Exhibit
10.3


REAFFIRMATION,
RATIFICATION AND ASSUMPTION AGREEMENT


THIS
REAFFIRMATION, RATIFICATION AND ASSUMPTION AGREEMENT (this “Agreement”),
dated as of December 26, 2006, is made by Great Lakes Dredge & Dock
Corporation (formerly named Great Lakes Dredge & Dock Holdings Corp.), a
Delaware corporation (“Successor Borrower”), in favor of Wells Fargo
HSBC Trade Bank, N.A., and the  Secured Party (as defined in the
International Security Agreement).


R E C I T
A L S:


A.            Great Lakes Dredge & Dock
Corporation, a Delaware corporation (the “Original Borrower”), and Bank
are parties to that certain International Letter of Credit Agreement dated as
of September 29, 2006 (as amended, restated, supplemented or otherwise
modified, the “Credit Agreement”). 
Capitalized terms used and not otherwise defined herein shall have the
meanings ascribed to them in the Credit Agreement.


B.            The Original Borrower is also a
party to (i) the Note, (ii) the International Security Agreement, (iii) the
Standby Letter of Credit Agreement, (iv) the Borrower Agreement, (v) the Fast
Track Borrower Agreement Supplement, (vi) the Acknowledgement of Country
Limitation Schedule, and (vii) other International Loan Documents executed and
delivered in connection with the Original Borrower’s Obligations under the
Credit Agreement.


C.            Effective as of even date herewith,
the Original Borrower has merged with and into the Successor Borrower, with the
Successor Borrower being the surviving Person of such merger (the “Borrower
Merger”).


D.            In order to obtain the consent of
the Bank to the Borrower Merger, the Successor Borrower is required, among
other things, to expressly assume the obligations of the Original Borrower
under, and reaffirm and ratify the effectiveness of, (i) the Credit Agreement,
(ii) the Note, (iii) the International Security Agreement, (iv) the Standby
Letter of Credit Agreement, (v) the Borrower Agreement, (vi) the Fast Track
Borrower Agreement Supplement, (vii) the Acknowledgement of Country Limitation
Schedule, and (viii) other International Loan Documents executed and delivered
in connection with the Original Borrower’s Obligations under the Credit
Agreement (collectively, the “Assumed Borrower Agreements”).


E.             Successor Borrower is executing and
delivering this Agreement in order to satisfy such requirements.


NOW,
THEREFORE, in consideration of the foregoing and to induce
the Bank to consent to the Borrower Merger, Successor Borrower hereby agrees as
follows:










 



1.             Assumption of Liabilities.


(a)           As the successor by merger to the
Original Borrower, Successor Borrower hereby expressly assumes all
indebtedness, liabilities and obligations of the Original Borrower under the
Assumed Borrower Agreements.


(b)           Any and all Liens, encumbrances,
Collateral, security interests, UCC financing statements, transfers and any and
all assignments of any right, claim or interest in and to property of any
nature whatsoever heretofore given or granted to the Bank or any of the other
Secured Parties by the Original Borrower are expressly assumed by Successor Borrower,
and shall continue without interruption, in full force and effect, surviving
the Borrower Merger and shall apply to any and all such property (i) owned
by the Original Borrower prior to the Borrower Merger, (ii) acquired by
Successor Borrower  as a result of the
Borrower Merger, or (iii) acquired hereafter by Successor Borrower.


2.             Reaffirmation
and Ratification of Loan Documents. 
Successor Borrower (i) hereby adopts, ratifies, reaffirms and
confirms all of the Assumed Borrower Agreements executed by the Original
Borrower, (ii) agrees that all Assumed Borrower Agreements shall remain in full
force and effect, (iii) shall be substituted as a party to all such Assumed
Borrower Agreements with the same force and effect as if Successor Borrower
were originally a party thereto and (iv) makes all of the representations and
warranties under the Assumed Borrower Agreements as a “Borrower” and a “Grantor”
as defined thereunder.


3.             Representations
and Warranties.  To induce the
Bank to consent to the Borrower Merger, Successor Borrower represents and
warrants to the Bank as follows:


(a)           Existence; Authority; Compliance with Law.  Successor Borrower (i) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware; (ii) has the power to own its Properties and to carry on its
business as now conducted; (iii) is duly qualified to do business and is
in good standing in all jurisdictions in which the failure to so qualify or be
in good standing could reasonably be expected to have a Material Adverse
Effect, (iv) has the power and authority to make, execute, deliver and carry
out this Agreement and the Assumed Borrower Agreements to which it is a party
(by assumption or otherwise);  and (v)
has complied in all material respects with all provisions of all applicable
laws and regulations, including those relating to Successor Borrower’s
ownership of real or personal property, the conduct and licensing of Successor
Borrower’s business, the payment and withholding of taxes, ERISA and other
employee matters, safety and environmental matters.


(b)           Authorization; No Contravention.  The execution, delivery and performance by
Successor Borrower of this Agreement and performance by Successor Borrower of
its obligations under the Assumed Borrower Agreements to which it is a party
(whether by assumption or otherwise) have been duly authorized by all necessary
proceedings on its part and do not and will not (i) conflict with or result in
a breach of any of the terms, conditions or provisions of, or constitute a
default under, or result in any violation of, or result in the creation or
imposition of any Lien on any of the Property of the Borrower or any Subsidiary
(other than Liens created under the International Loan Documents and, in connection
with the execution, delivery and performance of any Export Order, Permitted
Liens) pursuant to (a) the Organization



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Documents of
the Successor Borrower; (b) any Governmental Requirement; or (c) the
terms, conditions or provisions of any material contract to which the Successor
Borrower is a party or by which it is bound or to which it is subject.


(c)           No Consent. 
No authorization or approval or other action by, and no notice to or
filing with, any Person or any Governmental Authority is required for the due
execution, delivery, and performance of this Agreement or any of the Assumed
Borrower Agreements except (i) filings and recordings to perfect the Liens
created under the International Loan Documents and (ii) those which, if not
obtained, could not reasonably be expected to have a Material Adverse Effect.


(d)           No Default. 
No Default or Event of Default has occurred and is continuing.


(e)           Binding Effect. This Agreement, the Credit
Agreement and each other Assumed Borrower Agreements to which Successor
Borrower is a party (whether by assumption or otherwise) constitute the validly
and legally binding obligations of Successor Borrower, enforceable against
Successor Borrower in accordance with their respective terms, except as limited
by Debtor Laws.  The Liens created by the
International Security Documents constitute valid and perfected Liens on the
Collateral described therein superior in right to all other Liens, except for
Permitted Liens.


(f)            Representations and Warranties.  The representations and warranties set forth
in the Credit Agreement and the other Assumed Borrower Agreements are true and
correct in all material respects on and as of the date hereof, both before and
after giving effect to the Borrower Merger, as if such representations and warranties
were being made on and as of the date hereof, except for any representation or
warranty which is specified as being made as of an earlier date, in which case
such representation or warranty shall only speak to such earlier date.


(g)           Perfection of Liens.  All filings, registrations and recordings
necessary or appropriate to create, preserve, protect and perfect the security
interests granted by the Original Borrower to the Bank and hereby assumed by
Successor Borrower in respect of the Collateral owned by Successor Borrower
have been accomplished and the Liens and security interests granted to the Bank
pursuant to the International Security Documents in and to such Collateral
constitute a perfected security interest therein superior and prior to the
rights of all other Persons therein and subject to no other Liens (other than
Liens permitted by the Credit Agreement), and will be entitled to all the
rights, priorities and benefits afforded by the Uniform Commercial Code or
other relevant law as enacted in any relevant jurisdiction to perfected
security interests.


(h)           Chief Executive Office; Records.  The chief place of business and chief
executive office of Successor Borrower and the office where Successor Borrower
keeps the originals of all records concerning Successor Borrower’s
Export-Related Accounts Receivable and all originals of all chattel paper which
evidence the Export-Related Accounts Receivable are and will remain located at
the chief executive offices listed on Schedule 4 to the International
Security Agreement.  The organizational
number of Successor Borrower is as set forth on Schedule A attached
hereto.



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5.             Further
Assurances.  Successor
Borrower agrees to execute and deliver to Bank any and all documents requested
by Bank and reasonably necessary to continue, without interruption, the Liens
and security interests described in the International Security Documents hereby
assumed and ratified by Successor Borrower, including, without limitation, UCC
financing statements and amendments to reflect the Borrower Merger.


6.             APPLICABLE LAW.  THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES  (OTHER THAN THE PROVISIONS OF 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW).


[Remainder of Page Intentionally Left Blank; Signature Page Follows]



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IN WITNESS
WHEREOF, the undersigned has caused this Agreement to be duly executed and
delivered by its proper and duly authorized officer effective as of the date
first written above.


	
   

  	
  GREAT LAKES DREDGE &
  DOCK

  
	
   

  	
  CORPORATION
  (formerly named Great Lakes

  
	
   

  	
  Dredge &
  Dock Holdings Corp.)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
      /s/ Ellen Parker Burke

  	
   

  
	
   

  	
  Name: Ellen
  Parker Burke

  
	
   

  	
  Title: Corporate
  Secretary

  



 









 



SCHEDULE A

TO

REAFFIRMATION, RATIFICATION AND ASSUMPTION AGREEMENT


2122 York Road


Oak Brook, Illinois 60523


Organizational Number: