 5.12, 5.13, 6.5 or 13.3 is not more than United States Dollars fifty thousand (US$50,000) (or equivalent), it shall be referred to the Senior Representative of the Classification Society on site, acting as an expert and not as an arbitrator, whose decision shall be final and binding on the parties. If the value of the dispute exceeds United States Dollars fifty thousand (US$50,000) (or equivalent), the parties may by mutual agreement refer the dispute to the Senior Representative of the Classification Society on site acting as an expert and not as an arbitrator whose decision, in the event of such referral, shall be final and binding on the parties.

With respect to any dispute of any matter referred to in Clause 6.5 only which is not more than United States Dollars fifty thousand (US$50,000) (or equivalent) if the dispute mechanism outlined hereinabove should be deemed unsatisfactory by either Party, the Parties will endeavour to establish a mutually-agreed dispute resolution mechanism for such disputes. Failing the establishment of the Parties of a mutually-agreed dispute resolution mechanism for such Clause 6.5 disputes, any and all such disputes may be referred by either Party to arbitration in accordance with the terms and conditions of Clause 20 hereof.

6.10 Owner and Builder shall use all reasonable efforts to agree the necessary alteration to the Contract Delivery Date, Contract Price or Specifications arising as a consequence of the proposed modification or change but, if no agreement can be reached, either party may refer the dispute to an Appeals Board. Such Appeals Board shall consist of one representative of each party who is not part of the day to day activities involved in the performance of the Works. If the Appeal's Board is unable to reach an agreed decision either party shall be entitled to initiate arbitration procedures under Clause 20.

6.11 Notwithstanding that Builder Proposal has not been issued or that a Project Change Order has not been countersigned by Owner in relation thereto, Owner shall at any time have the right to issue a directive instructing Builder to proceed with the change to the Specifications in question. Builder shall comply with such directive, but such compliance shall not prejudice either party's rights to refer the dispute to the Senior Representative of the Classification Society on site in accordance with Clause 6.9, or to the Appeals Board as set forth in Clause 6.10 or to initiate arbitration proceedings as set forth in Clause 20 hereunder.

6.12 All Project Change Orders and/or the value for any directive issued by Owner hereunder this Clause 6 shall be denominated in US Dollars. The US Dollar figure shall be based on the official exchange rate for British Pounds Sterling in effect at the time the Project Change Order is signed by both Parties or the Owner directive is issued.

CLAUSE 7 - OWNER FURNISHED EQUIPMENT

7.1 Owner shall deliver to Builder's Yard all items of Owner Furnished Equipment in accordance with the delivery date for such item specified in the initial Primavera critical path project schedule (as amended from time to time by Permissible Delay), (the "OFE Scheduled Delivery Date").

7.2 All items of Owner Furnished Equipment shall be at Builder's risk from arrival at the dock or gates of the Builder's Yard.

7.3 NOT USED

7.4 From time of arrival at Builder's Yard, the Builder shall, at its own cost, transport and store all items of Owner Furnished Equipment in secure and appropriate storage in accordance with Owner Supplier's manual and instructions (and/or Owner's instructions) in the minimum number of separate warehouse(s) or area(s) practicable, taking care that the same shall not be damaged, and shall clearly mark all items of Owner Furnished Equipment as such and as the property of the Owner.

7.5 On arrival of each item of Owner Furnished Equipment at the Builder's Yard, the Builder shall inspect the same to ensure that the items contain no obvious defects or signs of damage, and shall measure and review the same to ensure that they are in accordance with the relevant Owner Supplier's specified dimensions and interfaces. Builder shall promptly advise Owner Project Manager in writing of any items which are damaged or do not appear to be in accordance with such specified dimensions or interfaces.

7.6 Provided that Owner has delivered the item of Owner Furnished Equipment on or before the OFE Scheduled Delivery Date, where the value of such an item exceeds United States Dollars five hundred thousand (US$ 500,000) and unless so instructed by Owner, where such item is not installed within sixty (60) days following the Scheduled Delivery Date, Builder shall pay to Owner interest at the rate of one half per cent (0.5%) of the price of such item pro rata per month calculated daily from and including the sixty-first (61st) day and paid monthly. Owner shall be entitled to set off all sums due to it pursuant to this Clause against the installment of the Contract Price payable pursuant to Clause 8.3.5.

CLAUSE 8 - PRICE AND TERMS OF PAYMENT

8.1 The total cost for Drillship No 1740 shall be United States Dollars Two Hundred and Sixty Million, Seven Hundred Fifty Nine Thousand, Two Hundred Thirty Four (US$260,759,234) comprised as follows:

A United States Dollars One Hundred and Fifty Three Million, Eight Hundred Fifty Nine Thousand, Two Hundred Thirty Four (US$153,859,234) (the "Contract Price") for detail design, procurement (exclusive of OFE, see below), construction, installation of all equipment, commissioning and setting to work of the total drillship, all according to this Contract.

B United States Dollars One Hundred Six Million, Two Hundred Nine Thousand (US$106,209,000) for OFE. Unless otherwise mutually agreed the Owner shall be responsible for all payments due in respect of OFE to Owner Suppliers and Owner Subcontractors.

8.2 Builder shall provide the Parent Company Guarantee and the Letter of Credit (attached in the forms of the Third and Fourth Schedules, respectively) to Owner at the date of signature of this Contract.

8.3 Provided that Owner has received the Parent Company Guarantee and Letter of Credit, payment of the Contract Price shall be made by installments from or on behalf of the Owner to the Builder as follows:

8.3.1   Twenty percent (20%) of the Contract Price on signature of
        this Contract within seven (7) days of Owner's receipt of
        Builder's invoice;

8.3.2   Twenty percent (20%) of the Contract Price at the start of
        preparation, intended to be the continuous cutting of steel but
        not before July 2, 1998;

8.3.3   Twenty percent (20%) of the Contract Price on keel laying of a
        minimum of five hundred (500) tons of steel, but not before
        January 1, 1999;

8.3.4   Twenty percent (20%) of the Contract Price at floatation of
        the Vessel in a condition where it can be floated without
        requiring new docking, but not before August 15, 1999; and

8.3.5   Twenty percent (20%) of the Contract Price, plus or minus any
        increases or decreases occasioned in accordance with the
        provisions of this Contract or any Amendment thereof which
        have not previously been accounted for by adjustment of this
        or any earlier installments, at Delivery of the Vessel,
        estimated to be February 10, 2000.

8.4 The Builder shall by not less than seven (7) days advance Notice in writing advise the Owner of the date upon which any of the installments referred to in Clauses 8.3.2 to 8.3.5 hereof shall become payable.

8.5 Payment of each of the installments at 8.3.2 to 8.3.4 above shall be subject to the receipt by the Owner of

(i) a Stage Certificate (in the form set out in the First Schedule hereto) signed by the Builder and countersigned by the Owner; and

(ii) following such counter-signature, the Builder's invoice in the amount of the relevant installment.

8.6 Notwithstanding Clause 8.1, if the aggregate of any increases in the Contract Price for the Vessel resulting from the operation of Clause 6 or any Amendment to this Contract amounts to an increase of more than two percent (2%) in the Contract Price at any time during the construction of the Vessel (such increase over and above two (2%) percent being called the "Excess"), the following shall apply:

(i) if there shall be an Excess on or before payment of the installment referred to in Clause 8.3.2, forty (40%) per cent of the Excess shall be paid together with such installment and sixty (60%) per cent shall be paid in equal proportions with the installments referred to in Clauses 8.3.3. to 8.3.5;

(ii) if there shall be an Excess after payment of the installment referred to in Clause 8.3.2, but on or before payment of the installment referred to in Clause 8.3.3, sixty (60%) per cent of the Excess shall be paid together with such installment and forty (40%) per cent shall be paid in equal proportions with the installments referred to in Clauses 8.3.4. to 8.3.5; and

(iii) if there shall be an Excess after payment of the installment referred to in Clause 8.3.3, but on or before payment of the installment referred to in Clause 8.3.4, eighty (80%) per cent of the Excess shall be paid together with such installment and twenty (20%) per cent shall be paid with the installment referred to in Clause 8.3.5.

For the avoidance of doubt, any Excess occurring following the payment of the installment referred to in Clause 8.3.4 and/or any increases that, in aggregate, do not exceed two per cent (2%) shall be paid together with the installment referred to in Clause 8.3.5.

8.7 The amount of each of the installments referred to in Clause 8.3 hereof shall be paid in US Dollars free of bank charges together with any VAT and other tax or duty then payable by the Owner direct to the Builder's Account No: by banker's draft or telegraphic transfer within seven
(7) days following receipt by Owner of the Builder's invoice in accordance with Clause 8.5, and, if not so paid shall (without prejudice to any other rights of the Builder in respect of non payment) bear interest from the due date until payment at the rate of two percent (2%) over one month LIBOR from time to time for the particular currency.

8.8 Any amounts for bonuses or liquidated damages under Clause 12 shall be calculated and determined on or before Delivery of the Vessel and shall be payable on the Delivery Date, and Owner shall be entitled to net-off such amount(s) against the installment referred to in Clause 8.3.5 above.

8.9 If the Owner fails to take delivery upon a Valid Tender of Delivery by the Builder, the Owner shall nevertheless make full and final payment on the date of such valid tender of Delivery and shall thereafter reimburse the Builder for all costs and expenses which the Builder reasonably incurs by reason of the Owner's failure to take Delivery.

8.10 Other sums due to Builder by Owner hereunder this Contract, except those payable for bonus or by Amendment, shall be the subject of Builder's Quarterly Invoices. For each quarter ending after the date of the signing of this Contract Builder, shall prepare and submit to Owner an invoice covering sums for and including, but not limited to, additional services which are requested by Owner, but are not provided for in any Project Change Order, and facilities usage for Owner's Subcontractors and Owner's Suppliers provided for in Clause 5.16, above. Upon its receipt of Builder's Quarterly Invoices, Owner shall pay the undisputed portion within thirty (30) days. Undisputed amounts of Builder's Quarterly Invoices beyond the thirty (30) day period shall bear interest at the rate of two per cent (2%) over one-month LIBOR from time to time for the particular currency.

CLAUSE 9 - PROPERTY AND JURISDICTION

9.1 Upon payment of the sum due under Clause 8.3.1 the Vessel, as it is constructed, and all machinery, equipment and materials whether wholly or partially finished or unfinished from time to time appropriated or intended for it in the Builder's Yard or elsewhere shall become and remain the absolute property of the Owner (but at the risk of the Builder) notwithstanding that any such machinery, equipment and materials shall subsequently be worked upon by the Builder or its Subcontractors or otherwise processed or incorporated into the Vessel and shall not be within the ownership or disposition of the Builder, but the Builder shall at all times have a lien thereon for any part of the Contract Price which is unpaid and for any sums due from time to time in accordance with this Contract provided that such lien shall not continue or be enforceable by or on behalf of the Builder in any of the circumstances described in Clauses 15.1 or 15.2.

9.2 Immediately upon machinery, equipment or material becoming the property of the Owner under the provisions of Clause 9.1 the Builder shall place or cause to be placed thereon the yard number of the Vessel and shall place such number at the bow of the Vessel and shall take all reasonable steps to cause all machinery, equipment and materials for the Vessel to be numbered as aforesaid by itself or its Subcontractors.

9.3 Any items, other than Owner Furnished Equipment (which shall be and remain the property of the Owner), not used in the construction of the Vessel shall after Delivery revert to and become the property of the Builder.

9.4 Without prejudice to the rights of Owner as provided in Clause 15, any engines, boilers, machinery or materials which are part of the Vessel or which are appropriated thereto shall not after delivery to the premises of the Builder be removed outside the Builder's Yard except for the purposes of effecting repairs thereto or obtaining replacements therefor.

9.5 Without prejudice to the rights of Owner as provided in Clause 15, the Vessel shall not be assembled or floated other than at the Builder's Yard without the prior approval of the Owner.

CLAUSE 10 - INSURANCE

10.1 Owner and Builder respectively shall each effect the insurances listed at the Sixteenth Schedule hereto, on the terms and conditions therein set out and shall, within fourteen (14) days of signature of this Contract supply each other with copies of all such insurances effected.

10.2 Owner's Builder's risk insurance referred to in Schedule 16 contains a deductible of United States Dollars two hundred thousand (US$ 200,000). Builder shall therefore, in addition to the insurances listed at Schedule 16, procure insurance from the date of signature of this Contract in the joint names of Owner and Builder, in the amount of United States Dollars two hundred thousand (US$200,000) in respect of each and every claim, with a deductible of United States Dollars fifty thousand (US$50,000).

10.3 In the event that the Vessel should suffer partial damage between the date of signature of this Contract and the Delivery Date, Owner shall be liable to pay to Builder the first United States Dollars fifty thousand (US$50,000) payable under each and every claim if the event which has given rise to the claim occurs as a result of the sole fault of Owner.

10.4 In the event of an actual, constructive, compromised or arranged total loss of the Vessel prior to the Delivery of the Vessel, either the Owner or the Builder shall be entitled to terminate this Contract by serving upon the Builder or the Owner as the case may be, written Notice of termination, such Notice to be dispatched within thirty days of the date upon which the insurers accept that the Vessel has become an actual, constructive, compromised or arranged total loss.

10.5 In the event of any loss or damage being sustained by the Vessel prior to Delivery which does not constitute an actual, constructive, compromised or arranged total loss the Builder shall repair and make good that loss or damage (hereinafter referred to as a "partial loss") to the approval of the Classification Society and reasonable approval of the Owner so that the Vessel in all respects meets the requirements of this Contract at the Specifications.

10.6 The proceeds of any claim shall be dealt with as follows:

10.6.1 in the case of a partial loss, when the insurers are satisfied that the Builder has made good the loss or damage the occurrence of which had given rise to the claim or when the insurers are satisfied that the Builder has made sufficient progress in repairing or making good the loss or damage the occurrence of which had given rise to the claim, then the insurers shall pay to the Builder the whole proceeds where the repairs are complete or such part of the proceeds as the insurers may decide as a payment on account of the partial repair.

10.6.2 in the event of an actual, constructive, compromised or arranged total loss, if refund has not been made pursuant to Clause 15, any amounts received and retained by the Owner out of the insurance proceeds shall be set off against any liability of Builder to Owner pursuant to Clause 15 hereof, and, to the extent such refund has been made, any proceeds shall be paid to Builder.

CLAUSE 11 - TRIALS AND PERFORMANCE

11.1 Prior to the Vessel's delivery to, and acceptance by the Owner, the Vessel shall undergo sea trials during a single trip, at a place appointed by the Builder and in accordance with the provisions of Specifications. The Vessel shall also undergo dock trials in accordance with the provisions of the Specifications.

11.2 The Owner shall receive from the Builder at least thirty
(30) days provisional Notice and seven (7) days definite Notice of the time and place of the sea trials of the Vessel.

11.3 The Authorized Representatives of the Owner who will attend and witness the performance of the Vessel during such sea trials shall be present on the date specified in such notice. Failure of the Owner or any of the Authorized Representatives to be present after due notice of not less than seven (7) days shall render the Owner liable for the costs of the abortive sea trial arrangements and shall constitute a Permissible Delay extending the Contract Delivery Date of the Vessel by the period of delay caused by such failure to be present which extension shall be effected by a Project Change Order in accordance with Clause 6.

11.4 In the event of the weather on the date specified for the sea trials being in the reasonable opinion of either party unfavorable, then the same shall take place on the first available day thereafter that weather conditions permit. If during the sea trials such changes in weather shall occur as would, in the opinion of either party , have precluded any commencement of the sea trials had the change in weather occurred before the sea trials had started then, in such event, either party shall have the option to discontinue the sea trials and require that the date for the sea trials be postponed until the first favorable day next following unless the Owner shall agree to accept the Vessel on the basis of the sea trials made prior to such sudden change in weather condition. Any delay in sea trials caused by adverse weather conditions shall be a Force Majeure delay within the terms of Clause 13.

11.5 Prior to dock and sea trials the Owner shall select the fuel oil and main engine lubricating oils in compliance with the Specifications and machinery manufacturer's recommendations, whereupon the Builder shall provide the Vessel with the required quantity of fuel oil, lubricating oils, grease and other stores necessary for the conduct of such dock and sea trials. Upon Delivery of the Vessel, the Owner shall pay to the Builder a sum equal to the cost of fuel oil and such lubricating oils, greases and other stores used during such trials and any such fuel oil, lubricating oils, greases and other stores on board the Vessel at Delivery.

11.6 If the Vessel fails any of the dock or sea trials for which the Builder is responsible, the Builder shall rectify any defects in respect of the Works which caused such failure and shall conduct additional trials until the Vessel meets or exceeds the applicable testing criteria.

11.7 No later than two (2) weeks prior to the anticipated Delivery Date the Owner and the Builder shall prepare a final punch list of defects. If such list cannot be agreed, any dispute shall be resolved in accordance with Clauses 6.9 and 6.10 or, if not so resolved, may be referred to arbitration in accordance with Clause 20.

This sub-clause is without prejudice to Builder's obligation to deliver the Vessel in accordance with the Contract and the Specifications.

CLAUSE 12 - DELIVERY

12.1 The Vessel shall be delivered to the Owner by the Builder at the Builder's Yard on or before the Contract Delivery Date.

12.2 Provided that:

(i) the Vessel is in compliance with the requirements of the Contract and the Specifications; and

(ii) all the Certificates referred to below are tendered

then Delivery of the Vessel shall be forthwith effected by the concurrent signature by the Owner and the Builder of a Certificate of Delivery acknowledging delivery of the Vessel by the Builder and acceptance thereof by the Owner.

Upon Delivery of the Vessel the Builder shall hand to the Owner, the Builder's Certificate, the Certificate of the Classification Society, all other Certificates required to enable the Owner to operate the Vessel and all other certificates, provisional certificates and protocols. If the Builder is unable to provide a final Classification Society Certificate at Delivery he shall be entitled to provide an interim certificate, provided that the Builder shall furnish Owner with the final certificate as promptly as possible thereafter.

If the relevant certificates, provisional certificates and/or protocols are not available due to delay in the provision by Owner, Owner Subcontractors or Owner Suppliers of the operations manuals including stability book, necessary to obtain the same, provided such delay was not occasioned by failure of Builder or its Subcontractors or Suppliers, to provide Owner, in a timely manner, with the necessary information and data to compile such operations manuals, Builder shall nevertheless be deemed, provided it has complied in all other respects with this Clause 12.2, to have achieved a Valid Tender of Delivery.

12.3 The Owner shall take possession of the Vessel immediately upon Delivery and, except as otherwise mutually agreed in writing in advance, remove the Vessel within seven (7) days of Delivery from the Builder's Yard. If Owner fails to remove the Vessel within seven (7) days, Owner shall reimburse Builder for any actual and direct costs incurred by Builder as a result of such failure to remove after seven (7) days.

12.4 Upon Delivery of the Vessel, the following shall occur:

12.4.1 If Delivery occurs on or before fifteen (15) days prior to the Contract Delivery Date, Owner shall pay to Builder the sum of United States Dollars Three Million (USD $3,000,000) as a bonus for early delivery;

12.4.2 If Delivery occurs between the period of fourteen (14) days prior to Contract Delivery Date and fifteen (15) days after Contract Delivery Date, the bonus referred to in Section

12.5.1, above, shall be reduced by the sum of United States Dollars One Hundred Thousand (USD $100,000) per day such that no bonus may be earned by the Builder after the expiry of such thirty (30) days.

12.4.3 There shall be a grace period of fifteen (15) days from the sixteenth (16th) through the thirtieth (30th) day after the Contract Delivery Date where no bonus may be earned by the Builder and no liquidated damages shall become due and payable to the Owner.

12.4.4 If Delivery occurs on or after the thirty-first day after the Contract Delivery Date, Builder shall pay to the Owner as liquidated damages, but not as a penalty, the sum of United States Dollars Fifty Thousand (USD $50,000) per day for a period not to exceed fifteen (15) days.

12.4.5 If Delivery occurs on or after the forty-sixth day after the Contract Delivery Date, Builder shall pay to the Owner as liquidated damages, but not as a penalty, the sum of United States Dollars Seventy Five Thousand (USD $75,000) per day for a period not to exceed fifteen (15) days.

12.4.6 If Delivery occurs on or after the sixty-first (61st) day after the Contract Delivery Date, Builder shall pay to Owner as liquidated damages, but not as a penalty, the sum of United States Dollars One Hundred Thousand (USD $100,000) per day for a period not to exceed thirty (30) days.

12.4.7 If Delivery has not occurred within the period of ninety
(90) days after the Contract Delivery Date, no further or other liquidated damages shall be payable by Builder and Builder's liability to pay liquidated damages under this Clause 12.5 shall be limited to the aggregate amount of United States Dollars, Four Million, Eight Hundred Seventy Five Hundred Thousand (USD $4,875,000), payable under clauses 12.4.4, 12.4.5, and 12.4.6, respectively, the liquidated damages payable thereunder being, for the avoidance of doubt, cumulative. In this event, Owner shall be entitled to exercise the rights and remedies available to it under Clause 15.

12.5 If any items on the Vessel are incomplete when the Vessel is otherwise ready for Delivery and the Owner and the Builder agree that such items:

(i) do not materially affect the operation of the Vessel;

(ii) are not likely to cause damage or deterioration; and

(iii) do not constitute such a number that whilst not individually giving rise to such material effect, nor likely to cause damage or deterioration, are in aggregate material to the condition of the Vessel;

then the Owner will take Delivery of the Vessel. Owner shall in any event have such items completed in a manner to be mutually agreed upon between the Builder and the Owner. Dispatch to the Vessel by sea freight, or if practicable by air freight in the case of emergency, of items completed and/or received at the Builder's Yard subsequent to departure of the Vessel therefrom shall be at the expense of the Builder excepting items of Owner Furnished Equipment the cost of dispatch of which shall be at the expense of the Owner.

CLAUSE 13 - FORCE MAJEURE

13.1 A Force Majeure occurrence shall mean any of the following occurrences beyond the control and without the fault or negligence of the party affected and which by the exercise of reasonable diligence the said party is unable to prevent or provide against and which delays the construction of the Vessel:

13.1.1 Act of God, fire, inclement weather of abnormal severity and/or duration;

13.1.2 war (whether declared or not), riots, insurrections or malicious damage;

13.1.3 damage to Vessel which constitutes a partial loss and is repaired from the proceeds of insurance under the provisions of Clauses 10.5 and 10.6.1;

13.1.4 requisition order, control, direction, intervention or requirement by or of any Government or body acting under the authority of any Government;

13.1.5 cessation, curtailment or interruption of fuel, power, gas, water or any other essential services; and

13.1.6 except where due to the fault or negligence of the Builder or its Subcontractors or Suppliers, any delay in or short delivery of, or defects in materials machinery services or equipment for the Vessel (provided that the Builder demonstrates that they are critical to construction of the Vessel at the time of delay and that they were ordered in due time);

PROVIDED HOWEVER THAT the Builder shall not be entitled to rely upon any of the causes of delay listed in Clause 13.1 unless the Builder has taken all reasonable steps to mitigate their effect upon the construction of the Vessel.

13.2 The Builder shall, within two (2) days of becoming aware that the occurrence of any event of the nature specified above is likely to cause delay, Notify the Owner in writing thereof. The Builder shall also advise the Owner in writing after any such occurrence of which Notice was given in accordance with the provisions of this Clause ceases within two (2) days of such cessation and shall then provide the Owner with the Builder's best estimate of the likely period of delay resulting therefrom. Failure of the Builder to provide due Notice as provided for in this Contract shall be deemed a waiver of Builder's right to claim Force Majeure.

13.3 A delay to the Contract Delivery Date caused by Force Majeure shall constitute Permissible Delay and issues as to (i) whether an event constitutes Force Majeure and (ii) the extent of any delay due to Force Majeure, shall be documented, agreed and/or resolved in accordance with Clause 6. The revised Contract Delivery Date resulting from Permissible Delays due to Force Majeure causes shall be established by extending the Contract Delivery Date by one day for each day of Force Majeure calculated after making full provision for concurrent delays and mitigation by the Builder.

13.4 In the event of a period of Force Majeure lasting more than forty-five (45) consecutive days, or period or periods thereof of more than sixty (60) days in the aggregate, the Owner shall be entitled to exercise the rights afforded to it under Clause 15.2.

CLAUSE 14 - DEFAULT OF THE OWNER

14.1 The Owner shall be in default and this Contract may be cancelled by the Builder by Notice in writing to the Owner if:

14.1.1 the Owner fails to pay any installment of the Contract Price within seven (7) days of its becoming due and payable in accordance with Clause 8; or

14.1.2 the Owner without due cause fails to pay all sums due on delivery within three days of a Valid Tender of Delivery.

Notice of cancellation by the Builder under this Clause shall be given by facsimile and confirmed in writing and shall (unless the Owner shall have then remedied the default) be effective fourteen (14) days after receipt thereof by the Owner whereupon the Builder shall be entitled to exercise the rights provided for in Clauses 14.2 and 14.3 and in which event title to the Vessel shall forthwith revest in the Builder, provided that the Builder shall not be entitled to exercise such rights in respect of any amount in dispute, where that dispute has been referred to the Senior Representative of the Classification Society, to the Appeals Board, or to arbitration or Court proceedings.

14.2 The Builder shall be entitled to cancel this Contract forthwith by notice given by facsimile and confirmed in writing upon an order being made or an effective resolution being passed for the winding up of the Owner (otherwise than a members voluntary winding up for the purpose of amalgamation or reconstruction) or a receiver or administrator being appointed of the whole or any part of the undertaking of the Owner.

14.3 If the Builder shall cancel this Contract under Clause 14.1 or 14.2 the Builder shall be entitled (in addition to interest as provided in Clause 8.7) to the proved loss resulting from the Owner's default. The Builder shall sell the Vessel by public auction or tender or private sale at its discretion and shall apply the proceeds of sale (after deducting the expenses of sale including the cost of completing the Vessel for sale) together with any installments of the Contract Price paid under Clause 8 as follows:

14.3.1  in satisfaction of the balance due to the Builder under
        this Contract.

14.3.2  the balance, if any, shall belong to the Owner.

14.4 If the proceeds of the sale of the Vessel when added to the installments received prior to cancellation are less than the aggregate of the Contract Price and the expenses of resale, the deficiency shall be paid by Owner to Builder and if not so paid shall be recoverable by action against Owner.

14.5 However, notwithstanding any of the foregoing, the Builder shall not be entitled to exercise its rights under this Clause if the Owner has already commenced the exercise of its rights pursuant to Clause 15.

15.1.1  the Vessel becomes a total loss in accordance with Clause
        10.4; or

15.1.2  the Vessel is requisitioned by the British Government; or

15.1.3  the Builder without just cause refuses to proceed with the
        construction of the Vessel; or

15.1.4  an order is made or an effective resolution is passed for
        the winding up of the Builder (otherwise than a members'
        voluntary winding up for the purpose of amalgamation or
        reconstruction) or a receiver or administrator is appointed of
        the whole or any part of the undertaking of the Builder; or

15.1.5  If at any time during this Contract, following receipt of
        request to do so from Owner, the Builder, utilising the Primavera
        level 3 critical path project schedule, is unable to demonstrate
        to the Owner's satisfaction that it has sufficient additional
        capacity, including sub-contracted labor, and/or materials,
        and/or has developed a recovery plan that would enable
        him to deliver the Vessel within ninety (90) days following the
        Contract Delivery Date and that the Builder is implementing such
        plan and/or utilizing such additional capacity and exercising
        all necessary due diligence to achieve Delivery within such
        period.

15.2 In circumstances of Builder's default as described in Clause 15.1 or in the circumstances set out in Clauses 12.4.6 or 13.4, the Owner, without prejudice to its rights under the Parent Company Guarantee, shall be entitled by Notice to the Builder EITHER:

(i) to cancel this Contract in which event Builder shall forthwith refund to the Owner (a) the aggregate amount of all sums paid pursuant to Clause 8, (b) any amount reasonably and properly paid by Owner to any Owner Subcontractors and (c) any and all amounts reasonably and properly paid by Owner for Owner Furnished Equipment which has been incorporated in the Vessel, all together with interest thereon at the rate of two (2%) percent over one-month LIBOR from time to time for the particular currency, calculated in each case from the date of payment by Owner to the date such refund is made.

However, the proceeds of any insurance claim previously received by Owner shall be deducted from the amount to be refunded under this sub-clause (i). Upon such refund as aforesaid being made in full, all the obligations, duties and liabilities of each of the parties hereto to the other under this Contract shall forthwith be completely discharged and title to the Vessel shall be vested in Builder; OR

(ii) to take possession of the Vessel in its unfinished state and complete the Vessel in accordance with this Contract and the Specifications either at the Builder's Yard or elsewhere, at Owner's sole option. In the event that Owner decides to complete the Vessel at Builder's Yard,Owner and its agents or Owner Subcontractors shall be entitled to use Builder's Yard, buildings, plant, machinery, tools and implements and all materials appropriated to or ordered for the Vessel and shall not be liable for breakage or damage thereto. In this case, in the event that the cost of completing the Vessel is more than the amount of the outstanding installments, Builder shall pay to Owner on demand an amount equal to the amount of such excess from the time of demand with interest thereon at two (2 % per cent over one month LIBOR from time to time for the particular currency calculated from the date of demand until the date of refund.

15.3 In the circumstances set out in Clause 15.2:

(i) Owner shall be entitled, in the event that it elects to cancel this Contract pursuant to Clause 15.2(i) above, and no refund is made in full by Builder within five (5) days of receipt of Notice of such cancellation, to make demand under the Letter of Credit and/or the Parent Company Guarantee, in Owner's sole option; and

(ii) Owner shall be entitled, in the event that it elects to take possession pursuant to Clause 15.2(ii), then or at any time thereafter to make demand under the Letter of Credit for the full amount thereof and to utilise the same for the purposes of completing the Vessel (in accordance with the terms of this Contract and the Specifications) and shall account to Builder for any unutilised amounts following such completion, and/or to make demand under the Parent Company Guarantee and to utilise all sums from time to time received thereunder for the purposes of completing the Vessel (in accordance with the terms of this Contract and the Specifications).

15.4 Subject always to the provisions of Clause 15.2(ii), 15.3 and 15.5, in the event of the cancellation, rescission or termination of this Contract by the Owner, the property in the Vessel and all its materials, machinery and equipment shall, following receipt by the Owner of the full amount of all installments paid up to the date of such cancellation, rescission or termination of the Contract and all other amounts payable by the Builder to the Owner hereunder, be transferred to and vest in the Builder.

15.5 In the event that the Owner elects to take possession of the Vessel pursuant to Clause 15.2(ii), the Builder shall assign (or procure the assignment of) the Subcontracts, Supplier contracts and/or any rights arising thereunder to the Owner and shall do and execute such assurances, acts and documentation required or desirable for vesting the Subcontracts and/or any rights arising thereunder in the Owner.

15.6 All items of Owner's Furnished Equipment not incorporated in the Vessel shall be made available to Owner.

15.7 In the event that Owner elects to take possession of the Vessel pursuant to Clause 15.2(ii), any sums due from Builder to Owner by way of liquidated damages already incurred at the date of Notice shall be set off against any remaining installments due from Owner to Builder.

15.8 Notice of cancellation by the Owner under Clause 15.2 as a result of Builder's default with 15.1.2, 15.1.3, or 15.1.5 shall be given by facsimile confirmed in writing and shall be effective fourteen (14) days after receipt by the Builder unless the Builder shall have demonstrated that it can speedily remedy the default, and is exercising the necessary due diligence to do so. Any other Notice of cancellation under 15.2 shall be effective forthwith upon service.

15.9 TERMINATION BY OWNER WITHOUT CAUSE. Notwithstanding any other provision herein contained Owner may, at its sole discretion and without cause, terminate the Contract at any time by giving written notice to Builder.

15.9.1 If Owner should elect to terminate the Contract pursuant to Clause 15.9:

15.9.1.1 Builder, unless the notice directs otherwise, shall cease performance of the work and shall perform only such work as is necessary in order to preserve and protect the permanent works, and shall, if at Builder's Yard, store the same at Owner's risk and expense, until such time as it is removed from Builder's Yard.

15.9.1.2 The Builder shall deliver and transfer to the Owner in accordance with the Owner's instructions all materials, supplies and other items for which Builder is entitled to receive reimbursement according to the Contract, together with all plans, drawings, specifications and other documents which Owner is entitled to according to the Contract.

15.9.1.3 Builder, shall, if requested by Owner, undertake all reasonable endeavours to cancel any or all of its outstanding orders or Subcontracts upon such terms as may be approved by the Owner. When such terms are not approved, or if Owner shall so request, Builder shall assign such orders or Subcontracts to Owner and take such actions as may be necessary in order to secure for Owner the rights of Builder therein.

15.9.2 In the event of termination by Owner in accordance with this Clause 15.9, Owner shall pay to Builder the following amounts in full and final settlement of all amounts due under or in any way arising from the amounts due under or in any way arising from the Contract, less all amounts previously paid:

        15.9.2.1  an amount, by way of termination fee, which is six
                  percent (6%) of the amounts in Clauses 15.9.2.2 and
                  15.9.2.3, respectively and below, but is not
                  less than United States Dollars Five Million
                  (US $5,000,000);

        15.9.2.2  an amount for the cost and expenses incurred by the
                  Builder for materials and equipment being in conformity
                  with the Contract and which are ordered for
                  incorporation into the Work, together with all
                  direct costs for work performed up to the
                  date of the notice of termination hereunder,
                  inclusive of overhead recovery;

        15.9.2.3  an amount for all other documented costs which the
                  Builder is legally obliged to pay Subcontractors or
                  Suppliers, or in respect of liabilities or
                  costs which Builder has undertaken in good faith in
                  connection with the work; and

        15.9.2.4  an amount for all costs, charges and expenses directly
                  attributable to the orderly close out of the performance
                  of the Work, such as the cost incurred for personnel
                  in order to satisfy the requirements of law and labour
                  agreements.


15.9.3  The Owner shall, within fourteen (14) days of notice of
        termination, at its cost and expense, remove the permanent
        works or any part thereof from the Builder's Yard, but in no case
        any longer than thirty (30) days.  If any of Owner's property
        remains in Builder's Yard longer than thirty (30) days from the
        notice of termination under this Clause 15.9, and Owner and
        Builder are unable to mutually agree on the disposition of
        Owner's property, then Builder may remove, at Owner's expense,
        all remaining Owner's property which obstructs Builder's
        activities within Builder's Yard.

CLAUSE 16 - GUARANTEE

16.1 The Builder, for the whole of the Guarantee Period, guarantees the Works against all defects which are due to defective design (to the extent that Builder has responsibility for such design pursuant to Clause 3), defective material, poor workmanship and/or the Works not having been performed in accordance with this Contract. The Guarantee Period shall be for a period of twelve (12) months from Delivery of the Vessel provided alwaysthat, in respect of any repairs or replacements or such additional works as are referred to in Clause 16.6, the Guarantee Period shall be twelve (12) months after completion of such repairs, replacements and additional works. The Guarantee Period shall not in any event exceed twenty four (24) months in total from Delivery.

16.2 The Owner shall give Notice to the Builder confirmed in writing within fourteen (14) days after discovery of any defect by any supervisory personnel on board the Vessel for which a claim is made under this Clause 16. The Owner's written Notice shall include full details as to the nature of the defect and the extent of the damage caused thereby. The Builder shall be freed from all liability under this Clause 16 for any defects discovered prior to the expiry of the Guarantee Period, unless Notice thereof is given by the Owner not later than fourteen (14) days after the expiry of the Guarantee Period. The Builder shall have no liability in respect of defects discovered after the expiry of the Guarantee Period.

16.3 Without prejudice to Clause 16.6, upon receipt of Notice under Clause 16.2 the Builder shall be entitled to arrange for inspection of the Vessel on its own behalf. The Owner shall make available to the representatives of the Builder at such inspection the Vessel's logbooks and any other relevant documents and information and shall supply such certified copies of such log books, documents and information as may reasonably be requested by the Builder.

16.4 If Builder needs to travel to the Vessel in connection with Clause 16, Owner shall provide transportation between shore base and Vessel for Builder's personnel and equipment, to the extent that Owner is able to obtain same without cost to Owner.

16.5 The Builder shall have no liability for errors, omissions or defects in the Works arising from inaccuracy of data provided by the Owner, or from a third party acting on behalf of the Owner for the purposes of the Works, unless the Builder shall have failed to use all reasonable endeavours to discover detectable inaccuracies of said data.

16.6 The Builder shall remedy at its own expense any defect arising during the Guarantee Period against which the Works are guaranteed under this Contract and which is Notified by Owner to Builder in accordance with Clause 16.2, by making all necessary repairs and replacements and by performing such additional works as may be required to remedy such defect (including without prejudice to the foregoing generality the provision of such personnel as the parties may agree). Further, if the Owner deems that it would be inconvenient to bring the Vessel back to the Builder's Yard, Owner shall have the right to complete repair work at other shipyards and Builder shall pay to Owner the actual cost to Owner of the repairs. Builder shall have the right to be consulted prior to the commencement of such repair work by another party, as to its extent and cost, provided that Owner shall be entitled following notification and consultation to effect such repairs by such other party whether or not the same are agreed by Builder. If the repairs are carried out by a third party, the Builder shall pay the cost of such repairs, but Builder shall not be liable for the efficacy of the same.

16.7 The Builder shall obtain guarantees of not less than twelve (12) months from Delivery orsuch longer period as Builder is able to obtain at no extra cost from its Subcontractors or Suppliers.

16.8 The Builder shall hold the benefit of all warranties, guarantees, liquidated damages clauses and other rights and remedies under contracts entered into with Subcontractors and Suppliers in trust for and in accordance with the Owner's instructions, and at the Owner's cost. At the end of the Guarantee Period the Builder shall assign to the Owner the benefit of any remaining Subcontractors' or Suppliers' guarantee(s), or warranties.

16.9 The guarantees and remedies contained in this Clause 16 concerning the defects which are covered by this Clause 16 are the sole and exclusive guarantees and remedies in favor of the Owner concerning such matters. All guarantees and remedies concerning such matters which would otherwise be implied by law (whether under the Sale of Goods Act or otherwise) and all remedies in tort, (including but not limited to negligence), are expressly excluded. For the avoidance of doubt, this Clause has no application to warranties concerning title or intellectual property rights.

16.10 The Builder warrants that the Works will be delivered to the Owner free and clear of any liens, charges, claims, mortgages, or other encumbrances of whatever nature upon the Owner's title thereto, and in particular, that the Works will be absolutely free of all burdens in the nature of imposts, taxes or charges and the Builder shall indemnify the Owner in respect of any liability arising as a consequence of the Builder's breach of this sub-clause.

16.11 The Builder's guarantee does not extend to loss or damage or expense to the extent arising from wear and tear, perils of the sea, accident, negligence or misuse on the part of the Owner or any third party.

16.12 The Builder has the right to appoint or nominate on Delivery of the Vessel upon terms and conditions to be agreed a competent guarantee engineer acceptable to the Owner to sail with the Vessel as guarantee engineer during the whole or any part of the Guarantee Period and, if the Owner has reason to be dissatisfied with the guarantee engineer so appointed, shall from time to time replace him by another competent guarantee engineer free of cost to the Owner. The wages and expenses and repatriation expenses of the guarantee engineer shall be paid by the Builder. The Owner and its employees shall give such guarantee engineer full co-operation in carrying out his duties as the Builder's representative on board the Vessel.

16.13 Notwithstanding the foregoing the Builder's Guarantee under this Clause 16 shall be limited to the terms of guarantees provided to the Builder by its Subcontractors or Suppliers in the case, where the Owner has specifically negotiated the sub-contract or purchase order in question or where the Owner has specifically requested a Subcontractor or Supplier not on the Subcontractor's List or the Maker's List.

CLAUSE 17 - INDEMNITIES FOR INFORMATION SUPPLIED

17.1 The Builder shall indemnify the Owner from and against all claims of third parties arising,by reason of the use by Owner or Owner Subcontractor or Owner Supplier of any information supplied to Owner, Owner Subcontractors or Owner Suppliers by Builder in connection with the performance of the Works, and from all costs and expenses (including costs and expenses of litigation) incurred by Owner by reason of such claim, except for claims or liabilities arising in connection with any matter to which Clause 17.2 applies.

17.2 The Owner shall indemnify the Builder from and against all claims of third parties arising by reason of the use by the Builder of the Specifications and of any document or information supplied to the Builder or its Subcontractors by the Owner, Owner Subcontractors or Owner Suppliers in connection with the design, construction and the building of the Vessel or the construction or installation of the machinery or equipment thereof or the provision of Owners Furnished Equipment and from all costs and expense (including costs and expenses of litigation) incurred by the Builder by reason of any such claim.

CLAUSE 18 - TAXES AND DUTIES, ETC

18.1 The Builder shall bear any taxes and duties applicable to materials or equipment supplied by the Builder, its Subcontractors or Suppliers.

18.2 The Owner shall bear any taxes and duties applicable to materials or equipment supplied by the Owner, Owner Subcontractors and Suppliers.

18.3 The Owner shall bear all other taxes, duties, commissions, fees and expenses incurred in connection with this Contract, including those incurred in arranging finance, mortgage facilities and registration formalities.

CLAUSE 19 - HEALTH AND SAFETY ENVIRONMENT AND EMPLOYMENT

19.1 The Builder and Owner shall and shall cause their respective Subcontractors and Suppliers while at the Builders Yard to observe and comply with the Health and Safety provisions of Schedule Fourteen hereto.

19.2 In all circumstances compliance with local legislative requirements and/or obligations shall take precedence over the requirements of Schedule Fourteen hereto.

19.3 The Builder and Owner and their respective Subcontractors shall comply with all laws, rules and regulations of Government having jurisdiction over the area in which the Works are undertaken to the extent that they are now, or may become applicable to them during the performance of this Contract.

CLAUSE 20 - LAW AND ARBITRATION

20.1 This Contract shall be governed by and construed in accordance with the Law of England.

20.2 Any dispute or difference touching or concerning this Contract or arising thereof, other than disputes to be referred to an expert by the provisions of this Contract shall be referred to the arbitration in London (or such other place as may be agreed between the parties) of a single arbitrator to be appointed by agreement between the parties or, (failing agreement within 14 days after either party has given to the other a written request to concur in the appointment of a single arbitrator) of three arbitrators, one to be appointed by each party and an umpire chosen by the two arbitrators so appointed. Any such reference shall be a submission to arbitration in accordance with the Arbitration Act 1996 or any statutory variation, modification or re-enactment thereof for the time being in force.

CLAUSE 21 - ASSIGNMENT OF CONTRACT

Except by the Owner to the ultimate parent company of Owner or an associated company of the Owner, neither of the parties hereto shall be entitled to assign or transfer any of its rights or duties hereunder without prior Notice to, and the prior written consent of, the other who shall not unreasonably withhold such consent. PROVIDED THAT in the event of an assignment, except to the ultimate parent company of Owner, Owner shall remain responsible for and guarantee the performance and observance of the assigned obligations by any such associated company. For the purposes of this Clause associated "company" means and includes any holding company, whether direct or indirect, or any subsidiary, whether direct or indirect, of the Owner or of such holding company, "holding company" and "subsidiary" having the meanings assigned to these terms by Section 736 of the Companies Act 1985.Any assignment permitted under this Clause shall be at the cost of the Assignor.

CLAUSE 22 - NOTICES AND COMMUNICATIONS

22.1 Any Notice or Notification to be given hereunder to the Owner shall be delivered to the Owner's Project Manager on site at the Builder's Yard and :

Global Marine International Services Corporation c/o McKinney, Bancroft & Hughes
Mareva House, 4 George Street
P.O. Box N. 3937
Nassau, Bahamas

Attention: President

With copies to:

Global Marine International Services Corporation c/o Global Marine UK LimitedStandbrook House, 2/5 Old Bond Street London, England W1X 4QH

Attention: F. L. Matthews, Vice President

and

Global Marine Drilling Company 777 N. Eldridge Parkway
Houston, Texas 77079

Attention: John A. Thorson, Manager Construction and Marine Projects Facsimile Number: 281-596-5179

or such other person, address or facsimile number as the Owner may from time to time by notice in writing to the Builder designate for that purposes.

22.2 Any notice to be given hereunder to the Builder shall be addressed to,

The Project Manager
Ship No: 1740
Harland and Wolff Shipbuilding and Heavy Industries Limited Queen's Island
BELFAST
BT3 9DU
Northern Ireland

Facsimile:01232-458515

or such other person, address or facsimile number as the Builder may from time to time by notice in writing to the Owner designate for that purpose.

22.3 Any Notice or other document to be given or served hereunder may be delivered by hand or sent by facsimile or posted by first-class mail (for inland mail) or airmail (for overseas mail) prepaid post, addressed to the address or facsimile number of the respective party as given in Clause 22.1 and 22.2. Any such Notices or documents sent by post in the manner specified above shall be deemed served two (for inland mail) or seven (for overseas mail) business days after posting. Where a Notice or document is transmitted by facsimile the document shall be deemed served when transmitted by the sending party.

22.4 Except as may be required by applicable law, the Parties agree that no public disclosures and/or press releases regarding the announcement of this Contract shall be made without first obtaining the written consent of the other.

CLAUSE 23 - WAIVER

Any waiver by or neglect or forbearance by either party to require or enforce any of the provisions of this Contract at any time given by either party shall not prejudice or affect any right of that party afterwards, with regard to any other failure to comply with the provisions of this Contract whether or not of a similar nature, to act strictly in accordance with the provisions herein contained.

CLAUSE 24 - ENTIRE CONTRACT AND AMENDMENTS

This Contract constitutes the entire agreement of the Builder and the Owner in relation to the construction and purchase of the Vessel and neither any representation, warranty or statement made by or on behalf of the Builder or the Owner prior to the date hereof shall affect the terms of this Contract or the rights or duties of the Builder or the Owner hereunder nor shall any modification of the terms of this Contract be of any effect unless made in writing and signed by the Owner and the Builder or their respective Authorized Representatives or Project Managers (in case of Project Change Orders).

CLAUSE 25 - LIABILITY AND INDEMNIFICATION

25.1 As used in Clauses 25 and 26 of this Contract:

(a) "Owner Group" means the following persons and entities, individually and collectively:

(i) Owner, its Parent, subsidiary, affiliated, associated Companies;

(ii) Owner Subcontractors and Owner Suppliers and other parties contracting with Owner (excepting Builder and Builder's Subcontractors);

(iii) The respective Officers, Directors, Employees, Agents, Owners, Shareholders, Servants, Representatives and Insurers of each of the parties set forth in Clauses 25.1 (a) (i) and 25.1 (a) (ii).

(b) "Builder Group" means the following persons and entities, individually and collectively:

(i) Builder, its Parent, Subsidiary, Affiliated, Associated Companies;

(ii) Builder's Subcontractors, Suppliers and other parties contracting with Builder (excepting Owner); and

(iii) The respective Officers, Directors, Employees, Agents, Owners, Shareholders, Servants, Representatives and Insurers of each of the parties set forth in Clauses 25.1 (b) (i) and 25.1 (b) (ii).

25.2 Builder shall at all times be responsible for and shall release, protect, indemnify, defend (including payment of reasonable attorney's fees and costs of litigation) and hold Owner Group harmless from and against any and all costs, losses, liabilities, claims, demands, causes of action, damages, penalties, judgments and awards of every kind and character, without limit and without regard to the cause or causes thereof or the negligence or fault of any party or parties (including without limitation the active, passive, concurrent or solely negligent acts or omissions of any member of Owner Group) arising in connection herewith:

(a) In favour of the officers, directors, employees, agents, servants, representatives or invitees of Builder Group on account of sickness, bodily injury or death; and/or

(b) On account of damage to or loss of Builder Group equipment or property; and/or

(c) From pollution or contamination occurring prior to Delivery
(including without limitation the control and/or removal thereof) which originates from Builder's Yard or equipment, the equipment of Builder's Subcontractors or materials under the control of Builder's Subcontractors, including but not limited to fuels, lubricants, motor oils, pipe dope, paints, solvents, garbage or debris.

(d) From the storage, transportation and/or disposal of any and all waste generated during the performance of the Work by Builder or Builder Group.

25.3 Owner shall at all times be responsible for and shall release, protect, indemnify, defend (including payment of reasonable attorney's fees and costs of litigation) and hold Builder Group harmless from and against any and all costs, losses, liabilities, claims, demands, causes of action, damages, judgments and of every kind and character, without limit and without regard to the cause or causes thereof or the negligence or fault of any party or parties (including without limitation the active, passive, concurrent or solely negligent acts or omissions of any member of Builder Group) arising in connection herewith:

(a) In favor of the officers, directors, employees, agents, servants, representatives or invitees of Owner Group on account of sickness, bodily injury or death; and/or

(b) On account of damage to or loss of the equipment and/or property of Owner Group, save for the Vessel and OFE in relation to which the other provisions of this Contract shall apply; and/or

(c) From pollution or contamination arising from the Vessel following Delivery.

25.4 Notwithstanding anything to the contrary, expressed or implied, in this Contract, inclusive of any amendments or Project Change Orders, in tort or otherwise at law, neither party shall be liable to the other for special, indirect, or consequential damages including, without limitation, loss of profits or business interruptions resulting from or arising out of this Contract or the performance of any work or services, however same may be caused including the negligence or fault of any party or parties and whether or not within the contemplation of the parties before, after or on the date of signature of this Contract.

25.5 Except as otherwise expressly limited in this Contract, it is the express intention of the parties hereto that all indemnity obligations and/or liabilities assumed by the parties under articles 25.2, 25.3 and 25.4 shall be without limit and without regard to the cause or causes thereof, including, but not limited to, preexisting conditions, whether such conditions be patent or latent; the unseaworthiness of any vessel or vessels, whether or not the preexisting breach of representation or warranty (express or implied); strict liability and/or ruin or defective premises, equipment, facilities, or appurtenances of any party under any code law or other type of strict liability, whether or not preexisting, and/or is latent, patent or otherwise; breach of contract; tort,breach of duty (statutory, contractual, common law or otherwise)or the negligence or fault of any party or parties, including, but not limited to, that of the indemnified parties, whether such be sole, joint or concurrent, active or passive; or any other theory of legal liability.

25.6 It is the express intention of the parties hereto that the provisions of this Contract shall exclusively govern the allocation of risks and liabilities of said parties, it being acknowledged that the agreement reflected herein has been based upon such express understanding.

25.7 All persons or entities who are or who may become a person or entity designated in Clause 25.1 (a) and (b), other than Owner and Builder, shall be deemed to be third party beneficiaries of this Contract for the purposes solely of enforcing an indemnity expressed to be for their benefit.

25.8 The indemnifications set forth in this Contract shall apply to all types of liabilities specifically covered by the indemnifications whether such liabilities are incurred directly by the indemnitees or indirectly through the operation of an indemnification agreement with another party provided that the liability for which such indemnification is sought, arose from or occurred as the result of or incidental to the performance of the parties' obligations hereunder.

CLAUSE 26 - BENEFIT OF INDEMNITIES

26.1 The indemnities given by Builder to Owner or Owner Group under Clause 25 are hereby agreed to be extended to and for the benefit of Owner Group as defined in Clause 25.1(a).

26.2 The indemnities given by Owner to Builder or Builder Group under Clause 25 are hereby agreed to be extended to and for the benefit of Builder Group as defined in Clause 25.1(b).

26.3 Owner hereby agrees to the appointment of Builder as its agent and trustee solely for the giving and receiving of the indemnities specified in Clause 25.3, which agency is solely for the purpose of permitting the indemnified party to make its claim against the indemnifying party and all duties, liabilities and obligations which would otherwise be imposed on or incurred by Owner by virtue of the agency are expressly excluded.

26.4 Builder hereby agrees to the appointment of Owner as its agent and trustee solely for the giving and receiving of the indemnities specified in Clause 25.2, which agency is solely for the purpose of permitting the indemnified party to make its claim against the indemnifying party and all duties, liabilities and obligations which would otherwise be imposed on or incurred by Builder by virtue of the agency are expressly excluded.

IN WITNESS WHEREOF, this Contract has been executed by duly authorized representatives of the Parties hereto in duplicate originals effective as of the date and year first above written.

GLOBAL MARINE INTERNATIONAL SERVICES       HARLAND AND WOLFF SHIPBUILDING D
CORPORATION                                AND HEAVY INDUSTRIES LIMITED

By: /s/ F. Luke Matthews                   By:       /s/ Per M. Nielsen
    F. L. Matthews                                   Per M. Nielsen
    Vice President                                   Chief Executive
                                                     Officer