Exhibit 10.7

GROUP II AGREEMENT- EXECUTION VERSION

NOVATION AND ASSUMPTION AGREEMENT

by and among

ACE American Insurance Company, acting for itself and its affiliates including,
without

limitation, Pacific Employers Insurance Company;

ACE INA Insurance Company;

ACE Insurance Company;

Insurance Company of North America

and

Creole Insurance Company, Ltd., a Bermuda company,

and

Boudin Insurance Company, Ltd., a Bermuda company

RECITALS

THIS NOVATION AND ASSUMPTION AGREEMENT (the “Agreement”), is entered into and
effective as of May 18, 2010 (the “Effective Date”) by and among ACE American
Insurance Company, individually and acting for the ACE Affiliates (in such
capacities, the “Company”), Creole Insurance Company, Ltd., a Bermuda company
(“Creole”), and Boudin Insurance Company, Ltd., a Bermuda company (“Boudin”).

WHEREAS, the Company and/or the ACE Affiliates have entered into the Existing
Reinsurance Agreements with Creole and Boudin; and

WHEREAS, pursuant to the Existing Reinsurance Agreements, Creole and Boudin are
obligated, among other things, to reinsure the Company and/or the ACE Affiliates
with regard to certain Existing Policies; and

WHEREAS, Creole, prior to the Separation, is a wholly owned Subsidiary of MII;
and

WHEREAS, MII intends to spin-off the B&W Entities (including Creole) from MII in
connection with a dividend of common stock of B&W to the shareholders of MII
(the “Separation”); and

WHEREAS, in connection with the Separation, the Parties wish to provide that
Boudin be the reinsurer with respect to cessions arising from the operations,
business, or property of MII and that Creole be the reinsurer with respect to
cessions arising from the operations, business, or property of B&W, in each case
whether such obligations were existing, accruing or arising before, on or after
the Effective Date; and

WHEREAS, the Company, on its own behalf and on behalf of the ACE Affiliates, is
willing to consent to the transfer, assumption, and novation of the matters as
set forth herein, subject to the terms and conditions of this Agreement;

NOW, THEREFORE, in consideration of the mutual promises set out herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:

1. Definitions. The following terms used herein, including in the recitals and
Exhibits hereto, shall have the following meanings:

“ACE Affiliate” means each Affiliate of ACE that has issued an Existing Policy,
including Pacific Employers Insurance Company, ACE INA Insurance Company, ACE
Insurance Company and Insurance Company of North America.

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“Affiliate” means, with respect to any specified Person, any other Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, the specified Person. For this
purpose “control” of a Person means the possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of such
Person, whether through ownership of voting securities, by contract or
otherwise.

“Agreement” has the meaning set forth in the recitals to this Agreement.

“ALAA” means the Assumption and Loss Allocation Agreement, dated as of the date
hereof, among the Company, B&W, MII and certain other MII Entities and B&W
Entities signatory thereto.

“Assumption Time” means midnight (New York time) on the Effective Date.

“B&W” means Babcock & Wilcox Holdings, Inc., a Delaware corporation, to be
succeeded by The Babcock & Wilcox Company, a Delaware corporation, after the
effective time of the merger, to occur after the date hereof, of Babcock &
Wilcox Holdings, Inc., with and into The Babcock & Wilcox Company, the surviving
entity of such merger.

“B&W Entity” means B&W and each of the entities listed on Exhibit I attached
hereto and made a part hereof. It is acknowledged and understood that, from and
after the effectiveness of the Separation, the B&W Entities will not be
Subsidiaries or Affiliates of MII or any of the other MII Entities.

“Boudin Assumption and Novation” has the meaning set forth in Section 2(a).

“Boudin LOC” has the meaning set forth in Section 3(a).

“Company” has the meaning set forth in the recitals to this Agreement.

“Company B&W Obligation” means any obligation of the Company or an ACE Affiliate
to or for the benefit of an Insured under an Existing Policy that arises, will
arise, or has arisen from the operations, business, or property of a B&W Entity.

“Company MII Obligation” means any obligation of the Company or an ACE Affiliate
to or for the benefit of an Insured under an Existing Policy that arises, will
arise, or has arisen from the operations, business, or property of an MII
Entity.

“Creole Assumption and Novation” has the meaning set forth in Section 2(c).

“Creole LOC” has the meaning set forth in Section 3(b).

“Effective Date” has the meaning set forth in the recitals to this Agreement.

“ESIS” means ESIS, Inc., an Affiliate of the Company.

“Existing Collateral” means any and all letters of credit or trust agreements
outstanding as of the date hereof provided by or required to be provided by
Creole or Boudin under the terms of any Existing Reinsurance Agreement in order
to secure obligations arising thereunder.

“Existing Policy” means each policy of general liability insurance, automobile
liability insurance, or workers compensation insurance issued prior to the date
hereof by the Company or an ACE Affiliate to one or more B&W Entities and/or one
or more MII Entities that is subject to an Existing Reinsurance Agreement.

“Existing Reinsurance Agreement” means each reinsurance agreement (whether
denominated a treaty, a reinsurance policy, a reinsurance agreement, a
facultative certificate, or otherwise) in which (a) Creole or Boudin is the
reinsurer, (b) one or more of the Company and/or ACE Affiliates is or are the
reinsureds, and (c) the ceded risk includes risk under any Existing Policy.
“Existing Reinsurance Agreements” shall not mean or include any Existing
Security Agreements (as defined below). Exhibit II attached hereto and made a
part hereof reflects the Parties’ best efforts to list all Existing Reinsurance
Agreements, but the definitions in this Agreement shall control in the event of
any errors or omissions on such Exhibit.

 

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“Existing Security Agreements” shall mean and include any trust agreement,
collateral agreement, pledge and security agreement or other similar contract
between the Company or an ACE Affiliate and Boudin or between the Company or an
ACE Affiliate and Creole, which was entered into in connection with or pursuant
to any Existing Reinsurance Agreement (as defined above), and which are embodied
in separately-executed written instruments.

“Go-Forward Boudin Obligations” means the obligations of Boudin under (a) the
Transferable Boudin Reinsurance Agreements, (b) the Novated-to-Boudin
Reinsurance Agreements and (c) the Wholly Retained Boudin Reinsurance
Agreements, in each case after giving effect to the transfers, assumptions,
novations, and releases effected by this Agreement.

“Go-Forward Creole Obligations” means the obligations of Creole under (a) the
Transferable Creole Reinsurance Agreements, (b) the Novated-to-Creole
Reinsurance Agreements and (c) the Wholly Retained Creole Reinsurance
Agreements, in each case after giving effect to the transfers, assumptions,
novations, and releases effected by this Agreement.

“Insured,” as a noun in reference to one or more insurance policies, means any
Person who is insured by such policy or policies, regardless of whether such
Person is designated an “Insured” or a “Named Insured” in such policy or is
otherwise expressly identified therein.

“Master Separation Agreement” means a Master Separation Agreement to be entered
into between MII and The Babcock & Wilcox Company in connection with the
Separation.

“MII” means McDermott International, Inc., a Panamanian corporation.

“MII Entity” means MII and each of the entities listed on Exhibit III attached
hereto and made a part hereof. It is acknowledged and understood that, from and
after the effectiveness of the Separation, the MII Entities will not be
Subsidiaries or Affiliates of B&W or any of the other B&W Entities.

“Novated Reinsurance Agreement” means a Novated-to-Boudin Reinsurance Agreement
or a Novated-to-Creole Reinsurance Agreement.

“Novated-to-Boudin Reinsurance Agreement” means, as to any Transferable Creole
Reinsurance Agreement after the Assumption Time and giving effect to this
Agreement, the aggregate of (a) all rights, duties, and obligations of Boudin to
and in respect of the Company under such Transferable Creole Reinsurance
Agreement as and to the extent novated to Boudin, and (b) all rights, duties,
and obligations of the Company to and in respect of Boudin under such
Transferable Creole Reinsurance Agreement as and to the extent novated to
Boudin.

“Novated-to-Creole Reinsurance Agreement” means, as to any Transferable Boudin
Reinsurance Agreement after the Assumption Time and giving effect to this
Agreement, the aggregate of (a) all rights, duties, and obligations of Creole to
and in respect of the Company under such Transferable Boudin Reinsurance
Agreement as and to the extent novated to Creole, and (b) all rights, duties,
and obligations of the Company to and in respect of Creole under such
Transferable Boudin Reinsurance Agreement as and to the extent novated to
Creole.

“Organizational Documents” means (a) with respect to any corporation, its
certificate or articles of incorporation or organization and its bylaws,
(b) with respect to any limited partnership, its certificate of limited
partnership and its partnership agreement, (c) with respect to any general
partnership, its partnership agreement, and (d) with respect to any limited
liability company, its certificate or articles of formation or organization and
its operating agreement or other organizational documents.

“Parties” means the Company, Creole and Boudin, collectively (and each
individually is a “Party”).

“Person” means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, a
union, an unincorporated organization or a governmental entity or any
department, agency or political subdivision thereof.

“Separation” has the meaning set forth in the recitals to this Agreement.

 

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“Subsidiary” means, with respect to any specified Person, any corporation,
partnership, limited liability company, joint venture or other organization,
whether incorporated or unincorporated, of which at least a majority of the
securities or interests having by the terms thereof ordinary voting power to
elect at least a majority of the board of directors or others performing similar
functions with respect to such corporation or other organization is directly or
indirectly owned or controlled by such specified Person or by any one or more of
its Subsidiaries, or by such specified Person and one or more of its
Subsidiaries.

“Substituted Collateral” means the MII LOC and the B&W LOC.

“Transferable Boudin Reinsurance Agreements” means those Existing Reinsurance
Agreements in which Boudin is the reinsurer and that reinsure, in whole or in
part and whether or not including other obligations, Company B&W Obligations.

“Transferable Creole Reinsurance Agreements” means those Existing Reinsurance
Agreements in which Creole is the reinsurer and that reinsures, in whole or in
part and whether or not including other obligations, Company MII Obligations.

“Wholly Retained Boudin Reinsurance Agreement” means an Existing Reinsurance
Agreement in which Boudin is the reinsurer and that is not a Transferable Boudin
Reinsurance Agreement.

“Wholly Retained Creole Reinsurance Agreement” means an Existing Reinsurance
Agreement in which Creole is the reinsurer and that is not a Transferable Creole
Reinsurance Agreement.

2. Assumption and Novation.

(a) Boudin Assumption and Novation. Notwithstanding anything in any Transferable
Creole Reinsurance Agreement to the contrary, and effective as of the Assumption
Time, Creole hereby transfers and assigns, and Boudin hereby assumes by
novation, so much of each Transferable Creole Reinsurance Agreement as reinsures
any Company MII Obligation. In connection with such transfer, assignment, and
novation:

(i) Boudin hereby agrees to observe, pay, perform, satisfy, fulfill and
discharge, to the extent and in the manner required under the applicable
Transferable Creole Reinsurance Agreement, any and all now existing and
hereafter arising duties, terms, provisions, covenants, obligations and
liabilities of Creole under the Transferable Creole Reinsurance Agreement with
respect to the Company MII Obligations insofar as transferred above (the “Boudin
Assumption and Novation”); and

(ii) The Company and each ACE Affiliate hereby consent to, and agree to give
full force and effect to, the Boudin Assumption and Novation. From and after the
Assumption Time, Boudin and not Creole shall be treated as the Company’s (or
applicable ACE Affiliate’s) contractual counterparty with respect the contracts
and mutual rights and obligations subject to the Boudin Assumption and Novation.
Without limitation, the Company and each ACE Affiliate, as applicable:

 

  a

may enforce against Boudin its rights with respect to the Company MII
Obligations under the Transferable Creole Reinsurance Agreements to the same
extent such Person could, prior to the Boudin Assumption and Novation, enforce
such rights against Creole, and

 

  b

shall perform for the benefit of Boudin any obligation with respect to the
Company MII Obligations under the Transferable Creole Reinsurance Agreements to
the same extent such Person was obligated, prior to the Boudin Assumption and
Novation, to perform such obligations for the benefit of Creole, and

 

  c

releases Creole from its obligation to observe, pay, perform, satisfy, fulfill
or discharge any obligations under any Transferable Creole Reinsurance
Agreements with respect to any Company MII Obligation.

(b) No Transfer or Novation of Creole Obligations arising from B&W Operations.
The Wholly Retained Creole Reinsurance Agreements are not novated or otherwise
affected by the Boudin Assumption

 

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and Novation. The Transferable Creole Reinsurance Agreements are novated to
Boudin as set forth above only to the extent that they reinsure Company MII
Obligations. To the extent that the Transferable Creole Reinsurance Agreements
reinsure Company B&W Obligations, the Parties acknowledge that Creole and not
Boudin shall continue to observe, pay, perform, satisfy, fulfill and discharge
any and all now existing and hereafter arising duties, terms, provisions,
covenants, obligations and liabilities of the reinsurer under the Transferable
Creole Reinsurance Agreements.

(c) Creole Assumption and Novation. Notwithstanding anything in any Transferable
Boudin Reinsurance Agreement to the contrary, and effective as of the Assumption
Time, Boudin hereby transfers and assigns, and Creole hereby assumes by novation
so much of each Transferable Boudin Reinsurance Agreement as reinsures any
Company B&W Obligation. In connection with such transfer and assignment,

(i) Creole hereby agrees to observe, pay, perform, satisfy, fulfill and
discharge, to the extent and in the manner required under the applicable
Transferable Boudin Reinsurance Agreement, any and all now existing and
hereafter arising duties, terms, provisions, covenants, obligations and
liabilities of Boudin under the Transferable Boudin Reinsurance Agreements with
respect to the Company B&W Obligations insofar as transferred above (the “Creole
Assumption and Novation”); and

(ii) The Company and each ACE Affiliate hereby consent to, and agree to give
full force and effect to, the Creole Assumption and Novation. From and after the
Assumption Time, Creole and not Boudin shall be treated as the Company’s (or
applicable ACE Affiliate’s) contractual counterparty with respect the contracts
and mutual rights and obligations subject to the Creole Assumption and Novation.
Without limitation, the Company and each ACE Affiliate, as applicable:

 

  a

may enforce against Creole its rights under the Transferable Boudin Reinsurance
Agreements to the same extent such Person could, prior to the Creole Assumption
and Novation, enforce such rights against Boudin, and

 

  b

shall perform for the benefit of Creole any obligation under the Transferable
Boudin Reinsurance Agreements to the same extent such Person was obligated,
prior to the Creole Assumption and Novation, to perform such obligations for the
benefit of Boudin, and

 

  c

releases Boudin from its obligation to observe, pay, perform, satisfy, fulfill
or discharge any obligations under any Transferable Boudin Reinsurance
Agreements with respect to any Company B&W Obligation.

(d) No Transfer or Novation of Boudin Obligations arising from MII Operations.
The Wholly Retained Boudin Reinsurance Agreements are not novated or otherwise
affected by the Creole Assumption and Novation. The Transferable Boudin
Reinsurance Agreements are novated to Creole as set forth above only to the
extent that they reinsure Company B&W Obligations. To the extent that the
Transferable Boudin Reinsurance Agreements reinsure Company MII Obligations, the
Parties acknowledge that Boudin and not Creole shall continue to observe, pay,
perform, satisfy, fulfill and discharge any and all now existing and hereafter
arising duties, terms, provisions, covenants, obligations and liabilities of the
reinsurer under the Transferable Boudin Reinsurance Agreements.

(e) No Effect on Aggregate Limits of Liability. For the avoidance of doubt, it
is understood and agreed that the aggregate liability of Creole and Boudin,
taken together, under the Existing Reinsurance Agreements (or any of them) is
not intended to be, and shall be deemed not to be, increased by implementation
of this Agreement. In particular, and without limitation, to the extent that any
Transferable Creole Reinsurance Agreement (or Transferable Boudin Reinsurance
Agreement) contains an aggregate limit of liability, that aggregate limit of
liability shall, after the Assumption Time, apply as a single, joint aggregate
limit of liability as between (i) the resulting Novated Reinsurance Agreement
and (ii) the portions of the Transferable Creole Reinsurance Agreement (or
Transferable Boudin Reinsurance Agreement) that are retained pursuant to
Section 2(b) (or Section 2(d)) above. Neither Creole or Boudin shall have any
further liability under a Novated Reinsurance Agreement upon actual exhaustion
by payment of the single, joint aggregate limit of liability thereunder;
provided, however, that each of Creole and Boudin agree that

 

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the Company may determine the order in which any such single, joint aggregate
limit of liability may be payable by each of them under such Novated Reinsurance
Agreement, and provided further that (x) neither Creole or Boudin may refuse to
pay any amount due to the Company on the basis of any claim or contention that
in determining the order in which such limits are to be paid thereunder, the
Company has not acted in good faith or has acted improperly, and (y) neither
Creole nor Boudin may assert any such claim or contention as a defense to
liability or payment or otherwise.

3. Collateral.

(a) Boudin LOC.

(i) Boudin (including for purposes of this Section 3, and if MII and Boudin so
elect, MII on Boudin’s behalf) will, within fifteen (15) days after the
Effective Date, provide to the Company, as beneficiary thereof, an irrevocable
letter of credit (the “Boudin LOC”) in an amount of $696.00 (which amount shall
be less than the aggregate amount of the Existing Collateral), issued in a form
and by a bank or other financial institution, in each case acceptable to the
Company; and/or such other forms of collateral as the Company may permit in
writing from time to time. The Boudin LOC shall secure the Go-Forward Boudin
Obligations.

(ii) The Boudin LOC shall be “evergreen,” meaning that it shall provide by its
terms that it will be renewed automatically each year for an additional year
unless written notice of non-renewal is received by the Company at least sixty
(60) days prior to the Boudin LOC’s anniversary date. If the Company permits
Boudin to provide collateral in a form other than the Boudin LOC, Boudin shall
provide such collateral in an amount and form acceptable to the Company.

(iii) Boudin shall continue to provide the Boudin LOC (or other collateral
acceptable to the Company) as security for payment of the Go-Forward Boudin
Obligations, until the Company determines that there is no longer any need for
such collateral. If there shall be a material deterioration in the financial
condition of the bank or other financial institution which has issued the Boudin
LOC, the Company shall have the right to require Boudin to replace the Boudin
LOC with a new letter of credit with similar terms issued by a bank or other
financial institution then acceptable to the Company.

(iv) The Company shall have the right to draw against the Boudin LOC and/or
other collateral solely (a) in accordance with the terms of the applicable
Wholly Retained Boudin Reinsurance Agreement or Novated-to-Boudin Reinsurance
Agreement, as the case may be, and/or as required and permitted by the laws and
regulations of the Commonwealth of Pennsylvania, or (b) in the event that a
notice of nonrenewal is received pursuant to the evergreen clause.

(v) Annually, the Company shall review and redetermine the amount of the
Go-Forward Boudin Obligations and the amount of collateral security required
pursuant to this Agreement. At such time, MII will provide its most recent
audited financial statements, interim financial statements, and any other
financial information reasonably requested by the Company for the purpose of
evaluating the financial condition of MII. MII will provide any needed increases
in the amount of the Boudin LOC (and/or other collateral if acceptable to the
Company) within thirty (30) days of the Company’s written request for any
additional required amount of the Boudin LOC. The Company will effect any
decreases in the amount of the Boudin LOC (and/or other collateral) promptly,
provided that Boudin is not in breach of any of its obligations under this
Agreement or the Existing Reinsurance Agreements as transferred and novated
hereunder and MII is not in breach of any of its obligations to the Company
under the ALAA.

(b) Creole LOC.

(i) Creole (including for purposes of this Section 3, and if B&W and Creole so
elect, B&W on Creole’s behalf) will, within fifteen (15) days after the
Effective Date, provide to the Company, as beneficiary thereof, an irrevocable
letter of credit (the “Creole LOC”) in an amount of $4,171,230.00 (which amount
shall be less than the aggregate amount of the Existing Collateral), issued in a
form and

 

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by a bank or other financial institution, in each case acceptable to the
Company; and/or such other forms of collateral as the Company may permit in
writing from time to time. The Creole LOC shall secure the Go-Forward Creole
Obligations.

(ii) The Creole LOC shall be “evergreen,” meaning that it shall provide by its
terms that it will be renewed automatically each year for an additional year
unless written notice of non-renewal is received by the Company at least sixty
(60) days prior to the Creole LOC’s anniversary date. If the Company permits
Creole to provide collateral in a form other than the Creole LOC, Creole shall
provide such collateral in an amount and form acceptable to the Company.

(iii) Creole shall continue to provide the Creole LOC (or other collateral
acceptable to the Company) as security for payment of the Go-Forward Creole
Obligations, until the Company determines that there is no longer any need for
such collateral. If there shall be a material deterioration in the financial
condition of the bank or other financial institution which has issued the Creole
LOC, the Company shall have the right to require Creole to replace the Creole
LOC with a new letter of credit with similar terms issued by a bank or other
financial institution then acceptable to the Company.

(iv) The Company shall have the right to draw against the Creole LOC and/or
other collateral solely (a) in accordance with the terms of the applicable
Wholly Retained Creole Reinsurance Agreement or Novated-to-Creole Reinsurance
Agreement, as the case may be, and/or as required and permitted by the laws and
regulations of the Commonwealth of Pennsylvania, or (b) in the event that a
notice of nonrenewal is received pursuant to the evergreen clause.

(v) Annually, the Company shall review and redetermine the amount of the
Go-Forward Creole Obligations and the amount of collateral security required
pursuant to this Agreement. At such time, B&W will provide its most recent
audited financial statements, interim financial statements, and any other
financial information reasonably requested by the Company for the purpose of
evaluating the financial condition of B&W. B&W will provide any needed increases
in the amount of the Creole LOC (and/or other collateral if acceptable to the
Company) within thirty (30) days of the Company’s written request for any
additional required amount of the Creole LOC. The Company will effect any
decreases in the amount of the Creole LOC (and/or other collateral) promptly,
provided that Creole is not in breach of any of its obligations under this
Agreement or the Existing Reinsurance Agreements as transferred and novated
hereunder and B&W is not in breach of any of its obligations to the Company
under the ALAA.

(c) Existing Security Agreements; Substituted Collateral. Notwithstanding
anything in any Existing Reinsurance Agreement or any Existing Security
Agreement to the contrary, the Company shall release the Existing Collateral
(including, without limitation, providing the necessary directions to issuing
banks of letters of credit, trustees of reinsurance trusts, and/or similar third
parties) upon receipt of the Substituted Collateral as set forth in
Section 3(a)(i) and 3(b)(i), and the Parties shall take all actions and execute
any documents necessary to terminate the Existing Security Agreements.

(d) Adjustments of Funds Withheld. To the extent that the Company has retained
funds of Creole or Boudin as funds withheld under any Existing Reinsurance
Agreement (including, without limitation, by allocating reinsurance premium or
other funds of the reinsurers to claim payment funds held by ESIS), such funds
shall continue to be maintained following the transactions contemplated by this
Agreement. If the Company desires to effect a one-time reallocation of such
funds withheld as between Creole and Boudin as a result of the transactions
contemplated by this Agreement, it shall provide notice of such reallocation as
promptly as possible after the Assumption Time, but in any event on or prior to
October 1, 2010, and Creole and Boudin shall accept the Company’s determination
of the amount of such reallocation.

4. Existing Collateral. The Substituted Collateral required to be provided by
Creole and Boudin hereunder shall, except to the extent provided otherwise in
this Agreement, be subject to all of the terms and conditions applicable to the
Existing Collateral pursuant to the Existing Reinsurance Agreements to the same
extent that such terms and conditions applied to the Existing Collateral
thereunder.

 

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5. Allocation.

(a) Company Designations. The Company’s determination as to whether an
obligation is a Go-Forward Boudin Obligation or a Go-Forward Creole Obligation
(a “Company Designation”) shall be binding on Creole and Boudin, and they shall
not delay, or make any deduction with respect to, their payment or other
response to such obligation on account of any disagreement with such
determination, provided, however, that such payment or other response shall not
be construed as prejudicial to either Party in any dispute between Creole and
Boudin with respect to any such Company Designation.

(b) Disputes. Any dispute or disagreement between Creole and Boudin with respect
to the correctness of a Company Designation shall be resolved pursuant to
Article V of the Master Separation Agreement by MII on behalf of Boudin and B&W
on behalf of Creole; provided, that (i) the Company will not be made a party to
any arbitration proceeding arising from such dispute or disagreement, but may be
called as a witness; (ii) any reasonable costs incurred by the Company in
respect of any such arbitration proceeding will be fully reimbursed to the
Company promptly following receipt of a reimbursement demand from the Company;
(iii) under no circumstances will MII or B&W or Creole or Boudin, as a result of
such arbitration proceeding, require the Company to return any amount received
by the Company pursuant to a prior Company Designation, whether such amount was
received as a result of the Company’s draw against security posted for its
benefit or otherwise, and (iv) the Company shall comply with the allocation or
other resolution of such dispute.

6. Billing. On and after the Effective Date, the Company will (in each case in
accordance with the billing procedures set forth in the applicable Existing
Reinsurance Agreement)

(a) bill Creole directly for such of the Go-Forward Creole Obligations as are
then due and payable, and provide Creole with appropriate reports and accounting
with respect to such obligations; and

(b) bill Boudin directly for such of the Go-Forward Boudin Obligations as are
then due and payable, and provide Boudin with appropriate reports and accounting
with respect to such obligations.

7. Amendments. Neither this Agreement nor any provision hereof may be amended,
changed, waived, discharged or terminated except by a written instrument signed
by each Party.

8. Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the Parties and their respective successors and permitted assigns.
Neither this Agreement nor any right or obligation hereunder may be assigned or
conveyed by any Party without the prior written consent of the other Parties,
which consent shall not be unreasonably withheld.

9. No Waiver. The failure or refusal by any Party to exercise any rights granted
hereunder shall not constitute a waiver of such rights or preclude the
subsequent exercise thereof, and no oral communication shall be asserted as a
waiver of any such rights hereunder unless such communication shall be confirmed
in a writing plainly expressing an intent to waive such rights and signed by the
Party against whom such waiver is asserted.

10. Counterparts. This Agreement may be executed in any number of counterparts
each of which when so executed and delivered shall constitute an original, but
such counterparts together shall constitute one and the same agreement. The
exchange of copies of this Agreement and of signature pages by facsimile
transmission shall constitute effective execution and delivery of this Agreement
as to the Parties and may be used in lieu of the original Agreement for all
purposes. Signatures of the Parties and other Persons signatory hereto
transmitted by facsimile shall be deemed to be their original signatures for all
purposes.

11. No Third Party Beneficiary. This Agreement shall not be deemed to give any
right or remedy to any third party whatsoever unless otherwise specifically
granted hereunder.

 

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12. Parties’ Representations. As of the Effective Date, each of the Parties
expressly represents on its own behalf: (a) it is an entity in good standing in
its jurisdiction of organization; (b) it has all requisite corporate power and
authority to enter into this Agreement, and to perform its obligations
hereunder; (c) the execution and delivery by it of this Agreement, and the
performance by it of its obligations under this Agreement, have been duly
authorized by all necessary corporate or other action; (d) this Agreement, when
duly executed and delivered by it, and subject to the due execution and delivery
hereof by the other Parties, will be a valid and binding obligation of it,
enforceable against it, its successors and permitted assigns, in accordance with
its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors’ rights generally and
general equity principles; (e) the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby in
accordance with the respective terms and conditions hereof will not (i) violate
any provision of its Organizational Documents, (ii) violate any applicable
order, judgment, injunction, award or decree of any court, arbitrator or
governmental or regulatory body against it, or binding upon it, or any agreement
with, or condition imposed by, any governmental or regulatory body, foreign or
domestic, binding upon it as of the date hereof, or (iii) violate any agreement,
contract, obligation, promise or undertaking that is legally binding and to
which it is a party or by which it is bound; and (f) the signatory hereto on
behalf of it is duly authorized and legally empowered to enter into this
Agreement on its behalf.

13. Notices. Any and all notices, requests, approvals, authorizations, consents,
instructions, designations and other communications that are required or
permitted to be given pursuant to this Agreement shall be in writing and may be
given either by personal delivery, first class prepaid post (airmail if to
another country) or by internationally recognized overnight delivery service to
the following address, or to such other address and recipient as such Party may
have notified in accordance with the terms of this section as being its address
or recipient for notification for the purposes of this Agreement:

 

If to the Company

  

ACE American Insurance Company

225 E. John Carpenter Freeway, Suite 1300

Irving, TX 75062

  

Attention:

  

Underwriting Manager

ACE Risk Management

  

Telephone:

  

(972) 465.7500

  

Facsimile:

  

(972) 465.7826

If to Boudin:

  

Boudin Insurance Company, Ltd., c/o McDermott International, Inc.

757 N. Eldridge Parkway

Houston, Texas 77079

  

Attention:

  

VP and Chief Risk Officer (with copy to General Counsel)

  

Telephone:

  

281-870-5785

  

Telecopier:

  

281-870-5923

  

Electronic Mail:

  

twoodard@mcdermott.com

  

with a copy to:

       

Boudin Insurance Company, Ltd.

Cedar House

41 Cedar Avenue

P.O. Box HM 1838

Hamilton HM HX Bermuda

Bermuda

Fax (441) 295-3982

  

Telephone:

  

281-870-5476

  

Telecopier:

  

281-870-5923

  

Electronic Mail:

  

cjryan@mcdermott.com

 

9

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

If to any MII Entity:

  

McDermott International, Inc.

757 N. Eldridge Parkway

Houston, Texas 77079

  

Attention:

  

VP and Chief Risk Officer (with copy to General Counsel)

  

Telephone:

  

281-870-5785

  

Telecopier:

  

281-870-5923

  

Electronic Mail:

  

twoodard@mcdermott.com

If to Creole:

  

Creole Insurance Company, Ltd.

  

Prior to the Separation:

  

Creole Insurance Company, Ltd., c/o Babcock & Wilcox Holdings, Inc.

800 Main Street

Lynchburg, Virginia 24504

  

Attention:

  

Director, Risk Management (with copy to General Counsel)

  

Telephone:

  

434-522-6800

  

with a copy to:

     

McDermott International, Inc.

777 N. Eldridge Parkway

Houston, Texas 77079

  

Attention:

  

Director, Risk Management (with copy to General Counsel)

  

with an additional copy to:

  

Creole Insurance Company, Ltd.

Cedar House

41 Cedar Avenue

P.O. Box HM 1838

Hamilton HM HX Bermuda

Bermuda

Fax (441) 295-3982

  

Telephone:

  

281-870-5476

  

Telecopier:

  

281-870-5923

  

Electronic Mail:

  

cjryan@mcdermott.com

  

On and After the Separation:

  

The Babcock & Wilcox Company

The Harris Building

13024 Ballantyne Corporate Place, Suite 700

Charlotte, North Carolina

  

Attention:

  

Director, Risk Management (with copy to General Counsel)

  

with a copy to:

  

Creole Insurance Company, Ltd.

Cedar House

41 Cedar Avenue

P.O. Box HM 1838

Hamilton HM HX Bermuda

Bermuda

Fax (441) 295-3982

  

Telephone:

  

281-870-5476

  

Telecopier:

  

281-870-5923

  

Electronic Mail:

  

cjryan@mcdermott.com

 

10

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

If to any B&W Entity:

  

Prior to the Separation:

  

Babcock & Wilcox Holdings, Inc.

(f/k/a The Babcock & Wilcox Company)

800 Main Street

Lynchburg, Virginia 24504

  

Attention:

  

Director, Risk Management (with copy to General Counsel)

  

Telephone:

  

434-522-6800

  

with a copy to:

     

McDermott International, Inc.

777 N. Eldridge Parkway

Houston, Texas 77079

  

Attention:

  

Director, Risk Management (with copy to General Counsel)

  

Telephone:

  

281-870-5476

  

Telecopier:

  

281-870-5923

  

Electronic Mail:

  

cjryan@mcdermott.com

  

On and After the Separation:

  

The Babcock & Wilcox Company

The Harris Building

13024 Ballantyne Corporate Place, Suite 700

Charlotte, North Carolina

  

Attention:

  

Director, Risk Management (with copy to General Counsel)

Any notice or communication to any Person shall be deemed to be received by that
Person:

(A) upon personal delivery; or

(B) upon receipt if sent by mail or courier.

14. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the Commonwealth of Pennsylvania without
regard to those provisions concerning conflicts of laws that would result in the
application of the laws of any other jurisdiction.

15. Entire Agreement. THIS AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT AMONG ALL
OF THE PARTIES WITH RESPECT TO THE TRANSFERS, ASSUMPTIONS, AND NOVATIONS
DESCRIBED HEREIN AND SUPERSEDES ALL OTHER PRIOR AGREEMENTS AND UNDERSTANDINGS,
BOTH WRITTEN AND ORAL, WITH RESPECT TO SUCH TRANSFERS, ASSUMPTIONS, AND
NOVATIONS. SOLELY FOR INTERPRETATION PURPOSES, THE PARTIES ACKNOWLEDGE THAT THIS
AGREEMENT IS INTENDED TO BE READ TOGETHER WITH THE ALAA.

16. Dispute Resolution.

(a) For dispute resolution purposes as between Creole and Boudin, and all
disputes between Creole and Boudin arising out of this Agreement, including
without limitation as to whether a given obligation is a Go-Forward Creole
Obligation or a Go-Forward Boudin Obligation, shall be resolved in accordance
with the procedures set forth in the Master Separation Agreement (provided,
however, that until the Master Separation Agreement is executed and delivered by
all parties thereto, the reference to such agreement in this Section 16(a) shall
be deemed to refer to the draft thereof dated as of April 28, 2010).

 

11

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

(b) As between the Company on the one hand and Creole and/or Boudin, on the
other hand, all disputes arising hereunder shall be resolved in accordance with
the arbitration provisions of the most recent Existing Reinsurance Agreement. In
any such arbitration, the entity named in the applicable Company Designation
shall be the party formally opposed to the Company, but the other of Boudin or
Creole shall have right to associate effectively in the defense and/or
prosecution of such arbitration.

17. Severability. If any term or other provision of this Agreement or the
Exhibits attached hereto is determined by a nonappealable decision by a court,
administrative agency or arbitrator to be invalid, illegal or incapable of being
enforced by any rule of law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any Party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the court, administrative agency or arbitrator shall
interpret this Agreement so as to effect the original intent of the Parties as
closely as possible in an acceptable manner to the end that transactions
contemplated hereby are fulfilled to the fullest extent possible. If any
sentence in this Agreement is so broad as to be unenforceable, the provision
shall be interpreted to be only so broad as is enforceable.

18. Rules of Construction. The definitions of terms used herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include 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 (a) 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, (b) any reference herein to any law shall be
construed as referring to such law as amended, modified, codified or reenacted,
in whole or in part, and in effect from time to time, (c) any reference herein
to any Person shall be construed to include such Person’s successors and assigns
(subject to the restrictions contained herein), (d) 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,
(e) with respect to the determination of any time period, the word “from” means
“from and including” and the word “to” means “to and including” and (f) any
reference herein to Articles, Sections and Exhibits shall be construed to refer
to Articles and Sections of, and Exhibits to, this Agreement. No provision of
this Agreement shall be interpreted or construed against any Person solely
because such Person or its legal representative drafted such provision.

[Remainder of Page Intentionally Left Blank]

 

12

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

IN WITNESS WHEREOF, the Parties intending to be legally bound hereby have
executed this Agreement, by their duly authorized representatives.

 

ACE AMERICAN INSURANCE COMPANY

By:

 

                  /S/    LAURA VEST        

Printed Name:

  Laura Vest

Title:

  Vice President

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

CREOLE INSURANCE COMPANY, LTD.

By:

 

/S/    BENJAMIN H. BASH        

  Benjamin H. Bash   Assistant Secretary BOUDIN INSURANCE COMPANY, LTD.

By:

 

/S/    LIANE K. HINRICHS        

  Liane K. Hinrichs   Assistant Secretary

Consented to for Purposes of Section 3:

 

MCDERMOTT INTERNATIONAL INC.

By:

 

/S/    LIANE K. HINRICHS        

Name:

  Liane K. Hinrichs

Title:

  Senior Vice President BABCOCK & WILCOX HOLDINGS, INC.

By:

 

/S/    MICHAEL S. TAFF        

Name:

  Michael S. Taff

Title:

  Senior Vice President

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

EXHIBIT I – B&W ENTITIES

See Schedule 1.1(a) and Schedule 1.1(c) attached hereto. No B&W Entity listed on
Schedule

1.1(a) shall be deemed to be an “Insured”, a “Named Insured” or otherwise be
deemed to be insured

under any Existing Policy or Existing Reinsurance Agreement solely by virtue of
being

listed on such Schedule 1.1(a).

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

Schedule 1.1(a)

B&W FORMER

Reference ID

  

Name

333   

Ahahsain Hudson Heat Transfer Co. Ltd.

398   

Advanced Refractory Technologies, Inc.

  

A.M. Lockett & Co., Limited

  

Amcermet Corporation

924   

ASEA Babcock

235   

Ash Acquisition Company

326   

B & W Clarion, Inc.

574   

B&W Ebensburg Pa., Inc.

460   

B&W Energy Investments, Inc.

383   

B&W Fort Worth Power, Inc.

950   

B&W Fuel Company

535   

B&W Fuel, Inc.

922   

B&W Mexicana, S.A. de C.V.

9991   

B&W North Branch G.P., Inc.

9990   

B&W North Branch L.P., Inc.

537   

B&W Nuclear Service Company

960   

B&W Nuclear Service Company

536   

B&W Nuclear, Inc.

586   

B&W Saba, Inc.

591   

B&W Service Company

579   

B&W SOFC G.P., Inc.

578   

B&W SOFC L.P., Inc.

381   

B&W Special Projects, Inc.

569   

B&W Triso Corporation

  

B&W Tubular Products Limited

573   

B&W/OHM Weldon Spring, Inc.

212   

Babcock & Wilcox Asia Investment Co., Inc.

115   

Babcock & Wilcox Asia Limited

533   

Babcock & Wilcox Canada Leasing Ltd.

503   

Babcock & Wilcox Canada Ltd.

215   

Babcock & Wilcox China Investment Co., Inc.

594   

Babcock & Wilcox do Brasil Limitada

528   

Babcock & Wilcox do Brasil Participacoes Limitada

206   

Babcock & Wilcox Egypt SAE

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

169   

Babcock & Wilcox Fibras Ceramicas Limitada

519   

Babcock & Wilcox Finance, Inc.

557   

Babcock & Wilcox Foreign Sales Corporation

175   

Babcock & Wilcox Gama Kazan Teknolojisi A.S.

552   

Babcock & Wilcox General Contracting Company

565   

Babcock & Wilcox Government Services Company

395   

Babcock & Wilcox HRSG Company

  

Babcock & Wilcox Industries, Ltd.

531   

Babcock & Wilcox International Sales Corporation

549   

Babcock & Wilcox International Sales Corporation

342   

Babcock & Wilcox Investment Company

305   

Babcock & Wilcox Jonesboro Power, Inc.

2007   

Babcock & Wilcox Nevada, LLC

  

Babcock & Wilcox Refractories Limited

323   

Babcock & Wilcox Salt City Power, Inc.

543   

Babcock & Wilcox Services, Inc.

322   

Babcock & Wilcox Tracy Power, Inc.

314   

Babcock & Wilcox Victorville Power, Inc.

727   

Babcock & Wilcox Volund France SAS

315   

Babcock PFBC, Inc.

559   

Babcock Southwest Construction Corporation

945   

Babcock-Brown Boveri Reaktor GmbH

936   

Babcock-Ultrapower Jonesboro

937   

Babcock-Ultrapower West Enfield

951   

Bailey Beijing Controls Co., Ltd.

516   

Bailey Controls Australia Pty. Limited

517   

Bailey Controls International Sales & Services Company, Inc.

954   

Bailey Controls Jordan for Process Controls Services, Ltd.

563   

Bailey Controls Sales & Service (Australia) Pty. Limited

564   

Bailey Controls Sales & Services Canada Inc.

561   

Bailey do Brasil Instrumentos Industriais Limitada

114   

Bailey International, Inc.

923   

Bailey Japan Company Limited

542   

Bailey Meter and Controls Company

  

Bailey Meter Company

562   

Bailey Meter Co. (Japan) Ltd.

  

Bailey Meter Company Limited

  

Bailey Meter GmbH

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

646   

Brick Insurance Company, Ltd.

590   

BWXT Protec, Inc.

  

C.C. Moore & Company Engineers

511   

Ceramatec G.P., Inc.

510   

Ceramatec SOFC, Inc.

329   

Clarion Energy, Inc.

328   

Clarion Power Company

321   

Conam Nuclear, Inc.

  

Control Components France

514   

Control Components Italy S.R.L.

  

Control Components, Inc. (California)

  

Control Components, Inc. (Delaware)

948   

Control Components Japan

1914   

CTR Solutions, LLC

545   

Detroit Broach & Machine Corporation

551   

Diamond Blower Company Limited

  

Diamond Canapower Ltd.

518   

Diamond Power Importacao e Exportacao Ltda.

144   

Diamond Power Korea Inc.

526   

Diamond Power Specialty (Japan) Ltd.

558   

Diamond Power Specialty (Proprietary) Limited

546   

Diamond Power Specialty Corporation (Delaware)

  

Diamond Power Speciality Corporation (Ohio)

529   

Diamond Power Specialty GmbH

  

Diescher Tube Mills, Inc.

332   

Ebensburg Energy, Inc.

397   

Ejendomsaktieselskabet Falkevej2

961   

Enserch Environmental Management Company, Inc.

968   

EPC Business Trust

919   

Especialidades Termomecanicas, S.A. de C.V.

550   

Ferry-Diamond Engineering Company Limited

928   

Fibras Ceramicas C.A.

509   

Fibras Ceramicas, Inc.

547   

Globe Steel Tubes Corporation

  

Greer Land Co.

  

Holmes Insulations Limited

124   

Hudson Heat Transfer International, Inc.

1955   

Hudson HEI Pty. Ltd.

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

914   

Hudson Northern Industries Inc.

125   

Hudson Products Aktiebolag

567   

Hudson Products Corporation (1)

902   

Hudson Products de Mexico, S.A. de C.V.

1907   

Integran Technologies Inc.

461   

International Disarmament Corporation

941   

Isolite Babcock Refractories Company, Ltd.

927   

Isolite Eastern Union Refractories Co., Ltd.

920   

KBW Gasification Systems, Inc.

512   

LT Produkter i Skutskar AB

938   

Maine Power Services

345   

McDermott Heat Transfer Company

344   

McDermott Productos Industriales de Mexico, S.A. de C.V.

946   

Medidores Bailey, S.A. de C.V.

942   

Morganite Ceramic Fibres Limited

943   

Morganite Ceramic Fibres Pty. Limited

944   

Morganite Ceramic Fibres S. A.

  

National Drill & Manufacturing Co.

544   

National Ecology (Alabama) Incorporated

575   

National Ecology (Utah) Incorporated

976   

Nooter/Eriksen - Babcock & Wilcox, L.L.C.

933   

North American CWF Partnership

9989   

North Branch Power Company L.P.

971   

North County Operations Associates

  

Nuclear Materials and Equipment Corporation

958   

Olin Pantex Inc.

1153   

P. T. Heat Exchangers Indonesia

934   

Palm Beach Energy Associates

  

Piedmont Tool Machine Company

576   

Power Computing Company

581   

Power Systems Sunnyside Operations GP, Inc.

583   

Power Systems Sunnyside Operations LP, Inc.

  

(1) a Delaware Corporation

905   

PowerSafety International, Inc.

508   

Productos de Caolin, Inc.

577   

PSO Caribbean, Inc.

1980   

Savannah River Alliance LLC

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

2008   

Savannah River Tactical Services LLC

984   

SOFCo L.P.

932   

South Point CWF

556   

Sunland Construction Co., Inc.

988   

Sunnyside Cogeneration Associates

582   

Sunnyside II, Inc.

992   

Sunnyside II, L.P

303   

Sunnyside III, Inc.

993   

Sunnyside Operations Associates L.P.

571   

Termobloc Industria E Comercio Ltda.

953   

Thermax Babcock & Wilcox Limited

502   

TLT-Babcock, Inc.

570   

Triso

1152   

W.E. Smith Hudson Pty. Ltd.

548   

W. F. and John Barnes Company

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

Schedule 1.1(c)

B&W CURRENT

 

Reference ID

  

Name

      553   

Americon Equipment Services, Inc.

   554   

Americon, Inc.

   732   

Applied Synergistics, Inc.

   127   

B&W de Panama, Inc.

   532   

Babcock & Wilcox Canada Ltd.

   1570   

Babcock & Wilcox China Holdings, Inc.

   555   

Babcock & Wilcox Construction Co., Inc.

   2011   

Babcock & Wilcox de Monterrey, S.A. de C.V.

   1571   

Babcock & Wilcox Denmark Holdings, Inc.

   327   

Babcock & Wilcox Ebensburg Power, Inc.

   302   

Babcock & Wilcox Equity Investments, Inc.

   1965   

Babcock & Wilcox Holdings, Inc.

   2028   

Babcock & Wilcox India Holdings, Inc.

   598   

Babcock & Wilcox India Private Limited

   126   

Babcock & Wilcox International Investments Co., Inc.

   530   

Babcock & Wilcox International Sales and Service Corporation

   541   

Babcock & Wilcox International, Inc.

   380   

Babcock & Wilcox Investment Company

   2010   

Babcock & Wilcox Modular Nuclear Energy LLC

   1974   

Babcock & Wilcox Nuclear Operations Group, Inc.

   1967   

Babcock & Wilcox Nuclear Energy, Inc.

  

(formerly Babcock & Wilcox Nuclear Power Generation Group, Inc.

2018   

Babcock & Wilcox Nuclear Services (U.K.) Limited

   500   

Babcock & Wilcox Power Generation Group, Inc.

   1961   

Babcock & Wilcox Technical Services (U.K.) Limited

   1970   

Babcock & Wilcox Technical Services Clinch River, LLC

   572   

Babcock & Wilcox Technical Services Group, Inc.

  

(formerly BWXT Services, Inc.)

587   

Babcock & Wilcox Technical Services Savannah River Company

  

(formerly BWXT Savannah River Company)

599   

Babcock & Wilcox Volund A/S

  

(formerly Babcock & Wilcox Volund ApS)

2000   

BCE Parts Ltd.

   596   

BWX Technologies, Inc.

   580   

BWXT Federal Services, Inc.

   589   

BWXT Hanford Company

   382   

BWXT of Idaho, Inc.

   592   

BWXT of Ohio, Inc.

  

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

1576   

BWXT Washington, Inc.

   189   

Creole Insurance Company, Ltd.

   1988   

Delta Power Services, LLC

   766   

Diamond Operating Co., Inc.

   1572   

Diamond Power Australia Holdings, Inc.

   1984   

Diamond Power Central & Eastern Europe s.r.o.

   1573   

Diamond Power China Holdings, Inc.

   521   

Diamond Power do Brasil Limitada

   1574   

Diamond Power Equity Investments, Inc.

   525   

Diamond Power Finland OY

   504   

Diamond Power Germany GmbH

  

(formerly Diamond Power - Sturm GmbH)

597   

Diamond Power International, Inc.

   949   

Diamond Power Machine (Hubei) Co., Inc.

   1908   

Diamond Power Services S.E.A. Ltd.

   522   

Diamond Power Specialty (Proprietary) Limited

   523   

Diamond Power Specialty Limited

   524   

Diamond Power Sweden AB

   1990   

DPS Berkeley, LLC

   1997   

DPS Cadillac, LLC

   1995   

DPS Florida, LLC

   1993   

DPS Gregory, LLC

   1996   

DPS Lowell Cogen, LLC

   1992   

DPS Mecklenburg, LLC

   1991   

DPS Michigan, LLC

   1994   

DPS Mojave, LLC

   1998   

DPS Sabine, LLC

   278   

Gumbo Insurance Company, Ltd.

   2003   

Intech International Inc.

   2002   

Intech, Inc.

   2001   

Ivey-Cooper Services, L.L.C.

   1968   

Marine Mechanical Corporation

   540   

National Ecology Company

   2005   

NFS Holdings, Inc.

   2004   

NOG-Erwin Holdings, Inc.

   501   

North County Recycling, Inc.

   2006   

Nuclear Fuel Services, Inc.

   1989   

O&M Holding Company

   707   

P. T. Babcock & Wilcox Asia

  

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

534   

Palm Beach Resource Recovery Corporation

560   

Power Systems Operations, Inc.

568   

Revloc Reclamation Service, Inc.

2013   

Servicios de Fabricacion de Valle Soleado, S.A. de C.V.

2012   

Servicios Profesionales de Valle Soleado, S.A. de C.V.

767   

SOFCo - EFS Holdings LLC

2029   

The Babcock & Wilcox Company

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

EXHIBIT II - EXISTING REINSURANCE AGREEMENTS

See Attached.

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

Name of Agreement

 

Party to Agreement

 

Party to Agreement

 

Party to Agreement

  Party to Agreement   Party to Agreement   Effective Date of Agreement        

Reinsurance Agreement (agreement # 22004)

  Creole Insurance Company, Ltd.   Insurance Company of North America  
McDermott Incorporated Et AI.       6/1/1975     mcdermott

Reinsurance Agreement

  Creole Insurance Company, Ltd.   Insurance Company of North America        
4/1/1977   WC only   tf

Reinsurance Agreement

  Creole Insurance Company, Ltd.   Insurance Company of North America        
4/1/1977   Auto & GL only   tf

Reinsurance Agreement

  Creole Insurance Company, Ltd.   Insurance Company of North America   INA of
Texas       4/1/1978   WC only   tf

Reinsurance Agreement

  Creole Insurance Company, Ltd.   Insurance Company of North America        
4/1/1978   Auto & GL only   tf

Reinsurance Agreement

  Creole Insurance Company, Ltd.   Insurance Company of North America   INA of
Texas       4/1/1979   WC only   tf

Reinsurance Agreement

  Creole Insurance Company, Ltd.   Insurance Company of North America   INA of
Texas       4/1/1979   Auto & GL only   tf

Reinsurance Agreement

  Creole Insurance Company, Ltd.   Insurance Company of North America   INA of
Texas       4/1/1980   WC only   tf

Reinsurance Agreement

  Creole Insurance Company, Ltd.   Insurance Company of North America   INA of
Texas       4/1/1980   Auto & GL only   tf

Reinsurance Agreement

  Creole Insurance Company, Ltd.   Insurance Company of North America        
4/1/1982   Various other issuing companies included   vm

Addendum Number Five to Reinsurance Agreement effective 4/1/1982

  Creole Insurance Company, Ltd.   Insurance Company of North America        
4/1/1983   Various other issuing companies included   vm

Addendum Number Six to Reinsurance Agreement effective 4/1/1982

  Creole Insurance Company, Ltd.   Insurance Company of North America        
4/1/1984   Various other issuing companies included   vm

Addendum Number Seven to Reinsurance Agreement effective 4/1/1982

  Creole Insurance Company, Ltd.   Insurance Company of North America        
4/1/1985   Various other issuing companies included   vm

Reinsurance Agreement

  Creole Insurance Company, Ltd.   Insurance Company of North America        
4/1/1986   Various other issuing companies included   vm

Reinsurance Agreement

  Creole Insurance Company, Ltd.   Insurance Company of North America        
4/1/1987   Various other issuing companies included; Amended to include CIGNA
Insurance Company   vm

Reinsurance Agreement

  Creole Insurance Company, Ltd.   CIGNA Insurance Company         4/1/1987  
Excess Liability   tf

Reinsurance Agreement

  Creole Insurance Company, Ltd.   Insurance Company of North America        
4/1/1988   Various other issuing companies included; for Auto, WC and GL   vm

Reinsurance Agreement

  Creole Insurance Company, Ltd.   CIGNA Insurance Company         4/1/1988  
for Excess Liability policy   vm

Trust Agreement

  Creole Insurance Company, Ltd.   Pacific Employers Insurance Company   Morgan
Guaranty Trust Company of New York       6/24/1988     vm

Reinsurance Agreement

  Creole Insurance Company, Ltd.   Insurance Company of North America        
4/1/1989   Various other issuing companies included   vm

Reinsurance Agreement

  Creole Insurance Company, Ltd.   Insurance Company of North America        
4/1/1990   Various other issuing companies included; for Auto, WC and GL   vm

Reinsurance Agreement

  Creole Insurance Company, Ltd.   Insurance Company of North America        
4/1/1990   for Maritime policy   vm

Reinsurance Agreement

  Creole Insurance Company, Ltd.   CIGNA Insurance Company         4/18/1990    
tf

Reinsurance Agreement - Addendum I

  Creole Insurance Company, Ltd.   CIGNA Insurance Company         4/19/1990    
tf

Reinsurance Agreement

  Creole Insurance Company, Ltd.   Insurance Company of North America        
4/1/1991   Various other issuing companies included; for Auto, WC and GL   vm

Reinsurance Agreement

  Creole Insurance Company, Ltd.   Insurance Company of North America        
4/1/1991   for Maritime policy   vm

Reinsurance Agreement

  Creole Insurance Company, Ltd.   Insurance Company of North America   Pacific
Employers Insurance Company       4/1/1992     cp

Reinsurance Agreement

  Creole Insurance Company, Ltd.   Insurance Company of North America   Pacific
Employers Insurance Company       4/1/1993     cp

Reinsurance Agreement

  Creole Insurance Company, Ltd.   Insurance Company of North America   Pacific
Employers Insurance Company       4/1/1994     cp

Reinsurance Agreement

  Creole Insurance Company, Ltd.   CIGNA Insurance Company of Texas        
4/1/1994     tf

Workers Compensation Residual Market Assessments Captive Programs

  Creole Insurance Company, Ltd.   CIGNA Insurance Company of Texas        
4/1/1994     tf

Reinsurance Agreement

  Creole Insurance Company, Ltd.   CIGNA Insurance Company         4/1/1995    
cp

Agreement for Workers Compensation Residual Market Assessments Captive Programs

  Creole Insurance Company, Ltd.   CIGNA Insurance Company         4/1/1995    
cp

Reinsurance Agreement

  Creole Insurance Company, Ltd.   CIGNA Insurance Company   Indemnity Insurance
Company of North America   CIGNA
Insurance
Company
of
Canada     4/1/1995     cp

Reinsurance Agreement

  Creole Insurance Company, Ltd.   Bankers Standard Insurance Company        
4/1/1995     tf

Workers Compensation Residual Market Assessments 1995 Captive Programs

  Creole Insurance Company, Ltd.   Bankers Standard Insurance Company        
4/1/1995     tf

Reinsurance Agreement

  Creole Insurance Company, Ltd.   Indemnity Insurance Co. of N.A.   CIGNA
Insurance Company   CIGNA
Insurance
Company
of
Canada     4/1/1995   Addendum 1 effective 4/1/96   dc

Addendum I to Reinsurance Agreement

  Creole Insurance Company, Ltd.   Indemnity Insurance Company of North America
  CIGNA Insurance Company   CIGNA
Insurance
Company
of
Canada     4/1/1996     cp

Reinsurance Agreement

  Creole Insurance Company, Ltd.   Indemnity Insurance Co. of N.A.   CIGNA
Insurance Company   CIGNA
Insurance
Company
of
Canada   Pacific
Employers
Insurance
Company   4/1/1997   Addendum 2 effective 4/1/97   dc

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

EXHIBIT III - MII ENTITIES

See Schedule 1.1(b) and Schedule 1.1(j) attached hereto. No MII Entity listed on
Schedule 1.1(b) shall be deemed to be an “Insured”, a “Named Insured” or
otherwise be deemed to be insured under any Existing Policy or Existing
Reinsurance Agreement solely by virtue of being listed on such Schedule 1.1(b).

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

Schedule 1.1(b)

MII FORMER

 

Reference ID

      947   

Arabian General Contracting Company

911   

Arabian Petroleum Marine Construction Company

8000   

Associated Pipe Line Contractors, Inc.

117   

Badya Builders, Inc.

242   

Beheer-en Beleggingsmaatschappij Belesa B.V.

9996   

BJA-Mentor Production Systems Limited

164   

Brown & Root McDermott Fabricators Limited

277   

Cayenne Insurance Company, Ltd.

629   

CCC Fabricaciones y Construcciones S.A. de C.V.

940   

Construcciones Maritimas Mexicanas, S.A. de C.V.

952   

Davy McDermott Limited

921   

DB/McDermott Company

1952   

Deep Gulf Contractors LLC

171   

Deep Sea Divers Australia Pty. Limited

  

Dick Evans, Inc.

997   

ETPM International (UK) Limited

955   

ETPM International S.A.S.

999   

Far East Vessels, Inc.

108   

First Emirates Trading Corporation

  

Harvey Lumber & Supply Company

174   

Heavy Lift Chartering, Inc.

935   

HeereMac v.o.f.

956   

Heerema-McDermott (Aust.) Pty. Ltd.

190   

Honore Insurance Company, Ltd.

917   

Initec, Astano y McDermott International Inc., S.A.

  

Ingenieria Petrolera Maritima, S.A. de C.V.

  

Iranian Marine Contractors, Inc.

102   

J. Ray McDermott & Co. (Nederland) B.V.

150   

J. Ray McDermott (Aust.) Pty. Ltd.

151   

J. Ray McDermott (U.K.) Inc.

350   

J. Ray McDermott (Venezuela) C.A.

325   

J. Ray McDermott Arctic Ltd.

307   

J. Ray McDermott Gulf Contractors, Inc. (formerly the Early Company)

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

394   

J. Ray McDermott International Services (No. 1) Limited

101   

J. Ray McDermott International Services Limited

152   

J. Ray McDermott London, Ltd.

641   

J. Ray McDermott Marine Construction AS

1125   

J. Ray McDermott Newfoundland, Ltd.

871   

J. Ray McDermott Offshore Chartering (U.S.), Inc.

372   

J. Ray McDermott Properties, Inc.

238   

J. Ray McDermott Underwater Services, Inc.

603   

J. Ray McDermott Venture Holdings (U.S.), Inc.

153   

Jaramac Associated Services, Ltd.

  

Jaramac Petroleum (U.K.) Limited

  

Khafji Contractors, Inc.

166   

Khor Contractors, Inc.

903   

KME a.s.

324   

Lan-Dermott, S.A. de C.V.

202   

Madock Shipyard Company, Ltd.

203   

Macshelf Marine Construction Company, Ltd.

106   

Mandato Pty. Limited

360   

Marine Contractors, Inc.

146   

McAntille, N.V.

168   

McDermott - ETPM V.O.F.

158   

McDermott (Holland) B.V.

304   

McDermott (Nigeria) Limited

245   

McDermott Acquisition Company, Inc.

972   

McDermott APG Services Limited

352   

McDermott Azerbaijan Pipelines, Inc.

156   

McDermott Azerbaijan, Inc.

351   

McDermott Central & Eastern Europe, Inc.

  

McDermott de Mexico, S.A. de C.V.

118   

McDermott Denmark ApS

464   

McDermott Energy Services, Inc.

178   

McDermott Engineering (Europe) Limited

  

McDermott Enterprises France, S.A.

128   

McDermott Europe Marine Services, Ltd.

313   

McDermott Industries, Inc.

354   

McDermott Inland Services, Inc.

201   

McDermott International Asset Management, Ltd.

343   

McDermott International Aviation, Inc.

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

346   

McDermott International Aviation, Inc.

  

(formerly McDermott International Aviation Co., Inc.)

  

McDermott International (Deutschland) GmbH

   237   

McDermott International Engineering & Construction Co., Ltd.

   139   

McDermott International Engineering Investments N.V.

   121   

McDermott International General Services, Inc.

   123   

McDermott International Marine Services, Inc.

   236   

McDermott International Marketing, Inc.

   143   

McDermott Marine UK Limited

   462   

McDermott Marketing Services, Inc.

   103   

McDermott Middle East Trading, Ltd.

   172   

McDermott Neutral Zone, Inc.

     

McDermott Norway, Inc.

     

McDermott Petroleum (Iran), Inc.

   105   

McDermott Sakhalin, Inc.

   347   

McDermott Shipbuilding, Inc.

   111   

McDermott Singapore Pte. Ltd.

   221   

McDermott Submarine Cable Ltd.

   1951   

McDermott Submarine Cable Systems Limited

   205   

McDermott Subsea Constructors Limited

   110   

McDermott Transition Co., Inc.

     

McDermott UAR, Inc.

   184   

McDermott West Indies Company

   187   

McDermott-ETPM (Norway), Inc.

   998   

McDermott-ETPM (UK) Limited

   963   

McDermott-ETPM B.V.

   161   

McDermott-ETPM East B.V.

   167   

McDermott-ETPM East N.V.

   964   

McDermott-ETPM N.V.

   965   

McDermott-ETPM S.A.

   962   

McDermott-ETPM West, Inc.

   104   

Menck GmbH

   463   

Mentor Engineering Consultants Limited

   131   

MIMCO, Inc.

   908   

MMC-McDermott Engineering Sdn. Berhad

   317   

Mofco N.V.

   129   

NOLA, Servicos E Participacoes Ltda.

   141   

Northern Marine Services, Inc.

   107   

Oceanic Red Sea Company

  

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

620   

Offshore Angola, Ltd.

632   

Offshore Energy Capital Corporation

622   

Offshore Hyundai International Limited

630   

Offshore Hyundai International, Ltd.

210   

Offshore Marine Chartering N.V.

610   

Offshore Petroleum Divers, Inc.

614   

Offshore Pipelines (Mauritius) Ltd.

616   

Offshore Pipelines Far East Limited

617   

Offshore Pipelines International Gulf E.C.

633   

Offshore Power Generation Ltd.

635   

Offshore Production Vessels, Ltd.

615   

OPI Offshore Netherlands Holding B.V.

611   

OPI Sales & Service Corporation

628   

OPI Towing & Supply, L.L.C.

624   

OPMI, E.C.

613   

P. T. Armandi Pranaupaya

850   

Panama Offshore Chartering Company 1, Inc.

859   

Panama Offshore Chartering Company 10, Inc.

860   

Panama Offshore Chartering Company 11, Inc.

861   

Panama Offshore Chartering Company 12, Inc.

862   

Panama Offshore Chartering Company 13, Inc.

863   

Panama Offshore Chartering Company 14, Inc.

864   

Panama Offshore Chartering Company 15, Inc.

865   

Panama Offshore Chartering Company 16, Inc.

866   

Panama Offshore Chartering Company 17, Inc.

867   

Panama Offshore Chartering Company 18, Inc.

868   

Panama Offshore Chartering Company 19, Inc.

851   

Panama Offshore Chartering Company 2, Inc.

869   

Panama Offshore Chartering Company 20, Inc.

870   

Panama Offshore Chartering Company 21, Inc.

852   

Panama Offshore Chartering Company 3, Inc.

853   

Panama Offshore Chartering Company 4, Inc.

854   

Panama Offshore Chartering Company 5, Inc.

855   

Panama Offshore Chartering Company 6, Inc.

856   

Panama Offshore Chartering Company 7, Inc.

857   

Panama Offshore Chartering Company 8, Inc.

858   

Panama Offshore Chartering Company 9, Inc.

154   

Panama Offshore Chartering Company, Inc.

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

990   

Personal Administrativo de Vera Cruz, S.A. de C.V.

991   

Personal Ejecutivo de Veracruz, S.A. de C.V.

645   

Pirogue Insurance Company, Ltd.

981   

Sakhalin Energy Investment Company, Ltd.

384   

Samburg Holdings, Inc.

109   

Sharman, Allen, Gay & Taylor, S.A.

989   

Tallares Navales del Golfo, S.A. de C.V.

  

The Evelyn Kay Company

  

The Roger Thomas Company

  

The Rosalie E. Company

  

The Walter E. Company

634   

TL Marine Sdn. Bhd.

621   

TL Offshore Sdn. Bhd.

926   

Topside Contractors of Newfoundland

925   

Topside Contractors of Newfoundland, Ltd.

642   

U.S. Offshore Chartering

918   

Universal Fabricators Incorporated

980   

US Shipbuilding Corporation, Inc.

318   

Wagley, Inc.

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

Schedule 1.1(j)

MII - CURRENT

 

CURRENT
Reference ID

  

Name

      873   

Barmada McDermott (L) Limited

   1953   

Barmada McDermott Sdn. Bhd.

   276   

Boudin Insurance Company, Ltd.

   939   

Caspian Offshore Fabricators LLC

   116   

Chartering Company (Singapore) Pte. Ltd.

   142   

Eastern Marine Services, Inc.

   249   

Global Energy - McDermott Limited

   140   

Hydro Marine Services, Inc.

   649   

International Vessels Ltd.

   148   

J. Ray McDermott (Aust.) Holding Pty. Limited

   1982   

J. Ray McDermott (Caspian), Inc.

  

(formerly J. Ray McDermott Diving International, Inc.)

243   

J. Ray McDermott (Nigeria) Ltd.

   2025   

J. Ray McDermott (Norway), AS

   1237   

J. Ray McDermott (Qingdao) Pte. Ltd.

   194   

J. Ray McDermott Asia Pacific Pte. Ltd.

  

(formerly McDermott South East Asia Pte. Ltd.)

1972   

J. Ray McDermott Canada Holding, Ltd.

   1969   

J. Ray McDermott Canada, Ltd.

   204   

J. Ray McDermott Contractors, Inc.

   246   

J. Ray McDermott de Mexico, S.A. de C.V.

   208   

J. Ray McDermott Eastern Hemisphere Limited

  

(formerly J. Ray Middle East (Indian Ocean) Ltd.)

1956   

J. Ray McDermott Engineering Services Private Limited

   1950   

J. Ray McDermott Engineering, LLC

   220   

J. Ray McDermott Far East, Inc.

   211   

J. Ray McDermott Holdings, LLC

  

(formerly J. Ray McDermott Holdings, Inc.)

627   

J. Ray McDermott International Vessels, Ltd.

  

(formerly OPI International, Ltd.)

602   

J. Ray McDermott International, Inc.

   160   

J. Ray McDermott Investments B.V.

  

(formerly Menck B.V.)

1958   

J. Ray McDermott Kazakhstan Limited Liability Partnership

   1975   

J. Ray McDermott Logistic Services Pvt. Limited

   136   

J. Ray McDermott Middle East, Inc.

   239   

J. Ray McDermott Solutions, Inc.

  

(formerly J. Ray McDermott Engineering Holdings, Inc.)

625   

J. Ray McDermott Technology, Inc.

   1957   

J. Ray McDermott UK Ltd.

   1960   

J. Ray McDermott Underwater Services, Inc.

  

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

248   

J. Ray McDermott West Africa Holdings, Inc.

   244   

J. Ray McDermott West Africa, Inc.

   601   

J. Ray McDermott, Inc.

   207   

J. Ray McDermott, S.A.

   644   

Lagniappe Insurance Company, Ltd.

   193   

Malmac Sdn. Bhd.

   132   

McDermott (Malaysia) Sendirian Berhad

   904   

McDermott Abu Dhabi Offshore Construction Company

   915   

McDermott Arabia Company Limited

   149   

McDermott Australia Pty. Ltd.

  

(formerly McDermott Industries (Aust.) Pty. Limited)

183   

McDermott Azerbaijan Marine Construction, Inc.

   241   

McDermott Caspian Contractors, Inc.

   275   

McDermott Cayman Ltd.

   181   

McDermott Far East, Inc.

   133   

McDermott Gulf Operating Company, Inc.

   177   

McDermott Holdings (U.K.) Limited

   300   

McDermott Incorporated

   147   

McDermott International B.V.

   120   

McDermott International Investments Co., Inc.

   119   

McDermott International Marine Investments N.V.

   213   

McDermott International Marketing, Inc.

  

(formerly McDermott International Beijing, Inc.)

130   

McDermott International Trading Co., Inc.

   1971   

McDermott International Vessels, Inc.

   100   

McDermott International, Inc.

   1962   

McDermott Kft.

   349   

McDermott Marine Construction Limited

   1986   

McDermott Marine Mexico, S.A. de C.V.

   135   

McDermott Offshore Services Company, Inc.

   176   

McDermott Old JV Office, Inc.

   162   

McDermott Overseas Investment Co. N.V.

   390   

McDermott Overseas, Inc.

   1966   

McDermott Panama Holdings, S.A.

   170   

McDermott Servicos de Construcao, Ltda.

   320   

McDermott Trade Corporation

   306   

Mentor Subsea Technology Services, Inc.

   138   

North Atlantic Vessel, Inc.

   2021   

North Ocean II AS

   2023   

North Ocean II KS

  

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

2022   

North Ocean V AS

   612   

Offshore Pipelines International, Ltd.

   618   

Offshore Pipelines Nigeria Limited

   619   

Offshore Pipelines Sdn. Bhd.

   626   

OPI Vessels, Inc.

   623   

OPMI, Ltd.

   185   

P. T. Bataves Fabricators

   180   

P. T. McDermott Indonesia

   901   

PT. Baja Wahana Indonesia

  

(formerly P.T. Babcock & Wilcox Indonesia)

643   

PT. J. Ray McDermott Indonesia

  

(formerly PT. Jay Ray)

636   

Sabine River Realty, Inc.

   1977   

Servicios de Fabricacion de Altamira, S.A. de C.V.

   1976   

Servicos Profesionales de Altamira, S.A. de C.V.

   2019   

Singapore Huangdao Pte. Ltd.

   640   

SparTEC, Inc.

  

(formerly J. Ray McDermott Spars, Inc.)

145   

Varsy International N.V.