Form of Transition Services Agreement (The Babcock & Wilcox Company)



 Exhibit 10.4 

TRANSITION SERVICES AGREEMENT 

BETWEEN 
 THE
BABCOCK & WILCOX COMPANY 
 (as service provider) 

and 
 MCDERMOTT
INTERNATIONAL, INC. 
 (as service receiver) 
  

 
  
  

Dated [            ], 2010 







 TABLE OF CONTENTS 

 

					
	 	  	 	  	Page No.
	ARTICLE I	  	 DEFINITIONS
	  	1
	 Section 1.1
	  	 Definitions
	  	1
			
	ARTICLE II	  	 SERVICES
	  	2
	 Section 2.1
	  	 Services
	  	2
	 Section 2.2
	  	 Service Coordinators
	  	3
	 Section 2.3
	  	 Additional Services
	  	3
	 Section 2.4
	  	 Third Party Services
	  	3
	 Section 2.5
	  	 Standard of Performance; Limitation of Liability
	  	4
	 Section 2.6
	  	 Service Boundaries and Scope
	  	5
	 Section 2.7
	  	 Cooperation
	  	6
	 Section 2.8
	  	 Transitional Nature of Services; Changes
	  	6
	 Section 2.9
	  	 Access
	  	6
			
	ARTICLE III	  	 SERVICE CHARGES
	  	6
	 Section 3.1
	  	 Compensation
	  	6
			
	ARTICLE IV	  	 PAYMENT
	  	6
	 Section 4.1
	  	 Payment
	  	6
	 Section 4.2
	  	 Payment Disputes
	  	7
	 Section 4.3
	  	 Review of Charges; Error Correction
	  	7
	 Section 4.4
	  	 Taxes
	  	7
	 Section 4.5
	  	 Records
	  	8
			
	ARTICLE V	  	 TERM
	  	8
	 Section 5.1
	  	 Term
	  	8
			
	ARTICLE VI	  	 DISCONTINUATION OF SERVICES
	  	8
	 Section 6.1
	  	 Discontinuation of Services
	  	8
	 Section 6.2
	  	 Procedures Upon Discontinuation or Termination of Services
	  	8
			
	ARTICLE VII	  	 DEFAULT
	  	9
	 Section 7.1
	  	 Termination for Default
	  	9
			
	ARTICLE VIII	  	 INDEMNIFICATION AND WAIVER
	  	9
	 Section 8.1
	  	 Waiver of Consequential Damages
	  	9
	 Section 8.2
	  	 Services Received
	  	9
	 Section 8.3
	  	 Express Negligence
	  	10
			
	ARTICLE IX	  	 CONFIDENTIALITY
	  	11
	 Section 9.1
	  	 Confidentiality
	  	11
	 Section 9.2
	  	 System Security
	  	11
			
	ARTICLE X	  	 FORCE MAJEURE
	  	12
	 Section 10.1
	  	 Performance Excused
	  	12
	 Section 10.2
	  	 Notice
	  	12
	 Section 10.3
	  	 Cooperation
	  	12

  

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	ARTICLE XI	  	 MISCELLANEOUS
	  	12
	 Section 11.1
	  	 Entire Agreement
	  	12
	 Section 11.2
	  	 Binding Effect; No Third-Party Beneficiaries; Assignment
	  	12
	 Section 11.3
	  	 Amendment; Waivers
	  	13
	 Section 11.4
	  	 Notices
	  	13
	 Section 11.5
	  	 Counterparts
	  	13
	 Section 11.6
	  	 Severability
	  	13
	 Section 11.7
	  	 Governing Law
	  	13
	 Section 11.8
	  	 Performance
	  	14
	 Section 11.9
	  	 Relationship of Parties
	  	14
	 Section 11.10
	  	 Regulations
	  	14
	 Section 11.11
	  	 Construction
	  	14
	 Section 11.12
	  	 Effect if Separation does not Occur
	  	14

 Schedules 

Schedule A - Tax Services 
 Schedule B -
Accounting and Financial Reporting Services 
 Schedule C - Corporate Secretary Services 

Schedule D - Legal Services 
 Schedule E - Human
Resources Services 
 Schedule F - Risk Management Services 

Schedule G - Treasury Services 
 Schedule H -
Sharepoint 
 Schedule I - Disaster Recovery 

Schedule 2.4   Certain Subcontractors 

Schedule 4.1  Payment Instructions 
  

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 TRANSITION SERVICES AGREEMENT 

This TRANSITION SERVICES AGREEMENT (together with the Schedules hereto, this “Agreement”) is entered into as of
[            ], 2010, by and between The Babcock & Wilcox Company, a Delaware corporation (“B&W”), and McDermott International, Inc., a Panamanian corporation
(“McDermott”). 
 WHEREAS, the Board of Directors of McDermott has determined that it would be
appropriate and desirable for McDermott to distribute (the “Distribution”) on a pro rata basis to the holders of outstanding shares of common stock, par value $1.00 per share, of McDermott all of the outstanding shares of common stock, par
value $0.01 per share, of B&W owned by McDermott; 
 WHEREAS, in order to effectuate the foregoing,
McDermott and B&W have entered into a Master Separation Agreement, dated as of the date hereof (the “Master Separation Agreement”), which provides, among other things, upon the terms and subject to the conditions thereof, for the
separation of the respective businesses of McDermott and B&W and the Distribution, and the execution and delivery of certain other agreements, including this Agreement, in order to facilitate and provide for the foregoing; and 

WHEREAS, in order to provide for an orderly transition under the Master Separation Agreement, it will be advisable for
B&W, through members of the B&W Group, to provide to McDermott certain services described herein for a transitional period. 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows: 

ARTICLE I 

DEFINITIONS 

Section 1.1    Definitions. As used in this Agreement, the following terms shall have the
meanings set forth below: 
 “Additional Services” has the meaning set forth in
Section 2.3. 
 “Agreement” has the meaning set forth in the preamble. 

“Availed Party” has the meaning set forth in Section 9.2(a). 

“B&W” has the meaning set forth in the preamble. 

“Distribution” has the meaning set forth in the recitals. 

“Force Majeure Event” has the meaning set forth in Section 10.1. 

 

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 “Master Separation Agreement” has the meaning set
forth in the recitals. 
 “McDermott” has the meaning set forth in the preamble.

 “Schedules” means the Schedules attached hereto. 

“Security Regulations” has the meaning set forth in Section 9.2(a). 

“Service Coordinator” has the meaning set forth in Section 2.2. 

“Services” has the meaning set forth in Section 2.1(a). 

“Systems” has the meaning set forth in Section 9.2(a). 

“Tax” has the meaning set forth in Section 4.4. 

Capitalized terms used but not otherwise defined in this Agreement shall have the respective meanings assigned to such
terms in the Master Separation Agreement. 
 ARTICLE II 

SERVICES 

Section 2.1    Services. 

(a) Upon the terms and subject to the conditions of this Agreement, B&W, acting directly and/or through its Affiliates
and their respective employees, agents, contractors or independent third parties designated by any of them, agrees to use commercially reasonable efforts to provide or to cause to be provided services to the MII Group as set forth in
Schedules A through I (including any Additional Services provided in accordance with Section 2.3 hereof, all such services are collectively referred to herein as the “Services”). 

(b) At all times during the performance of the Services, all Persons performing such Services (including agents,
temporary employees, independent third parties and consultants) shall be construed as being independent from the MII Group, and such Persons shall not be considered or deemed to be employees of any member of the MII Group nor entitled to any
employee benefits of MII as a result of this Agreement. The responsibility of such Persons is to perform the Services in accordance with this Agreement and, as necessary, to advise the applicable member of the MII Group in connection therewith, and
such Persons shall not be responsible for decision-making on behalf of any member of the MII Group. Such Persons shall not be required to report to management of any member of the MII Group nor be deemed to be under the management or direction of
any member of the MII Group. McDermott acknowledges and agrees that, except as may be expressly set forth herein as a Service (including any Additional Services provided in accordance with Section 2.3 hereof) or otherwise expressly set forth in
the Master Separation Agreement or an Ancillary Agreement, no member of the B&W Group shall be obligated to provide, or cause to be provided, any service or goods to any member of the MII Group. 

 

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 (c) Notwithstanding anything to the contrary in this Agreement, B&W and
members of the B&W Group shall not be required to perform Services hereunder or take any actions relating thereto that conflict with or violate any applicable law, contract, license, authorization, certification or permit or B&W’s Code
of Business Conduct or other governance policies, as they may be amended from time to time. 
 Section
2.2    Service Coordinators. Each party will nominate in writing a representative to act as the primary contact with respect to the provision of the Services and the resolution of disputes under this Agreement (each such
person, a “Service Coordinator”). The initial Service Coordinators shall be Mr. Gary Brauchle (for McDermott) and Mr. Keith Robinson (for B&W) (or their designated delegates) for each of McDermott and B&W, respectively.
The Service Coordinators shall meet as expeditiously as possible to resolve any dispute hereunder; and any dispute that is not resolved by the Service Coordinators within 45 days shall be resolved in accordance with the dispute resolution procedures
set forth in Article V of the Master Separation Agreement. Each party hereto may treat an act of a Service Coordinator of the other party hereto which is consistent with the provisions of this Agreement as being authorized by such other party
without inquiring behind such act or ascertaining whether such Service Coordinator had authority to so act; provided, however, that no such Service Coordinator shall have authority to amend this Agreement. McDermott and B&W shall
advise each other promptly (in any case no more than three Business Days) in writing of any change in their respective Service Coordinators, setting forth the name of the replacement, and stating that the replacement Service Coordinator is
authorized to act for such party in accordance with this Section 2.2. 
 Section
2.3    Additional Services. McDermott may request additional Services (the “Additional Services”) from B&W by providing written notice. Upon the mutual written agreement as to the nature, cost, duration and
scope of such Additional Services, McDermott and B&W shall supplement in writing the Schedules hereto to include such Additional Services. Subject to the other limitations in this Agreement, including the provisions in Section 2.6, but
nothwithstanding the foregoing provisions of this Section 2.3, in addition to providing the Services specified in the Schedules, B&W, acting directly and/or through its Affiliates and their respective employees, agents, contractors or
independent third parties designated by any of them, shall use commercially reasonable efforts to provide or to cause to be provided additional, de minimis administrative support services to the MII Group as may be requested by any member of the MII
Group from time to time, at no cost beyond the amounts set forth in the Schedules (as the amounts set forth in the Schedules contemplate such additional, de minimis administrative support services); provided, however, that, for any such additional
services to be considered de minimis for purposes of this sentence, such additional services shall not require the attention of (i) any one employee of any member of the B&W Group for more than 2 hours in any single calendar month or
(ii) any group of employees of any one or more members of the B&W Group for more than 30 hours in any single calendar month. Except where the context otherwise indicates or requires, any such additional services referred to in the
immediately preceding sentence shall be deemed to be “Services” under this Agreement. 
 Section
2.4    Third Party Services. B&W shall have the right to hire third-party subcontractors to provide all or part of any Service hereunder; provided, that B&W shall consult in good faith with McDermott regarding the
proposed hiring of any third-party subcontractor that has not previously been involved in the activities relating to such Service prior to the date hereof; 
  

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provided, further, that, in the event such subcontracting is inconsistent with the practice applied by B&W generally from time to time within its own organization, B&W shall give notice
to McDermott of its intent to subcontract any portion of the Services and McDermott shall have 20 days (or such lesser period set forth in the notice as may be practicable in the event of exigent circumstances) to determine, in its sole discretion,
whether to permit such subcontracting or whether to cancel such Service in accordance with Article VI hereof. If McDermott opts to cancel a Service pursuant to the immediately preceding sentence, it shall not be liable to B&W pursuant to
Section 6.1 for any costs or expenses B&W or any member of the B&W Group remains obligated to pay to the third-party subcontractor identified in the notice provided by B&W as described above. B&W shall not be required to give
notice of its intent to subcontract Services to any party listed on Exhibit 2.4 hereto, nor shall McDermott have any right to cancel any Service subcontracted to any such listed party pursuant to this Section 2.4 (provided, that this sentence
shall not prevent McDermott from cancelling any Service pursuant to Section 6.1). 
 Section
2.5    Standard of Performance; Limitation of Liability. 
 (a) The Services to be
provided hereunder shall be performed with the same general degree of care, at the same general level and at the same general degree of accuracy and responsiveness, as when performed within the McDermott organization (including, for this purpose,
B&W and its subsidiaries) prior to the date of this Agreement. It is understood and agreed that B&W and the members of the B&W Group are not professional providers of the types of services included in the Services and that B&W
personnel performing Services have other responsibilities and will not be dedicated full-time to performing Services hereunder. 

(b) In the event B&W or any member of the B&W Group fails to provide, or cause to be provided, the Services in
accordance with the standard of service set forth in Section 2.5(a) or Section 2.5(c), the sole and exclusive remedy of McDermott shall be, at McDermott’s sole discretion, within 90 days from the date that B&W or such member of
the B&W Group first fails to provide such Service, to not pay for such Service; provided that in the event B&W defaults in the manner described in clause (ii) of Section 7.1, McDermott shall have the further rights set forth
in Article VII. 
 (c) EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 2.5, NO REPRESENTATIONS OR WARRANTIES
OF ANY KIND, EXPRESSED OR IMPLIED (INCLUDING THE WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR CONFORMITY TO ANY REPRESENTATION OR DESCRIPTION), ARE MADE BY B&W OR ANY MEMBER OF THE B&W GROUP WITH
RESPECT TO THE SERVICES UNDER THIS AGREEMENT AND, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ALL SUCH REPRESENTATIONS OR WARRANTIES ARE HEREBY WAIVED AND DISCLAIMED. MCDERMOTT (ON ITS OWN BEHALF AND ON BEHALF OF EACH OTHER MEMBER OF THE MII
GROUP) HEREBY EXPRESSLY WAIVES ANY RIGHT MCDERMOTT OR ANY MEMBER OF THE MII GROUP MAY OTHERWISE HAVE FOR ANY LOSSES, TO ENFORCE SPECIFIC PERFORMANCE OR TO PURSUE ANY OTHER REMEDY AVAILABLE IN CONTRACT, AT LAW OR IN EQUITY IN THE EVENT OF ANY
NON-PERFORMANCE, INADEQUATE PERFORMANCE, FAULTY PERFORMANCE OR OTHER FAILURE OR BREACH BY B&W OR ANY MEMBER OF THE B&W GROUP 

 

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UNDER OR RELATING TO THIS AGREEMENT, NOTWITHSTANDING THE NEGLIGENCE OR GROSS NEGLIGENCE (WHETHER SOLE, JOINT OR CONCURRENT OR ACTIVE OR PASSIVE) OF B&W OR ANY MEMBER OF THE B&W GROUP OR
ANY THIRD PARTY SERVICE PROVIDER AND WHETHER DAMAGES ARE ASSERTED IN CONTRACT OR TORT, UNDER FEDERAL, STATE OR NON U.S. LAWS OR OTHER STATUTE OR OTHERWISE; PROVIDED, HOWEVER, THAT THE FOREGOING WAIVER SHALL NOT EXTEND TO COVER, AND B&W SHALL BE
RESPONSIBLE FOR, SUCH LOSSES CAUSED BY THE WILLFUL MISCONDUCT OF B&W OR ANY MEMBER OF THE B&W GROUP. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO EVENT SHALL THE B&W GROUP BE LIABLE TO THE MII GROUP WITH RESPECT TO
CLAIMS ARISING OUT OF THIS AGREEMENT FOR AMOUNTS IN THE AGGREGATE EXCEEDING THE AGGREGATE SERVICE CHARGES PAID HEREUNDER BY THE MII GROUP. 

Section 2.6    Service Boundaries and Scope. Except as provided in a Schedule for a specific
Service: (a) B&W shall be required to provide, or cause to be provided, the Services only at (i) the locations such Services are being provided by any member of the B&W Group for any member of the MII Group immediately prior to the
Distribution Date and (ii) the corporate headquarters of B&W in Charlotte, North Carolina; provided, however, that, to the extent any such Service is to be provided by an employee of B&W who works in the corporate headquarters of
B&W, such Service shall, to the extent feasible, only be provided by such employee from the corporate headquarters of B&W; and (b) the Services shall be available only for purposes of conducting the business of the MII Group
substantially in the manner it was conducted immediately prior to the Distribution Date. Except as provided in a Schedule for a specific Service, in providing, or causing to be provided, the Services, B&W shall not be obligated to:
(i) maintain the employment of any specific employee or hire additional employees or third-party service providers; (ii) purchase, lease or license any additional equipment (including computer equipment, furniture, furnishings, fixtures,
machinery, vehicles, tools and other tangible personal property), software or other assets, rights or properties; (iii) make modifications to its existing systems or software; (iv) provide any member of the MII Group with access to any
systems or software other than those to which it has authorized access immediately prior to the Distribution Date; or (v) pay any costs related to the transfer or conversion of data of any member of the MII Group. McDermott acknowledges (on its
own behalf and on behalf of the other members of the MII Group) that the employees of B&W or any other members of the B&W Group who may be assisting in the provision of Services hereunder are at-will employees and, as such, may terminate or
be terminated from employment with B&W or any of the other members of the B&W Group providing Services hereunder at any time for any reason. In no event shall B&W or any of its Affiliates or any of their respective employees or agents be
required to perform any Services or take any other actions hereunder that conflict with any applicable Law. For the avoidance of doubt and except as may hereafter be designated as Additional Services in accordance with Section 2.3, the Services
do not include any services required for or as the result of any business acquisitions, divestitures, start-ups or terminations by the MII Group. To the extent McDermott desires B&W to provide any services in connection with any such
acquisitions, divestitures, start-ups or terminations, McDermott shall follow the procedures for requesting Additional Services pursuant to Section 2.3. 
  

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 Section 2.7    Cooperation. McDermott and B&W
shall cooperate with one another and provide such further assistance as the other party may reasonably request in connection with the provision of Services hereunder. 

Section 2.8    Transitional Nature of Services; Changes. Subject to Sections 2.3 and 2.5, the
parties acknowledge the transitional nature of the Services and that B&W may make changes from time to time in the manner of performing the Services. 

Section 2.9    Access. During the term of this Agreement and for so long as any Services are
being provided to McDermott by B&W, McDermott will provide B&W and its authorized representatives reasonable access, during regular business hours upon reasonable notice, to McDermott and its employees, representatives, facilities and books
and records as B&W and its representatives may reasonably require in order to perform such Services. 
 ARTICLE III

 SERVICE CHARGES 

Section 3.1    Compensation. Subject to the specific terms of this Agreement, the compensation
to be received by B&W for each Service provided hereunder will be the fees set forth on the Schedule relating to the particular Service, subject to any escalation provided for on such Schedule. In consideration for the provision of a Service,
each member of the MII Group receiving such Service shall pay to B&W or, at the election of B&W, the member of the B&W Group providing such Service, the applicable fee for such Service as set forth on the attached Schedules. 

ARTICLE IV 

PAYMENT 

Section 4.1    Payment. Except as otherwise provided in a Schedule for a specific Service,
charges for Services shall be invoiced monthly by B&W or, at its option, the member of the B&W Group providing the Service. Except as otherwise provided in a Schedule for a specific Service, McDermott shall make the corresponding payment no
later than 60 days after receipt of the invoice. Unless otherwise provided in this Agreement, McDermott shall remit funds in payment of invoices provided hereunder either by wire transfer or ACH (Automated Clearing House) in accordance with the
payment instructions set forth in Schedule 4.1. Each invoice shall be directed to the MII Service Coordinator or such other person designated in writing from time to time by such Service Coordinator. The invoice shall set forth in reasonable detail
the Services rendered and the invoice amount for the Services rendered for the period covered by such invoice. Interest will accrue on any unpaid amounts at ten percent (10%) per annum (compounded monthly) or, if less, the maximum non-usurious
rate of interest permitted by applicable law, until such amounts, together with all accrued and unpaid interest thereon, are paid in full. All timely payments under this Agreement shall be made without early payment discount. Any preexisting
obligation to make payment for Services provided hereunder shall survive the termination of this Agreement. If B&W incurs any reasonable out-of-pocket expenses (including any incremental license fees incurred by B&W in connection with
performance of the Services and any travel expenses incurred at the request or with the consent of McDermott) or remits funds to a third-party on behalf of McDermott, in either case in 

 

 6 








 
connection with the rendering of Services, then B&W shall include such amount on its monthly invoice to McDermott, with reasonable supporting documentation, and McDermott shall reimburse that
amount to B&W pursuant to this Section 4.1 as part of its next monthly payment. 
 Section
4.2    Payment Disputes. McDermott may object to any amounts for any Service at any time before, at the time of, or after payment is made, provided such objection is made in writing to B&W within 120 days following the
date of the disputed invoice. McDermott shall timely pay the disputed items in full while resolution of the dispute is pending; provided, however, that B&W shall pay interest at a rate of five percent (5%) per annum (compounded monthly) on
any amounts it is required to return to McDermott upon resolution of the dispute. Payment of any amount shall not constitute approval thereof. The Service Coordinators shall meet as expeditiously as possible to resolve any dispute. Any dispute that
is not resolved by the Service Coordinators within 45 days shall be resolved in accordance with the dispute resolution and arbitration procedures set forth in Article V of the Master Separation Agreement. Neither party (or any member of its
respective Group) shall have a right of set-off against the other party (or any member of its respective Group) for billed amounts hereunder. Upon written request, B&W will provide to McDermott reasonable detail and support documentation to
permit McDermott to verify the accuracy of an invoice. 
 Section 4.3    Review of
Charges; Error Correction. B&W shall maintain accurate books and records (including invoices of third parties) related to the Services sufficient to calculate, and allow McDermott to verify, the amounts owed under this Agreement. From time
to time until 120 days following the termination of this Agreement, McDermott shall have the right to review, and B&W shall provide access to, such books and records to verify the accuracy of such amounts, provided that such reviews shall not
occur more frequently than once per calendar quarter. Each such review shall be conducted during normal business hours and in a manner that does not unreasonably interfere with the operations of B&W. If, as a result of any such review, McDermott
determines that it overpaid any amount to B&W, then McDermott may raise an objection pursuant to the provisions of Section 4.2. McDermott shall bear the cost and expense of any such review. B&W shall make adjustments to charges as
required to reflect the discovery of errors or omissions in charges. 
 Section
4.4    Taxes. All transfer taxes, excises, fees or other charges (including value added, sales, use or receipts taxes, but not including a tax on or measured by the income, net or gross revenues, business activity or
capital of a member of the B&W Group), or any increase therein, now or hereafter imposed directly or indirectly by law upon any fees paid hereunder for Services, which a member of the B&W Group is required to pay or incur in connection with
the provision of Services hereunder (“Tax”), shall be passed on to McDermott as an explicit surcharge and shall be paid by McDermott in addition to any Service fee payment, whether included in the applicable Service fee payment, or added
retroactively. If McDermott submits to B&W a timely and valid resale or other exemption certificate acceptable to B&W and sufficient to support the exemption from Tax, then such Tax will not be added to the Service fee payable pursuant to
Article III; provided, however, that if a member of the B&W Group is ever required to pay such Tax, McDermott will promptly reimburse B&W for such Tax, including any interest, penalties and attorney’s fees related thereto. The parties
will cooperate to minimize the imposition of any Taxes. 
  

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 Section 4.5    Records. B&W shall maintain
true and correct records of all receipts, invoices, reports and such other documents relating to the Services hereunder in accordance with its standard accounting practices and procedures, consistently applied. B&W shall retain such accounting
records and make them available to McDermott’s authorized representatives and auditors for a period of not less than one year from the close of each fiscal year of B&W; provided, however, that B&W may, at its option, transfer such
accounting records to McDermott upon termination of this Agreement. 
 ARTICLE V 

TERM 

Section 5.1    Term. Subject to Articles VI and VII, the B&W Group shall provide the
specific Services to the MII Group pursuant to this Agreement for the time period set forth on the Schedule relating to the specific Service. In accordance with the Master Separation Agreement and Article VI of this Agreement, except as otherwise
provided in a Schedule for a specific Service, McDermott shall undertake to provide to itself and members of the MII Group, and to terminate as soon as reasonably practicable, the Services provided to the MII Group hereunder. Except as otherwise
provided in a Schedule for a specific Service or group of related Services, all Services provided for hereunder shall terminate on March 31, 2011. Except as otherwise expressly agreed or unless sooner terminated, this Agreement shall commence
upon the Distribution Date and shall continue in full force and effect between the parties for so long as any Service set forth in any Schedule hereto is being provided to McDermott or members of the MII Group and this Agreement shall terminate upon
the cessation of all Services provided hereunder; provided that Articles I, IV, VIII, IX and XI and Section 2.5(c) will survive the termination of this Agreement and any such termination shall not affect any obligation for the payment of
Services rendered prior to termination. 
 ARTICLE VI 

DISCONTINUATION OF SERVICES 

Section 6.1    Discontinuation of Services. Unless otherwise provided in the relevant Schedule
for a particular Service, at any time after the Distribution Date, McDermott may, without cause and in accordance with the terms and conditions hereunder and the Master Separation Agreement, request the discontinuation of one or more specific
Services by giving B&W at least 30 days’ prior written notice; provided, however, that any such discontinuation will not affect the amounts payable to B&W hereunder unless (and then only to the extent that) the charges for the
discontinued Services have been separately identified in the applicable Schedule. McDermott shall be liable to B&W for all costs and expenses B&W or any member of the B&W Group remains obligated to pay in connection with any discontinued
Service or Services, except in the case of a Service terminated by McDermott pursuant to clause (ii) of the first sentence of Section 7.1 hereof. The parties shall cooperate as reasonably required to effectuate an orderly and systematic
transfer to the MII Group of all of the duties and obligations previously performed by B&W or a member of the B&W Group under this Agreement. 

Section 6.2    Procedures Upon Discontinuation or Termination of Services. Upon the
discontinuation or termination of a Service hereunder, this Agreement shall be of no further force and effect with respect to such Service, except as otherwise provided in a Schedule for a specific 

 

 8 








 
Service and except as to obligations accrued prior to the date of discontinuation or termination; provided, however, that Articles I, IV, VIII, IX and XI and Section 2.5(c) of this
Agreement shall survive such discontinuation or termination. Each party and the applicable member(s) of its respective Group shall, within 60 days after discontinuation or termination of a Service, deliver to the other party and the applicable
member(s) of its respective Group originals of all books, records, contracts, receipts for deposits and all other papers or documents in its possession which pertain exclusively to the business of the other party and relate to such Service; provided
that a party may retain copies of material provided to the other party pursuant to this Section 6.2 as it deems necessary or appropriate in connection with its financial reporting obligations or internal control practices and policies.

 ARTICLE VII 

DEFAULT 

Section 7.1    Termination for Default. In the event (i) of a failure of McDermott to pay
for Services in accordance with the terms of this Agreement, or (ii) any party shall default, in any material respect, in the due performance or observance by it of any of the other terms, covenants or agreements contained in this Agreement,
then (1) if the non-defaulting party is B&W, B&W shall have the right, at its sole discretion, to immediately terminate the Service with respect to which the default occurred, and (2) if the non-defaulting party is McDermott,
McDermott shall have the right, at its sole discretion, to immediately terminate the Service with respect to which the default occurred, in either case if the defaulting party has failed to cure the default within 30 days of receipt of the written
notice of such default. McDermott’s right to terminate this Agreement pursuant to this Article VII and the rights set forth in Section 2.5 shall constitute McDermott’s sole and exclusive rights and remedies for a breach by B&W
hereunder (including any breach caused by an Affiliate of B&W or other third party providing a Service hereunder). 
 ARTICLE
VIII 
 INDEMNIFICATION AND WAIVER 

Section 8.1    Waiver of Consequential Damages. NEITHER PARTY SHALL BE LIABLE TO THE OTHER
PARTY UNDER THIS AGREEMENT FOR ANY EXEMPLARY, PUNITIVE, SPECIAL, INDIRECT, CONSEQUENTIAL, REMOTE OR SPECULATIVE DAMAGES (INCLUDING IN RESPECT OF LOST PROFITS OR REVENUES), HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE OR GROSS
NEGLIGENCE) ARISING IN ANY WAY OUT OF THIS AGREEMENT, WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES; PROVIDED, HOWEVER, THAT THE FOREGOING LIMITATIONS SHALL NOT LIMIT EACH PARTY’S INDEMNIFICATION OBLIGATIONS FOR
LIABILITIES TO THIRD PARTIES AS SET FORTH IN THIS AGREEMENT, THE MASTER SEPARATION AGREEMENT OR ANY ANCILLARY AGREEMENT. 

Section 8.2    Services Received. McDermott hereby acknowledges and agrees that: 

(a) the Services to be provided hereunder are subject to and limited by the provisions of
Section 2.5, Article VII and the other provisions hereof, including the limitation of remedies available to McDermott that restricts available remedies resulting from a Service not 

 

 9 








 
provided in accordance with the terms hereof to non-payment and, in certain limited circumstances, the right to terminate this Agreement; 

(b) the Services are being provided solely to facilitate the transition of McDermott as a separate company
as a result of the Distribution, and B&W and its Affiliates do not provide any such Services to non-Affiliates; 

(c) it is not the intent of B&W and the other members of the B&W Group to render, nor of McDermott
and the other members of the MII Group to receive from B&W and the other members of the B&W Group, professional advice or opinions, whether with regard to tax, legal, treasury, finance, employment or other business and financial matters, or
technical advice, whether with regard to information technology or other matters; McDermott shall not rely on, or construe, any Service rendered by or on behalf of B&W as such professional advice or opinions or technical advice; and McDermott
shall seek all third-party professional advice and opinions or technical advice as it may desire or need, and in any event McDermott shall be responsible for and assume all risks associated with the Services, except to the limited extent set forth
in Section 2.5 and Article VII; 
 (d) with respect to any software or documentation within
the Services, McDermott shall use such software and documentation internally and for their intended purpose only, shall not distribute, publish, transfer, sublicense or in any manner make such software or documentation available to other
organizations or persons, and shall not act as a service bureau or consultant in connection with such software; and 

(e) a material inducement to B&W’s agreement to provide the Services is the limitation of
liability and the release provided by McDermott in this Agreement. 
 ACCORDINGLY, EXCEPT WITH
REGARD TO THE LIMITED REMEDIES EXPRESSLY SET FORTH HEREIN, MCDERMOTT SHALL ASSUME ALL LIABILITY FOR AND SHALL FURTHER RELEASE, DEFEND, INDEMNIFY AND HOLD B&W, ANY MEMBER OF THE B&W GROUP AND THEIR RESPECTIVE EMPLOYEES, OFFICERS, DIRECTORS
AND AGENTS (ALL AS INDEMNIFIED PARTIES) FREE AND HARMLESS FROM AND AGAINST ALL LOSSES RESULTING FROM, ARISING OUT OF OR RELATED TO THE SERVICES, HOWSOEVER ARISING AND WHETHER OR NOT CAUSED BY THE NEGLIGENCE OR GROSS NEGLIGENCE OF B&W, ANY MEMBER
OF THE B&W GROUP OR ANY THIRD PARTY SERVICE PROVIDER, OTHER THAN THOSE LOSSES CAUSED BY THE WILLFUL MISCONDUCT OF B&W OR ANY MEMBER OF THE B&W GROUP. 

Section 8.3    Express Negligence. THE INDEMNITY, RELEASES AND LIMITATIONS OF
LIABILITY IN THIS AGREEMENT (INCLUDING ARTICLES II AND VIII) ARE INTENDED TO BE ENFORCEABLE AGAINST THE PARTIES IN ACCORDANCE WITH THE EXPRESS TERMS AND SCOPE THEREOF NOTWITHSTANDING ANY EXPRESS NEGLIGENCE RULE OR ANY SIMILAR DIRECTIVE THAT WOULD
PROHIBIT OR OTHERWISE LIMIT INDEMNITIES BECAUSE OF THE NEGLIGENCE OR GROSS NEGLIGENCE (WHETHER SOLE, 
  

 10 








 
JOINT OR CONCURRENT OR ACTIVE OR PASSIVE) OR OTHER FAULT OR STRICT LIABILITY OF ANY OF THE INDEMNIFIED PARTIES. 

ARTICLE IX 

CONFIDENTIALITY 

Section 9.1    Confidentiality. B&W and McDermott each acknowledge and agree that the
terms of Section 6.9 of the Master Separation Agreement shall apply to information, documents, plans and other data made available or disclosed by one party to the other in connection with this Agreement. B&W and McDermott each acknowledge
and agree that any third party Information (to the extent such Information does not constitute B&W Books and Records) provided by any member of the MII Group to any member of the B&W Group after the Distribution Date in connection with the
provision of the Services by any member of the B&W Group, or generated, maintained or held in connection with the provision of the Services by any member of the B&W Group after the Distribution Date, in each case that primarily relates to
the MII Business, the MII Assets, or the MII Liabilities, shall not be considered Privileged Information of B&W or Confidential Information of B&W. 

Section 9.2     System Security. 

(a) If any party hereto is given access to the other party’s computer systems or software (collectively, the
“Systems”) in connection with the Services, the party given access (the “Availed Party”) shall comply with all of the other party’s system security policies, procedures and requirements that have been provided to the Availed
Party in advance and in writing (collectively, “Security Regulations”), and shall not tamper with, compromise or circumvent any security or audit measures employed by such other party. The Availed Party shall access and use only those
Systems of the other party for which it has been granted the right to access and use. 
 (b) Each party hereto
shall use commercially reasonable efforts to ensure that only those of its personnel who are specifically authorized to have access to the Systems of the other party gain such access, and use commercially reasonable efforts to prevent unauthorized
access, use, destruction, alteration or loss of information contained therein, including notifying its personnel of the restrictions set forth in this Agreement and of the Security Regulations. 

(c) If, at any time, the Availed Party determines that any of its personnel has sought to circumvent, or has
circumvented, the Security Regulations, that any unauthorized Availed Party personnel has accessed the Systems, or that any of its personnel has engaged in activities that may lead to the unauthorized access, use, destruction, alteration or loss of
data, information or software of the other party hereto, the Availed Party shall promptly terminate any such person’s access to the Systems and immediately notify the other party hereto. In addition, such other party hereto shall have the right
to deny personnel of the Availed Party access to its Systems upon notice to the Availed Party in the event that the other party hereto reasonably believes that such personnel have engaged in any of the activities set forth above in this
Section 9.2(c) or otherwise pose a security concern. The Availed Party shall use commercially reasonable efforts to cooperate with the other party hereto in investigating any apparent unauthorized access to such other party’s Systems.

  

 11 








 ARTICLE X 

FORCE MAJEURE 

Section 10.1    Performance Excused. Continued performance of a Service may be suspended
immediately to the extent caused by any event or condition beyond the reasonable control of the party suspending such performance (and not involving any willful misconduct of such party), including acts of God, pandemics, floods, fire, earthquakes,
labor or trade disturbances, strikes, war, acts of terrorism, civil commotion, electrical shortages or blackouts, breakdown or injury to computing facilities, compliance in good faith with any Law (whether or not it later proves to be invalid),
unavailability of materials or bad weather (a “Force Majeure Event”). McDermott shall not be obligated to pay any amount for Services that it does not receive as a result of a Force Majeure Event (and the parties hereto shall negotiate
reasonably to determine the amount applicable to such Services not received). In addition to the reduction of any amounts owed by McDermott hereunder, during the occurrence of a Force Majeure Event, to the extent the provision of any Service has
been disrupted or reduced, during such disruption or reduction, (a) McDermott may replace any such affected Service by providing any such Service for itself or engaging one or more third parties to provide such Service at the expense of
McDermott and (b) B&W shall cooperate with, provide such information to and take such other actions as may be reasonably required to assist such third parties to provide such substitute Service. 

Section 10.2    Notice. The party claiming suspension due to a Force Majeure Event will give
prompt notice to the other of the occurrence of the Force Majeure Event giving rise to the suspension and of its nature and anticipated duration. 

Section 10.3    Cooperation. Upon the occurrence of a Force Majeure Event, the parties shall
cooperate with each other to find alternative means and methods for the provision of the suspended Service. 
 ARTICLE XI

 MISCELLANEOUS 

Section 11.1    Entire Agreement. This Agreement, together with the documents referenced
herein (including the Master Separation Agreement), constitutes the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior written and oral and all contemporaneous oral
agreements and understandings with respect to the subject matter hereof. To the extent any provision of this Agreement conflicts with the provisions of the Master Separation Agreement, the provisions of this Agreement shall be deemed to control with
respect to the subject matter hereof. 
 Section 11.2    Binding Effect; No Third-Party
Beneficiaries; Assignment. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns; and nothing in this Agreement, express or implied, is intended to confer upon
any other person or entity any rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement. This Agreement may not be assigned by either party hereto, except with the prior written consent of the other party hereto.

  

 12 








 Section 11.3    Amendment; Waivers. No change or
amendment may be made to this Agreement except by an instrument in writing signed on behalf of both of the parties hereto. Either party hereto may, at any time, (i) extend the time for the performance of any of the obligations or other acts of
the other, (ii) waive any inaccuracies in the representations and warranties of the other contained herein or in any document delivered pursuant hereto, and (iii) waive compliance by the other with any of the agreements, covenants or
conditions contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the party to be bound thereby. No failure or delay on the part of either party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or acquiescence in, any breach of any representation, warranty, covenant or agreement contained herein, nor shall any single or partial exercise of any such right preclude other or
further exercise thereof or of any other right. 
 Section 11.4    Notices. Unless
otherwise expressly provided herein, all notices, claims, certificates, requests, demands and other communications hereunder shall be in writing and shall be deemed to be duly given (i) when personally delivered or (ii) if mailed by
registered or certified mail, postage prepaid, return receipt requested, on the date the return receipt is executed or the letter is refused by the addressee or its agent or (iii) if sent by overnight courier which delivers only upon the signed
receipt of the addressee, on the date the receipt acknowledgment is executed or refused by the addressee or its agent or (iv) if sent by facsimile or electronic mail, on the date confirmation of transmission is received (provided that a copy of
any notice delivered pursuant to this clause (iv) shall also be sent pursuant to clause (i), (ii) or (iii)), addressed to the attention of the addressee’s General Counsel at the address of its principal executive office or to such
other address or facsimile number for a party hereto as it shall have specified by like notice. 
 Section
11.5    Counterparts. This Agreement, including the Schedules hereto and the other documents referred to herein, may be executed in multiple counterparts, each of which when executed shall be deemed to be an original but
all of which together shall constitute one and the same agreement. 
 Section
11.6    Severability. If any term or other provision of this Agreement or the Schedules 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 either party hereto. 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. 

Section 11.7    Governing Law. This Agreement shall be governed by, and construed and enforced
in accordance with, the substantive laws of the State of Texas, without regard to any conflicts of law provisions thereof that would result in the application of the laws of any other jurisdiction. 

 

 13 








 Section 11.8    Performance. Each party hereto
shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any Subsidiary or Affiliate of such party. 

Section 11.9    Relationship of Parties. This Agreement does not create a fiduciary
relationship, partnership, joint venture or relationship of trust or agency between the parties. The parties hereto agree that B&W (and any other member of the B&W Group which performs Services hereunder) is an independent contractor in the
performance of Services for the MII Group under this Agreement. 
 Section
11.10    Regulations. All employees of B&W and the members of the B&W Group shall, when on the property of McDermott, conform to the rules and regulations of McDermott concerning safety, health and security which
are made known to such employees in advance in writing. 
 Section
11.11    Construction. This Agreement shall be construed as if jointly drafted by the parties hereto and no rule of construction or strict interpretation shall be applied against either party. In this Agreement, unless the
context clearly indicates otherwise, words used in the singular include the plural and words used in the plural include the singular; and if a word or phrase is defined in this Agreement, its other grammatical forms, as used in this Agreement, shall
have a corresponding meaning. Whenever the context requires, the gender of all words used in this Agreement includes the masculine, feminine and the neuter. Unless the context otherwise requires, the words “include,” “includes”
and “including” shall be deemed to be followed by the words “without limitation,” and the word “or” shall have the inclusive meaning represented by the phrase “and/or.” The words “shall” and
“will” are used interchangeably in this Agreement and have the same meaning. Relative to the determination of any period of time hereunder, “from” means “from and including,” “to” means “to but
excluding” and “through” means “through and including.” All references herein to a specific time of day in this Agreement shall be based upon Central Standard Time or Central Daylight Savings Time, as applicable, on the date
in question. Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified. Any reference herein to any Article, Section or Schedule means such Article or Section of, or such Schedule
to, this Agreement, as the case may be, and references in any Section or definition to any clause means such clause of such Section or definition. As used in this Agreement, the words “this Agreement,” “herein,”
“hereunder,” “hereof,” “hereto” and words of similar import shall be deemed references to this Agreement as a whole and not to any particular Section or other provision of this Agreement. The titles to Articles and
headings of Sections contained in this Agreement, in any Schedule and in the table of contents to this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of or to affect the meaning or interpretation
of this Agreement. 
 Section 11.12    Effect if Separation does not Occur. If the
Distribution does not occur, then all actions and events that are, under this Agreement, to be taken or occur effective as of or following the Distribution Date, or otherwise in connection with the Distribution, shall not be taken or occur except to
the extent specifically agreed by the parties and neither party shall have any liability or further obligation to the other party under this Agreement. 

[Signature page follows.] 
  

 14 








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

			
	THE BABCOCK & WILCOX COMPANY
		
	By:	 	 
		 	Name:
		 	Title:
	
	MCDERMOTT INTERNATIONAL, INC.
		
	By:	 	 
		 	Name:
		 	Title:


  

 15 








 Schedule A 

Tax Services 

Description of Services to be Provided: 

Services to be provided as part of Tax Transition Services: 
  

	(A)	 Assistance with 2009 and 2010 tax compliance for the following entities / jurisdictions: 



 

	 	a.	 J. Ray Holdings, Inc. & Subsidiaries as part of the Babcock & Wilcox U.S. consolidated return 



	 	b.	 J. Ray McDermott, Inc. – Louisiana 



	 	c.	 J. Ray McDermott, Inc. – Alabama 



	 	d.	 J. Ray McDermott, Inc. – Mississippi 



	 	e.	 J. Ray McDermott, Inc. – Texas 



	 	f.	 J. Ray McDermott, Inc. – Florida 



	 	g.	 Sabine River Realty, Inc. – Louisiana 


  

	(B)	 Assistance with the calculation of the domestic tax provision to be included in the Q2 2010 (and Q3 2010, if applicable) Form 10-Q for McDermott
International, Inc. 


  

	(C)	 Miscellaneous subject matter expertise on an as needed basis 



Service Fee: 
  

			
	 Amount:
	  	$8,861 per month
	 Currency:
	  	United States Dollars (USD)

 Termination Date:

 Services provided until all 2010 tax compliance is complete (not later than November 15, 2011). 

 

 1 








 Schedule B 

Accounting and Financial Reporting Services 

Areas of Service: 

Assistance in Preparation of Quarterly/Annual Filings and Shareholder Reports 

	 	o	 Assistance with preparation and filing of MII’s quarterly and annual SEC filings (10Q/10K), in accordance with the details specified on Annex A
hereto. 



	 	o	 Assistance with managing the accounting close and consolidations efforts. 



	 	o	 Assistance with monitoring and managing collection of footnotes and coordination of SEC filings on the Securities and Exchange Commission’s
EDGAR system (XBRL / R.R. Donnelly). 



	 	o	 Assistance with evaluating stock option volatility measures and required documentation. 



	 	o	 Provision of support in the accounting for equity and pension plans (FAS 123R stock expense, compensation, options, 10Q/10K disclosures, thrift
plan, APIC, stock compensation). 



	 	o	 Provision of support in the development of select. 



	 	o	 Assistance with performing various analyses during the quarterly and annual close processes to assist MII’s management with understanding
current results and the latest forecast, with variance explanations and with information for earnings calls with analysts and others. 



Additional Subject Matter Support 

	 	o	 Assistance with accounting for SERP and Excess plan. 



	 	o	 Assistance with healthcare & benefits accounting (including pensions). 



	 	o	 Assistance with equity accounting. 



	 	o	 Assistance with SGA expense analyses and reporting (Blue Book). 



	 	o	 Assistance with thrift plan funding. 



	 	o	 Assistance with sales and use tax compliance for pre-spin periods. 



Special Provisions: 
  

	 	o	 Formal training courses will be provided if required, subject to availability of qualified trainers at rates to be agreed (not included in Service
Fee below). 



	 	o	 Except as necessitated by completion of the Distribution, preparation of quarterly and annual financial statements and reporting will be consistent
with historical practice. 


  

 2 








 Service Fee: 
  

			
	 Amount:
	  	$13,858 per month
	 Currency:
	  	United States Dollars (USD)
	 Note:
	  	Service fee above does not include interim executive costs


Termination Date: 

Services provided up to one year from the Distribution Date. 

 

 3 








 Schedule C 

Corporate Secretary Services 

Areas of Service: 
  

	1.	 Provide general advice regarding securities and corporate governance matters. 



	2.	 Provide consulting and advisory assistance regarding fiscal year proxy statement (incl. compensation discussion & analysis).



 Special Provisions: 
  

	 	•	 	 Formal training courses to be provided if required subject to availability of qualified trainers at rates to be agreed (not included in Service Fee
below). 



	 	•	 	 Support limited to the business units and associated transactions and activities as of the Distribution Date. 



	 	•	 	 Preparation of annual proxies consistent with historical practice. 



Service Fee: 
  

			
	 Amount:
	  	$3,075 per month
	 Currency:
	  	United States Dollars (USD)

 Termination Date:

 Services provided up to 9 months from the Distribution Date. 

 

 4 








 Schedule D 

Legal Services 

Description of Services to be Provided: 

Services to be provided as part of Legal Transition Services: 
  

	 	(A)	 Qualified Plans Support 



	 	(B)	 Nonqualified Deferred Compensation Plans Support 



	 	(C)	 Employee Benefit Plan Committees Support 



	 	(D)	 Employment and Separation Agreement Support 



	 	(E)	 Bell v. J. Ray McDermott, Inc. Support 



	 	(F)	 2009 Form 5500 Support 



	 	(G)	 Annual EPL and FL insurance renewal 



	 	(H)	 HR Legal Support 



(A) Qualified Plans Support 

	 	o	 Assistance as reasonably requested for tax and legal compliance of qualified plans: 



	 	¡	 	 Plan design, amendment and drafting 



	 	¡	 	 Reporting and disclosure 



	 	¡	 	 QDRO and claims administration 



	 	¡	 	 Governmental agency filings 



	 	¡	 	 Plan interpretation 



	 	¡	 	 Acting as liaison with plan service providers 



(B) Nonqualified Deferred Compensation Plans Support 

	 	o	 Assistance as reasonably requested for tax and legal compliance of nonqualified deferred compensation programs: 



	 	¡	 	 Plan design, amendment and drafting 



	 	¡	 	 Code Section 409A issues 



	 	¡	 	 Code Section 457A issues 



	 	¡	 	 Reporting and disclosure 



(C) Employee Benefit Plan Committees Support 

	 	o	 Continue to serve as nonmember secretary to the following committees: 



	 	¡	 	 U.S. and TCN Retirement Plan Investment Committees 



	 	¡	 	 Thrift Plan Committee 



	 	¡	 	 TCN Retirement Plan Administrative Committee 



 

 5 








 (D) Employment and Separation Agreement Support 

	 	o	 Assistance as reasonably requested for: 



	 	•	 	 Design and drafting of employment agreements and separation agreements 



	 	•	 	 Administration of existing agreements 



	 	•	 	 Statutory and regulatory compliance 



(E) Bell v J. Ray McDermott, Inc. Support 

	 	o	 Assistance as reasonably requested for: 



	 	•	 	 Acting as liaison with outside counsel, company employees and witnesses 



	 	•	 	 Reviewing outside counsel bills 



	 	•	 	 Setting case strategy 



	 	•	 	 Reviewing pleadings and other court filings 



(F) 2009/2010 Form 5500 Support 

	 	o	 Oversight of preparation and filing of 2009 Form 5500 for MI/JRM employee benefit plans and final 2010 filings 



(G) EPL and FL Insurance Annual Renewal Support 

	 	o	 Assistance as reasonably requested for: 



	 	•	 	 Research and preparation of responses for renewal applications 



	 	•	 	 Compilation of supporting documentation 



	 	•	 	 Preparation of presentation materials for underwriters 



	 	•	 	 Responding to questions from underwriters and brokers 



(H) HR Legal Support 

	 	o	 Assistance as reasonably requested for: 



	 	•	 	 HR related statutory and regulatory compliance 



	 	•	 	 M&A due diligence 



Service Fee: 
  

			
	 Amount:
	  	$4,690 per month
	 Currency:
	  	United States Dollars (USD)

 Termination Date:

 Services provided up to nine months from the Distribution Date. 

 

 6 








 Schedule E 

Human Resources Services 

Description of Services to be Provided: 

Services to be provided as part of Human Resources Transition Services: 
  

	 	(A)	 Assistance with Payroll Management/Oversight and Processing Support 



	 	(B)	 Assistance with Stock Plan Administration 



(A) Assistance with Payroll Management/Oversight and Processing Support 

	 	o	 Provide the services of the Director, Americas Payroll Service Center for assistance with oversight of payroll processing




	 	o	 Assistance as reasonably requested for: 



	 	•	 	 Pay issue troubleshooting 



	 	•	 	 Special payment processing (bonus, vacation, pay advances) 



	 	•	 	 Garnishment processing 



	 	•	 	 Payroll tax filings and research 



	 	•	 	 Payroll processing back-up 



(B) Assistance with Stock Plan Administration 

	 	o	 Assist with administration of the long-term incentive and supplemental executive retirement programs, to include: 



	 	•	 	 Managing Schwab service delivery 



	 	•	 	 Resolving issues and responding to inquires from plan participants 



	 	•	 	 Compliance and external reporting 



	 	•	 	 Training new Stock Plan Administrator 



Service Fee: 
  

			
	 Amount:
	  	$5,754
	 Currency:
	  	US Dollars (USD)

 Termination Date:

 Services provided for up to six months from the Transaction Date. 

 

 7 








 Schedule F 

Risk Management Services 

Description of Services to be Provided: 

Miscellaneous advice and consulting as requested concerning: 
  

	 	1.	 Historic MII CIRM activities, documents and processes including, but not limited to, insurance coverages, captive operations and coverages, and RIMS
systems. 


  

	 	2.	 Risk identification, assessment, and treatment (including financing via transfer or captive). 



 

	 	3.	 Removal of B&W related rights and obligations from Boudin and Non-B&W obligations from Creole. 



 

	 	4.	 Support migration from current RMIS System to new RMIS system. 



 

	 	5.	 New employee training. 



Charges: 
 $1,148
per month for three months from the effective date hereof. After three months, charges to be agreed if any services still are being provided. 
  

 8 








 Schedule G 

Treasury Services 

Description of Services to be Provided: 

Services to be provided as part of Treasury Transition Services: 
  

	 	(A)	 Assistance with managing surety bonding and guarantees 



Each such service category is described below. 

(A) Assistance with managing Bonding and Guarantees 

	 	o	 Assistance with establishing lines with surety companies 



	 	o	 Assistance with managing issuance of and termination of surety bonds 



	 	o	 Assistance with managing issuance of and termination of all letters of credit 



	 	o	 Assistance with managing the issuance of parent company guarantees 



Service Fee 
  

			
	 Amount:
	  	$5,032 per month

 Termination Date

 Service provided up to nine months from the Distribution Date. 

 

 9 








 Schedule H 

Sharepoint 

Description of Services to be Provided: 

Support services described in this schedule are those required to support the Sharepoint site that has been created for collaboration and
sharing of documentation between the records management personnel of McDermott and B&W (the “Sharepoint Site”). The Sharepoint Site will include information such as detailed inventory lists of records forwarded to B&W and a log
documenting when such information was forwarded. Records management personnel from McDermott and B&W may load new documents as well as modify and edit documents already loaded on the Sharepoint Site. B&W will routinely back-up the Sharepoint
Site, consistent with B&W’s back-up procedures for its other sites and applications of a similar nature, and provide a complete electronic copy of the Sharepoint Site to McDermott at the end of the Sharepoint Transition Period. 

Service Fee: 

Amount: 50% of all customary costs associated with maintaining the Sharepoint Site. 

Currency: US Dollars (USD). 

Termination Date: 

B&W will provide the Services for twenty-four (24) months from the Distribution Date, and such period may be extended by an additional
six (6) months at the request of either B&W or McDermott (“Sharepoint Transition Period”). 
  

 10 








 Schedule I 

Disaster Recovery 

Description of Services to be Provided: 

Support services described in this schedule are those required to provide disaster recovery for McDermott’s data center in Houston
(the “Houston Data Center”) during the Disaster Recovery Transition Period. In the event of an extended interruption in service to the Houston Data Center, B&W will provide the following services to McDermott from B&W’s
PGG Barberton data center: 
  

	 	•	 	 receiving and storage of backup tapes; 


  

	 	•	 	 adequate data center floor space for two standard equipment racks; 



 

	 	•	 	 six 30-Amp power feeds; 


  

	 	•	 	 work space for up to six McDermott IT personnel; 


  

	 	•	 	 landline telephone equipment/service and external internet access; and 



 

	 	•	 	 infrastructure support from B&W IT personnel as reasonably required to establish and make operational the McDermott recovery team in the PGG
Barberton data center. 


 Such services are collectively referred to herein as the “Extended
Interruption Services.” A period of Extended Interruption Services remains in effect until McDermott removes from B&W’s PGG Barberton data center all equipment installed in response to the Houston Data Center service disruption.

 In the event McDermott anticipates a disruption in service to the Houston Data Center due to hurricane or other foreseeable
event, B&W will provide the following services to McDermott from B&W’s PGG Barberton data center: 
  

	 	•	 	 receiving and storage of back up tapes; and 


  

	 	•	 	 work space for up to two McDermott IT personnel. 



Such services are collectively referred to herein as the “Foreseeable Interruption Services.” A period of Foreseeable
Interruption Services remains in effect until McDermott removes from B&W’s PGG Barberton data center all equipment installed in response to the Houston Data Center service disruption. 

Service Fee: 

Amount: 
  

	 	•	 	 $2,100 per month for those months in which the Extended Interruption Services are provided. 



 

	 	•	 	 $1,000 per month for those months in which the Foreseeable Interruption Services are provided. If Extended Interruption Services are subsequently
provided, those charges would also apply. 


 Currency: US Dollars (USD). 

 

 11 








 Termination Date: 

B&W will provide the option for McDermott to utilize the Extended Interruption Services and Foreseeable Interruption Services from the
Distribution Date until December 1, 2010, unless earlier terminated upon thirty (30) days’ prior written notice provided to B&W by McDermott (“Disaster Recovery Transition Period”). 

 

 12 








 Schedule 2.4 

Certain Subcontractors 

None. 
  

 13 








 Schedule 4.1 

Payment Instructions 

Until further notice, the following are wire transfer/ACH payment instructions for payment to B&W for amounts owing under this
Agreement: 
 The Babcock & Wilcox Company 
  

			
	 Bank Name:
	  	JP Morgan Chase Bank New York
	 Bank ABA #:
	  	021000021
	 Account Name:
	  	The Babcock & Wilcox Company
	 Account Number:
	  	304607029

  

 14