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                                                                   EXHIBIT 10.12

                         REGISTRATION RIGHTS AGREEMENT

                             Dated December 9, 2003

                                    between

                            J. RAY MCDERMOTT, S.A.,

                          THE GUARANTORS NAMED HEREIN

                                      and

                       MORGAN STANLEY & CO. INCORPORATED

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                          REGISTRATION RIGHTS AGREEMENT

         THIS REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made and
entered into December 9, 2003, among J. Ray McDermott, S.A., a Panamanian
corporation (the "COMPANY"), the guarantors named on the signature pages hereto
(the "GUARANTORS") and MORGAN STANLEY & CO. INCORPORATED (the "INITIAL
PURCHASER").

         This Agreement is made pursuant to the Purchase Agreement dated
November 21, 2003, among the Company, the Guarantors and the Initial Purchaser
(the "PURCHASE AGREEMENT"), which provides for the sale by the Company to the
Initial Purchaser of $200,000,000 aggregate principal amount of the Company's
11% Senior Secured Notes due 2013 (the "NOTES" and, together with the related
guaranties of the Guarantors, the "SECURITIES"). In order to induce the Initial
Purchaser to enter into the Purchase Agreement, the Company and the Guarantors
have agreed to provide to the Initial Purchaser and its direct and indirect
transferees the registration rights set forth in this Agreement. The execution
of this Agreement is a condition to the closing under the Purchase Agreement.

         In consideration of the foregoing, the parties hereto agree as follows:

         1.       Definitions.

         As used in this Agreement, the following capitalized defined terms
shall have the following meanings:

         "1933 ACT" shall mean the Securities Act of 1933, as amended from time
to time.

         "1934 ACT" shall mean the Securities Exchange Act of 1934, as amended
from time to time.

         "CLOSING DATE" shall mean the Closing Date as defined in the Purchase
Agreement.

         "COMPANY" shall have the meaning set forth in the preamble and shall
also include any successor to the Company.

         "EXCHANGE OFFER" shall mean the exchange offer by the Company and the
Guarantors of Exchange Securities for Registrable Securities pursuant to Section
2(a) hereof.

         "EXCHANGE OFFER REGISTRATION" shall mean a registration under the 1933
Act effected pursuant to Section 2(a) hereof.

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         "EXCHANGE OFFER REGISTRATION STATEMENT" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form) and all amendments and supplements to such registration statement, in each
case including the Prospectus contained therein, and all exhibits thereto.

         "EXCHANGE SECURITIES" shall mean securities issued by the Company and
the Guarantors under the Indenture containing terms identical to the Securities
(except that (i) interest on the senior secured notes included in the Exchange
Securities (the "EXCHANGE NOTES") shall accrue from the last date on which
interest was paid on the Notes or, if no such interest has been paid, from
December 9, 2003 and (ii) the Exchange Securities will not contain restrictions
on transfer) and to be offered to Holders of Securities in exchange for
Securities pursuant to the Exchange Offer.

         "HOLDER" shall mean the Initial Purchaser, for so long as they own any
Registrable Securities, and each of its successors, assigns and direct and
indirect transferees who become registered owners of Registrable Securities
under the Indenture; provided that for purposes of Sections 4 and 5 of this
Agreement, the term "HOLDER" shall include Participating Broker-Dealers (as
defined in Section 4(a)).

         "INDENTURE" shall mean the Indenture relating to the Securities dated
as of the date hereof among the Company, the Guarantors and The Bank of New
York, as trustee, and as the same may be amended from time to time in accordance
with the terms thereof.

         "MAJORITY HOLDERS" shall mean the Holders of a majority of the
aggregate principal amount of outstanding Registrable Securities; provided that
whenever the consent or approval of Holders of a specified percentage of
Registrable Securities is required hereunder, Registrable Securities held by the
Company or any of its affiliates (as such term is defined in Rule 405 under the
1933 Act) (other than the Initial Purchaser or subsequent Holders of Registrable
Securities if such subsequent holders are deemed to be such affiliates solely by
reason of their holding of such Registrable Securities) shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage or amount.

         "PERSON" shall mean an individual, partnership, limited liability
company, corporation, trust or unincorporated organization, or a government or
agency or political subdivision thereof.

         "INITIAL PURCHASER" shall have the meaning set forth in the preamble.

         "PURCHASE AGREEMENT" shall have the meaning set forth in the preamble.

         "PROSPECTUS" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus

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supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to such prospectus, and in each case including
all material incorporated by reference therein.

         "REGISTRABLE SECURITIES" shall mean the Securities; provided, however,
that the Securities shall cease to be Registrable Securities on the first to
occur of: (i) when a Registration Statement with respect to such Securities
shall have been declared effective under the 1933 Act and such Securities shall
have been exchanged or disposed of pursuant to such Registration Statement; (ii)
when such Securities are eligible to be sold to the public pursuant to Rule
144(k) (or any similar provision then in force, but not Rule 144A) under the
1933 Act; or (iii) when such Securities shall have ceased to be outstanding.

         "REGISTRATION EXPENSES" shall mean any and all expenses incident to
performance of or compliance by the Company and the Guarantors with this
Agreement, including without limitation: (i) all applicable SEC, stock exchange
or National Association of Securities Dealers, Inc. registration and filing
fees, (ii) all fees and expenses incurred in connection with compliance with
state securities or blue sky laws (including reasonable fees and disbursements
of counsel for any underwriters or Holders in connection with blue sky
qualification of any of the Registrable Securities), (iii) all expenses of any
Persons in preparing or assisting in preparing, word processing, printing and
distributing any Registration Statement, any Prospectus, any amendments or
supplements thereto, any underwriting agreements, securities sales agreements
and other documents relating to the performance of and compliance with this
Agreement, (iv) all rating agency fees relating to the Securities or the
Exchange Securities, (v) all fees and disbursements relating to the
qualification of the Indenture under applicable securities laws, (vi) the fees
and disbursements of the Trustee and its counsel, (vii) the fees and
disbursements of counsel for the Company and, in the case of a Shelf
Registration Statement, the reasonable fees and disbursements of one counsel for
the Holders (which counsel shall be selected by the Majority Holders and
reasonably satisfactory to the Company and which counsel may also be counsel for
the Initial Purchaser) and (viii) the fees and disbursements of the independent
public accountants of the Company, including the expenses of any opinions or
"cold comfort" letters required by or incident to such performance and
compliance, but excluding fees and expenses of counsel to the underwriters
(other than fees and expenses set forth in clause (ii) above) or the Holders and
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of Registrable Securities by a Holder.

         "REGISTRATION STATEMENT" shall mean any registration statement of the
Company and the Guarantors that covers any of the Exchange Securities or
Registrable Securities pursuant to the provisions of this Agreement and all
amendments and supplements to any such Registration Statement, including
post-effective amendments, in each case including the Prospectus contained
therein, and all exhibits thereto.

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         "SEC" shall mean the Securities and Exchange Commission.

         "SHELF REGISTRATION" shall mean a registration effected pursuant to
Section 2(b) hereof.

         "SHELF REGISTRATION STATEMENT" shall mean a "SHELF" registration
statement of the Company and the Guarantors pursuant to the provisions of
Section 2(b) of this Agreement which covers all of the Registrable Securities
(but no other securities unless approved by the Holders whose Registrable
Securities are covered by such Shelf Registration Statement) on an appropriate
form under Rule 415 under the 1933 Act, or any similar rule that may be adopted
by the SEC, and all amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, and all exhibits thereto and all material incorporated by
reference therein.

         "SUSPENSION PERIOD" shall have the meaning set forth in Section 3
hereof.

         "TRUSTEE" shall mean the trustee with respect to the Securities under
the Indenture.

         "UNDERWRITER" shall have the meaning set forth in Section 3 hereof.

         "UNDERWRITTEN REGISTRATION" or "UNDERWRITTEN OFFERING" shall mean a
registration in which Registrable Securities are sold to an Underwriter for
reoffering to the public.

         2.       Registration Under the 1933 Act.

                  (a)      To the extent not prohibited by any applicable law or
         applicable interpretation of the Staff of the SEC, the Company and the
         Guarantors shall use commercially reasonable efforts to cause to be
         filed an Exchange Offer Registration Statement covering the offer by
         the Company to the Holders to exchange all of the Registrable
         Securities for Exchange Securities and to have such Registration
         Statement remain effective until the closing of the Exchange Offer. The
         Company shall commence the Exchange Offer promptly after the Exchange
         Offer Registration Statement has been declared effective by the SEC and
         use commercially reasonable efforts to have the Exchange Offer
         consummated not later than 30 days after such effective date. The
         Company shall commence the Exchange Offer by mailing the related
         exchange offer Prospectus and accompanying documents to each Holder
         stating, in addition to such other disclosures as are required by
         applicable law:

                           (i)      that the Exchange Offer is being made
                  pursuant to this Registration Rights Agreement and that all
                  Registrable Securities validly tendered will be accepted for
                  exchange;

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                           (ii)     the dates of acceptance for exchange (which
                  shall be a period of at least 20 business days from the date
                  such notice is mailed) (the "EXCHANGE DATES");

                           (iii)    that any Registrable Security not tendered
                  will remain outstanding and continue to accrue interest, but
                  will not retain any rights under this Registration Rights
                  Agreement;

                           (iv)     that Holders electing to have a Registrable
                  Security exchanged pursuant to the Exchange Offer will be
                  required to surrender such Registrable Security, together with
                  the enclosed letters of transmittal, to the institution and at
                  the address (located in the Borough of Manhattan, The City of
                  New York) specified in the notice prior to the close of
                  business on the last Exchange Date; and

                           (v)      that Holders will be entitled to withdraw
                  their election, not later than the close of business on the
                  last Exchange Date, by sending to the institution and at the
                  address (located in the Borough of Manhattan, The City of New
                  York) specified in the notice a telegram, telex, facsimile
                  transmission or letter setting forth the name of such Holder,
                  the principal amount of Registrable Securities delivered for
                  exchange and a statement that such Holder is withdrawing his
                  election to have such Securities exchanged.

                           As soon as practicable after the last Exchange Date,
                  the Company shall:

                           (i)      accept for exchange Registrable Securities
                  or portions thereof tendered and not validly withdrawn
                  pursuant to the Exchange Offer; and

                           (ii)     deliver, or cause to be delivered, to the
                  Trustee for cancellation all Registrable Securities or
                  portions thereof so accepted for exchange by the Company and
                  issue, and cause the Trustee to promptly authenticate and mail
                  to each Holder, an Exchange Security equal in principal amount
                  to the principal amount of the Registrable Securities
                  surrendered by such Holder.

         The Company shall use commercially reasonable efforts to complete the
Exchange Offer as provided above and shall comply with the applicable
requirements of the 1933 Act, the 1934 Act and other applicable laws and
regulations in connection with the Exchange Offer. The Exchange Offer shall not
be subject to any conditions, other than that the Exchange Offer does not
violate applicable law or any applicable interpretation of the Staff of the SEC.
The Company shall inform the Initial Purchaser of the names and addresses of the
Holders to whom the Exchange Offer is made, and the Initial Purchaser shall have

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the right, subject to applicable law, to contact such Holders and otherwise
facilitate the tender of Registrable Securities in the Exchange Offer.

                  (b)      In the event that (i) the Company determines that the
         Exchange Offer Registration provided for in Section 2(a) above is not
         available or may not be consummated as soon as practicable after the
         last Exchange Date because it would violate applicable law or the
         applicable interpretations of the Staff of the SEC, (ii) the Exchange
         Offer is not for any other reason consummated by July 6, 2004 or the
         Exchange Offer has been completed and in the opinion of counsel for the
         Initial Purchaser a Registration Statement must be filed and a
         Prospectus must be delivered by the Initial Purchaser in connection
         with any offering or sale of Registrable Securities, the Company shall
         use commercially reasonable efforts to cause to be filed as soon as
         practicable after such determination, date or notice of such opinion of
         counsel is given to the Company, as the case may be, a Shelf
         Registration Statement providing for the sale by the Holders of all of
         the Registrable Securities and to have such Shelf Registration
         Statement declared effective by the SEC. In the event the Company is
         required to file a Shelf Registration Statement solely as a result of
         the matters referred to in clause (iii) of the preceding sentence, the
         Company shall use commercially reasonable efforts to file and have
         declared effective by the SEC both an Exchange Offer Registration
         Statement pursuant to Section 2(a) with respect to all Registrable
         Securities and a Shelf Registration Statement (which may be a combined
         Registration Statement with the Exchange Offer Registration Statement)
         with respect to offers and sales of Registrable Securities held by the
         Initial Purchaser after completion of the Exchange Offer. The Company
         agrees to use commercially reasonable efforts to keep the Shelf
         Registration Statement continuously effective until the expiration of
         the period referred to in Rule 144(k) with respect to the Registrable
         Securities or such shorter period that will terminate when all of the
         Registrable Securities covered by the Shelf Registration Statement have
         been sold pursuant to the Shelf Registration Statement. The Company
         further agrees to supplement or amend the Shelf Registration Statement
         if required by the rules, regulations or instructions applicable to the
         registration form used by the Company for such Shelf Registration
         Statement or by the 1933 Act or by any other rules and regulations
         thereunder for shelf registration or if reasonably requested by a
         Holder with respect to information relating to such Holder, and to use
         commercially reasonable efforts to cause any such amendment to become
         effective and such Shelf Registration Statement to become usable as
         soon as thereafter practicable. The Company agrees to furnish to the
         Holders of Registrable Securities copies of any such supplement or
         amendment promptly after its being used or filed with the SEC.

                  (c)      The Company shall pay all Registration Expenses in
         connection with the registration pursuant to Section 2(a) and Section
         2(b).

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         Each Holder shall pay all underwriting discounts and commissions and
         transfer taxes, if any, relating to the sale or disposition of such
         Holder's Registrable Securities pursuant to the Shelf Registration
         Statement.

                  (d)      An Exchange Offer Registration Statement pursuant to
         Section 2(a) hereof or a Shelf Registration Statement pursuant to
         Section 2(b) hereof will not be deemed to have become effective unless
         it has been declared effective by the SEC; provided, however, that, if,
         after it has been declared effective, the offering of Registrable
         Securities pursuant to a Shelf Registration Statement is interfered
         with by any stop order, injunction or other order or requirement of the
         SEC or any other governmental agency or court, such Registration
         Statement will be deemed not to have become effective during the period
         of such interference until the offering of Registrable Securities
         pursuant to such Registration Statement may legally resume. In the
         event the Exchange Offer Registration Statement or the Shelf
         Registration Statement is not declared effective on or prior to June 6,
         2004, the interest rate on the Securities will be increased by 0.50%
         per annum until the Exchange Offer Registration Statement or the Shelf
         Registration Statement is declared effective by the SEC. Unless the
         Shelf Registration Statement shall have become effective, in the event
         the Exchange Offer is not consummated on or prior to July 6, 2004, the
         interest rate on the Securities will be increased by 0.50% per annum
         until the Exchange Offer is consummated; provided, however, that on the
         effectiveness of the Shelf Registration Statement, any such increased
         interest will cease to accrue.

                  (e)      Without limiting the remedies available to the
         Initial Purchaser and the Holders, the Company acknowledges that any
         failure by the Company to comply with its obligations under Section
         2(a) and Section 2(b) hereof may result in material irreparable injury
         to the Initial Purchaser or the Holders for which there is no adequate
         remedy at law, that it will not be possible to measure damages for such
         injuries precisely and that, in the event of any such failure, the
         Initial Purchaser or any Holder may obtain such relief as may be
         required to specifically enforce the Company's obligations under
         Section 2(a) and Section 2(b) hereof.

         3.       Registration Procedures.

         In connection with the obligations of the Company with respect to the
Registration Statements pursuant to Section 2(a) and Section 2(b) hereof, the
Company shall as expeditiously as possible:

                  (a)      prepare and file with the SEC a Registration
         Statement on the appropriate form under the 1933 Act, which form (x)
         shall be selected by the Company and (y) shall, in the case of a Shelf
         Registration, be available for the sale of the Registrable Securities
         by the selling Holders thereof and (z) shall comply as to form in all
         material respects with the

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         requirements of the applicable form and include all financial
         statements required by the SEC to be filed therewith, and use
         commercially reasonable efforts to cause such Registration Statement to
         become effective and remain effective in accordance with Section 2
         hereof;

                  (b)      prepare and file with the SEC such amendments and
         post-effective amendments to each Registration Statement as may be
         necessary to keep such Registration Statement effective for the
         applicable period and cause each Prospectus to be supplemented by any
         required prospectus supplement and, as so supplemented, to be filed
         pursuant to Rule 424 under the 1933 Act; to keep each Prospectus
         current during the period described under Section 4(3) and Rule 174
         under the 1933 Act that is applicable to transactions by brokers or
         dealers with respect to the Registrable Securities or Exchange
         Securities;

                  (c)      in the case of a Shelf Registration, furnish to each
         Holder of Registrable Securities, to counsel for the Initial Purchaser,
         to counsel for the Holders and to each Underwriter of an Underwritten
         Offering of Registrable Securities, if any, without charge, as many
         copies of each Prospectus, including each preliminary Prospectus, and
         any amendment or supplement thereto and such other documents as such
         Holder or Underwriter may reasonably request, in order to facilitate
         the public sale or other disposition of the Registrable Securities; and
         the Company consents to the use of such Prospectus and any amendment or
         supplement thereto in accordance with applicable law by each of the
         selling Holders of Registrable Securities and any such Underwriters in
         connection with the offering and sale of the Registrable Securities
         covered by and in the manner described in such Prospectus or any
         amendment or supplement thereto in accordance with applicable law;

                  (d)      use commercially reasonable efforts to register or
         qualify the Registrable Securities under all applicable state
         securities or "BLUE SKY" laws of such jurisdictions as any Holder of
         Registrable Securities covered by a Registration Statement shall
         reasonably request in writing by the time the applicable Registration
         Statement is declared effective by the SEC, to cooperate with such
         Holders in connection with any filings required to be made with the
         National Association of Securities Dealers, Inc. and do any and all
         other acts and things which may be reasonably necessary or advisable to
         enable such Holder to consummate the disposition in each such
         jurisdiction of such Registrable Securities owned by such Holder;
         provided, however, that the Company shall not be required to (i)
         qualify as a foreign corporation or as a dealer in securities in any
         jurisdiction where it would not otherwise be required to qualify but
         for this Section 3(d), (ii) file any general consent to service of
         process, (iii) subject itself to taxation in any such jurisdiction if
         it is not so subject or (iv) amend its articles of incorporation or
         bylaws;

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                  (e)      in the case of a Shelf Registration, notify each
         Holder of Registrable Securities, counsel for the Holders and counsel
         for the Initial Purchaser promptly and, if requested by any such Holder
         or counsel, confirm such advice in writing (i) when a Registration
         Statement has become effective and when any post-effective amendment
         thereto has been filed and becomes effective, (ii) of any request by
         the SEC or any state securities authority for amendments and
         supplements to a Registration Statement and Prospectus or for
         additional information after the Registration Statement has become
         effective, (iii) of the issuance by the SEC or any state securities
         authority of any stop order suspending the effectiveness of a
         Registration Statement or the initiation of any proceedings for that
         purpose, (iv) if, between the effective date of a Registration
         Statement and the closing of any sale of Registrable Securities covered
         thereby, the representations and warranties of the Company contained in
         any underwriting agreement, securities sales agreement or other similar
         agreement, if any, relating to the offering cease to be true and
         correct in all material respects or if the Company receives any
         notification with respect to the suspension of the qualification of the
         Registrable Securities for sale in any jurisdiction or the initiation
         of any proceeding for such purpose, of the happening of any event
         during the period a Shelf Registration Statement is effective which
         makes any statement made in such Registration Statement or the related
         Prospectus untrue in any material respect or which requires the making
         of any changes in such Registration Statement or Prospectus in order to
         make the statements therein not misleading and (vi) of any
         determination by the Company that a post-effective amendment to a
         Registration Statement would be appropriate;

                  (f)      use commercially reasonable efforts to obtain the
         withdrawal of any order suspending the effectiveness of a Registration
         Statement at the earliest possible moment and provide prompt notice to
         each Holder of the withdrawal of any such order;

                  (g)      in the case of a Shelf Registration, furnish to each
         Holder of Registrable Securities, without charge, at least one
         conformed copy of each Registration Statement and any post-effective
         amendment thereto (without exhibits thereto, unless specifically
         requested);

                  (h)      in the case of a Shelf Registration, cooperate with
         the selling Holders of Registrable Securities to facilitate the timely
         preparation and delivery of certificates representing Registrable
         Securities to be sold and not bearing any restrictive legends and
         enable such Registrable Securities to be in such denominations
         (consistent with the provisions of the Indenture) and registered in
         such names as the selling Holders may reasonably request at least one
         business day prior to the closing of any sale of Registrable
         Securities;

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                  (i)      in the case of a Shelf Registration, upon the
         occurrence of any event contemplated by Section 3(e)(v) hereof, use
         commercially reasonable efforts to prepare and file with the SEC a
         supplement or post-effective amendment to a Registration Statement or
         the related Prospectus or any document incorporated therein by
         reference or file any other required document so that, as thereafter
         delivered to the purchasers of the Registrable Securities, such
         Prospectus will not contain any untrue statement of a material fact or
         omit to state a material fact necessary to make the statements therein,
         in the light of the circumstances under which they were made, not
         misleading. The Company agrees to notify the Holders to suspend use of
         the Prospectus as promptly as practicable after the occurrence of such
         an event, and the Holders hereby agree to suspend use of the Prospectus
         until the Company has amended or supplemented the Prospectus to correct
         such misstatement or omission;

                  (j)      a reasonable time prior to the filing of any
         Registration Statement, any Prospectus, any amendment to a Registration
         Statement or any amendment or supplement to a Prospectus after initial
         filing of a Registration Statement, provide copies of such document to
         the Initial Purchaser (and, in the case of a Shelf Registration
         Statement, the Holders) and make such of the representatives of the
         Company as shall be reasonably requested by the Initial Purchaser or
         its counsel (and, in the case of a Shelf Registration Statement, the
         Holders) available for discussion of such document, and shall not at
         any time file or make any amendment to the Registration Statement, any
         Prospectus or any amendment of or supplement to a Registration
         Statement or a Prospectus, of which the Initial Purchaser (and, in the
         case of a Shelf Registration Statement, the Holders) shall not have
         previously been advised and furnished a copy or to which the Initial
         Purchaser (and, in the case of a Shelf Registration Statement, the
         Holders) shall reasonably object pursuant to a written notice delivered
         to the Company prior to such filing;

                  (k)      obtain a CUSIP number for all Exchange Securities or
         Registrable Securities, as the case may be, not later than the
         effective date of a Registration Statement;

                  (l)      cause the Indenture to be qualified under the Trust
         Indenture Act of 1939, as amended (the "TIA"), in connection with the
         registration of the Exchange Securities or Registrable Securities, as
         the case may be, cooperate with the Trustee and the Holders to effect
         such changes to the Indenture as may be required for the Indenture to
         be so qualified in accordance with the terms of the TIA and execute,
         and use commercially reasonable efforts to cause the Trustee to
         execute, all documents as may be required to effect such changes and
         all other forms and documents required to be filed with the SEC to
         enable the Indenture to be so qualified in a timely manner;

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                  (m)      in the case of a Shelf Registration, make available
         for inspection by a representative of the Holders of the Registrable
         Securities, any Underwriter participating in any disposition pursuant
         to such Shelf Registration Statement, and attorneys and accountants
         designated by the Holders, at reasonable times and in a reasonable
         manner, all financial and other records, pertinent documents and
         properties of the Company, and cause the respective officers, directors
         and employees of the Company to supply all information reasonably
         requested by any such representative, Underwriter, attorney or
         accountant in connection with a Shelf Registration Statement;

                  (n)      if reasonably requested by any Holder of Registrable
         Securities covered by a Registration Statement, (i) promptly
         incorporate in a Prospectus supplement or post-effective amendment such
         information with respect to such Holder as such Holder reasonably
         requests to be included therein and (ii) make all required filings of
         such Prospectus supplement or such post-effective amendment promptly
         after the Company has received notification of the matters to be
         incorporated in such filing; and

                  (o)      in the case of a Shelf Registration, enter into such
         customary agreements and take all such other actions in connection
         therewith (including those requested by the Holders of a majority of
         the Registrable Securities being sold) in order to expedite or
         facilitate the disposition of such Registrable Securities including,
         but not limited to, an Underwritten Offering and in such connection, to
         the extent possible, make such representations and warranties to the
         Holders and any Underwriters of such Registrable Securities with
         respect to the business of the Company and its subsidiaries, the
         Registration Statement, and the Prospectus, in each case, in form,
         substance and scope as are customarily made by issuers to underwriters
         in similar underwritten offerings of debt securities and confirm the
         same if and when requested, (ii) obtain opinions of counsel to the
         Company (which counsel and opinions, in form, scope and substance,
         shall be reasonably satisfactory to the Holders and such Underwriters)
         addressed to each selling Holder and Underwriter of Registrable
         Securities, covering the matters customarily covered in opinions
         requested in similar underwritten offerings of debt securities, (iii)
         obtain "cold comfort" letters from the independent certified public
         accountants of the Company (and, if necessary, any other certified
         public accountant of any subsidiary of the Company, or of any business
         acquired by the Company for which financial statements and financial
         data are or are required to be included in the Registration Statement)
         addressed to each selling Holder and Underwriter of Registrable
         Securities, such letters to be in customary form and covering matters
         of the type customarily covered in "cold comfort" letters in connection
         with similar underwritten offerings of debt securities, and (iv)
         deliver such documents and certificates as may be reasonably requested
         by the Holders of a majority in

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         principal amount of the Registrable Securities being sold or the
         Underwriters, and which are customarily delivered in similar
         underwritten offerings of debt securities, to evidence the continued
         validity of the representations and warranties of the Company made
         pursuant to clause (i) above and to evidence compliance with any
         customary conditions contained in an underwriting agreement; provided
         that the Company shall not be required to enter into any such agreement
         with respect to any or all of the Registrable Securities more than
         once.

         In the case of a Shelf Registration Statement, the Company may require
each Holder of Registrable Securities to furnish to the Company such information
regarding the Holder and the proposed distribution by such Holder of such
Registrable Securities as the Company may from time to time reasonably request
in writing. No Holder of Registrable Securities shall be entitled to the
increased interest rate described in Section 2(d) unless and until such Holder
shall have provided all such information which is required by rules of the
Commission to be included in the Shelf Registration Statement prior to the time
it is declared effective. Each selling Holder agrees to promptly furnish
additional information required to be disclosed in order to make the information
previously furnished to the Company by such Holder not misleading.

         In the case of a Shelf Registration Statement, each Holder agrees that,
upon receipt of any notice from the Company of the happening of any event of the
kind described in Section 3(e)(v) hereof, such Holder will forthwith discontinue
disposition of Registrable Securities pursuant to a Registration Statement until
such Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 3(i) hereof, and, if so directed by the Company, such
Holder will deliver to the Company (at its expense) all copies in its
possession, other than permanent file copies then in such Holder's possession,
of the Prospectus covering such Registrable Securities current at the time of
receipt of such notice.

         The Holders of Registrable Securities covered by a Shelf Registration
Statement who desire to do so may sell such Registrable Securities in an
Underwritten Offering. In any such Underwritten Offering, the investment banker
or investment bankers and manager or managers (the "UNDERWRITERS") that will
administer the offering will be selected by the Majority Holders of the
Registrable Securities included in such offering, provided that such investment
banker or manager is reasonably satisfactory to the Company.

         The Company may suspend the Shelf Registration Statement (a "SUSPENSION
PERIOD"), if the Company determines, upon advice of counsel, that the continued
effectiveness and use of the Shelf Registration Statement would require the
disclosure of confidential information or interfere with any financing,
acquisition, reorganization or other material transaction involving the Company.
A Suspension Period shall commence on and include the date that the Company
gives notice that the Shelf Registration Statement is no longer effective or the

                                       12

<PAGE>

Prospectus included therein is no longer usable for offers and sales of
Registrable Securities covered by such Registration Statement and continue until
Holders of such Registrable Securities either receive the copies of the
supplemented or amended prospectus or are advised in writing by the Company that
use of the Prospectus may be resumed. Any such suspension may not exceed 60 days
in the aggregate during any twelve month period.

         As a condition to its participation in the Exchange Offer, each Holder
of Registrable Securities (including, without limitation, any Holder who is a
Participating Broker-Dealer) shall furnish, upon the request of the Company,
prior to the consummation of the Exchange Offer, a written representation to the
Company to the effect that (A) that such Holder is not an Affiliate of the
Company or a Participating Broker-Dealer tendering Registrable Securities
acquired directly from the Company for its own account, (B) such Holder will
have no arrangement or understanding with any person to participate in the
distribution of the Registrable Securities or the Exchange Securities within the
meaning of the Act, (C) if the Holder is not a Participating Broker-Dealer or is
a Participating Broker-Dealer but will not receive Exchange Securities for its
own account in exchange for Registrable Securities, neither the Holder nor any
such other Person is engaged in or intends to participate in a distribution of
the Exchange Securities, and (D) any Exchange Securities received by such Holder
will be acquired in the ordinary course of its business. If the Holder is a
Participating Broker-Dealer that will receive Exchange Securities for its own
account in exchange for Registrable Securities, it will represent that the
Registrable Securities to be exchanged for the Exchange Securities were acquired
by it as a result of market-making activities or other trading activities, and
will acknowledge that it will deliver a prospectus meeting the requirements of
the 1933 Act in connection with any resale of such Exchange Securities. It is
understood that, by acknowledging that it will deliver, and by delivering, a
prospectus meeting the requirement of the 1933 Act in connection with any resale
of such Exchange Securities, the Holder is not admitting that it is an
"underwriter" within the meaning of the 1933 Act.

         4.       Participation of Broker-Dealers in Exchange Offer.

                  (a)      The Staff of the SEC has taken the position that any
         broker-dealer that receives Exchange Securities for its own account in
         the Exchange Offer in exchange for Securities that were acquired by
         such broker-dealer as a result of market-making or other trading
         activities (a "PARTICIPATING BROKER-DEALER"), may be deemed to be an
         "underwriter" within the meaning of the 1933 Act and must deliver a
         prospectus meeting the requirements of the 1933 Act in connection with
         any resale of such Exchange Securities.

         The Company understands that it is the Staff's position that if the
Prospectus contained in the Exchange Offer Registration Statement includes a
plan of distribution containing a statement to the above effect and the means by

                                       13

<PAGE>

which Participating Broker-Dealers may resell the Exchange Securities, without
naming the Participating Broker-Dealers or specifying the amount of Exchange
Securities owned by them, such Prospectus may be delivered by Participating
Broker-Dealers to satisfy their prospectus delivery obligation under the 1933
Act in connection with resales of Exchange Securities for their own accounts, so
long as the Prospectus otherwise meets the requirements of the 1933 Act.

                  (b)      In light of the above, notwithstanding the other
         provisions of this Agreement, the Company agrees that the provisions of
         this Agreement as they relate to a Shelf Registration shall also apply
         to an Exchange Offer Registration to the extent, and with such
         reasonable modifications thereto as may be, reasonably requested by the
         Initial Purchaser or by one or more Participating Broker-Dealers, in
         each case as provided in clause (ii) below, in order to expedite or
         facilitate the disposition of any Exchange Securities by Participating
         Broker-Dealers consistent with the positions of the Staff recited in
         Section 4(a) above; provided that:

                           (i)      the Company shall not be required to amend
                  or supplement the Prospectus contained in the Exchange Offer
                  Registration Statement, as would otherwise be contemplated by
                  Section 3(i), for a period exceeding the earliest to occur of
                  (1) the date that is 180 days after the last Exchange Date and
                  (2) the date on which all Exchange Securities held by the
                  Participating Broker-Dealers on the Exchange Date have been
                  sold pursuant to the Exchange Offer Registration Statement or
                  are no longer outstanding, and Participating Broker-Dealers
                  shall not be authorized by the Company to deliver and shall
                  not deliver such Prospectus after such period in connection
                  with the resales contemplated by this Section 4; and

                           (ii)     the application of the Shelf Registration
                  procedures set forth in Section 3 of this Agreement to an
                  Exchange Offer Registration, to the extent not required by the
                  positions of the Staff of the SEC or the 1933 Act and the
                  rules and regulations thereunder, will be in conformity with
                  the reasonable request to the Company by the Initial Purchaser
                  or with the reasonable request in writing to the Company by
                  one or more broker-dealers who certify to the Initial
                  Purchaser and the Company in writing that they anticipate that
                  they will be Participating Broker-Dealers; and provided
                  further that, in connection with such application of the Shelf
                  Registration procedures set forth in Section 3 to an Exchange
                  Offer Registration, the Company shall be obligated (x) to deal
                  only with one entity representing the Participating
                  Broker-Dealers, which shall be Morgan Stanley & Co.
                  Incorporated unless it elects not to act as such
                  representative, (y) to pay the fees and expenses of only

                                       14

<PAGE>

                  one counsel representing the Participating Broker-Dealers,
                  which shall be counsel to the Initial Purchaser unless such
                  counsel elects not to so act and (z) to cause to be delivered
                  only one, if any, "cold comfort" letter with respect to the
                  Prospectus in the form existing on the last Exchange Date and
                  with respect to each subsequent amendment or supplement, if
                  any, effected during the period specified in clause (i) above.

                  (c)      The Initial Purchaser shall have no liability to the
         Company or any Holder with respect to any request that it may make
         pursuant to Section 4(b) above.

         5.       Indemnification and Contribution.

                  (a)      The Company agrees to indemnify and hold harmless the
         Initial Purchaser, each Holder and each Person, if any, who controls
         the Initial Purchaser or any Holder within the meaning of either
         Section 15 of the 1933 Act or Section 20 of the 1934 Act, or is under
         common control with, or is controlled by, the Initial Purchaser or any
         Holder, from and against all losses, claims, damages and liabilities
         (including, without limitation, any out-of-pocket legal or other
         out-of-pocket expenses reasonably incurred by the Initial Purchaser,
         any Holder or any such controlling or affiliated Person in connection
         with defending or investigating any such action or claim) caused by any
         untrue statement or alleged untrue statement of a material fact
         contained in any Registration Statement (or any amendment thereto)
         pursuant to which Exchange Securities or Registrable Securities were
         registered under the 1933 Act, or caused by any omission or alleged
         omission to state therein a material fact required to be stated therein
         or necessary to make the statements therein not misleading, or caused
         by any untrue statement or alleged untrue statement of a material fact
         contained in any Prospectus (as amended or supplemented if the Company
         shall have furnished any amendments or supplements thereto), or caused
         by any omission or alleged omission to state therein a material fact
         necessary to make the statements therein in the light of the
         circumstances under which they were made not misleading, except insofar
         as such losses, claims, damages or liabilities are caused by any such
         untrue statement or omission or alleged untrue statement or omission
         based upon information relating to the Initial Purchaser or any Holder
         furnished to the Company in writing by Morgan Stanley & Co.
         Incorporated or any selling Holder expressly for use therein; provided,
         however, that the foregoing indemnity shall not inure to the benefit of
         any Holder if such Holder sold the Registrable Securities that are the
         subject of the claim (x) after receipt of a notice from the Company
         pursuant to Section 3(e) hereof and prior to receipt of copies of a
         supplemented or amended Registration Statement or Prospectus or (y)
         during a Suspension Period unless notice thereof has not been given. In
         connection with any Underwritten Offering permitted by Section 3, the
         Company will also

                                       15

<PAGE>

         indemnify the Underwriters, if any, selling brokers, dealers and
         similar securities industry professionals participating in the
         distribution, their officers and directors and each Person who controls
         such Persons (within the meaning of the 1933 Act and the 1934 Act) to
         the same extent as provided above with respect to the indemnification
         of the Holders, if requested in connection with the Shelf Registration
         Statement.

                  (b)      Each Holder agrees, severally and not jointly, to
         indemnify and hold harmless the Company, the Initial Purchaser and the
         other selling Holders, and each of their respective directors, officers
         who sign the Registration Statement and each Person, if any, who
         controls the Company, the Initial Purchaser and any other selling
         Holder within the meaning of either Section 15 of the 1933 Act or
         Section 20 of the 1934 Act to the same extent as the foregoing
         indemnity from the Company to the Initial Purchaser and the Holders,
         but only with reference to information relating to such Holder
         furnished to the Company in writing by such Holder expressly for use in
         any Registration Statement (or any amendment thereto) or any Prospectus
         (or any amendment or supplement thereto).

                  (c)      In case any proceeding (including any governmental
         investigation) shall be instituted involving any Person in respect of
         which indemnity may be sought pursuant to either paragraph (a) or
         paragraph (b) above, such Person (the "INDEMNIFIED PARTY") shall
         promptly notify the Person against whom such indemnity may be sought
         (the "INDEMNIFYING PARTY") in writing and the indemnifying party, upon
         request of the indemnified party, shall retain counsel reasonably
         satisfactory to the indemnified party to represent the indemnified
         party and any others the indemnifying party may designate in such
         proceeding and shall pay the fees and disbursements of such counsel
         related to such proceeding. In any such proceeding, any indemnified
         party shall have the right to retain its own counsel, but the fees and
         expenses of such counsel shall be at the expense of such indemnified
         party unless (i) the indemnifying party and the indemnified party shall
         have mutually agreed to the retention of such counsel or (ii) the named
         parties to any such proceeding (including any impleaded parties)
         include both the indemnifying party and the indemnified party and
         representation of both parties by the same counsel would be
         inappropriate due to actual or potential differing interests between
         them. It is understood that the indemnifying party shall not, in
         connection with any proceeding or related proceedings in the same
         jurisdiction, be liable for (A) the fees and expenses of more than one
         separate firm (in addition to any local counsel) for the Initial
         Purchaser and all Persons, if any, who control the Initial Purchaser
         within the meaning of either Section 15 of the 1933 Act or Section 20
         of the 1934 Act, the fees and expenses of more than one separate firm
         (in addition to any local counsel) for the Company, its directors, its
         officers who sign the Registration Statement and each Person, if any,
         who controls the Company

                                       16

<PAGE>

         within the meaning of either such Section and (c) the fees and expenses
         of more than one separate firm (in addition to any local counsel) for
         all Holders and all Persons, if any, who control any Holders within the
         meaning of either such Section, and that all such fees and expenses
         shall be reimbursed as they are incurred. In such case involving the
         Initial Purchaser and Persons who control the Initial Purchaser, such
         firm shall be designated in writing by Morgan Stanley & Co.
         Incorporated. In such case involving the Holders and such Persons who
         control Holders, such firm shall be designated in writing by the
         Majority Holders. In all other cases, such firm shall be designated by
         the Company. The indemnifying party shall not be liable for any
         settlement of any proceeding effected without its written consent but,
         if settled with such consent or if there be a final judgment for the
         plaintiff, the indemnifying party agrees to indemnify the indemnified
         party from and against any loss or liability by reason of such
         settlement or judgment. Notwithstanding the foregoing sentence, if at
         any time an indemnified party shall have requested an indemnifying
         party to reimburse the indemnified party for fees and expenses of
         counsel as contemplated by the second and third sentences of this
         paragraph, the indemnifying party agrees that it shall be liable for
         any settlement of any proceeding effected without its written consent
         if (i) such settlement is entered into more than 30 days after receipt
         by such indemnifying party of the aforesaid request and (ii) such
         indemnifying party shall not have reimbursed the indemnified party for
         such fees and expenses of counsel in accordance with such request prior
         to the date of such settlement. No indemnifying party shall, without
         the prior written consent of the indemnified party, effect any
         settlement of any pending or threatened proceeding in respect of which
         such indemnified party is or could have been a party and indemnity
         could have been sought hereunder by such indemnified party, unless such
         settlement includes an unconditional release of such indemnified party
         from all liability on claims that are the subject matter of such
         proceeding.

                  (d)      If the indemnification provided for in paragraph (a)
         or paragraph (b) of this Section 5 is unavailable to an indemnified
         party or insufficient in respect of any losses, claims, damages or
         liabilities referred to therein, then each indemnifying party under
         such paragraph, in lieu of indemnifying such indemnified party
         thereunder, shall contribute to the amount paid or payable by such
         indemnified party as a result of such losses, claims, damages or
         liabilities in such proportion as is appropriate to reflect the
         relative fault of the indemnifying party or parties on the one hand and
         of the indemnified party or parties on the other hand in connection
         with the statements or omissions that resulted in such losses, claims,
         damages or liabilities, as well as any other relevant equitable
         considerations. The relative fault of the Company and the Holders shall
         be determined by reference to, among other things, whether the untrue
         or alleged untrue statement of a material fact or the omission or
         alleged omission to state a material fact relates to information
         supplied by the

                                       17

<PAGE>

         Company or by the Holders and the parties' relative intent, knowledge,
         access to information and opportunity to correct or prevent such
         statement or omission. The Holders' respective obligations to
         contribute pursuant to this Section 5(d) are several in proportion to
         the respective principal amount of Registrable Securities of such
         Holder that were registered pursuant to a Registration Statement.

                  (e)      The Company and each Holder agree that it would not
         be just or equitable if contribution pursuant to this Section 5 were
         determined by pro rata allocation or by any other method of allocation
         that does not take account of the equitable considerations referred to
         in paragraph (d) above. The amount paid or payable by an indemnified
         party as a result of the losses, claims, damages and liabilities
         referred to in paragraph (d) above shall be deemed to include, subject
         to the limitations set forth above, any out-of-pocket legal or other
         out-of-pocket expenses reasonably incurred by such indemnified party in
         connection with investigating or defending any such action or claim.
         Notwithstanding the provisions of this Section 5, no Holder shall be
         required to contribute any amount in excess of the amount by which the
         total price at which Registrable Securities were sold by such Holder
         exceeds the amount of any damages that such Holder has otherwise been
         required to pay by reason of such untrue or alleged untrue statement or
         omission or alleged omission. No Person guilty of fraudulent
         misrepresentation (within the meaning of Section 11(f) of the 1933 Act)
         shall be entitled to contribution from any Person who was not guilty of
         such fraudulent misrepresentation. The remedies provided for in this
         Section 5 are not exclusive and shall not limit any rights or remedies
         which may otherwise be available to any indemnified party at law or in
         equity.

         The indemnity and contribution provisions contained in this Section 5
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
the Initial Purchaser, any Holder or any Person controlling the Initial
Purchaser or any Holder, or by or on behalf of the Company, its officers or
directors or any Person controlling the Company, (iii) acceptance of any of the
Exchange Securities and (iv) any sale of Registrable Securities pursuant to a
Shelf Registration Statement.

         6.       Miscellaneous.

                  (a)      No Inconsistent Agreements. The Company has not
         entered into, and on or after the date of this Agreement will not enter
         into, any agreement which is inconsistent with the rights granted to
         the Holders of Registrable Securities in this Agreement or otherwise
         conflicts with the provisions hereof in any material respect. The
         rights granted to the Holders hereunder do not in any way conflict with
         and are not inconsistent with the rights granted to the holders of the
         Company's other issued and outstanding securities under any such
         agreements.

                                       18

<PAGE>

                  (b)      Amendments and Waivers. The provisions of this
         Agreement, including the provisions of this sentence, may not be
         amended, modified or supplemented, and waivers or consents to
         departures from the provisions hereof may not be given unless the
         Company has obtained the written consent of Holders of at least a
         majority in aggregate principal amount of the outstanding Registrable
         Securities affected by such amendment, modification, supplement, waiver
         or consent; provided, however, that no amendment, modification,
         supplement, waiver or consent to any departure from the provisions of
         Section 5 hereof shall be effective as against any Holder of
         Registrable Securities unless consented to in writing by such Holder.

                  (c)      Notices. All notices and other communications
         provided for or permitted hereunder shall be made in writing by
         hand-delivery, registered first-class mail, telex, telecopier, or any
         courier guaranteeing overnight delivery (i) if to a Holder, at the most
         current address given by such Holder to the Company by means of a
         notice given in accordance with the provisions of this Section 6(c),
         which address initially is, with respect to the Initial Purchaser, the
         address set forth in the Purchase Agreement; and (ii) if to the
         Company, initially at the Company's address set forth in the Purchase
         Agreement and thereafter at such other address, notice of which is
         given in accordance with the provisions of this Section 6(c).

         All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next business day if timely delivered to an air courier guaranteeing
overnight delivery.

         Copies of all such notices, demands, or other communications shall be
concurrently delivered by the Person giving the same to the Trustee, at the
address specified in the Indenture.

                  (d)      Successors and Assigns. This Agreement shall inure to
         the benefit of and be binding upon the successors, assigns and
         transferees of each of the parties, including, without limitation and
         without the need for an express assignment, subsequent Holders;
         provided that nothing herein shall be deemed to permit any assignment,
         transfer or other disposition of Registrable Securities in violation of
         the terms of the Purchase Agreement. If any transferee of any Holder
         shall acquire Registrable Securities, in any manner, whether by
         operation of law or otherwise, such Registrable Securities shall be
         held subject to all of the terms of this Agreement, and by taking and
         holding such Registrable Securities such Person shall be conclusively
         deemed to have agreed to be bound by and to perform all of the terms
         and provisions of this Agreement and such Person shall be entitled to
         receive the benefits hereof. The Initial Purchaser (in its

                                       19

<PAGE>

         capacity as Initial Purchaser) shall have no liability or obligation to
         the Company with respect to any failure by a Holder to comply with, or
         any breach by any Holder of, any of the obligations of such Holder
         under this Agreement.

                  (e)      Purchases and Sales of Securities. The Company shall
         not, and shall use its best efforts to cause its affiliates (as defined
         in Rule 405 under the 1933 Act) not to, purchase and then resell or
         otherwise transfer any Registrable Securities.

                  (f)      Third Party Beneficiary. The Holders shall be third
         party beneficiaries to the agreements made hereunder between the
         Company, on the one hand, and the Initial Purchaser, on the other hand,
         and shall have the right to enforce such agreements directly to the
         extent it deems such enforcement necessary or advisable to protect its
         rights or the rights of Holders hereunder.

                  (g)      Counterparts. This Agreement may be executed in any
         number of counterparts and by the parties hereto in separate
         counterparts, each of which when so executed shall be deemed to be an
         original and all of which taken together shall constitute one and the
         same agreement.

                  (h)      Headings. The headings in this Agreement are for
         convenience of reference only and shall not limit or otherwise affect
         the meaning hereof.

                  (i)      Governing Law. This Agreement shall be governed by
         the laws of the State of New York.

                  (j)      Severability. In the event that any one or more of
         the provisions contained herein, or the application thereof in any
         circumstance, is held invalid, illegal or unenforceable, the validity,
         legality and enforceability of any such provision in every other
         respect and of the remaining provisions contained herein shall not be
         affected or impaired thereby.

                                       20

<PAGE>

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

                                       J. RAY MCDERMOTT, S.A.

                                       By: /s/Francis S. Kalman
                                           ------------------------------------
                                           Name:    Francis S. Kalman
                                           Title:   Executive Vice President
                                                    and Chief Financial Officer

<PAGE>

                                       CHARTERING COMPANY (SINGAPORE)
                                          PTE. LTD.
                                       EASTERN MARINE SERVICES, INC.
                                       HYDRO MARINE SERVICES, INC.
                                       J. RAY MCDERMOTT, INC.
                                       J. RAY MCDERMOTT (AUST.) HOLDING
                                          PTY. LIMITED
                                       J. RAY MCDERMOTT ENGINEERING
                                          HOLDINGS, INC.
                                       J. RAY MCDERMOTT FAR EAST, INC.
                                       J. RAY MCDERMOTT HOLDINGS, INC.
                                       J. RAY MCDERMOTT INTERNATIONAL,
                                          INC.
                                       J. RAY MCDERMOTT INTERNATIONAL
                                          SERVICES LIMITED
                                       J. RAY MCDERMOTT INTERNATIONAL
                                          VESSELS, LTD.
                                       J. RAY MCDERMOTT INVESTMENTS B.V.
                                       J. RAY MCDERMOTT MIDDLE EAST, INC.
                                       MCDERMOTT CASPIAN CONTRACTORS,
                                          INC.
                                       MCDERMOTT FAR EAST, INC.
                                       MCDERMOTT GULF OPERATING
                                          COMPANY, INC.
                                       MCDERMOTT INDUSTRIES (AUST.) PTY
                                          LIMITED
                                       MCDERMOTT INTERNATIONAL MARINE
                                          INVESTMENTS N.V.
                                       MCDERMOTT OLD JV OFFICE, INC.
                                       MCDERMOTT SOUTH EAST ASIA PTE.
                                          LTD.
                                       MCDERMOTT WEST INDIES COMPANY
                                       MENTOR ENGINEERING CONSULTANTS
                                          LIMITED
                                       MENTOR SUBSEA TECHNOLOGY
                                          SERVICES, INC.
                                       NORTH ATLANTIC VESSEL, INC.
                                       OPI VESSELS, INC.
                                       SPARTEC, INC.
                                       VARSY INTERNATIONAL N.V.

                                       By: /s/Francis S. Kalman
                                           ------------------------------------
                                           Name:    Francis S. Kalman
                                           Title:   Authorized Representative

<PAGE>

                                       FIRST EMIRATES TRADING
                                          CORPORATION
                                       J. RAY MCDERMOTT DIVING
                                          INTERNATIONAL, INC.
                                       J. RAY MCDERMOTT EASTERN
                                          HEMISPHERE LIMITED
                                       J. RAY MCDERMOTT ENGINEERING, LLC
                                       J. RAY MCDERMOTT UNDERWATER
                                          SERVICES, INC.
                                       MCDERMOTT MARINE CONSTRUCTION
                                          LIMITED
                                       MCDERMOTT MARINE UK LIMITED
                                       MCDERMOTT OVERSEAS, INC.

                                       By: /s/ James R. Easter
                                           ------------------------------------
                                           Name:    James R. Easter
                                           Title:   Authorized Representative

<PAGE>

                                       MCDERMOTT HOLDINGS (U.K.) LIMITED

                                       By: /s/ Rudolph D. Hargis Jr.
                                           ------------------------------------
                                           Name:    Rudolph D. Hargis Jr.
                                           Title:   Authorized Representative

<PAGE>

                                       J. RAY MCDERMOTT CONTRACTORS,
                                          INC.
                                       MCDERMOTT OFFSHORE SERVICES
                                          COMPANY, INC.
                                       OCEANIC RED SEA COMPANY

                                       By: /s/ Liane K. Hinrichs
                                           ------------------------------------
                                           Name:    Liane K. Hinrichs
                                           Title:   Authorized Representative

<PAGE>

Confirmed and accepted as of
   the date first above written:

MORGAN STANLEY & CO. INCORPORATED

By: /s/ David Schwarzbach
    ----------------------------------
    Name:    David Schwarzbach
    Title:   Vice President<PAGE>

                                                                    EXHIBIT 10.2

                       THIRD AMENDMENT TO CREDIT AGREEMENT

         THIS THIRD AMENDMENT TO CREDIT AGREEMENT, dated as of February 20, 2004
(this "Amendment"), is by and among VERITAS DGC INC., a Delaware corporation
("Company"), VERITAS ENERGY SERVICES INC., an Alberta corporation ("VES"), and
VERITAS ENERGY SERVICES PARTNERSHIP, an Alberta general partnership ("VESP";
collectively, VES and VESP are referred to herein as "Canadian Borrowers"),
VERITAS DGC LIMITED, a company incorporated under the laws of England and Wales
("UK Borrower"; collectively, Company, Canadian Borrowers and UK Borrower are
referred to herein as "Borrowers" and individually as a "Borrower"), certain
financial institutions party to the Credit Agreement referred to below (the
"Lenders"), DEUTSCHE BANK AG, NEW YORK BRANCH, in its capacity as administrative
agent ("Administrative Agent"), and DEUTSCHE BANK AG, CANADA BRANCH, in its
capacity as Canadian administrative agent ("Canadian Administrative Agent";
Administrative Agent and Canadian Administrative Agent are collectively referred
to herein as "Agents").

                                   BACKGROUND

         A.       Borrowers, the Lenders, and Agents are parties to that certain
Credit Agreement dated as of February 14, 2003 (as amended, restated,
supplemented or otherwise modified and in effect from time to time, the "Credit
Agreement").

         B.       Borrowers have requested Agents and the Lenders to amend the
Credit Agreement in certain respects as set forth herein, and Agents and the
Lenders are agreeable to the same, subject to the terms and conditions set forth
herein.

                                    AGREEMENT

         NOW THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:

         SECTION 1. DEFINED TERMS. Unless otherwise defined herein, all
capitalized terms used herein shall have the meanings given them in the Credit
Agreement.

         SECTION 2. AMENDMENTS TO CREDIT AGREEMENT.

                  (a)      Section 1.1 of the Credit Agreement is hereby amended
         by inserting the following definitions in their proper alphabetical
         sequence:

                           "Convertible Note Offering" means the offering and
                  sale by the Company of the Convertible Notes on or prior to
                  May 31, 2004.

                           "Convertible Notes" means the Company's unsecured
                  convertible notes issued and sold in the Convertible Note
                  Offering (i) in an aggregate principal amount up to $155
                  million, (ii) with a stated maturity no earlier than one (1)
                  year after the latest maturity date for the Facilities, (iii)
                  having market terms substantially similar to those for
                  comparable issuances, (iv) on terms and conditions not more
                  restrictive to the Company and its Subsidiaries than those set
                  forth in this Agreement and (v) otherwise on terms and
                  conditions and in form and substance satisfactory to
                  Administrative Agent.

                  (b)      Section 3.2(e) of the Credit Agreement is hereby
         amended by deleting the reference to "Sections 4.4(c), (e) or (f)" and
         inserting a reference to "Sections 4.4(c), (e), (f) or (h)" in lieu
         thereof.

                  (c)      Section 4.4 of the Credit Agreement is hereby amended
         by inserting the following subsection (h) thereto at the end of such
         Section:

<PAGE>

                  "(h)     MANDATORY PREPAYMENT WITH PROCEEDS OF CONVERTIBLE
         NOTE OFFERING. No later than the first Business Day after receipt
         thereof by the Company or any Subsidiary, an amount equal to 100% of
         the Net Offering Proceeds of the Convertible Note Offering shall be
         applied as a mandatory prepayment of principal of the Loans pursuant to
         the terms of Section 4.5(a); provided that, notwithstanding the
         foregoing, within 30 days of the closing of the Convertible Note
         Offering the Company may apply up to the lesser of $20,000,000 or 20%
         of the Net Offering Proceeds of the Convertible Note Offering toward a
         repurchase of the Company's Capital Stock as permitted under Section
         8.5(c)."

         (d)      Section 4.5(a) of the Credit Agreement is hereby amended and
restated in its entirety as follows (emphasis added in this Amendment for
convenient reference of inserted text only):

                  "(a)     PREPAYMENTS. Except as expressly provided in this
         Agreement, all prepayments of principal made by any Borrower pursuant
         to Section 4.4(c) through (f) shall be applied (i) first, to the
         payment of the unpaid principal amount of the Term Loans constituting
         First Priority Debt on a pro rata basis until paid in full (ii) second,
         to the pro rata payment of the then outstanding balance of the UK
         Revolving Loans, the Domestic Revolving Loans and Canadian Revolving
         Loans (with corresponding permanent reductions to such Commitments)
         until paid in full and the cash collateralization of LC Obligations,
         (iii) third, to the payment of the unpaid principal amount of the Term
         C Loans until paid in full, (iv) within each of the foregoing Loans,
         first to the payment of Base Rate Loans and second to the payment of
         Eurocurrency Loans; and (v) with respect to Eurocurrency Loans, in such
         order as such Borrower shall request (and in the absence of such
         request, as Administrative Agent shall determine). All prepayments of
         principal made by Borrowers pursuant to Section 4.4(h) shall be applied
         (i) first, to the payment of the unpaid principal amount of the Term C
         Loans until paid in full, (ii) second, to the payment of the unpaid
         principal amount of the Terms A Loans and Term B Loans on a pro rata
         basis, (iii) within each of the foregoing Loans, first to the payment
         of Base Rate Loans and second to the payment of Eurocurrency Loans and
         (iv) with respect to Eurocurrency Loans, in such order as such Borrower
         shall request (and in the absence of such request, as Administrative
         Agent shall determine). Each prepayment of Term Loans constituting
         First Priority Debt made pursuant to Section 4.4 shall be allocated to
         such Term Loans based on the aggregate principal amount of the
         Scheduled Term Repayments based upon their applicable Term Pro Rata
         Share and pro rata to each Scheduled Term Repayment. Each prepayment of
         the Term C Loans shall be applied to reduce the principal amount
         thereof. If any prepayment of Eurocurrency Loans made pursuant to a
         single Borrowing shall reduce the outstanding Loans made pursuant to
         such Borrowing to an amount less than the Minimum Borrowing Amount,
         such Borrowing shall immediately be converted into Base Rate Loans. All
         prepayments shall include payment of accrued interest on the principal
         amount so prepaid, shall be applied to the payment of interest before
         application to principal and shall include amounts payable, if any,
         under Section 3.5."

         (e)      Section 8.2 of the Credit Agreement is hereby amended by
deleting the word "and" at the end of clause (k), changing the existing
subsection (l) to subsection (m) and adding the following new subsection (l)
thereto:

                  "(l)     Indebtedness pursuant to the Convertible Notes; and"

         (f)      Section 8.5(c) of the Credit Agreement is hereby amended by
inserting the following text at the end of such Section:

                  ", which amount shall increase, dollar for dollar but in no
         event by more than $10,000,000, on the first anniversary of the initial
         sale of Convertible Notes, to the extent that the Net Offering Proceeds
         of such sale are used to repurchase the Company's Capital Stock prior
         to such date"

         SECTION 3. FEES. Borrowers agree jointly and severally to pay all
reasonable costs and expenses of Administrative Agent in connection with the
negotiation, preparation, printing, typing, reproduction, execution and

                                       2

<PAGE>

delivery of this Amendment and all other documents furnished pursuant hereto or
in connection herewith, including without limitation, the reasonable fees and
out-of-pocket expenses of Winston & Strawn LLP, special counsel to
Administrative Agent, as well as the reasonable fees and out-of-pocket expenses
of any local counsel retained by Administrative Agent relative hereto, other
Attorney Costs, independent public accountants and other outside experts
retained by Administrative Agent in connection with the administration of this
Amendment.

         SECTION 4. CONDITIONS PRECEDENT TO EFFECTIVENESS OF AGREEMENT. This
Amendment shall become effective upon the date (the "Third Amendment Effective
Date") each of the following conditions have been satisfied:

                  (a)      Third Amendment. Borrowers, Agents, the Majority
Lenders of the Term A Facility, the Majority Lenders of the Term B Facility and
the Required Lenders shall have executed and delivered this Amendment.

                  (b)      Convertible Note Offering. The Convertible Notes
shall have been offered and sold by the Company in the Convertible Note
Offering.

                  (c)      No Defaults. No Event of Default or Unmatured Event
of Default under the Credit Agreement (as amended hereby) shall have occurred
and be continuing.

                  (d)      Representations and Warranties. The representations
and warranties of each Borrower contained in this Amendment, the Credit
Agreement (as amended hereby) and the other Loan Documents shall be true and
correct in all material respects as of the Third Amendment Effective Date, with
the same effect as though made on such date, except to the extent that any such
representation or warranty expressly relates to an earlier date, in which case
such representation or warranty shall be true and correct in all material
respects as of such earlier date.

                  (e)      Payment of Fees. Borrowers shall have paid in full
(i) to Administrative Agent the fees set forth in Section 3 hereof and (ii) to
the Administrative Agent for the account of each Lender executing and delivering
its signature page to this Amendment on or prior to 1:00 p.m. (New York City
time) on Friday, February 20, 2004, a fee equal to 0.10% of the aggregate amount
of such Lender's Commitments.

                  (f)      Reaffirmation of Guaranty. Each Guarantor shall have
executed and delivered a Reaffirmation of Guaranty in the form attached as
Exhibit A hereto.

                  (g)      Other. Receipt by Agents or any Lender of such other
documents, instruments and certificates as Agents or such Lender shall have
reasonably requested.

         SECTION 5. REPRESENTATIONS AND WARRANTIES.

                  (a)      Each Borrower represents and warrants (i) that it has
full corporate (or equivalent) power and authority to enter into this Amendment
and perform its obligations hereunder in accordance with the provisions hereof,
(ii) that this Amendment has been duly authorized, executed and delivered by
such Borrower and (iii) that this Amendment constitutes the legal, valid and
binding obligation of such Borrower, enforceable against such Borrower in
accordance with its terms, except to the extent that such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or law).

                  (b)      Each Borrower represents and warrants that the
following statements are true and correct, in each case after giving effect to
this Amendment:

                           (i)      The representations and warranties contained
                  in the Credit Agreement and each of the other Loan Documents
                  are and shall each be true and correct in all material
                  respects on and as of the Third Amendment Effective Date to
                  the same extent as though made on and as of that date, except
                  to the extent such representations and warranties expressly
                  relate to an earlier date, in which case they were true and
                  correct in all material respects on and as of such earlier
                  date.

                                       3

<PAGE>

                           (ii)     No Event of Default or Unmatured Event of
                  Default shall have occurred and be continuing.

                           (iii)    Neither the execution, delivery and
                  performance by such Borrower of this Amendment, nor compliance
                  by it with the terms and provisions hereof, nor the
                  consummation of the transactions described herein (A) will
                  contravene any provision of any Requirement of Law applicable
                  to such Borrower, (B) will violate or result in any breach of
                  or constitute a tortious interference with any of the terms,
                  covenants, conditions or provisions of, or constitute a
                  default under, or result in the creation or imposition of (or
                  the obligation to create or impose) any Lien (except pursuant
                  to the Security Documents) upon any of the property or assets
                  of such Borrower pursuant to the terms of any material
                  Contractual Obligation to which such Borrower is a party or by
                  which it or any of its property or assets is bound or to which
                  it may be subject, (C) will violate any provision of any
                  Organizational Document of such Borrower or (D) require any
                  approval of stockholders or any approval or consent of any
                  Person (other than a Governmental Authority).

                           (iv)     No order, consent, approval, license,
                  authorization or validation of, or filing, recording or
                  registration with, or exemption by, any Governmental
                  Authority, is required to authorize, or is required in
                  connection with, (A) the execution, delivery and performance
                  of this Amendment or (B) the legality, validity, binding
                  effect or enforceability of this Amendment.

         SECTION 6. REFERENCES TO AND EFFECT ON THE CREDIT AGREEMENT.

                  (a)      On and after the Third Amendment Effective Date each
reference in the Credit Agreement to "this Agreement," "hereunder," "hereof,"
"herein," or words of like import, and each reference to the Credit Agreement in
the Loan Documents and all other documents (the "Ancillary Documents") delivered
in connection with the Credit Agreement shall mean and be a reference to the
Credit Agreement as amended hereby.

                  (b)      Except as specifically amended above, the Credit
Agreement, the Loan Documents and all other Ancillary Documents shall remain in
full force and effect and are hereby ratified and confirmed.

                  (c)      The execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any right, power or remedy of the
Lenders or Administrative Agent under the Credit Agreement, the Loan Documents
or the Ancillary Documents.

         SECTION 7. EXECUTION IN COUNTERPARTS. This Amendment may be executed in
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument. Delivery of an executed counterpart of a signature page of this
Amendment by facsimile transmission shall be effective as delivery of a manually
executed counterpart of this Amendment.

         SECTION 8. GOVERNING LAW. THIS AMENDMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES
SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF SAID
STATE, INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS
LAW BUT EXCLUDING ALL OTHER CHOICE OF LAW AND CONFLICTS OF LAWS RULES.

         SECTION 9. HEADINGS. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Amendment for any other purposes.

         SECTION 10. REAFFIRMATION. Company hereby unconditionally consents to
the terms of this Amendment and fully ratifies and affirms its Guaranty set
forth in Article XIV of the Credit Agreement, taking into account this
Amendment.

                            [signature pages follow]

                                       4

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective officers thereunto duly authorized as of the
date above first written.

                                    VERITAS DGC INC.

                                    By: ________________________________________
                                        David B. Robson
                                        Chairman & Chief Executive Officer

                                    VERITAS DGC LIMITED

                                    By: ________________________________________
                                        Nicholas A.C. Bright
                                        Managing Director

                                    VERITAS ENERGY SERVICES INC.

                                    By: ________________________________________
                                        David B. Robson
                                        President

                                    VERITAS ENERGY SERVICES PARTNERSHIP,
                                    by its partners,

                                    VERITAS ENERGY SERVICES INC.

                                    By: ________________________________________
                                        David B. Robson
                                        President

                                    TIME SEISMIC EXCHANGE LTD.

                                    By: ________________________________________
                                        Richard E. Earle
                                        President

             Signature Page -- Third Amendment to Credit Agreement
                                VERITAS DGC INC.

<PAGE>

                                    DEUTSCHE BANK AG, NEW YORK BRANCH,
                                    in its individual capacity and as
                                    Administrative Agent

                                    By: ________________________________________
                                        Name:
                                        Title:

                                    By: ________________________________________
                                        Name:
                                        Title:

                                    DEUTSCHE BANK AG, CANADA BRANCH,
                                    as Canadian Administrative Agent

                                    By: ________________________________________
                                        Name:

                                        Title:

                                    By: ________________________________________
                                        Name:
                                        Title:

             Signature Page -- Third Amendment to Credit Agreement
                                VERITAS DGC INC.

<PAGE>

                                    HSBC BANK CANADA

                                    By: ________________________________________
                                        Name:
                                        Title:

             Signature Page -- Third Amendment to Credit Agreement
                                VERITAS DGC INC.

<PAGE>

                                    WELLS FARGO BANK, N.A.

                                    By: ________________________________________
                                        Name:
                                        Title:

             Signature Page -- Third Amendment to Credit Agreement
                                VERITAS DGC INC.

<PAGE>

                                    BANK ONE, NA, with its main offices in
                                    Chicago, Illinois

                                    By: ________________________________________
                                        Name:
                                        Title:

             Signature Page -- Third Amendment to Credit Agreement
                                VERITAS DGC INC.

<PAGE>

                                    NATEXIS BANQUES POPULAIRES

                                    By: ________________________________________
                                        Name:
                                        Title:

             Signature Page -- Third Amendment to Credit Agreement
                                VERITAS DGC INC.

<PAGE>

                                    ABELCO FINANCE LLC

                                    By: ________________________________________
                                        Name:
                                        Title:

             Signature Page -- Third Amendment to Credit Agreement
                                VERITAS DGC INC.

<PAGE>

                                    ____________________________________________
                                              [Name of Institution]

                                    By: ________________________________________
                                        Name:
                                        Title:

             Signature Page -- Third Amendment to Credit Agreement
                                VERITAS DGC INC.

<PAGE>

                                    EXHIBIT A

                            REAFFIRMATION OF GUARANTY

             Signature Page -- Third Amendment to Credit Agreement
                                VERITAS DGC INC.

<PAGE>

                            REAFFIRMATION OF GUARANTY

         Each of the undersigned acknowledges receipt of the Credit Agreement
dated as of February 14, 2003, as amended by the Third Amendment to Credit
Agreement dated as of February 20, 2004 (as so amended, the "Credit Agreement"),
by and among Veritas DGC Inc., a Delaware corporation, Veritas Energy Services
Inc., an Alberta corporation, Veritas Energy Services Partnership, an Alberta
general partnership, Veritas DGC Limited, a company incorporated under the laws
of England and Wales, certain financial institutions party thereto, Deutsche
Bank AG, New York Branch, in its capacity as administrative agent, and Deutsche
Bank AG, Canada Branch, in its capacity as Canadian administrative agent and
each of the undersigned consents to the Credit Agreement (as so amended) and
each of the amendments, referenced therein, and hereby reaffirms its obligations
under its respective Guaranty (as such term is defined in the Credit Agreement)
executed by the undersigned.

Dated as of February 20, 2004

HAMPSON-RUSSELL LIMITED PARTNERSHIP,
by its general partner Hampson-Russell GP Inc.

By: __________________________________________
    Brian Russell
    Vice President

VERITAS ENERGY SERVICES PARTNERSHIP,
by its partners,

         VERITAS ENERGY SERVICES INC.

         By: __________________________________
             David B. Robson
             President

         TIME SEISMIC EXCHANGE LTD.

         By: __________________________________
             Richard E. Earle
             President

VERITAS ENERGY SERVICES INC.

By: ___________________________________________
    David B. Robson
    President

             Signature Page -- Third Amendment to Credit Agreement
                                VERITAS DGC INC.

<PAGE>

TIME SEISMIC EXCHANGE LTD.

By: ___________________________________________
    Richard E. Earle
    President

VERITAS DGC LIMITED

By: ___________________________________________
    Nicholas A.C. Bright
    Managing Director

VERITAS GEOPHYSICAL CORPORATION

By: ___________________________________________
    Timothy L. Wells
    President

EUROSEIS, INC.

By: ___________________________________________
    Timothy L. Wells
    President

VERITAS DGC LAND INC.

By: ___________________________________________
    Craig P. Rothwell
    President

VIKING MARITIME INC.

By: ___________________________________________
    Timothy L. Wells
    President

             Signature Page -- Third Amendment to Credit Agreement
                                VERITAS DGC INC.

<PAGE>

RC SURVIVOR CORP.

By: ___________________________________________
    Larry L. Worden
    Vice President

VERITAS DGC ASIA PACIFIC LTD.

By: ___________________________________________
    Timothy L. Wells
    President

             Signature Page -- Third Amendment to Credit Agreement
                                VERITAS DGC INC.

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