Document:

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                                                                     EXHIBIT 4.6

                          FIRST PREFERRED SHIP MORTGAGE

         FIRST PREFERRED SHIP MORTGAGE, dated December 8, 2003 to be effective
December 9, 2003 by J. Ray McDermott, Inc., a corporation organized and existing
under the laws of the State of Delaware with offices at 757 N. Eldridge Parkway,
Houston, Texas 77079 (the "Shipowner") and The Bank of New York, as trustee
under the Indenture referred to below, a New York banking corporation with
offices at 101 Barclay Street, New York, New York 10286 (the "Mortgagee");

         WHEREAS:

A.       The Shipowner is the sole owner of the whole of the vessel INTERMAC
         650, Official No. 626227 (hereinafter referred to as the "Vessel"),
         which Vessel has been duly documented in the name of the Shipowner in
         accordance with the laws of the United States of America.

B.       Pursuant to the Indenture dated as of December 9, 2003 (the
         "Indenture") between J. Ray McDermott, S.A., a corporation organized
         and existing under the laws of the Republic of Panama (the "Issuer")
         and the Mortgagee, the Issuer has issued USD 200,000,000 aggregate
         principal amount of its 11% Senior Secured Notes due 2013 (the
         "Notes"). A copy of the form of the Indenture which includes the form
         of the Notes is attached hereto as Exhibit 1 and made a part hereof.

C.       Pursuant to Article 12 of the Indenture, the Shipowner has agreed to
         guaranty the obligations of the Issuer under the Indenture and the
         Notes (the "Guaranty").

D.       In order to secure the payment of all amounts due under the Guaranty
         (including the principal of and interest thereon) according to its
         terms, and the payment of all other such sums that may hereinafter be
         secured by this First Preferred Mortgage (this "Mortgage") in
         accordance with the terms hereof, and to secure the performance and
         observance of and compliance with all the agreements, covenants and
         conditions of this Mortgage, the Shipowner has duly authorized the
         execution and delivery of this Mortgage under and pursuant to 46 U.S.C.
         Section 31321 et seq.

         NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, and in order to secure the payment of all amounts due
under the Guaranty (including the principal of and interest thereon) according
to the terms of this Mortgage and the Guaranty, and the payment of all other
sums that may hereafter be secured by this Mortgage in accordance with the terms
hereof (all such principal, interest, and other sums being hereinafter called
the "Indebtedness hereby secured") and to secure the performance and observance
of and compliance with all of the agreements, covenants and conditions of this
Mortgage and the Guaranty, the Shipowner has granted, conveyed, mortgaged,
pledged, confirmed, assigned, transferred and set over and by these presents
does grant, convey, mortgage, pledge, confirm,

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assign, transfer and set over, unto the Mortgagee, and its successors and
assigns, the whole of the above mentioned Vessel, including, without being
limited to, all of the boilers, engines, machinery, masts, spars, boats,
anchors, cables, chains, rigging, tackle, capstans, outfit, tools, cranes, pumps
and pumping equipment, apparel, furniture, fittings, equipment, spare parts, and
all other appurtenances thereunto appertaining or belonging, whether now owned
or hereafter acquired, and also any and all additions, improvements, renewals
and replacements hereafter made in or to the Vessel or any part thereof,
including all items and appurtenances aforesaid, BUT SPECIFICALLY EXCLUDING any
contract rights, accounts, general intangibles, chattel paper, instruments,
inventory, other goods and proceeds arising therefrom or otherwise related
thereto.

         TO HAVE AND TO HOLD all and singular the above mortgaged and described
property unto the Mortgagee and its successors and assigns, to its and to its
successors' and assigns' own use, benefit and behoof forever.

         PROVIDED, and these presents are upon the condition, that, if (i) the
Shipowner or its successors or assigns shall pay or cause to be paid the
Indebtedness hereby secured as and when the same shall become due and payable in
accordance with the Guaranty and this Mortgage, and all other such sums as may
hereafter become secured by this Mortgage in accordance with the terms hereof,
and the Shipowner shall duly perform, observe and comply with or cause to be
performed, observed, or complied with all the covenants, terms and conditions of
this Mortgage, and the Guaranty or (ii) all sums due under and in accordance
with the terms of the Notes and the Indenture shall have been paid in full, then
this Mortgage and the estate and rights hereunder shall cease, determine and be
void, otherwise to remain in full force and effect.

         The Shipowner for itself, its successors and assigns, hereby covenants,
declares and agrees with the Mortgagee and its successors and assigns that the
Vessel is to be held subject to the further covenants, conditions, terms and
uses hereinafter set forth.

                                    ARTICLE I
                 Representations and Covenants of the Shipowner.

         Section 1. The Shipowner will pay the Indebtedness hereby secured and
will observe, perform and comply with the covenants, terms and conditions herein
and in the Guaranty, on its part to be observed, performed or complied with.

         Section 2. The Shipowner is a corporation duly incorporated and
existing under the laws of the State of Delaware. The Shipowner has full power
and authority to own and mortgage the Vessel; all action necessary and required
by law for the execution and delivery of this Mortgage has been duly and
effectively taken; and the Indebtedness hereby secured is and will be the valid
and enforceable obligation of the Shipowner in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles.

         Section 3. The Shipowner lawfully owns and is lawfully possessed of the
Vessel free from any Liens or encumbrances whatsoever other than the Lien of
this Mortgage and other Permitted Encumbrances and will warrant and defend the
title and possession thereto and to

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every part thereof for the benefit of the Mortgagee against the claims and
demands of all persons whomsoever subject to Permitted Encumbrances and other
matters permitted by this Mortgage.

         Section 4. The Shipowner will cause this Mortgage to be duly recorded
at the United States Coast Guard National Vessel Documentation Center in
accordance with the provisions of Chapter 313 of Title 46 of the United States
Code, as at any time amended, and will otherwise comply with and satisfy all of
the provisions of Chapter 313 of Title 46 of the United States Code in order to
establish and maintain this Mortgage as a first preferred mortgage Lien
thereunder upon the Vessel and upon all renewals, replacements and improvements
made in or to the same for the amount of the Indebtedness hereby secured.

         Section 5. The Shipowner will not cause or permit the Vessel to be
operated in any manner contrary to applicable law, engage in any unlawful trade
or violate any applicable law, conduct any construction operations or carry any
cargo, in the case of any of the foregoing, that will unreasonably expose the
Vessel to penalty, forfeiture or capture, and will not do, or suffer or permit
to be done, anything which can or may injuriously affect the registration or
enrollment of the Vessel under the laws and regulations of the United States of
America and will at all times keep the Vessel duly documented thereunder.

         Section 6. The Shipowner will pay and discharge when due and payable,
from time to time, all taxes, assessments, governmental charges, fines and
penalties lawfully imposed on the Vessel or any income therefrom; provided that
the Shipowner shall not be required to pay and discharge any such tax,
assessment, governmental charge, fine or penalty if the validity or amount
thereof is concurrently contested in good faith by appropriate proceedings or
other acts and if the Shipowner shall have set aside on its books reserves in
accordance with generally accepted accounting principles in the United States
deemed by it adequate with respect to such tax, assessment or charge; and
provided further, however, that the Shipowner will (i) pay or cause to be paid
all such taxes, assessments or charges forthwith upon the commencement of
proceedings to foreclose any Lien which is attached as security therefore or
(ii) take such other actions as may be necessary to stay such proceedings
pending resolution of such contest.

         Section 7. Neither the Shipowner, any charterer, the Masters of the
Vessel nor any other person has or shall have any right, power or authority to
create, incur or permit to be placed or imposed or continued upon the Vessel any
Lien whatsoever (including any encumbrance or security interest) other than the
Lien of this Mortgage and other Permitted Encumbrances.

         Section 8. The Shipowner agrees to hold a certified copy of this
Mortgage in safekeeping with the Vessel's papers at its principal office and on
demand to exhibit the same to any person having business with the Vessel, or to
any representative of the Mortgagee. The Shipowner shall also place on board the
Vessel and cause to be displayed in a prominent place and in a durable manner a
notice printed in plain type of such size that the paragraph of reading matter
shall cover a space not less than six inches wide by nine inches high, reading
as follows:

                               "NOTICE OF MORTGAGE

                  This Vessel is covered by a First Preferred Ship Mortgage in
                  favor of The Bank of New York, as Trustee under authority of
                  Chapter 313 of Title 46 of the United States Code. Under the
                  terms of said

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                  Mortgage, neither the owner, any charterer, the Master of this
                  Vessel nor any other person has any right, power or authority
                  to create, incur or permit to be imposed upon this Vessel any
                  other Lien whatsoever except Permitted Encumbrances (as
                  defined in the Mortgage)."

         Section 9. Except for the Lien of this Mortgage and other Permitted
Encumbrances, the Shipowner will not suffer to be continued any Lien,
encumbrance or charge on the Vessel, and in due course and in any event within
forty-five (45) days after the same becomes due and payable will pay or cause to
be discharged or make adequate provision for the satisfaction or discharge of
all such claims or demands, or will cause the Vessel to be released or
discharged from any such Lien, encumbrance or charge therefor.

         Section 10. If a libel or complaint is filed against the Vessel or the
Vessel is otherwise attached, levied upon or taken into custody by virtue of any
legal proceeding in any court, the Shipowner will promptly notify the Mortgagee
thereof by telex or telefax confirmed by letter, at its address, as specified in
this Mortgage, and within thirty (30) days will cause the Vessel to be released
and all Liens thereon other than this Mortgage and other Permitted Encumbrances
to be discharged, and will promptly notify the Mortgagee thereof in the manner
aforesaid. The Shipowner will notify the Mortgagee within forty-eight (48) hours
after it has become known to the Shipowner of any average or salvage incurred by
the Vessel.

         Section 11. (a) Except while the Vessel is undergoing repairs,
maintenance or is in lay up, the Shipowner will at all times and without cost or
expense to the Mortgagee, maintain and preserve, or cause to be maintained and
preserved, the Vessel and all of its equipment, outfit and appurtenances, tight,
staunch, strong, in good condition, working order and repair and in all respects
seaworthy and fit for its intended service, and will keep the Vessel, or cause
it to be kept, in such condition as will entitle them to at least the current
classification and rating for the Vessel in the American Bureau of Shipping or
other classification society of like standing; provided, however, the Shipowner
shall not lay up the Vessel unless (i)(x) the Shipowner has delivered to the
American Bureau of Shipping or other classification society of like standing the
Shipowner's plans to preserve, maintain and protect the Vessel while in lay up,
(y) the American Bureau of Shipping or such classification society has reviewed
and confirmed or otherwise approved such plans and (z) the Shipowner has
delivered to the Mortgagee a copy of such plans and (ii) the Shipowner complies
with such plans in all material respects while the Vessel is in lay up.
Notwithstanding the foregoing restrictions on the lay up of the Vessel, the
Mortgagee hereby acknowledges that Vessel is currently in lay up, and the
Mortgagee hereby consents to such lay up without compliance with the foregoing
proviso on the condition that the Vessel will be preserved and maintained in the
condition it is in on the date of this Mortgage. The Vessel shall, and the
Shipowner covenants that they will, at all times comply in all material respects
with all applicable laws, treaties and conventions to which the United States of
America is a party, and rules and regulations issued thereunder, and shall have
on board as and when required thereby valid certificates showing compliance
therewith. The Shipowner will not make, or permit to be made, any substantial
change in the structure, type or speed of the Vessel or substantial change in
her rig if such change would diminish the value of the Vessel.

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         (b) The Shipowner agrees, following request by the Mortgagee, to give
the Mortgagee at least ten (10) days notice of actual date and place of any
survey of the Vessel in order that the Mortgagee may have representatives
present if desired. The Shipowner agrees that at the Mortgagee's request it will
satisfy the Mortgagee that the expense of such survey or work to be done thereat
is within the Shipowner's financial ability and will not result in a claim or
Lien against the Vessel in violation of the provisions of this Mortgage.

         Section 12. (a) The Shipowner will at all reasonable times afford the
Mortgagee or its authorized representatives full and complete access to the
Vessel for the purpose of inspecting the Vessel and her cargo and papers and, at
the request of the Mortgagee, the Shipowner will deliver for inspection copies
of any and all contracts and documents relating to the Vessel, whether on board
or not. Until an Event of Default has occurred and is continuing, any such
inspection shall be conducted at a time and in a manner which does not interfere
with the operation of the Vessel and in the ordinary course of the Shipowner's
business.

         (b) The Shipowner hereby appoints the Mortgagee attorney-in-fact of the
Shipowner, whether or not an event of default shall have occurred or is
continuing, to appear before governmental bodies, classification societies and
to demand and receive to the same extent that the Shipowner itself might, all
information and certificates respecting (i) the corporate status of the
Shipowner under the laws of its jurisdiction of incorporation or any other
jurisdiction in which it may have qualified to do business, (ii) the status of
the Vessel under the laws and regulations of its country of registration and its
compliance with the requirements thereof, and (iii) the state of the records of
the Vessel or of the Shipowner in respect of the Vessel in any classification
society with which the Vessel may be classed; and the Shipowner hereby agrees
that the Mortgagee may execute its powers as attorney-in-fact as aforesaid
through its agents, representatives and attorneys. This power of attorney is
coupled with an interest and shall be irrevocable as long as any of the
Indebtedness hereby secured remains outstanding.

         Section 13. The Shipowner will not transfer or change the flag or port
of documentation of the Vessel without the prior written consent of the
Mortgagee. Any such written consent to any one transfer or change of flag or
port of documentation shall not be construed to be a waiver of this provision
with respect to any subsequent proposed transfer or change of flag or port of
documentation. Provided, however, that no consent of the Mortgagee shall be
required for a transfer of the Vessel if:

(a)      such transfer is to the flag of:

         (i)      The Republic of Liberia;

         (ii)     The Republic of the Marshall Islands;

         (iii)    The Republic of Vanuatu;

         (iv)     The Commonwealth of the Bahamas; or

         (v)      The Republic of Panama;

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(b)      simultaneously with such transfer a new mortgage in favor of the
         Mortgagee on the Vessel substantially similar to this Mortgage has been
         executed by the Shipowner and recorded as required by the laws of the
         new flag state (the "New Mortgage"); and

(c)      upon the recording of the New Mortgage, the Shipowner provides to the
         Mortgagee an opinion of counsel that the New Mortgage has been
         perfected under the laws of the new flag state, that it constitutes a
         valid, enforceable and first priority ship mortgage on the Vessel under
         the laws of the new flag state and that it also constitutes a foreign
         preferred ship mortgage under 46 U.S.C. Section 31301(6).

         Section 14. The Shipowner will not sell, mortgage, charter, or transfer
the Vessel except as permitted under the Indenture.

         Section 15.

         (a) The Shipowner will cause to be carried and maintained on or in
respect of the Vessel without expense to the Mortgagee, all risk equivalent Hull
and Machinery insurance and War Risk insurance in the event that the Vessel is
located outside United States territorial waters with responsible and reputable
insurance companies, underwriters, associations, clubs or funds in an amount
which is not less than the Insured Value of the Vessel (as defined below) and
which when added to the insurances maintained on other vessels mortgaged to the
Mortgagee pursuant to the terms of the Indenture shall not be less than the
outstanding principal amount of the Notes. On an annual basis, the Shipowner, in
consultation with responsible and reputable insurance companies, underwriters,
associations, clubs or funds, shall determine the insured Hull and Machinery and
War Risk value of each vessel mortgaged to the Mortgagee pursuant to the
Indenture in accordance with customary industry practice and such values shall
then be the Insured Value for each such vessel for such year so long as such
determination is commercially reasonable. All insurances required by this
Article I, Section 15 shall be in such form (including without limitation, the
form of the loss payable clause for physical damage covered by the Hull and
Machinery and War Risk insurances) as is customary for vessels engaged in the
same type of operations as the Vessel and shall be in U.S. currency. The
Shipowner shall maintain liability insurance including vessel liability, crew
liability, cargo liability, pollution liability, contractual liability and
removal of wreck insurance in amounts similar to that maintained by owners of
similar vessels engaged in similar operations in the same general geographic
region or in the Shipowner's sole discretion and without expense to the
Mortgagee, have the Vessel fully entered in a responsible and reputable
Protection and Indemnity Association or club in good standing. There shall be
severability of interests in favor of the Mortgagee. The Shipowner will cause
the liability insurance company, underwriters, association or club to issue to
the Mortgagee a Letter of Undertaking or certificate or cover note, noting the
Mortgagee's interest in such insurance. The Shipowner will furnish the Mortgagee
from time to time on request and in any event at least annually a detailed
certificate (including a list showing the Insured Value of the Vessel) signed by
a reputable firm of marine insurance brokers with respect to the insurance
carried and maintained on the Vessel, and a letter from such broker stating that
such insurance complies with the requirements of this Section 15. The Shipowner
will cause such firm to agree to advise the Mortgagee promptly of any default in
the payment of any premium. The Shipowner will also cause such firm to agree to
advise the Mortgagee promptly of any other act or omission on the part of the
Shipowner of which it has knowledge and which might invalidate or render

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unenforceable, in whole or in part, any insurance on the Vessel. The Shipowner
agrees that, unless the insurances by its terms provide that they cannot cease
without the Mortgagee being informed and having the right to continue the
insurances by paying any premiums not paid by the Shipowner, certificates of
insurance evidencing the required insurance shall be in the hands of the
Mortgagee at least two (2) days before the risk in question commences.

         (b) The Shipowner shall, at its own expense, furnish to the Mortgagee a
mortgagee's single interest policy providing coverage in an amount equal to at
least 105% of the amount of the Indebtedness hereby secured. Such mortgagee's
interest insurance shall be maintained in the broadest form available in the
American or British markets for vessels of the same type as the Vessel through
reputable underwriters of international standing. The Vessel shall not undertake
any construction operations or carry any cargoes which is not permitted by the
policies in force or proceed in an area then excluded by trading warranties
under its marine or war risk policies (including protection and indemnity)
without obtaining all necessary additional coverage, and evidence of which
additional insurance shall be furnished to the Mortgagee.

         (c) The Shipowner will cause the relevant insurance brokers to agree
to, and the Shipowner hereby covenants and agrees that it will, advise the
Mortgagee of any expiration, termination, nonrenewal, material alteration or
cancellation of any policy, any default in the payment of any premium and of any
other act or omission on the part of the Shipowner of which it has knowledge and
which might invalidate or render unenforceable, in whole or in part, any
insurance on the Vessel. To the extent obtainable from underwriters or brokers,
all policies required hereby shall provide for not less than thirty (30) days
prior written notice to be received by the Mortgagee of the termination or
cancellation of the insurance evidenced thereby. All policies of insurance
maintained pursuant to this Article I, Section 15 shall contain provisions
waiving underwriters' rights of subrogation thereunder against the Mortgagee or
its assignee.

         (d) All insurance required by this Article I, Section 15, except for
insurance covering the Shipowner's liability to the crew of the Vessel, must
name the Mortgagee as an additional insured, but without liability for premiums,
club calls, assessments, warranties or representations, and all amounts of
whatsoever nature payable under any insurance must be payable to the Mortgagee
for distribution first to itself and thereafter to the Shipowner or others as
interest may appear. Nevertheless, until an Event of Default shall have occurred
and is continuing (i) amounts payable under any insurance on the Vessel with
respect to liability or protection and indemnity risks shall be paid directly to
the Shipowner to reimburse it for any loss, damage or expense incurred by it and
covered by such insurance or to the person to whom any liability covered by such
insurance has been incurred; provided, however, if the Mortgagee shall give
notice of an Event of Default hereunder, all such payments shall be made to the
Mortgagee (with the exception of payments made under employers liability,
workman's compensation and similar insurances) until the Indebtedness hereby
secured has been fully discharged, and (ii) amounts payable under any insurance
with respect to the Vessel involving any damage to the Vessel not constituting
an actual or constructive total loss, the underwriters may pay direct for the
repair, salvage or other charges involved or, if the Shipowner shall have first
fully repaired the damage or paid all of the salvage or other charges, may pay
the Shipowner as reimbursement therefor; provided, however, that if such amounts
(including any franchise or deductible) are greater than USD 1,000,000.00 the
underwriters shall pay such amount to the Mortgagee to be applied as provided in
the Indenture.

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         (e) All amounts paid to the Mortgagee in respect of any insurance on
the Vessel shall be held and applied by the Mortgagee as provided in the
Indenture.

         (f) In the event that any claim or Lien is asserted against the Vessel
for loss, damage or expense which is covered by insurance required hereunder and
it is necessary for the Shipowner to obtain a bond or supply other security to
prevent arrest of the Vessel or to release the Vessel from arrest on account of
such claim or Lien, the Mortgagee, on request of the Shipowner, shall assign to
any person, firm or corporation executing a surety or guarantee bond or other
agreement to save or release the Vessel from such arrest, all right, title and
interest of the Mortgagee in and to said insurance covering said loss, damage or
expense, as collateral security to indemnify against liability under said bond
or other agreement.

         (g) The Shipowner shall deliver to the Mortgagee on each anniversary of
this Mortgage certified copies of all certificates of entry, cover notes,
binders, evidences of insurance and policies for the purpose of inspection or
safekeeping, or, alternatively, satisfactory letters of undertaking from the
broker holding the same.

         (h) The Shipowner agrees that it will not execute or permit or
willingly allow to be done any act by which any insurance may be suspended,
impaired or canceled, and that it will not permit or allow the Vessel to
undertake any construction operations or run any risk or transport any cargo
which is not permitted by the policies in force, without having previously
insured the Vessel by additional coverage to extend to such construction
operations, risks or cargoes.

         (i) If an Event of Default has occurred and is continuing and any
underwriter proposes to pay less on any claim than the amount thereof, the
Shipowner shall forthwith inform the Mortgagee and the Mortgagee shall have the
right, but not the obligation, to negotiate and agree to any compromise.

         (j) The Shipowner will comply with and satisfy all of the provisions of
any applicable law, convention, regulation, proclamation or order concerning
financial responsibility for liabilities imposed on the Shipowner or the Vessel
with respect to pollution by any state or nation or political subdivision
thereof and will maintain all certificates or other evidence of financial
responsibility as may be required by any such law, convention, regulation,
proclamation or order with respect to the trade which the Vessel are from time
to time engaged in and the cargo carried by it or the construction projects
conducted by it.

         Section 16. Upon written request from the Mortgagee, the Shipowner will
reimburse the Mortgagee promptly, for any and all reasonable expenditures which
the Mortgagee may from time to time make, lay out or expend in providing such
protection in respect of insurance, discharge or purchase of Liens, taxes, dues,
assessments, governmental charges, fines and penalties lawfully imposed,
repairs, attorney's fees, necessary translation fees for documents made in a
language other than English, and other matters as the Shipowner is obligated
herein to provide, but fails to provide. Such obligation of the Shipowner to
reimburse the Mortgagee shall be an additional indebtedness due from the
Shipowner, secured by this Mortgage, and shall be payable by the Shipowner on
demand. The Mortgagee, though privileged to do so, shall be under no obligation
to the Shipowner to make any such expenditures, nor shall the making thereof
relieve the Shipowner of any default in that respect.

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         Section 17. The Shipowner will perform in all material respects any and
all charter parties or contracts of affreightment which are, or may be, entered
into with respect to the Vessel.

         Section 18. The Shipowner further covenants and agrees with the
Mortgagee that, so long as any part of the Indebtedness hereby secured remains
unpaid, there shall be no change in the ownership of the Vessel except as
permitted under the Indenture.

         Section 19. The Shipowner hereby irrevocably authorizes the Mortgagee
to file and record financing statements under the Uniform Commercial Code in any
jurisdiction where the same may be in force or under any legislation having
similar effect for the purpose of perfecting or continuing the perfection of the
security interests granted by the Shipowner to the Mortgagee herein without
obtaining the signature of the Shipowner thereto. The Shipowner hereby
irrevocably authorizes the Mortgagee to execute any such financing statement or
similar document in the name of the Shipowner.

                                   ARTICLE II
                         Events of Default and Remedies.

         Section 1. In case any one or more of the following events, herein
termed "Events of Default", shall have occurred and be continuing:

         (a) An Event of Default (as defined in the Indenture) has occurred and
is continuing; or

         (b) The statements in Sections 2 and 3 of Article I shall prove to be
untrue in a material way; or

         (c) a default shall have occurred in the due and punctual observance
and performance of any of the provisions of Sections 4, 5, 9, 10, 11, 13, 14,
15(a), (b), (c), and (h), 16 or 18 of Article I hereof; or

         (d) a default by the Shipowner in the observance or performance of any
other agreement under this Mortgage shall have occurred and shall remain
unremedied for thirty (30) days after written notice thereof shall have been
given to the Shipowner by the Mortgagee;

then, and in each and every such case, the Mortgagee shall have the right to:

         (1) Exercise all rights and remedies available under the Indenture and
the Guaranty;

         (2) Exercise all of the rights and remedies in foreclosure and
otherwise given to mortgagees by the provisions of the laws of the United States
of America or of any other jurisdiction where the Vessel may be found;

         (3) Bring suit at law, in equity or in admiralty, as it may be advised,
to recover judgment for the Indebtedness hereby secured, and collect the same
out of any and all property of the Shipowner whether covered by this Mortgage or
otherwise;

         (4) Take and enter into possession of the Vessel, at any time, wherever
the same may

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be, without legal process and without being responsible for loss or damage, and
the Shipowner or other person in possession forthwith upon demand of the
Mortgagee shall surrender to the Mortgagee possession of the Vessel and if at
any time the Mortgagee shall avail itself of the right herein given it to take
the Vessel, the Mortgagee shall have the right to dock the Vessel, for a
reasonable time at any dock, pier or other premises of the Shipowner without
charge, or to dock them at any other place at the cost and expense of the
Shipowner;

         (5) To the extent permitted by and in accordance with applicable law,
take and enter into possession of the Vessel, at any time, wherever the same may
be, without legal process and without being responsible for loss or damage, sell
the Vessel, at any place and at such time as the Mortgagee may specify and in
such manner as the Mortgagee may specify, free from any claim by the Shipowner
in admiralty, in equity, at law or by statute, at public or private sale, by
sealed bids or otherwise, by mailing, by air or otherwise, notice of such sale,
whether public or private, addressed to the Shipowner at its last known address,
twenty (20) days prior to the date fixed for entering into the contract of sale
and by first publishing notice of any such public sale for ten consecutive days,
in a daily newspaper of general circulation published in Houston, State of
Texas, or if the place of sale should not be in Houston, Texas then by
publication of a similar notice at or near the place of sale; in the event that
the Vessel shall be offered for sale by private sale, no newspaper publication
of notice shall be required, nor notice of adjournment of sale; the sale may be
held at such place and at such time as the Mortgagee by notice may have
specified, or may be adjourned by the Mortgagee from time to time by
announcement at the time and place appointed for such sale or for such adjourned
sale, and without further notice or publication the Mortgagee may make any such
sale at the time and place to which the same shall be so adjourned; and any sale
may be conducted without bringing the Vessel to the place designated for such
sale.

         Section 2. Any sale of the Vessel made in pursuance of this Mortgage,
whether under the power of sale hereby granted or any judicial proceedings,
shall operate to divest all right, title and interest of any nature whatsoever
of the Shipowner therein and thereto, and shall bar the Shipowner, its
successors and assigns, and all persons claiming by, through or under it. No
purchaser shall be bound to inquire whether notice has been given, or whether
any default has occurred, or as to the propriety of the sale, or as to the
application of the proceeds thereof. In case of any such sale, the Mortgagee, if
it is the purchaser, shall be entitled for the purpose of making settlement or
payment for the property purchased to use and apply the Indebtedness hereby
secured in order that there may be credited against the amount remaining due and
unpaid thereon the sums payable out of the net proceeds of such sale to the
Mortgagee after allowing for the costs and expense of sale and other charges;
and thereupon, such purchaser shall be credited, on account of such purchase
price, with the net proceeds that shall have been so credited upon the
Indebtedness hereby secured. At any such judicial sale, the Mortgagee may bid
for and purchase such property and upon compliance with the terms of sale may
hold, retain and dispose of such property without further accountability
therefor.

         Section 3. The Mortgagee is hereby appointed attorney-in-fact of the
Shipowner, upon the happening of any Event of Default and during the continuance
of such Event of Default, to execute and deliver to any purchaser aforesaid, and
is hereby vested with full power and authority to make, in the name and on
behalf of the Shipowner, a good conveyance of the title to the Vessel sold
pursuant to this Article II. In the event of any sale of the Vessel, under

                                       10
<PAGE>

any power herein contained, the Shipowner will, if and when required by the
Mortgagee, execute such form of conveyance of the Vessel as the Mortgagee may
direct or approve.

         Section 4. The Mortgagee is hereby appointed attorney-in-fact of the
Shipowner upon the happening of any Event of Default and during the continuance
of such Event of Default, in the name of the Shipowner to demand, collect,
receive, compromise and sue for, so far as may be permitted by law, all amounts
due from underwriters under any insurance thereon as payment of losses or as
return premiums or otherwise, salvage awards and recoveries, recoveries in
general average or otherwise, and all other sums due or to become due at the
time of the happening of any Event of Default in respect of any insurance
thereon, from any person whomsoever, and to make, give and execute in the name
of the Shipowner acquittances, receipts, releases or other discharges for the
same, whether under seal or otherwise, and to endorse and accept in the name of
the Shipowner all checks, notes, drafts, warrants, agreements and other
instruments in writing with respect to the foregoing.

         Section 5. Whenever any right to enter and take possession of the
Vessel accrues to the Mortgagee, it may require the Shipowner to deliver, and
the Shipowner shall on demand, at its own cost and expense, deliver to the
Mortgagee the Vessel to a location designated by the Mortgagee as demanded. If
the Mortgagee shall be entitled to take any legal proceedings to enforce any
right under this Mortgage, the Mortgagee shall be entitled as a matter of right
to the appointment of a receiver of the Vessel.

         Section 6. After an Event of Default has occurred, and is continuing,
the Shipowner authorizes and empowers the Mortgagee or its appointees or any of
them to appear in the name of the Shipowner, its successors and assigns, in any
court of any country or nation of the world where a suit is pending against the
Vessel because of or on account of any alleged Lien against the Vessel from
which the Vessel have not been released and to take such proceedings as to them
or any of them may seem proper towards the defense of such suit and the purchase
or discharge of such Lien, and all expenditures made or incurred by them or any
of them for the purpose of such defense or purchase or discharge shall be a debt
due from the Shipowner, its successors and assigns, to the Mortgagee, and shall
be secured by the Lien of this Mortgage in like manner and extent as if the
amount and description thereof were written herein.

         Section 7. Each and every power and remedy herein given to the
Mortgagee shall be cumulative and shall be in addition to every other power and
remedy herein given or now or hereafter existing at law, in equity, in admiralty
or by statute, and each and every power and remedy whether herein given or
otherwise existing may be exercised from time to time and as often and in such
order as may be deemed expedient by the Mortgagee, and the exercise or the
beginning of the exercise of any power or remedy shall not be construed to be a
waiver of the right to exercise at the same time or thereafter any other power
or remedy. No delay or omission by the Mortgagee in the exercise of any right or
power or in the pursuance of any remedy accruing upon any Event of Default shall
impair any such right, power or remedy or be construed to be a waiver of any
such Event of Default or to be an acquiescence therein; nor shall the acceptance
by the Mortgagee of any security or of any payment of or on account of the
Indebtedness hereby secured maturing after any Event of Default or of any
payment on account of any past default be construed to be a waiver of any right
to take advantage of any future Event of Default or of any past Event of Default
not completely cured thereby. No consent, waiver or

                                       11
<PAGE>

approval of the Mortgagee shall be deemed to be effective unless in writing and
duly signed by authorized signatories of the Mortgagee.

         Section 8. If at any time after an Event of Default and prior to the
actual sale of the Vessel by the Mortgagee or prior to any enforcement or
foreclosure proceedings the Shipowner offers completely to cure all Events of
Default and to pay all expenses, advances and damages to the Mortgagee
consequent to such Events of Default, with interest at the rate provided for
late payments in the Notes and the Indenture, then the Mortgagee may accept such
offer and payment and restore the Shipowner to its former position, but such
action, if taken, shall not affect any subsequent Event of Default or impair any
rights consequent thereon.

         Section 9. In case the Mortgagee shall have proceeded to enforce any
right, power or remedy under this Mortgage by foreclosure, entry or otherwise,
and such proceedings shall have been discontinued or abandoned for any reason or
shall have been determined adversely to the Mortgagee, then and in every such
case the Shipowner and the Mortgagee shall be restored to their former positions
and rights hereunder with respect to the property subject or intended to be
subject to this Mortgage, and all rights, remedies and powers of the Mortgagee
shall continue as if no such proceedings had been taken.

         Section 10. The proceeds of any sale of the Vessel and any and all
other moneys received by the Mortgagee pursuant to or under the terms of this
Mortgage or in any proceedings hereunder, the application of which has not
elsewhere herein been specifically provided for, shall be held and applied by
the Mortgagee as provided in the Indenture.

         Section 11. Until an Event of Default has occurred and is continuing,
the Shipowner (a) shall be suffered and permitted to retain actual possession
and use of the Vessel and (b) shall have the right, from time to time, in its
discretion, and without application to the Mortgagee, and without obtaining a
release thereof by the Mortgagee, to dispose of, free from the Lien hereof, any
boilers, engines, machinery, masts, spars, sails, rigging, boats, anchors,
chains, tackle, apparel, furniture, fittings, cranes or equipment or any other
appurtenances of the Vessel that are no longer useful, necessary, profitable or
advantageous in the operation of the Vessel, first or simultaneously replacing
the same by new boilers, engines, machinery, masts, spars, sails, rigging,
boats, anchors, chains, tackle, apparel, furniture, fittings, cranes, equipment,
or other appurtenances of at least substantially equal value to the Shipowner,
which shall forthwith become subject to the Lien of this Mortgage as a preferred
mortgage thereon.

         Section 12. (a) If any provision of this Mortgage should be deemed
invalid or shall be deemed to affect adversely the preferred status of this
Mortgage under any applicable law, such provision shall cease to be a part of
this Mortgage without affecting the remaining provisions, which shall remain in
full force and effect.

         (b) In the event that the Notes, the Indenture, the Guaranty or this
Mortgage or any of the documents or instruments which may from time to time be
delivered hereunder or thereunder or any provision hereof or thereof shall be
deemed invalidated by present or future law of any nation or by decision of any
court, or if any third party shall fail or refuse to recognize any of the powers
granted to the Mortgagee hereunder when it is sought to exercise them, this
shall not affect the validity or enforceability of all or any other parts of the
Notes, the Indenture, the Guaranty or the Mortgage or such documents or
instruments and, in any such case, the

                                       12
<PAGE>

Shipowner covenants and agrees that, on demand, it will execute and deliver such
other and further agreements, documents and instruments and do such things as
the Mortgagee may require to carry out the true intent of this Mortgage, the
Indenture, the Guaranty and the Notes.

         (c) Anything herein to the contrary notwithstanding, it is intended
that nothing herein shall waive the preferred status of this Mortgage and that,
if any provision or portion thereof herein shall be construed to waive the
preferred status of this Mortgage, then such provision to such extent shall be
void and of no effect.

         Section 13. In the event of any legal proceedings, the Shipowner
accepts for itself and subsequent owners of the Vessel, irrespective of domicile
or residence the nonexclusive jurisdiction of the United States District Court
of the Southern District Court of New York as venue with notice provided in the
manner established for residents of the venue served on the Shipowner or on the
Vessel's masters.

                                  ARTICLE III
                                Sundry Provisions

         Section 1. All of the covenants, promises, stipulations and agreements
of the Shipowner in this Mortgage contained shall bind the Shipowner and its
successors and assigns and shall inure to the benefit of the Mortgagee and its
respective successors and assigns. In the event of any assignment or transfer of
this Mortgage, the term "Mortgagee", as used in this Mortgage, shall be deemed
to mean any such assignee or transferee.

         Section 2. Wherever and whenever herein any right, power or authority
is granted or given to the Mortgagee, such right, power or authority may be
exercised in all cases by the Mortgagee or such agent or agents as it may
appoint, and the act or acts of such agent or agents when taken shall constitute
the act of the Mortgagee hereunder.

         Section 3. This Mortgage may be executed in any number of counterparts,
each of which shall be an original, but such counterparts shall together
constitute but one and the same instrument.

         Section 4. Any notice or other communication to be given pursuant
hereto shall be in the manner provided in Section 13.03 of the Indenture and
addressed:

If to the Shipowner to:

                  J. Ray McDermott, Inc.
                  757 N. Eldridge Parkway
                  Houston, Texas 77079
                  Attention: President
                  Fax: No.: (281) 870-5015

                                       13
<PAGE>

If to the Mortgagee to:

                  The Bank of New York
                  101 Barclay Street, Floor 8W
                  New York, New York  10286
                  Attention: Corporate Trust Administration
                  Fax: No.: (212) 815-5707

or at such other address as either party may notify to the other in writing.

         Section 5. If the Indebtedness hereby secured or the Notes shall have
been fully and finally satisfied and discharged then this Mortgage and the
estate and rights hereunder shall cease, determine, and become null and void and
the Mortgagee, on the request of the Shipowner, at the Shipowner's cost and
expense and subject to compliance with the Indenture, shall forthwith cause this
Mortgage to be discharged of record. Upon any termination of this Mortgage or
release of the Vessel, the Mortgagee will, at the expense of the Shipowner,
execute and deliver to the Shipowner such documents and take such other actions
as the Shipowner shall reasonably request to evidence the termination of this
Mortgage or the release of the Vessel, as the case may be.

         Section 6. During the term of this Mortgage and so long as no Event of
Default shall have occurred and be continuing, the Shipowner shall have the full
and peaceful enjoyment, use, right to possession and control of the Vessel
subject to the terms of the Indenture.

         Section 7. All capitalized terms used in this Mortgage and not defined
herein shall have the meanings given to them in the Indenture.

         Section 8. The maximum principal amount that may be outstanding under
this Mortgage is Two Hundred Million United States Dollars (USD 200,000,000.00)
and for the purpose of recording this Mortgage, as required by Chapter 313 of
Title 46 of the United States Code the total amount of this First Preferred
Mortgage is Two Hundred Million United States Dollars (USD 200,000,000.00) and
interest and performance of mortgage covenants. The discharge amount is the same
as the total amount.

         Section 9. In connection with its appointment and acting hereunder, the
Mortgagee is entitled to all rights, privileges, immunities, benefits,
protections and indemnities provided to it under the Indenture. In acting under
this Mortgage, the Mortgagee shall be required to perform duties and exercise
remedies or powers only to the extent set forth in Section 7.01 of the
Indenture.

         Section 10. The Mortgagee, by acceptance of this Mortgage, agrees, for
itself and each holder of the Notes, that any information concerning the
business and affairs of the Shipowner and the Vessel that is not already
generally available to the public shall be treated and held as confidential and
not used by the Mortgagee or any holder of a Note except in connection with this
Mortgage and the investment represented by the Notes. Any Person required to
maintain the confidentiality of information as provided in this Article III,
Section 10 shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care

                                       14
<PAGE>

to maintain the confidentiality of such information as such Person would accord
to its own confidential information.

                  [Remainder of page intentionally left blank.]

                                       15
<PAGE>

         IN WITNESS WHEREOF, the Shipowner has caused this Mortgage to be duly
executed the day and year first above written.

                                    J. RAY MCDERMOTT, INC.

                                    By: _______________________________________
                                    Name: _____________________________________
                                    Title: ____________________________________

                                       16
<PAGE>

STATE OF TEXAS             )
                           )ss
COUNTY OF HARRIS           )

         On this 8th day of December, 2003, before me personally appeared
_______________, to me known, who, being by me duly sworn, did depose and say
that he resides at ________________________; that he is the ________________ of
J. Ray McDermott, Inc., the corporation described in the foregoing instrument;
that he signed his name thereto by order of the Board of Directors of said
corporation and that the foregoing instrument is the act and deed of the
corporation.

                                  ____________________________________________
                                  Notary Public<PAGE>

                                                                     EXHIBIT 4.7

                                PLEDGE AGREEMENT

         PLEDGE AGREEMENT, dated as of December 9, 2003 (this "AGREEMENT"),
among J. Ray McDermott, S.A., a Panamanian corporation (the "COMPANY"), each
Subsidiary of the Company listed on the signature pages hereto and The Bank of
New York, not in its individual capacity but solely as collateral agent (in such
capacity, the "COLLATERAL AGENT").

         WHEREAS, the Company, the Guarantors from time to time party thereto
and The Bank of New York, not in its individual capacity but solely as trustee
(the "TRUSTEE"), have entered into the Indenture dated as of December 9, 2003
(as amended, restated, supplemented or otherwise modified from time to time, the
"INDENTURE");

         WHEREAS the Company is willing to secure its obligations under the
Indenture and the Notes issued thereunder by granting Liens on certain of its
assets to the Collateral Agent as provided herein;

         WHEREAS each other Pledgor has guaranteed the foregoing obligations of
the Company and is willing to secure its obligations under that guarantee by
granting Liens on certain of its assets to the Collateral Agent as provided
herein;

         NOW, THEREFORE, in consideration of the premises and to induce the
Collateral Agent to enter into the Indenture and to induce potential investors
to purchase the Notes, the Pledgors hereby agree with the Collateral Agent as
follows:

         Section 1. Definitions.

         (a) Terms Defined in Indenture. Terms defined in the Indenture and not
otherwise defined herein have, as used herein, the respective meanings provided
for therein.

         (b) Additional Definitions. The following additional terms, as used
herein, have the following meanings:

         "COLLATERAL" means all property, whether now owned or hereafter
acquired, on which a Lien is granted or purports to be granted to the Collateral
Agent pursuant to the Pledge Documents. When used with respect to a specific
Pledgor, the term "Collateral" means all its property on which such a Lien is
granted or purports to be granted.

         "CONTROL" has the meaning specified in UCC Section 8-106.

         "INDENTURE" has the meaning set forth in the first WHEREAS clause.

<PAGE>

         "EQUITY INTEREST" means (i) in the case of a corporation, any shares of
its capital stock, (ii) in the case of a limited liability company, any
membership interest therein, (iii) in the case of a partnership, any partnership
interest (whether general or limited) therein, (iv) in the case of any other
business entity, any participation or other interest in the equity or profits
thereof and (v) any warrant, option or other right to acquire any Equity
Interest described in this definition.

         "LLC INTEREST" means a membership interest or similar interest in a
limited liability company.

         "ORIGINAL PLEDGOR" means any Pledgor that grants a Lien on any of its
assets hereunder on the Issue Date.

         "OWN" refers to the possession of sufficient rights in property to
grant a security interest therein as contemplated by UCC Section 9-203, and
"ACQUIRE" refers to the acquisition of any such rights.

         "PERMITTED ENCUMBRANCES" has the meaning set forth in the Indenture.

          "PARTNERSHIP INTEREST" means a partnership interest, whether general
or limited.

          "PLEDGE AGREEMENT SUPPLEMENT" means a Pledge Agreement Supplement,
substantially in the form of Exhibit A, signed and delivered to the Collateral
Agent for the purpose of adding a Subsidiary of the Company as a party hereto
pursuant to Section 15 and/or adding additional property to the Collateral
pursuant to Section 16.

         "PLEDGE DOCUMENTS" means this Agreement, the Pledge Agreement
Supplements and all other supplemental or additional agreements or similar
instruments delivered hereunder.

         "PLEDGED", when used in conjunction with any type of asset, means at
any time an asset of such type that is included (or that creates rights that are
included) in the Collateral at such time. For example, "Pledged Equity Interest"
means an Equity Interest that is included in the Collateral at such time.

         "PLEDGORS" means the Company, each Subsidiary of the Company listed on
the signature pages hereto and each Subsidiary of the Company which from time to
time becomes party hereto pursuant to Section 15.

         "POST-PETITION INTEREST" means any interest that accrues after the
commencement of any case, proceeding or other action relating to the bankruptcy,
insolvency or reorganization of any one or more of the Pledgors (or would accrue
but for the operation of applicable bankruptcy or insolvency laws), whether or
not such interest is allowed or allowable as a claim in any such proceeding.

                                       2
<PAGE>

         "PROCEEDS" means all proceeds of, and all other profits, products,
rents or receipts, in whatever form, arising from the collection, sale,
exchange, assignment, or other disposition of, or other realization upon, any
Collateral.

         "SECURED AGREEMENT", when used with respect to any Secured Obligation,
refers collectively to each instrument, agreement or other document that sets
forth obligations of the Company, obligations of a Guarantor and/or rights of
the holder with respect to such Secured Obligation.

         "SECURED GUARANTEE" means, with respect to each Guarantor, its
guarantee of the Secured Obligations under Article 12 of the Indenture.

         "SECURED OBLIGATIONS" has the meaning set forth in the Indenture.

         "SECURED PARTIES" has the meaning set forth in the Indenture.

         "TRANSACTION LIENS" means the Liens granted by the Pledgors under the
Pledge Documents.

         "UCC" means the Uniform Commercial Code as in effect from time to time
in the State of New York; provided that, if perfection or the effect of
perfection or non-perfection or the priority of any Transaction Lien on any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than New York, "UCC" means the Uniform Commercial Code as in
effect from time to time in such other jurisdiction for purposes of the
provisions hereof relating to such perfection, effect of perfection or
non-perfection or priority.

         (c) Terms Generally. The definitions of terms herein (including those
incorporated by reference to the UCC or to another document) apply equally to
the singular and plural forms of the terms defined. Whenever the context may
require, any pronoun includes the corresponding masculine, feminine and neuter
forms. The words "INCLUDE", "INCLUDES" and "INCLUDING" shall be deemed to be
followed by the phrase "WITHOUT LIMITATION". The word "WILL" shall be construed
to have the same meaning and effect as the word "SHALL". Unless the context
requires otherwise, (i) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (ii) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (iii) the words "HEREIN", "HEREOF" and "HEREUNDER", and words of
similar import, shall be construed to refer to this Agreement in its entirety
and not to any particular provision hereof, (iv) all references herein to
Sections, Exhibits and Schedules shall be construed to refer to Sections of, and
Exhibits and Schedules to, this Agreement and (v) the word "PROPERTY" shall be
construed to refer to any and all

                                       3
<PAGE>

tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.

         Section 2. Pledge.

         (a) The Company, in order to secure the Secured Obligations, and each
other Pledgor, in order to secure its Secured Guarantee, grants to the
Collateral Agent for the benefit of the Secured Parties a continuing security
interest in all the following property of the Company or such other Pledgor, as
applicable, whether now owned or existing or hereafter acquired or arising and
regardless of where located:

                  (i) all Equity Interests in any Material Subsidiary or
         Material Guarantor held directly by such Pledgor, and all of its rights
         and privileges with respect thereto and all income and profits thereon,
         and all dividends and other payments and distributions with respect
         thereto; and

                  (ii) all Proceeds of the Collateral described in the foregoing
         clause (i);

         (b) The Transaction Liens are granted as security only and shall not
subject the Collateral Agent or any other Secured Party to, or transfer or in
any way affect or modify, any obligation or liability of any Pledgor with
respect to any of the Collateral or any transaction in connection therewith.

         Section 3. General Representations and Warranties. Each Original
Pledgor represents and warrants that:

         (a) Such Pledgor is duly organized, validly existing and in good
standing under the laws of the jurisdiction identified as its jurisdiction of
organization in Schedule 1 hereto.

         (b) Schedule 1 lists all Equity Interests in Material Subsidiaries or
Material Guarantors owned by such Pledgor as of the Issue Date.

         (c) Such Pledgor owns its Collateral free and clear of any Lien other
than Permitted Encumbrances. All shares of capital stock included in such
Pledged Equity Interests have been duly authorized and validly issued and, in
the case of Pledged Equity Interests issued by an entity organized under the
laws of a jurisdiction of the United States, are fully paid and non-assessable.
None of such Pledged Equity Interests is subject to any option to purchase or
similar right of any Person. Except as otherwise permitted in the Indenture,
such Pledgor is not and will not become a party to or otherwise bound by any
agreement (except the Indenture, the Pledge Documents and the other Secured
Agreements) which restricts in any manner the rights of any present or future
holder of any Pledged Equity Interest with respect thereto.

                                       4
<PAGE>

         (d) The Transaction Liens granted hereby on all Collateral owned by
such Pledgor (i) have been validly created, (ii) will attach to each item of
such Collateral on the Issue Date (or, if such Pledgor first obtains rights
thereto on a later date, on such later date) and (iii) when so attached, will
secure all the Secured Obligations or such Pledgor's Secured Guarantee, as the
case may be.

         (e) Immediately prior to delivery of the Pledged Equity Interests to
the Collateral Agent, such Pledgor holds all Pledged Equity Interests owned by
it directly (i.e., not through a Subsidiary, a Securities Intermediary (as
defined in the UCC) or any other Person). All Pledged Equity Interests are
represented by a certificate.

         Section 4. Further Assurances; General Covenants. (a) Each Pledgor
covenants that such Pledgor will, from time to time, at the Company's expense,
execute, deliver, file and record any statement, assignment, instrument,
document, agreement or other paper and take any other action (including any
filing of financing or continuation statements under the UCC) that from time to
time may be necessary or desirable, or that the Collateral Agent may reasonably
request, in order to create, preserve, perfect, confirm, validate or enforce the
Transaction Liens of such Pledgor's Collateral and cause the Collateral Agent to
have Control thereof and enable the Collateral Agent and the other Secured
Parties to obtain the full benefits of the Pledge Documents. To the extent
permitted by applicable law, such Pledgor authorizes the Collateral Agent to
file such financing statements or continuation statements without such Pledgor's
signature appearing thereon.

         (b) No Pledgor will (i) change its name or corporate structure or (ii)
change its location (determined as provided in UCC Section 9-307) unless it
shall have given the Collateral Agent prior notice thereof.

         (c) Each Pledgor will, promptly upon request, provide to the Collateral
Agent all information and evidence concerning such Pledgor's Collateral that the
Collateral Agent may reasonably request from time to time to enable it to
enforce the provisions of the Pledge Documents.

         Section 5. Investment Property. Each Pledgor represents, warrants and
covenants as follows:

         (a) Equity Interests. On the Issue Date (in the case of an Original
Pledgor) or the date on which it signs and delivers its first Pledge Agreement
Supplement (in the case of any other Pledgor), such Pledgor will deliver to the
Collateral Agent as Collateral hereunder all certificates representing Pledged
Equity Interests then owned by such Pledgor. Thereafter, whenever such Pledgor
acquires any other certificate representing a Pledged Equity Interest, such
Pledgor will immediately deliver such certificate to the Collateral Agent as
Collateral hereunder.

                                       5
<PAGE>

         (b) Perfection as to Equity Interests. When such Pledgor delivers the
certificate representing any Pledged Equity Interest owned by it to the
Collateral Agent and complies with Section 5(c) in connection with such
delivery, (i) the Transaction Lien on such Pledged Equity Interest will be
perfected, subject to no prior Liens or rights of others, (ii) the Collateral
Agent will have Control of such Pledged Equity Interest and (iii) the Collateral
Agent will be a protected purchaser (within the meaning of UCC Section 8-303)
thereof.

         (c) Delivery of Pledged Certificates. All certificates representing
Pledged Equity Interests, when delivered to the Collateral Agent, will be in
suitable form for transfer by delivery, or accompanied by duly executed
instruments of transfer or assignment in blank.

         (d) Communications. Each Pledgor will promptly give to the Collateral
Agent copies of any material notices and other communications received by it
from any third party with respect to Pledged Equity Interests registered in the
name of such Pledgor or its nominee.

         (e) Compliance with Applicable Foreign Laws. If and so long as the
Collateral includes any Equity Interest in a legal entity organized under the
laws of a jurisdiction outside the United States, the relevant Pledgor will take
all such action as may be required under the laws of such foreign jurisdiction
to ensure that the Transaction Lien on such Collateral ranks prior to all Liens
and rights of third parties therein.

         Section 6. Transfer Of Record Ownership. To the extent permitted by
and subject to compliance with applicable law, at any time when an Event of
Default shall have occurred and be continuing and provided that the Collateral
Agent shall have given written notice to the Pledgors of its intent to exercise
its rights under this Section 6, the Collateral Agent may (and to the extent
that action by it is required, the relevant Pledgor, if directed to do so by the
Collateral Agent, will as promptly as practicable) cause each of the Pledged
Equity Interests (or any portion thereof specified in such direction) to be
transferred of record into the name of the Collateral Agent or its nominee. Each
Pledgor will take any and all actions reasonably requested by the Collateral
Agent to facilitate compliance with this Section. The Collateral Agent will
promptly give to the relevant Pledgor copies of any notices and other
communications received by the Collateral Agent with respect to Pledged Equity
Interests registered in the name of the Collateral Agent or its nominee.

         Section 7. Right to Vote Pledged Equity Interests. (a) Unless an Event
of Default shall have occurred and be continuing and the Collateral Agent shall
have given the Pledgors written notice of its intent to exercise its rights
under this Section 7(a), each Pledgor will have the right, from time to time, to
vote and to give consents, ratifications and waivers with respect to any Pledged
Equity Interests owned by it, and the Collateral Agent will, upon receiving a
written

                                       6
<PAGE>

request from such Pledgor, deliver to such Pledgor or as specified in such
request such proxies, powers of attorney, consents, ratifications and waivers in
respect of any such Pledged Equity Interests that is registered in the name of
the Collateral Agent or its nominee, in each case as shall be specified in such
request and be in form and substance satisfactory to the Collateral Agent.
Unless an Event of Default shall have occurred and be continuing and the
Collateral Agent shall have given the Pledgors written notice of its intent to
exercise its rights under this Section 7(a), the Collateral Agent will have no
right to take any action which the owner of a Pledged Partnership Interest or
Pledged LLC Interest is entitled to take with respect thereto, except the right
to receive payments and other distributions to the extent provided herein.

         (a) If an Event of Default shall have occurred and be continuing and
the Collateral Agent shall have given the Pledgors written notice of its intent
to exercise its rights under this Section 7(b), the Collateral Agent will have
the right (but not the obligation) to the extent permitted by applicable law
(and, in the case of a Pledged Partnership Interest or Pledged LLC Interest, by
the relevant partnership agreement, limited liability company agreement,
operating agreement or other governing document) to vote, to give consents,
ratifications and waivers and to take any other action with respect to the
Pledged Equity Interests, with the same force and effect as if the Collateral
Agent were the absolute and sole owner thereof, and each Pledgor will take all
such action as the Collateral Agent may reasonably request from time to time to
give effect to such right.

         Section 8. Right to Receive Distributions on Collateral. At any time
when an Event of Default shall have occurred and be continuing, the Collateral
Agent shall have the right to receive and to retain as Collateral hereunder all
dividends and other distributions made upon or with respect to the Collateral
and the Pledgor shall take all such action as may be necessary or as the
Collateral Agent may deem necessary or appropriate to give effect to such right.
All such dividends and other distributions which are received by the Pledgor at
any time when an Event of Default shall have occurred and be continuing shall be
received in trust for the benefit of the Collateral Agent and, if the Collateral
Agent so directs during the continuance of an Event of Default, shall be
segregated from other funds of the Pledgor and shall, forthwith upon demand by
the Collateral Agent during the continuance of an Event of Default, be paid over
to the Collateral Agent as Collateral in the same form as received (with any
necessary endorsement). After all Events of Default have been cured, the
Collateral Agent's right to retain dividends and other distributions under this
Section 8 shall cease and the Collateral Agent shall pay over to the Pledgor any
such Collateral retained by it during the continuance of an Event of Default.

         Section 9. Remedies upon Event of Default. (a) If an Event of Default
shall have occurred and be continuing and the Collateral Agent shall have given
prior written notice to the Pledgors of its intent to exercise its remedies
under the Indenture and the Pledge Documents, the Collateral Agent may exercise
(or cause

                                       7
<PAGE>

its agents to exercise) any or all of the remedies available to it (or to such
agents) under the Indenture and the Pledge Documents.

         (b) Without limiting the generality of the foregoing, if an Event of
Default shall have occurred and be continuing, the Collateral Agent may exercise
on behalf of the Secured Parties all the rights of a secured party under the UCC
(whether or not in effect in the jurisdiction where such rights are exercised)
with respect to any Collateral and may sell or otherwise dispose of the
Collateral or any part thereof. Notice of any such sale or other disposition
shall be given to the relevant Pledgor(s) as required by Section 11.

         Section 10. Application of Proceeds. If an Event of Default shall have
occurred and be continuing, the Collateral Agent shall apply the proceeds of any
sale or other disposition of all or any part of the Collateral in the order of
priorities set forth in Section 6.10 of the Indenture.

         Section 11. Authority to Administer Collateral. Each Pledgor
irrevocably appoints the Collateral Agent its true and lawful attorney, with
full power of substitution, in the name of such Pledgor, any Secured Party or
otherwise, for the sole use and benefit of the Secured Parties, but at the
Company's expense, to the extent permitted by applicable law to exercise, at any
time and from time to time while an Event of Default shall have occurred and be
continuing, all or any of the following powers with respect to all or any of
such Pledgor's Collateral:

                  (a) to demand, sue for, collect, receive and give acquittance
         for any and all monies due or to become due upon or by virtue thereof,

                  (b) to settle, compromise, compound, prosecute or defend any
         action or proceeding with respect thereto, and

                  (c) to sell or otherwise dispose of the same or the proceeds
         or avails thereof, as fully and effectually as if the Collateral Agent
         were the absolute owner thereof;

provided that, except in the case of Collateral that threatens to decline
speedily in value or is of a type customarily sold on a recognized market, the
Collateral Agent will give the relevant Pledgor at least ten days' prior written
notice of the time and place of any public sale thereof or the time after which
any private sale or other intended disposition thereof will be made. Any such
notice shall (i) contain the information specified in UCC Section 9-613, (ii) be
Authenticated (as defined in the UCC) and (iii) be sent to the parties required
to be notified pursuant to UCC Section 9-611(c); provided that, if the
Collateral Agent fails to comply with this sentence in any respect, its
liability for such failure shall be limited to the liability (if any) imposed on
it as a matter of law under the UCC.

                                       8
<PAGE>

         Section 12. Limitation on Duty in Respect of Collateral. Beyond the
exercise of reasonable care in the custody and preservation thereof, the
Collateral Agent will have no duty as to any Collateral in its possession or
control or in the possession or control of any agent or bailee or any income
therefrom or as to the preservation of rights against prior parties or any other
rights pertaining thereto. The Collateral Agent will be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession or control if such Collateral is accorded treatment substantially
equal to that which it accords its own property, and will not be liable or
responsible for any loss or damage to any Collateral, or for any diminution in
the value thereof, by reason of any act or omission of any agent or bailee
selected by the Collateral Agent in good faith, except to the extent that such
liability arises from the Collateral Agent's gross negligence or willful
misconduct.

         Section 13. General Provisions Concerning the Collateral Agent.

         (a) In connection with its appointment and acting hereunder, the
Collateral Agent shall be entitled to all rights, privileges, protections,
immunities and indemnities provided to the Trustee (including in its capacity as
Collateral Agent) under the Indenture, and shall be required to perform duties
and exercise remedies or powers only to the extent required by Section 7.01 of
the Indenture. Without limiting the generality of the foregoing and except as
expressly set forth in the Indenture, (i) the Collateral Agent shall not be
subject to any fiduciary or other implied duties, regardless of whether an Event
of Default has occurred and is continuing, (ii) the Collateral Agent shall not
have any duty to take any discretionary action or exercise any discretionary
powers, and (iii) the Collateral Agent shall not have any duty to disclose, and
shall not be liable for any failure to disclose, any information relating to the
Company or its Subsidiaries that is communicated to or obtained by the entity
serving as Collateral Agent or any of its Affiliates in any capacity. The
Collateral Agent shall not be responsible for the existence, genuineness or
value of any Collateral or for the validity, perfection, priority or
enforceability of any Transaction Lien, whether impaired by operation of law or
by reason of any action or omission to act on its part under the Pledge
Documents. The Collateral Agent shall be deemed not to have knowledge of any
Event of Default except as provided in Section 7.02(10) of the Indenture.

         (b) Agents and Related Parties. The Collateral Agent may perform any of
its duties and exercise any of its rights and powers through one or more agents
appointed by it. The Collateral Agent and any such agent may perform any of its
duties and exercise any of its rights and powers through its Affiliates. The
exculpatory provisions of this Section shall apply to any such agent and to the
Affiliates of the Collateral Agent and any such agent.

         (c) Information as to Secured Obligations and Actions by Secured
Parties. For all purposes of the Pledge Documents, including determining the

                                       9
<PAGE>

amounts of the Secured Obligations or whether any action has been taken under
any Secured Agreement, the Collateral Agent will be entitled to rely on
information from (i) its own records for information as to the Secured Parties,
their Secured Obligations and actions taken by them, (ii) any Secured Party (or
any trustee, agent or similar representative designated pursuant to Section
13(b) to supply such information) for information as to its Secured Obligations
and actions taken by it, to the extent that the Collateral Agent has not
obtained such information from its own records, and (iii) the Company, to the
extent that the Collateral Agent has not obtained information from the foregoing
sources.

         (d) Refusal to Act. The Collateral Agent may refuse to act on any
notice, consent, direction or instruction from any Secured Parties or any agent,
trustee or similar representative thereof that, in the Collateral Agent's
opinion, (i) is contrary to law or the provisions of the Indenture or any Pledge
Document, (ii) may expose the Collateral Agent to liability (unless the
Collateral Agent shall have been indemnified, to its reasonable satisfaction,
for such liability by the Secured Parties that gave such notice, consent,
direction or instruction) or (iii) is unduly prejudicial to Secured Parties not
joining in such notice, consent, direction or instruction.

         Section 14. Termination of Transaction Liens; Release of Collateral.

         (a) The Transaction Liens granted by the Pledgors shall automatically
terminate and all rights to the Collateral shall revert to the applicable
Pledgor when all the Secured Obligations are satisfied in full. Subject to the
compliance by the Pledgor with the requirements of the Indenture relating to the
release of Collateral, the Collateral Agent will, at the Company's expense,
execute and deliver to the Pledgors such instruments, and take such other
actions, as the Pledgors shall reasonably request to evidence such termination.

         (b) At any time before the Secured Obligations are satisfied in full,
the Pledgors may sell or otherwise transfer any Collateral if such sale or
transfer is permitted by the Indenture. Subject to the compliance by the Pledgor
with the requirements of the Indenture relating to the release of Collateral,
the Collateral Agent will, at the request of the applicable Pledgor and at such
Pledgor's expense, execute and deliver such instruments, and take such other
actions as such Pledgor shall reasonably request to release the Collateral
subject to such permitted sale or transfer from the Transaction Liens.

         Section 15. Additional Pledgors. Any Subsidiary of the Company may
become a party hereto by signing and delivering to the Collateral Agent a Pledge
Agreement Supplement, whereupon such Subsidiary shall become a "Pledgor" as
defined herein.

         Section 16. Additional Collateral. Any Pledgor may from time to time
add additional Equity Interests to the Collateral by signing and delivering to
the

                                       10
<PAGE>

Collateral Agent a Pledge Agreement Supplement whereupon such Equity Interests
shall become "Collateral" as defined herein.

         Section 17. Notices. Each notice, request or other communication given
to any party hereunder shall be given in accordance with Section 13.03 of the
Indenture, and in the case of any such notice, request or other communication to
a Pledgor other than the Company, shall be given to it in care of the Company.

         Section 18. No Implied Waivers; Remedies Not Exclusive. No failure by
the Collateral Agent or any Secured Party to exercise, and no delay in
exercising and no course of dealing with respect to, any right or remedy under
any Pledge Document shall operate as a waiver thereof; nor shall any single or
partial exercise by the Collateral Agent or any Secured Party of any right or
remedy under the Indenture, any Pledge Document or any Secured Agreement
preclude any other or further exercise thereof or the exercise of any other
right or remedy. The rights and remedies specified in the Indenture, the Pledge
Documents and the Secured Agreements are cumulative and are not exclusive of any
other rights or remedies provided by law.

         Section 19.  Successors and Assigns. This Agreement is for the benefit
of the Collateral Agent and the Secured Parties. If all or any part of any
Secured Party's interest in any Secured Obligation is assigned or otherwise
transferred, the transferor's rights hereunder, to the extent applicable to the
obligation so transferred, shall be automatically transferred with such
obligation. This Agreement shall be binding on the Pledgors and their respective
successors and assigns.

         Section 20. Amendments and Waivers. Neither this Agreement nor any
provision hereof may be waived, amended, modified or terminated except pursuant
to an agreement or agreements in writing entered into by the Collateral Agent
and in compliance with the requirements of the Indenture.

         Section 21. Choice of Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of New York, except as
otherwise required by mandatory provisions of law and except to the extent that
remedies provided by the laws of any jurisdiction other than the State of New
York are governed by the laws of such jurisdiction.

         Section 22. Waiver of Jury Trial. EACH PARTY HERETO WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO ANY PLEDGE DOCUMENT OR ANY TRANSACTION CONTEMPLATED THEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY

                                       11
<PAGE>

HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

         Section 23. Severability. If any provision of any Pledge Document is
invalid or unenforceable in any jurisdiction, then, to the fullest extent
permitted by applicable law, (i) the other provisions of the Pledge Documents
shall remain in full force and effect in such jurisdiction and shall be
liberally construed in favor of the Collateral Agent and the Secured Parties in
order to carry out the intentions of the parties thereto as nearly as may be
possible and (ii) the invalidity or unenforceability of such provision in such
jurisdiction shall not affect the validity or enforceability thereof in any
other jurisdiction.

      [Remainder of Page Intentionally Left Blank; Signature Pages Follow]

                                       12
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.

                                    J. RAY MCDERMOTT, S.A.

                                    By: /s/ James R. Easter
                                        ----------------------------------------
                                        Name: James R. Easter
                                        Title: Vice President, Finance and
                                               Treasurer

                                    J. RAY MCDERMOTT HOLDINGS, INC.

                                    By: /s/ James R. Easter
                                        ----------------------------------------
                                        Name: James R. Easter
                                        Title: Vice President, Finance and
                                               Treasurer

                                    J. RAY MCDERMOTT INTERNATIONAL, INC.

                                    By: /s/ James R. Easter
                                        ----------------------------------------
                                        Name: James R. Easter
                                        Title: Treasurer

                                    OPI VESSELS, INC.

                                    By: James R. Easter
                                        ----------------------------------------
                                        Name: James R. Easter
                                        Title: Treasurer

                                    THE BANK OF NEW YORK, not in its
                                        individual capacity but solely as
                                        Collateral Agent

                                    By: /s/ Remo J. Reale
                                        ----------------------------------------
                                        Name: Remo J. Reale
                                        Title: Vice President

<PAGE>

                                                                      SCHEDULE 1

                 EQUITY INTERESTS IN SUBSIDIARIES AND AFFILIATES
                           OWNED BY ORIGINAL PLEDGORS
                             (AS OF THE ISSUE DATE)

<TABLE>
<CAPTION>
                         JURISDICTION OF                               JURISDICTION OF                     NUMBER OF
                          ORGANIZATION                                 ORGANIZATION OF     PERCENTAGE      SHARES OR
     ISSUER                OF ISSUER                  PLEDGOR             PLEDGOR            OWNED           UNITS
     ------                ---------                  -------             -------            -----           -----
<S>                      <C>                   <C>                     <C>                 <C>             <C>
Hydro Marine               Panama              J. Ray McDermott, S.A.     Panama              100%          100,000
Services, Inc.
J. Ray McDermott           Delaware            J. Ray McDermott, S.A.     Panama              100%              100
Holdings, Inc.
J. Ray McDermott           Panama              J. Ray McDermott, S.A.     Panama              100%            1,000
International, Inc.
J. Ray McDermott, Inc.     Delaware            J. Ray McDermott           Delaware            100%            1,000
                                               Holdings, Inc.
OPI Vessels, Inc.          Delaware            J. Ray McDermott           Delaware            100%               20
                                               Holdings, Inc.
J. Ray McDermott           Panama              J. Ray McDermott           Panama              100%          100,000
Contractors, Inc.                              International, Inc.
J. Ray McDermott Middle    Panama              J. Ray McDermott           Panama              100%           10,000
East, Inc.                                     International, Inc.
J. Ray McDermott           Cayman Islands      OPI Vessels, Inc.          Delaware            100%              100
International Vessels,
Ltd.
</TABLE>

                                      S-1-1

<PAGE>

                                                                       EXHIBIT A

                                                             TO PLEDGE AGREEMENT

                           PLEDGE AGREEMENT SUPPLEMENT

         PLEDGE AGREEMENT SUPPLEMENT dated as of _______, ____, between [NAME OF
PLEDGOR] (the "PLEDGOR") and The Bank of New York, not in its individual
capacity but solely as Collateral Agent.

         WHEREAS, J. Ray McDermott, S.A., the other Pledgors party thereto and
The Bank of New York, as Collateral Agent, are parties to a Pledge Agreement
dated as of December 9, 2003 (as heretofore amended and/or supplemented, the
"PLEDGE AGREEMENT"), under which J. Ray McDermott, S.A. secures certain of its
obligations (the "SECURED OBLIGATIONS") and the other Pledgors secure their
respective guarantees of the Secured Obligations;

         [WHEREAS, [name of Pledgor] desires to become a party to the Pledge
Agreement as a Pledgor thereunder pursuant to Section 15 of the Pledge
Agreement; and] (1)

         [WHEREAS, [name of Pledgor] is a party to the Pledge Agreement as a
Pledgor thereunder and desires to add additional Equity Interests to the
Collateral by signing and delivering to the Collateral Agent this Pledge
Agreement Supplement pursuant to Section 16 of the Pledge Agreement; and] (2)

         WHEREAS, terms defined in the Pledge Agreement (or whose definitions
are incorporated by reference in Section 1 of the Pledge Agreement) and not
otherwise defined herein have, as used herein, the respective meanings provided
for therein;

         NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

----------------------

         (1) Include this recital if a new Pledgor is becoming a party to the
Pledge Agreement.

         (2) Include this recital if an existing Pledgor is subjecting
additional Equity Interests to the Transaction Liens.

<PAGE>

         1. Grant of Transaction Liens. (a) In order to secure [its Secured
Guarantee] (3) [the Secured Obligations] (4), the Pledgor grants to the
Collateral Agent for the benefit of the Secured Parties a continuing security
interest in all the following property of the Pledgor, whether now owned or
existing or hereafter acquired or arising and regardless of where located (the
"NEW COLLATERAL"):

         [describe property being added to the Collateral]

                  (b) The foregoing Transaction Liens are granted as security
         only and shall not subject the Collateral Agent or any other Secured
         Party to, or transfer or in any way affect or modify, any obligation or
         liability of the Pledgor with respect to any of the New Collateral or
         any transaction in connection therewith.

         2. Delivery of Collateral. Concurrently with delivering this Pledge
Agreement Supplement to the Collateral Agent, the Pledgor is complying with the
provisions of Section 5 of the Pledge Agreement with respect to Equity
Interests, in each case if and to the extent included in the New Collateral at
such time.

         3. [Party to Pledge Agreement. Upon delivering this Pledge Agreement
Supplement to the Collateral Agent, the Pledgor will become a party to the
Pledge Agreement and will thereafter have all the rights and obligations of a
Guarantor and a Pledgor thereunder and be bound by all the provisions thereof as
fully as if the Pledgor were one of the original parties thereto.] (5)

         4. Representations and Warranties. (a) The Pledgor is duly organized,
validly existing and in good standing under the laws of [jurisdiction of
organization].

                  (b) The execution and delivery of this Pledge Agreement
         Supplement by the Pledgor and the performance by it of its obligations
         under the Pledge Agreement as supplemented hereby are within its
         corporate or other powers, have been duly authorized by all necessary
         corporate or other action, require no action by or in respect of, or
         filing with, any governmental body, agency or official and do not
         contravene, or constitute a default under, any provision of applicable
         law or regulation or

-----------------

         (3) Delete bracketed words if the Pledgor is the Company.

         (4) Delete bracketed words if the Pledgor is a Guarantor.

         (5) Delete Section 3 if the Pledgor is already a party to the Pledge
Agreement.

                                       A-2
<PAGE>

         of its organizational documents, or of any agreement, judgment,
         injunction, order, decree or other instrument binding upon it or result
         in the creation or imposition of any Lien (except a Transaction Lien)
         on any of its assets.

                  (c) The Pledge Agreement as supplemented hereby constitutes a
         valid and binding agreement of the Pledgor, enforceable in accordance
         with its terms, except as limited by (i) applicable bankruptcy,
         insolvency, fraudulent conveyance or other similar laws affecting
         creditors' rights generally and (ii) general principles of equity.

                  (d) Each of the representations and warranties set forth in
         Sections 3 and 5 of the Pledge Agreement is true as applied to the
         Pledgor and the New Collateral. For purposes of the foregoing sentence,
         references in said Sections to a "Pledgor" shall be deemed to refer to
         the Pledgor, references to Schedules to the Pledge Agreement shall be
         deemed to refer to the corresponding Schedules to this Pledge Agreement
         Supplement, references to "Collateral" shall be deemed to refer to the
         New Collateral, and references to the "Issue Date" shall be deemed to
         refer to the date on which the Pledgor signs and delivers this Pledge
         Agreement Supplement.

         5. Governing Law. This Pledge Agreement Supplement shall be construed
in accordance with and governed by the laws of the State of New York.

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

                                       A-3

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement Supplement to be duly executed by their respective authorized officers
as of the day and year first above written.

                                    [NAME OF PLEDGOR]

                                    By: ________________________________________
                                        Name:
                                        Title:

                                    THE BANK OF NEW YORK, not in its individual
                                        capacity but solely as Collateral Agent

                                    By: ________________________________________
                                        Name:
                                        Title:

                                       A-4

<PAGE>

                                                                      SCHEDULE 1
                                                             TO PLEDGE AGREEMENT
                                                                      SUPPLEMENT

                        EQUITY INTERESTS IN SUBSIDIARIES
                                OWNED BY PLEDGOR

<TABLE>
<CAPTION>
                          JURISDICTION OF
                            ORGANIZATION          PERCENTAGE          NUMBER OF
ISSUER                       OF ISSUER              OWNED         SHARES OR UNITS
------                       ---------              -----         ---------------
<S>                       <C>                     <C>             <C>

</TABLE>

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