<PAGE>
 
                                                                       EXHIBIT 2


                   MASTER TERMINATION AND TRANSFER AGREEMENT

                                BY AND BETWEEN

                            J. RAY MCDERMOTT, S.A.

                                      AND

                   HEEREMA OFFSHORE CONSTRUCTION GROUP INC.

                         DATED AS OF DECEMBER 19, 1997



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                                     INDEX



Article                                                                  Page
-------                                                                  ----
Article I -      Definitions...................                           13
Article II -     Acquisition and Consideration.                           15
Article III -    Representations and Warranties                             
                 of McDermott..................                           17
Article IV -     Representations and Warranties                             
                 of Heerema....................                           19
Article V -      Post-Closing Matters..........                           23
Article VI -     Closing Matters...............                           25
Article VII -    Miscellaneous Provisions......                           28 


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                   MASTER TERMINATION AND TRANSFER AGREEMENT

          THIS AGREEMENT is made and entered into by and between J. RAY
McDERMOTT, S.A. (hereinafter referred to as "McDermott"), a corporation
organized and existing under the laws of the Republic of Panama and having its
executive office at New Orleans, Louisiana, United States of America, and
HEEREMA OFFSHORE CONSTRUCTION GROUP INC. (hereinafter referred to as "Heerema"),
a corporation organized and existing under the laws of the Republic of Panama
and having an office at Geneva, Switzerland.  Certain capitalized terms used
herein are defined in Article I hereof.

          WHEREAS, an Affiliate of McDermott and Heerema entered into a
Concentrative Joint Venture Agreement dated September 1, 1990, and thereafter
twice amended (hereinafter the "CJV Agreement"), pursuant to which the parties
thereto combined their respective heavy lifting marine activities relating to
the operation of semi-submersible derrick barges in order to participate in
certain aspects of the heavy lift marine construction business effectively and
continuously through a Concentrative Joint Venture enterprise;

          WHEREAS, the Parties have decided to abandon, relinquish and terminate
the CJV Agreement and the joint ventures and joint ownership and other
arrangements and agreements entered into between the Parties whether in
furtherance of the CJV Agreement or otherwise, except as otherwise expressly
provided herein;

          WHEREAS, the Parties have agreed to effect such abandonment,
relinquishment and termination in the manner set out in this Agreement.

          NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and obligations hereinafter contained, the parties
agree as follows:

                           ARTICLE I -   DEFINITIONS

          Unless otherwise clearly required by the context of this Agreement,
the terms listed below shall have the following meanings:

          (a) "Affiliate" for purposes of this Agreement shall not include any
     Joint Venture Company and as to McDermott shall mean any Person which is
     controlled by, controls or is under common control with McDermott and as to
     Heerema shall mean any Person which is controlled by, controls or is under
     common control with Heerema and as to any other Person shall mean any
     Person which is controlled by, controls or is under common control with
     such other Person.  For the purpose of this definition, "control" when used
     in respect to any Person shall mean the possession of the power, through
     the ownership of voting securities or otherwise, to direct or cause the
     direction of the management or policies of such Person.

          (b) "Closing" shall have the meaning set out in Article VI, Section 1.

          (c) "DB 100 Crane" shall mean the crane originally affixed to the
     derrick barge bearing the designation DB 100, together with all associated
     equipment, spares and outfitting, as is, where is.


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<PAGE>
 
          (d) "DB 101" shall mean the self-propelled, semi-submersible derrick
     barge bearing such designation, together with all associated equipment,
     spares and outfitting, including the equipment, spares and outfitting set
     forth in Schedule I(d).

          (e) "Heerema McDermott Australia" shall have the meaning set forth in
     Article II, Section 1.

          (f) "HeereMac" shall mean HeereMac v.o.f., a partnership formed under
     the laws of The Netherlands in accordance with a Joint Venture Agreement
     entered into by an Affiliate of McDermott and Heerema as of November 18,
     1988.

          (g) "HeereMac Contracts" has the meaning set forth in Article IV,
     Section 11.

          (h) "HeereMac Vessel" shall have the meaning set out in Article IV,
     Section 9.

          (i) "HBU" shall have the meaning set out in Article IV, Section 10.

          (j) "HOC 650" shall have the meaning set out in Article II, Section 2.

          (k) "ING" shall have the meaning set out in Article IV, Section 10.

          (l) "Intermac 600" shall mean the launch barge bearing such
     designation, together with all associated equipment, spares and outfitting,
     including the equipment, spares and outfitting set forth in Schedule I(l).

          (m) "Intermac 650" shall mean the launch barge bearing such
     designation, together with all associated equipment, spares and outfitting,
     including the equipment, spares and outfitting set forth in Schedule I(m).

          (n) "Intermac 650 Partnership" has the meaning set forth in Article
     IV, Section 7.

          (o) "Joint Venture Companies" shall mean HeereMac, POCCI, OMC, Heerema
     McDermott Australia and each of their respective subsidiaries, if any and
     until the Closing, and Intermac 650 Partnership and its subsidiaries; if
     any.

          (p) "JRMII" shall have the meaning set out in Article III, Section 5.

          (q) "Launchco CJV Agreement" shall have the meaning set out in Article
     IV, Section 12.

          (r) "Liens" shall mean any mortgage, pledge, lien, security interest,
     encumbrance, claim, restriction or charge of any kind.

          (s) "McDermott Holland" shall have the meaning set out in Article II,
     Section 1.

          (t) "MII" shall have the meaning set out in Article IV, Section 10.

          (u) "MWB 403" shall mean the launch barge bearing such designation,
     together with all associated equipment, spares and outfitting, including
     the equipment, spares and outfitting set forth in Schedule I(u).

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          (v) "MWB 403 Option" shall mean the option granted to Heerema Offshore
     Services (U.S.), Inc. to purchase MWB 403 pursuant to the option agreement
     entered into between J. Ray McDermott, Inc. and Heerema Offshore Services
     (U.S.), Inc. on the date of this Agreement in the form attached hereto as
     Exhibit 1.

          (w) "Omnibus Guarantee" shall mean any obligation of McDermott or its
     Affiliates arising under the Limited Blanket Counterindemnity Arrangement
     dated January 1, 1991.

          (x) "OMC" shall mean Offshore Marine Chartering N.V., a corporation
     formed under the laws of the Netherlands Antilles.

          (y) "Organizational Documents" shall mean, as appropriate, the
     articles of incorporation, certificate of incorporation, charter,
     organizational instrument and bylaws of any corporation and the partnership
     agreement of any partnership.

          (z) "Parties" shall mean McDermott, Heerema, the Joint Venture
     Companies and their respective Affiliates, or any combination of them
     collectively, as the case may be, and shall include their respective
     successor(s) in interest.

          (aa) "Partnership Interests" shall have the meaning set out in Article
     II, Section 1.

          (bb) "Person" shall mean an individual, a corporation, a partnership,
     an association, a trust or any other entity or organization, including a
     government, supranational authority or political subdivision or any agency
     or instrumentality thereof.

          (cc) "POCCI" shall mean Panama Offshore Chartering Company Inc., a
     limited liability company formed under the laws of the Republic of Panama.

          (dd) "POCCI # 19" shall mean Panama Offshore Chartering Company 19,
     Inc. (Panama), a limited liability company formed under the laws of the
     Republic of Panama.

          (ee) "POCCI # 21" shall mean Panama Offshore Chartering Company 21,
     Inc. (Panama), a limited liability company formed under the laws of the
     Republic of Panama.

          (ff) "South African Job" shall mean contract reference 55001317
     between Mossgas Propriety Ltd. and HeereMac dated January 9, 1997.

          (gg) "Subordinated Note" shall mean the 7.75% Subordinated Note
     outstanding from OMC to JRMII.

          (hh) "USD" or "US Dollars" shall mean United States Dollars, the
     lawful currency of the United States of America.

                 ARTICLE II -   ACQUISITION AND CONSIDERATION

     Section 1.  Acquisition and Sale.

          At the Closing, Heerema will acquire from McDermott and its
Affiliates, and
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McDermott will, and will cause its Affiliates to, sell, assign, convey, transfer
and deliver to Heerema or one of its Affiliates, (a) all direct and indirect
ownership interests of McDermott in (i) Offshore Heavy Lift (Holland) B.V.
("McDermott Holland"), which was formerly named McDermott (Holland) B.V. and
which holds the entire 50% interest of McDermott in HeereMac, (ii) POCCI, (iii)
OMC and (iv) Heerema McDermott Australia PTY Ltd. ("Heerema McDermott
Australia") (such interests being herein collectively referred to as the
"Partnership Interests"), and (b) the Subordinated Note. At the Closing,
McDermott, through its wholly owned subsidiary J. Ray McDermott, Inc., will
grant to Heerema Offshore Services (U.S.), Inc. the MWB 403 Option. At the
Closing, McDermott will acquire from Heerema, its Affiliates and the Joint
Venture Companies and Heerema will, and will cause its Affiliates and the Joint
Venture Companies to, sell, assign, convey, transfer and deliver to McDermott or
one of its Affiliates all right, title and interest in, and good and marketable
title, free and clear of any Liens, to, (i) DB 101, (ii) Intermac 600, (iii)
100% of the capital stock of Heerema in Heerema Offshore Chartering (U.S.), Inc.
("HOC 650"), the entity which owns all of Heerema's interest in the general
partnership which owns Intermac 650, and (iv) the DB 100 Crane. All such
acquisitions, sales, assignments and transfers shall be effected in the manner
specified in Article VI of this Agreement.

     Section 2.  Additional Consideration.

          At the Closing, Heerema, as additional consideration for the transfers
and the grant of the option described above, will deliver or cause to be
delivered to McDermott or one of its Affiliates in immediately available funds
to such account as McDermott shall have directed the amount of USD 318,500,000
(three hundred eighteen million and five hundred thousand US Dollars), of which
USD 61,637,000 constitutes undistributed earnings of and from HeereMac, POCCI
and OMC.  The Parties agree and acknowledge that (a) the consideration specified
in this Section 2 of Article II includes and reflects all undistributed earnings
and all recorded and unrecorded liabilities attributable, relating or accruing
to or in respect of the Partnership Interests, and (b) the fair market value of
(i) DB 101 is USD 30,500,000, (ii) HOC 650 is USD 5,400,000, (iii) the DB 100
Crane is USD 1,000,000, (iv) the Intermac 600 is USD 2,250,000, (v) McDermott
Holland is USD 37,000,000, (vi) McDermott's interest in Heerema McDermott
Australia is USD 1,000, (vii) McDermott's interest in POCCI is USD 50,000,000,
(viii) McDermott's interest in OMC is USD 169,289,000, (ix) the Subordinated
Note (including interest accrued but not paid thereon) is USD 100,160,000 and
(x) the MWB 403 Option is USD 1,200,000.

     Section 3.  Termination of the Agreements.

          The purpose and effect of the transactions contemplated by this
Agreement will be to irrevocably terminate and cancel the CJV Agreement, the
Launchco CJV Agreement, the joint ventures and joint ownership and other
arrangements and agreements entered into in furtherance of the CJV Agreement or
the Launchco CJV Agreement, as a result of which, notwithstanding any provision
(including, but not limited to, any survival provisions of such agreements) of
the CJV Agreement, the Launchco CJV Agreement or any other agreement to the
contrary, and except as set forth in this Agreement or in any agreement listed
on Schedule II.3, all rights and obligations of each of McDermott, Heerema, the
Joint Venture Companies and their respective Affiliates under the CJV Agreement,
the Launchco CJV Agreement, each such joint venture, joint ownership or other
arrangement or agreement shall irrevocably terminate and no such rights and
obligations shall survive the Closing.  Heerema, on behalf of itself, its
Affiliates and the Joint Venture Companies, further agrees and acknowledges that
(a) none of Heerema, its Affiliates or the Joint Venture Companies will have any
claim against McDermott or any of its Affiliates and (b) neither McDermott nor
any of its Affiliates has or will have any liability 

                                      16
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or obligation, in the case of each of clause (a) or (b), under, arising out of
or related to the agreements listed on Schedule II.3. McDermott, on behalf of
itself, its Affiliates or the Joint Venture Companies, acknowledges that (c)
none of McDermott, its Affiliates or the Joint Venture Companies will have any
claim against Heerema, its Affiliates or any of the Joint Venture Companies and
(d) neither Heerema, its Affiliates nor any of the Joint Venture Comapnies has
or will have any liability or obligation, in the case of each of clause (c) or
(d) under, arising out of or related to the agreements listed on Schedule II.3.

          ARTICLE III -   REPRESENTATIONS AND WARRANTIES OF MCDERMOTT

     McDermott hereby represents and warrants to Heerema that:

     Section 1.  Organization.

          Each of McDermott and McDermott Holland is a corporation duly
organized and validly existing under the laws of the jurisdiction of its
incorporation and McDermott has full corporate power and authority to enter into
this Agreement and to perform its obligations hereunder.

     Section 2.  Authorization.

          The execution, delivery and performance of this Agreement by McDermott
has been duly authorized by all necessary corporate action.

     Section 3.  Validity.

          This Agreement has been duly and validly executed and delivered by
McDermott and constitutes a valid, legal and binding obligation of McDermott
enforceable in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, or similar laws affecting creditors'
rights generally and equitable remedies may be limited by equitable principles
of general applicability.

     Section 4.  No Conflict; No Violation.

          The execution and delivery of this Agreement by McDermott and the
consummation by McDermott of the transactions contemplated hereby do not and
will not conflict with, result in the breach of, constitute a default under or
violate (i) the Organizational Documents of McDermott, (ii) any statute, law,
rule, regulation, judgment, decree, order, injunction, permit or license of any
jurisdiction, court or governmental or regulatory body binding on McDermott or
its property or assets, or (iii) any material contract, lease, instrument,
obligation or agreement of any kind to which McDermott is a party or by which
its property or assets are bound.  McDermott Holland is not in violation or
breach of or in default (or with notice or the passage of time or both, will be
in default) under (i) its Organizational Documents, (ii) any statute, law, rule,
regulation, judgment, decree, order, injunction, permit or license of any
jurisdiction, court or governmental or regulatory body binding on McDermott
Holland or its property or assets, or (iii) any contract, lease, instrument,
obligation or agreement of any kind to which McDermott Holland is a party or by
which its property or assets are bound, except, in the case of clauses (ii) and
(iii) of this sentence, where such violations, breaches or defaults (or events
which, with notice or the passage of time or both, would be defaults) would not,
in the aggregate, have a material adverse effect on McDermott Holland.

                                      17
<PAGE>
 
     Section 5.  Interest in HeereMac.

          McDermott, through its wholly owned subsidiaries J. Ray McDermott
International, Inc. ("JRMII") and Varsy International NV, is the owner of all
outstanding and fully paid up shares of the capital stock of McDermott Holland,
which holds the entire 50% interest of McDermott in HeereMac free and clear of
any Liens.  McDermott Holland (a) prior to Closing has neither engaged in
business outside of The Netherlands nor defaulted under or breached any
contract, instrument or other agreement to which it is or was a party and (b)
has no liabilities or obligations known or unknown, disclosed or undisclosed,
contingent or accrued, in the case of each of clause (a) and (b), other than
with respect to Heerema, its Affiliates or the Joint Venture Companies.  To the
extent any liabilities or obligations of McDermott Holland other than those
relating to Heerema, its Affiliates or the Joint Venture Companies arise, they
will be the sole responsibility of, and will be assumed and discharged by,
McDermott. R. T. Tyner, Jr., L. R. Gibson, and M. M. Pettyjohn, each of whom
have at various times served as Managing Directors of McDermott Holland during
the period from 1989 through the Closing, were residents of the Bahamas during
the periods of their respective service as Managing Directors, and, during such
period, exercised no management of McDermott Holland from the United Kingdom.

     Section 6.  Interest in POCCI.

          McDermott, through JRMII, is the owner of 500 shares of the common
stock of POCCI, with good and marketable title thereto free and clear of any
Liens, with full power and authority to sell, assign and transfer such shares as
provided herein.

     Section 7.  Interest in OMC.

          McDermott, through JRMII, is the owner of 3,000 shares of the common
stock of OMC, with good and marketable title thereto free and clear of any
Liens, with full power and authority to sell, assign and transfer such shares as
provided herein.

     Section 8.  MWB 403.

          McDermott's wholly owned subsidiary J. Ray McDermott, Inc. has good
and marketable title to MWB 403, free and clear of any Liens (other than the MWB
403 Option), with full power and authority to grant the MWB 403 Option as
provided herein.  Schedule III.8 sets forth each commitment under which services
of MWB 403 are required on and after the date of the Closing.  MWB 403 will be
delivered to Heerema in Louisiana, United States of America.  There are, and at
the Closing there will be, no liabilities, known or unknown, disclosed or
undisclosed, contingent or accrued, affecting MWB 403 and no claims of any kind
whatsoever, including in rem, arising out of or relating in any way to the
ownership, use or operation of MWB 403 or facts known to McDermott or its
Affiliates which could reasonably be expected to result in such a liability or
claim.  MWB 403 is permanently registered and recorded in the name of its owner
with the appropriate maritime authorities under the law of its flag country.
MWB 403 is in all respects seaworthy, is in class, is free of any material
recommendations, notations, visas and reservations by the classification society
in which she is entered, is free of material average damage affecting class,
with all class and trading certificates, national and international, clean and
valid and MWB 403's hull surveys and continuous machinery survey cycles are up
to date or have been extended.  Except where the failure to comply would not be
material, MWB 403 and its owner are in compliance with all current regulations
and requirements (statutory or otherwise) applicable to vessels registered under
the laws of its flag country and applicable to vessels trading to any
jurisdiction to which MWB 403 trades.  MWB 403 is in conformity with the current
requirements of the 

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applicable classification or regulatory society, including ABS, BV or the U.S.
Coast Guard, as well as IMO and SOLAS and all other national and international
rules, regulations, requirements, treaties and conventions which are required to
be complied with or observed by MWB 403 in the normal course of its operations
in order to allow MWB 403 to operate for its intended purpose and, subject to
the next sentence, there are no facts known to McDermott or its Affiliates which
indicate that any of the licenses, permissions, authorizations and consents
relating to the foregoing may be revoked or may not be renewed, in whole or in
part, in the ordinary course of events. To the knowledge of McDermott or its
Affiliates, MWB 403 has not been employed in any trade or business which is
unlawful under the laws of any relevant jurisdiction or in carrying illicit or
prohibited goods, in each case to the extent such use has or could have be
material, or in any manner whatsoever which may render it liable to condemnation
in a Prize Court or to destruction, seizure or confiscation.

     Section 9.  Heerema McDermott Australia.

          McDermott, through J. Ray McDermott (Aust.) Holding Pty. Limited, is
the owner of one share of Heerema McDermott Australia with good and marketable
title thereto free and clear of any Liens, with full power and authority to
sell, assign and transfer such shares as provided herein.

     Section 10. Subordinated Note.

          JRMII is the legal and beneficial owner of the Subordinated Note, with
full corporate power and authority to assign the Subordinated Note as provided
herein.  After such assignment, neither JRMII nor any of its Affiliates will
have any claim against Heerema or any of its Affiliates or the Joint Venture
Companies with respect to the Subordinated Note.

           ARTICLE IV -   REPRESENTATIONS AND WARRANTIES OF HEEREMA

     Heerema represents and warrants to McDermott as follows:

     Section 1.  Organization.

          Each of Heerema and HOC 650 is a corporation duly organized and
validly existing under the laws of the jurisdiction of its incorporation, and
Heerema has full corporate power and authority to enter into this Agreement and
to perform its obligations hereunder.

     Section 2.  Authorization.

          The execution, delivery and performance of this Agreement by Heerema
has been duly authorized by all necessary corporate action.

     Section 3.  Validity.

          This Agreement has been duly and validly executed and delivered by
Heerema and constitutes a valid, legal and binding obligation of Heerema
enforceable in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, or similar laws affecting creditors'
rights generally and equitable remedies may be limited by equitable principles
of general applicability.

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<PAGE>
 
     Section 4.  No Conflict; No Violation.

          The execution and delivery of this Agreement by Heerema and the
consummation by Heerema of the transactions contemplated hereby do not and will
not conflict with, result in the breach of, constitute a default under or
violate (i) the Organizational Documents of Heerema, (ii) any statute, law,
rule, regulation, judgment, decree, order, injunction, permit or license of any
jurisdiction, court or governmental or regulatory body binding on Heerema or its
property or assets, or (iii) any material contract, lease, instrument,
obligation or agreement of any kind to which Heerema is a party or by which its
property or assets are bound.  Neither HOC 650 nor Intermac 650 Partnership is
in violation or breach of or in default (or with notice or the passage of time
or both, will be in default) under (i) its Organizational Documents, (ii) any
statute, law, rule, regulation, judgment, decree, order, injunction, permit or
license of any jurisdiction, court or governmental or regulatory body binding on
HOC 650 or Intermac 650 Partnership or their respective properties or assets, or
(iii) any contract, lease, instrument, obligation or agreement of any kind to
which HOC 650 or Intermac 650 Partnership is a party or by which their
respective properties or assets are bound, except, in the case of clauses (ii)
and (iii) of this sentence, where such violations, breaches or defaults (or
events which, with notice or the passage of time or both, would be defaults)
would not, in the aggregate, have a material adverse effect on HOC 650 or
Intermac 650 Partnership, as the case may be.

     Section 5.  DB 101.

          OMC, through its wholly owned subsidiary DB 101 Shipping Inc., has
good and marketable title to DB 101 free and clear of any Liens, with full power
and authority to sell, assign and transfer such title as provided herein.  There
are no commitments under which services of DB 101 are required on or after the
date of the Closing other than the South African Job.  There are, and at Closing
there will be, no liabilities, known or unknown, disclosed or undisclosed,
contingent or accrued, affecting DB 101 and no claims of any kind whatsoever,
including in rem, arising out of or relating in any way to the ownership, use or
operation of DB 101, or facts known to Heerema, its Affiliates or the Joint
Venture Companies which could reasonably be expected to result in such a
liability or claim.

     Section 6.  Intermac 600.

          POCCI # 19 is a wholly owned subsidiary of POCCI and has good and
marketable title to Intermac 600 free and clear of any Liens, with full power
and authority to sell, assign and transfer such title as provided herein.
Schedule IV.6 sets forth each commitment under which services of Intermac 600
are required on and after the date of the Closing.  Intermac 600 will be
delivered to McDermott or its designee in Rotterdam, The Netherlands.  There
are, and at Closing there will be, no liabilities, known or unknown, disclosed
or undisclosed, contingent or accrued, affecting Intermac 600 and no claims of
any kind whatsoever, including in rem, arising out of or relating in any way to
the ownership, use or operation of Intermac 600, or facts known to Heerema, its
Affiliates or the Joint Venture Companies which could reasonably be expected to
result in such a liability or claim.

     Section 7.  Intermac 650.

          Heerema Offshore Services (U.S.), Inc. is the owner of all of the
outstanding shares of HOC 650 with good and marketable title thereto free and
clear of any Liens, with full power and authority to sell, assign and transfer
such shares as provided herein.  

                                      20
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HOC 650 is the owner of the entire 50% interest of Heerema in the general
partnership U.S. Offshore Chartering (hereinafter "Intermac 650 Partnership"),
free and clear of any Liens. Intermac 650 Partnership has good and marketable
title to Intermac 650 free and clear of any Liens, with full power and authority
to sell, assign and transfer such title. Intermac 650 will be delivered to
McDermott or its designee in Louisiana, United States of America. There are, and
at Closing there will be, no liabilities, known or unknown, disclosed or
undisclosed, contingent or accrued, affecting Intermac 650 and no claims of any
kind whatsoever, including in rem, arising out of or relating in any way to the
ownership, use or operation of Intermac 650, or facts known to Heerema, its
Affiliates or the Joint Venture Companies which could reasonably be expected to
result in such a liability or claim. Schedule IV.7(a) sets forth each commitment
under which services of Intermac 650 are required on and after the date of the
Closing. Other than as set forth on Schedule IV.7(b), there are no liabilities
or other obligations of HOC 650 or Intermac 650 Partnership, whether known or
unknown, disclosed or undisclosed, contingent or accrued, and any liabilities or
obligations of either HOC 650 or Intermac 650 Partnership not set forth on such
schedule will be the sole responsibility of, and will be assumed and discharged
by, Heerema, its Affiliates and the Joint Venture Companies.

     Section 8.  DB 100 Crane.

          POCCI # 21 is a wholly owned subsidiary of POCCI and has good and
marketable title to the DB 100 Crane, free and clear of any Liens, with full
power and authority to sell, assign and transfer such title as provided herein.
The DB 100 Crane will be delivered to McDermott or its designee in the McDermott
yard at Batam, Indonesia.  There are, and at Closing there will be, no
liabilities, known or unknown, disclosed or undisclosed, contingent or accrued,
affecting the DB 100 Crane and no claims of any kind whatsoever arising out of
or relating in any way to the ownership, use or operation of the DB100 Crane, or
facts known to Heerema, its Affiliates or the Joint Venture Companies which
could reasonably be expected to result in such a liability or claim.

     Section 9.  Vessel Representations.

          Each of Intermac 600, Intermac 650 and DB 101 (each a "HeereMac
Vessel") is permanently registered and recorded in the name of its owner with
the appropriate maritime authorities under the law of its flag country.  Each
HeereMac Vessel is in all respects seaworthy, is in class, is free of any
material recommendations, notations, visas and reservations by the
classification society in which she is entered, is free of material average
damage affecting class, with all class and trading certificates, national and
international, clean and valid and each HeereMac Vessel's hull surveys and
continuous machinery survey cycles are up to date or have been extended.  Except
where the failure to comply would not be material, each HeereMac Vessel and its
owner is in compliance with all current regulations and requirements (statutory
or otherwise) applicable to vessels registered under the laws of its flag
country and applicable to vessels trading to any jurisdiction to which such
HeereMac Vessel trades.  Each HeereMac Vessel is in conformity with the current
requirements of the applicable classification or regulatory society, including
ABS, BV or the U.S. Coast Guard, as well as IMO and SOLAS and all other national
and international rules, regulations, requirements, treaties and conventions
which are required to be complied with or observed by such HeereMac Vessel in
the normal course of its operations in order to allow such HeereMac Vessel to
operate for its intended purpose and, subject to the next sentence, there are no
facts known to Heerema, its Affiliates or the Joint Venture Companies which
indicate that any of the licenses, permissions, authorizations and consents
relating to the foregoing may be revoked or may not be renewed, in whole or in
part, in the ordinary course of events.  To the knowledge of Heerema, its
Affiliates or the Joint Venture Companies, none of the HeereMac Vessels has 

                                      21
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been employed in any trade or business which is unlawful under the laws of any
relevant jurisdiction or in carrying illicit or prohibited goods, in each case
to the extent such use has or could be material, or in any manner whatsoever
which may render it liable to condemnation in a Prize Court or to destruction,
seizure or confiscation.

          Following the consummation of the transactions contemplated by this
Agreement, Intermac 650 Partnership will continue to own, pursuant to good and
marketable title, its interest in the Intermac 650, without incurring any
penalty or other adverse consequence, including, without limitation, any
increase in rentals, royalties, or licenses or other fees imposed as a result
of, or arising from, the consummation of the transactions contemplated by this
Agreement.

     Section 10. Undertakings to Banks.

          All obligations, direct, contingent or otherwise, of McDermott and
McDermott International, Inc. ("MII") under their guarantees provided to
Hollandsche Bank-Unie N.V. ("HBU") and ING Bank N.V. ("ING") for banking
facilities provided to Affiliates of Heerema and to the Joint Venture Companies
and all obligations, direct, contingent or otherwise of Hydro Marine Services,
Inc. and JRMII under the Subordination Agreement dated 25th of March, 1996 with
ABN AMRO Bank N.V., HBU and ING have been assumed by Heerema or have been
cancelled by the banks.

     Section 11. Omnibus Guarantees.

          Neither McDermott nor any of its Affiliates has any liability or
obligation under any Omnibus Guarantee.  Each of Heerema, its Affiliates and the
Joint Venture Companies and their subsidiaries has fully released McDermott and
its Affiliates and will indemnify each of them against any liability or
obligation arising under or with respect to the Limited Blanket Counterindemnity
Arrangement dated January 1, 1991.

     Section 12. Assumption of Liability.

          As of the Closing, (a) all liabilities and obligations, known or
unknown, disclosed or undisclosed, contingent or accrued, which relate in any
way to or are in any way associated with or arise out of any operation or
activities of or with respect to (i) Heerema, any of its Affiliates and the
Joint Venture Companies, (ii) the CJV Agreement and the Concentrative Joint
Venture enterprise and related entities contemplated thereby or (iii) the
Launchco Concentrative Joint Venture Agreement (the "Launcho CJV Agreement")
between McDermott and Heerema dated March 27, 1995 and the Concentrative Joint
Venture enterprise and related entities contemplated thereby, in each case,
including those matters currently under discussion between the United States
Department of Justice ("Department") and Heerema, its Affiliates or any of
the Joint Venture Companies, will be the sole responsibility of, and will be
assumed and discharged by, Heerema, its Affiliates and the Joint Venture
Companies; provided, however, that, notwithstanding the foregoing, no
liabilities or obligations for claims based upon or arising from facts related
to alleged antitrust violations, including the submission of bids by Heerema,
its subsidiaries or the Joint Venture Companies for heavy lift projects from
November 18, 1988 to and including April 17, 1997 which claims are asserted by
McDermott, its Affiliates, any Persons who are not Parties, or any governmental
or supranational authorities (in each instance, other than the Department as
provided above) shall be so assumed, and (b) all liabilities and obligations,
known or unknown, disclosed or undisclosed, contingent or accrued, of (i)
Heerema McDermott Australia and (ii) McDermott Holland, to the extent that such
liabilities and obligations relate to the activities or operations of Heerema,
HeereMac, POCCI or OMC or their respective Affiliates or any of 

                                      22
<PAGE>
 
the Joint Venture Companies, will be the sole responsibility of, and will be
assumed and discharged by, Heerema, its Affiliates and the Joint Venture
Companies.

     Section 13. Turnover.

          The combined worldwide turnover of Heerema and its Affiliates
(including HeereMac) does not exceed ECU 5,000 million, and no filing is
required under the EU Merger Regulation with respect to Heerema's acquisition of
all of McDermott's direct and indirect interest in HeereMac.

                      ARTICLE V -   POST-CLOSING MATTERS

     Section 1.  McDermott Identification.

          Heerema will, and will cause each of its Affiliates and each of the
Joint Venture Companies to, promptly (a) cease the use of the names "McDermott"
and "HeereMac" and all aspects thereof, including the use of "MAC" in a manner
which might be likely to be viewed as a reference to McDermott or otherwise
cause confusion in the marketplace, in any form (hereafter collectively
"McDermott Identification"), and (b) remove all such McDermott Identification
from all signage, logos, stationery, business cards, promotional literature,
brochures, advertisements and the like.  The parties acknowledge and agree that
for purposes of the foregoing obligations of Heerema, the term "promptly" shall
mean no longer than 90 days following the Closing, except that, in the case of
the name "HeereMac" and the related HeereMac logo and the other related uses of
"MAC", "promptly" shall mean six months following the Closing.  Heerema shall
promptly send to McDermott evidence that the names of each of HeereMac and
Heerema McDermott Australia have been changed in compliance with this Agreement.
Heerema shall and shall cause each of its Affiliates and each of the Joint
Venture Companies to execute any documentation reasonably requested in order to
give effect to its obligations under this Section 1.

     Section 2.  Heerema Identification.

          McDermott will, and will cause each of its Affiliates to, promptly (a)
cease the use of the name "Heerema" and all aspects thereof, in any form
(hereafter collectively "Heerema Identification"), and (b) remove all such
Heerema Identification from all signage, logos, stationery, business cards,
promotional literature, brochures, advertisements and the like.  The parties
acknowledge and agree that for purposes of the foregoing obligations of
McDermott, the term "promptly" shall mean no longer than 90 days following the
Closing, except that, in the case of the name "HeereMac" and the related
HeereMac logo and the other related uses of "Heere", "promptly" shall mean six
months following the Closing.  McDermott shall promptly send to Heerema evidence
that the name of HOC 650 has been changed in compliance with this Agreement.
McDermott shall and shall cause its Affiliates to execute any documentation
reasonably requested in order to give effect to its obligations under this
Section 2.

     Section 3.  Post-Closing Access.

          (a) Following the Closing, Heerema will, and will cause its Affiliates
and the Joint Venture Companies to, (i) provide to McDermott access to all
documents necessary for McDermott to prepare any tax filing required to be made
by McDermott or its Affiliates with respect to HOC 650 and Intermac 650
Partnership (the "McDermott Acquired Interests") and to respond to any related
inquiry or audit by any taxing regulatory body, (ii) retain such documents and
related records until the expiry of the longest statute 

                                      23
<PAGE>
 
of limitations applicable to relevant tax periods and, at McDermott's request
and expense, to provide copies of such records to McDermott, (iii) respond to
any questions of McDermott regarding any tax audits or any tax regulatory
filings with respect to the McDermott Acquired Interests, and (iv) provide
McDermott's Accounting Coordinator at HeereMac a reasonable period of time to
vacate his office and enable him to assemble and transmit to McDermott, in hard
copy or computer format, all documents received and retained by him in
discharging his duties on behalf of McDermott.

          (b) Following the Closing, McDermott will, and will cause its
Affiliates to, (i) provide to Heerema access to all documents necessary for
Heerema to prepare any tax filing required to be made by Heerema, its Affiliates
or the Joint Venture Companies with respect to McDermott Holland, (ii) retain
such documents and related records until the expiry of the longest statute of
limitations applicable to relevant tax periods and, at Heerema's request and
expense, to provide copies of such records to Heerema, and (iii) respond to any
questions of Heerema regarding any tax audits or any tax regulatory filings with
respect to McDermott Holland.

     Section 4.  Charter Commitments.

          McDermott agrees that it or one of its Affiliates shall make each of
DB 101, Intermac 600, Intermac 650 and, prior to the exercise of the MWB 403
Option, MWB 403 available by charter to Heerema pursuant to an agreement in the
form of Exhibit 2 hereto (with respect to DB 101) and in the form of Exhibit 3
for the other vessels, all for the periods and at the rates set forth on
Schedule V.4(a).  Heerema agrees that on and after the exercise of the MWB 403
Option, it, one of its Affiliates or one of the Joint Venture Companies shall
make MWB 403 available by charter to McDermott pursuant to an agreement in the
form of Exhibit 3 hereto for the periods and at the rates set forth on Schedule
V.4(b).

     Section 5.  DB 101 Personnel.

          Heerema, its Affiliates, and the Joint Venture Companies shall permit
no more than five representatives of McDermott to remain aboard DB 101 from the
period between the Closing and the expiry of the charter entered into pursuant
to Article V, Section 4 relating to DB 101 and will provide suitable
accommodations and meals, free of charge.

     Section 6.  Intellectual Property and Proprietary Data.

          Heerema on behalf of HeereMac, OMC and POCCI hereby grants and
confirms that such entities have granted, as of the Closing, to each of the
Parties a worldwide, non-exclusive, royalty-free license in favor of each of the
Parties to use and sublicense to others the right to use all proprietary and
other intellectual property relating to the matters covered by Netherlands
patent no. 1002160, including under any foreign counterparts of said patent or
any continuations, continuations in part or reissues of any such patent.

     Section 7.  Insurance.

          (a)  Heerema, its Affiliates and the Joint Venture Companies shall
maintain liability insurance policies under which McDermott is an additional
named insured on the same basis as was contemplated by the CJV Agreement and the
Launchco CJV Agreement until the expiration of the coverage periods currently in
effect and shall take no action to reduce the scope or term of or levels of
coverage under such policies as currently

                                      24
<PAGE>
 
in effect.

          (b)  None of Heerema, any of its Affiliates or any of the Joint
Venture Companies shall submit any insurance claim in respect of MWB 403, the
derrick barge bearing the designation OHI 5000, the self-propelled, semi-
submersible derrick barge bearing the designation DB 102 and the launch barge
bearing the designation Intermac 627 under all hull and machinery insurance
policies obtained by McDermott or any of its Affiliates other than the claims
identified on Schedule V.7.

     Section 8.  Intercompany Payables.

          To the extent not paid at or prior to the Closing pursuant to Article
VI, Section 3, each of the Parties shall pay in the ordinary course all amounts
owed to the other Parties for goods and services provided in the ordinary
course.

     Section 9.  Further Assurances.

          From time to time after the Closing, each of the Parties will execute
and deliver such other and further instruments of conveyance, assignment and
transfer and take such other action (which shall include the making of all
necessary filings or giving of all necessary notices) as the other Party may
request in order to fully and effectively consummate and confirm the
transactions contemplated by this Agreement, including, but not limited to,
access to the OHI 5000 in order that McDermott can deliver the Manitowoc 4000
crawler crane currently located on the OHI 5000 to the owner of such crane,
Hyundai Heavy Industries, Ltd.

                        ARTICLE VI -   CLOSING MATTERS

     Section 1.  Time and Place.  The deliveries identified in Section 2
of this Article VI shall take place at 10:00 A.M. Paris time on December 19,
1997 at the offices of Cahill Gordon & Reindel, 19 rue Francois 1er 75008 Paris,
France or such other time and place as the Parties shall mutually agree.  The
deliveries contemplated to occur at such time and place are referred to as the
"Closing."

     Section 2.  Deliveries at Closing.

     (a)  Heerema Deliveries.  Pursuant to Article II of this Agreement, at
the Closing, Heerema will deliver to McDermott the items described below:

   (i)   Cash Payment.  By wire transfer in immediately available funds to an
   account designated by McDermott, USD 318,500,000 (three hundred eighteen
   million and five hundred thousand US Dollars);

   (ii)  DB 100 Crane Documents.  A bill of sale in the form attached hereto as
   Exhibit 4 for the DB 100 Crane, from POCCI # 21 to Hydro Marine Services,
   Inc., which bill of sale shall be dated the date of the Closing, and all
   other documents necessary to effect and evidence the transfer of the DB 100
   Crane;

   (iii) Intermac 650 Documents.

                 (a)  Certificates representing all of the outstanding capital
         stock of HOC 650 with satisfactory evidence of the transfer thereof to
         J. Ray McDermott Inc.,

                                      25
<PAGE>
 
                 (b)  true, correct and complete minute books of HOC 650,

                 (c)  letters of resignation of each member of the board of
         directors of HOC 650, each effective as of the Closing, and

                 (d)  a certificate of ownership of Intermac 650 dated the date
         of the Closing, showing title, a certificate from an appropriate
         Panamanian authority indicating the absence of Liens on Intermac 650
         and a class maintained certificate for Intermac 650 dated no more than
         five days prior to the date of the Closing, as well as all current
         vessel documentation requested by McDermott;

   (iv)  DB 101 Documents.

                 (a)  A certificate of ownership of DB 101 dated the date of the
         Closing, showing title, a certificate from an appropriate Panamanian
         authority indicating the absence of any Liens on DB 101 and a class
         maintained certificate for DB 101 dated no more than five days prior to
         the date of the Closing,

                 (b)  a bill of sale in the form attached hereto as Exhibit 5
         for DB 101, including all equipment items, spares and outfitting as
         described in Schedule I(d), from DB 101 Shipping Inc. (Panama) to Hydro
         Marine Services, Inc., which bill of sale shall be dated the date of
         the Closing and all other documents necessary to effect and evidence
         the transfer of DB 101, and

                 (c)  evidence satisfactory to McDermott of the satisfaction of
         each mortgage or other Lien on DB 101 and the release and termination
         of each assignment of each insurance policy covering DB 101;

   (v)   Intermac 600 Documents.

                 (a)  A certificate of ownership of Intermac 600 dated the date
         of the Closing, showing title, a certificate from an appropriate
         Panamanian authority indicating the absence of Liens on Intermac 600
         and a class maintained certificate for Intermac 600 dated no more than
         five days prior to the date of the Closing, and

                 (b)  a bill of sale in the form attached hereto as Exhibit 4
         for and all title documents relating to Intermac 600, including all
         equipment, spares and outfitting as described in Schedule I(m), from
         POCCI # 19 to Hydro Marine Services, Inc., as well as all current
         vessel documentation requested by McDermott and all other documents
         necessary to effect and evidence the transfer of Intermac 600;

   (vi)  Undertakings to Banks. Evidence satisfactory to McDermott that all
   obligations, direct, contingent or otherwise, of McDermott and MII under
   their guarantees given to HBU and ING for banking facilities provided to
   Affiliates of Heerema and to the Joint Venture Companies and all obligations,
   direct, contingent or otherwise of Hydro Marine Services, Inc. and JRMII
   under the Subordination Agreement dated 25th of March, 1996 with ABN AMRO
   Bank N.V., HBU and ING have been assumed by Heerema or have been cancelled by
   the banks;

                                      26
<PAGE>
 
   (vii)  Liability Insurance Coverage.  Certificates of Insurance satisfactory
   to McDermott evidencing liability insurance coverage relating to all
   liability insurance policies under which McDermott is an additional named
   insured on the same basis as was contemplated by the CJV Agreement and the
   Launchco CJV Agreement;

   (viii) Governmental Approvals.  Satisfactory evidence of all governmental
   approvals necessary, if any, to permit the sale, assignment, conveyance,
   transfer and delivery of the items listed in clauses (i) through (vii) above;
   and

   (ix)   Resolutions.  Copies of duly adopted resolutions of the board of
   directors of Heerema, each of its Affiliates and each of the Joint Venture
   Companies as is appropriate to effect the transactions contemplated by this
   Agreement, in each case, certified by the secretary or other appropriate
   officer of each such Person.

          (b)  McDermott Deliveries.  Pursuant to Article II of this Agreement,
at the Closing, McDermott will deliver to Heerema the items described below:

   (i)    McDermott Holland Shares. Evidence of the transfer of the ownership of
   all of the outstanding capital stock of McDermott Holland to Heerema Offshore
   Construction Group B.V.;

   (ii)   POCCI Shares. Certificates representing 500 shares of the common stock
   of POCCI, with satisfactory evidence of the transfer thereof to Heerema;

   (iii)  OMC Shares.  Certificates representing 3,000 shares of the common
   stock of OMC, with satisfactory evidence of the transfer thereof to Heerema;

   (iv)   Heerema McDermott Australia Shares. Certificates representing one
   share of the common stock of Heerema McDermott Australia, with satisfactory
   evidence of the transfer thereof to HOCG International B.V.;

   (v)    Directors' Resignations.  Letters of resignation of each member of the
   board of directors of McDermott Holland and each member of the boards of
   directors of POCCI, OMC and Heerema McDermott Australia who is a
   representative of McDermott;

   (vi)   MWB 403 Documents. A duly executed copy of the MWB 403 Option
  Agreement;

   (vii)  Subordinated Note.  The note evidencing the Subordinated Note, with an
   executed assignment thereof to Heerema;

   (viii) Governmental Approvals.  Satisfactory evidence of all governmental
   approvals, if any, necessary to permit the sale, assignment, conveyance,
   transfer and delivery of the items listed in clauses (i) through (vii) above;
   and

   (ix)   Resolutions.  Copies of duly adopted resolutions of the board of
   directors of McDermott and each of its Affiliates as is appropriate to effect
   the transactions contemplated by this Agreement, in each case, certified by
   the secretary or other appropriate officer of each such Person.

                                      27
<PAGE>
 
     Section 3.  Other Matters Related to the Closing.

     At or prior to the Closing,

     (a)  Intercompany Accounts.  Each of the Parties shall have paid,
whether in cash or by agreed offsets, all amounts known at the Closing to be
owed to the other Parties for goods and services provided in the ordinary course
pursuant to agreements and arrangements which are being terminated pursuant to
Article II, Section 3 which amounts are set forth on Schedule V. 3.

     (b)  Termination of Certain Insurance.  Effective as of the Closing,
McDermott and its Affiliates shall have terminated all hull and machinery
insurance policies obtained by any of them in respect of MWB 403, the derrick
barge bearing the designation OHI 5000, the self-propelled, semi-submersible
derrick barge bearing the designation DB 102 and the launch barge bearing the
designation Intermac 627.

     (c)  Additional Agreements. Concurrently with the execution and
delivery of this Agreement, each of the Parties has executed and delivered such
additional agreements and other and further instruments of conveyance,
assignment and transfer as are necessary to give effect to the transactions
contemplated by this Agreement.  As between the Parties, should any conflict
exist or arise, the provisions of this Agreement shall prevail over the
provisions of such additional agreements and instruments.

 
                    ARTICLE VII -  MISCELLANEOUS PROVISIONS

     Section 1.  Notices.

     All notices required or contemplated by this Agreement from or to either
Party shall be in writing and shall be delivered either (a) by personal
delivery, acknowledged by written receipt of the recipient, (b) by registered or
certified airmail, postage prepaid, or (c) by telex or facsimile ("telefax")
transmission, confirmed within twenty-four (24) hours by registered or certified
airmail, postage prepaid. All notices delivered by airmail, telex or telefax
shall be addressed to the recipient at its address set forth in this Article
VII, Section 1, which address may be changed from time to time by notice
delivered in accordance with this Section. The effective date of any notice
delivered in accordance with this Section shall be (a) the date of personal
delivery, (b) the fifteenth (15th) day after the day of airmailing or (c) the
first business day after transmission of telex or telefax. The addresses to
which notice shall be sent, until different addresses are specified by notice as
above provided, are:


                                      28
<PAGE>
 
McDERMOTT:                       J. RAY McDERMOTT S.A.
                                 1450 Poydras Street
                                 Post Office Box 600035
                                 New Orleans, Louisiana  70160 U.S.A.

Attention:                       Senior Vice President, General Counsel and
                                 Secretary
Telefax:                         1 504 587 5237

HEEREMA:                         HEEREMA OFFSHORE CONSTRUCTION GROUP, INC.
                                 5 Rue Pedro-Meylan
                                 1208 Geneva, Switzerland

Attention:                       President
Telefax:                         41-22-7861865

     To the extent that either Party receives correspondence addressed to a
Person who is an Affiliate of the other Party, the Party receiving such
correspondence shall promptly forward such correspondence to the other Party at
the address set forth above.

     Section 2.  Successors and Assigns.

     This Agreement is exclusively for the benefit of the Parties hereto and
shall not vest any benefits or rights in, or create any obligations or duties
toward, any third party. All covenants herein shall bind and inure to the
benefit of the successors and assigns of the Parties, whether so expressed or
not; provided, however, that no Party may assign its rights, duties or
obligations under this Agreement without the prior written consent of the other
Party. No consent, assignment or assumption shall relieve or release the
assigning Party from any of its obligations under this Agreement to the non-
assigning Party and the assigning Party shall remain bound and obligated as if
no such assignment had been made. No assignment of any rights of a Party
hereunder shall be valid or have any force unless the assignee shall have
assumed, in writing, the duties and obligations of the assigning Party. Heerema
shall cause any transferee of or successor to any substantial portion of
Heerema's business or assets to assume, in writing, the duties and obligations
of Heerema pursuant to this Agreement.

     Section 3.  Entire Agreement.

     The terms and provisions herein contained and other supporting documents
specifically referred to herein constitute the entire agreement between the
Parties and shall supersede all previous communications, either oral or written,
between the Parties hereto with respect to the subject matter hereof; and no
agreements or understandings varying or extending the same shall be binding upon
any Party hereto unless in a writing signed by a duly-authorized officer or
representative of each of Heerema and McDermott.

     Section 4.  Severability.

     If any covenant, term or provision of this Agreement, or the application
thereof to any situation or circumstance, shall be invalid or unenforceable to
any extent, the remainder of this Agreement, or the application of such
covenant, term or provision to situations or circumstances other than those as
to which it is invalid or unenforceable, 

                                      29
<PAGE>
 
shall not be affected; and each covenant, term or provision of this Agreement
shall be valid and enforceable to the fullest extent permitted by applicable
law.

     Section 5.  Waiver.

     No failure or delay on the part of any Party in the exercise of any power,
right or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof, or of any other power, right or privilege.

     Section 6.  Applicable Law, Dispute Resolution and Judgment Currency.

     a.   The execution, interpretation, construction, performance and
enforcement of this Agreement and any and all disputes including, but not
limited to, disputes in contract or tort, whether in law or in equity, of
whatsoever nature arising out of, in connection with or relating in any way,
directly or indirectly, to (i) this Agreement or the subjects thereof, (ii) the
performance by any party hereunder, including any remedy for breach or (iii) the
relationships, arrangements and agreements terminated by this Agreement (herein,
collectively, the "Subjects of this Agreement") shall be governed exclusively by
the internal laws of England.

     b.   Any claim, cause of action, dispute, controversy or difference
known or hereafter discovered ("Claim") between the Parties (including their
respective Affiliates and the Joint Venture Companies) arising out of, in
connection with or relating in any way, directly or indirectly, to the Subjects
of this Agreement shall be brought and asserted only in The English High Court,
Strand, London EC4 (the "Court") and each Party irrevocably agrees to submit and
will cause each of its Affiliates, and with regard to the Joint Venture
Companies, Heerema will cause each Joint Venture Company, irrevocably to submit
to the exclusive jurisdiction of said Court.

     c.   Each Party on behalf of itself, each of its Affiliates and each
of the Joint Venture Companies, hereby waives, and agrees not to assert, as a
defense, ground for avoidance or objection in any action, suit or proceeding
arising out of, in connection with or relating in any way, directly or
indirectly, to any Claim regarding the Subjects of this Agreement, in said
Court, that it is not subject to the jurisdiction of said Court or that such
action, suit or proceeding may not be brought in or is not maintainable in said
Court or that this Agreement may not be enforced in or by said Court or that its
property, wherever located, is exempt or immune from execution, that the suit,
action or proceeding is brought in an inconvenient forum, or that the venue of
the suit, action or proceeding is in any way improper.

     d.   Service of process with respect to any Claim relating to the
Subjects of this Agreement may be made upon any Party by mailing a copy thereof
by registered or certified mail, postage prepaid, to such party at its address
as provided in Section 1 of this Article VII provided that, alternatively,
service of process may be accomplished in any manner permitted by the laws of
England.

     e.   Heerema hereby irrevocably and unconditionally appoints Baker &
McKenzie at its registered office, currently located at 100 New Bridge Street,
London EC4V 6J4, England, Attention:  Lynda M. Martin Alegi or Head of
Litigation Department, as its agent for service of process before such Court.
McDermott hereby irrevocably and unconditionally appoints Ince & Co. at its
office, currently located at Knollys House, 11 Byward Street, London EC3R 5EN,
DX 1070 London City, England, Attention:  David Sheehan, as its agent for
service of process before such Court.  Either agent may resign 

                                      30
<PAGE>
 
such appointment, provided that such resignation shall be effective only upon
(a) the appointment of a successor agent in London, England, (b) the acceptance
of such appointment by such successor agent and (c) notice thereof being
provided to the non-appointing Party pursuant to Section 1 of this Article VII.

     f.   To the extent that any Party has or hereafter may acquire any
immunity from the jurisdiction of any court of (i) any jurisdiction in which any
Party owns or leases property or assets, (ii) the United States or the State of
New York or (iii) the United Kingdom or any political subdivision thereof or
from any legal process (whether through service of notice, attachment prior to
judgment, attachment in aid of execution, execution or otherwise) with respect
to itself or its property and assets, this Agreement or actions to enforce
judgments in respect of any thereof, it hereby irrevocably waives such immunity
in respect of its obligations under the above-referenced documents and this
Agreement and such immunity shall be treated and understood by the Parties to be
null and void.

     g.   Each Party shall indemnify the other Party against any loss
incurred by such other Party as a result of any judgment or order being given or
made for any amount due under this Agreement and such judgment or order being
expressed and paid in a currency (the "Judgment Currency") other than United
States dollars and as a result of any variation as between (i) the rate of
exchange at which the United States dollar amount is converted into the Judgment
Currency for the purpose of such judgment or order and (ii) the spot rate of
exchange in The City of New York at which such other Party on the date of
payment of such judgment or order is able to purchase United States dollars with
the amount of the Judgment Currency actually received by such other Party.  The
foregoing indemnity shall continue in full force and effect notwithstanding any
such judgment or order as aforesaid.  The term "spot rate of exchange" shall
include any premiums and costs of exchange payable in connection with the
purchase of, or conversion into, United States dollars.

     Section 7.  Headings.

     The headings in this Agreement are for convenience of reference only
and shall be ignored in the construction or interpretation of this Agreement.

     Section 8.  Counterpart.

     This Agreement may be executed simultaneously in two (2) counterparts,
each of which shall be deemed an original, but both of which together shall
constitute one and the same instrument.

     Section 9.  Language Interpretation.

     Words imparting singular also include the plural and vice versa where
the context so requires.  The misplacement, misspelling, addition, omission or
typographical error of a word or character shall not change the intent of any
part of this Agreement from that set forth by this Agreement as a whole.

     Section 10. No Reliance

     Neither Party has relied on any agreement, understanding, arrangement,
representation, undertaking or warranty (whether written or spoken) not
expressly set out or referred to in this Agreement and each Party irrevocably
and unconditionally waives any right it may have to rescind this Agreement
and/or claim damages for misrepresentation 

                                      31
<PAGE>
 
not contained in this Agreement or for breach of any warranty not contained in
this Agreement unless such misrepresentation or warranty was made fraudulently.

          IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to
be executed in two (2) counterparts by their duly authorized and empowered
officer(s) or representative(s) as of the 19th day of December, 1997.

J. RAY McDERMOTT, S.A.                       HEEREMA OFFSHORE CONSTRUCTION 
                                             GROUP INC.

/s/ Robert H. Rawle                          /s/ Pieter H. Heerema
________________________                     __________________________
By: Robert H. Rawle                          By: Pieter H. Heerema
Title: President and Chief                   Title: President
       Operating Officer

                                      32